BT 1999 Annual Report Download - page 47

46
CORPORATE GOVERNANCE
expected to be finalised until summer 1999. When the
guidelines are finalised, the Board intends to use them to
report on the whole system of internal control.
Relations with shareholders
Senior executives, led by the Chief Executive and Group
Finance Director, hold meetings with the company’s
principal institutional shareholders to discuss the
company’s strategy, financial performance and specific
major investment activities. As explained in the Report on
directors’ remuneration, the company also maintains contact,
when appropriate, through the Chairman of the
Remuneration Committee and appropriate senior executives
to discuss overall remuneration policies and plans. Contact
with institutional shareholders (and financial analysts,
brokers and the press) is controlled by written guidelines to
ensure the protection of share price sensitive information
which has not already been made available generally to the
company’s shareholders.
The company’s policy has always been to allow
shareholders to vote at the AGM on the annual report and
it is continuing that policy this year. The Board has also
decided that shareholders should this year be asked to
vote on the company’s directors’ and senior executives’
remuneration policy, as set out on pages 47 to 49 in the
Report on directors’ remuneration.
It is also part of the company’s policy to involve its
shareholders fully in the affairs of the company and to give
them the opportunity at the AGM to ask questions about
the company’s activities and prospects and to vote on every
substantially different issue by proposing a separate
resolution for each issue. The Board’s opinion is that the re-
election and fees of the auditors are inter-related issues and
should therefore be dealt with by one resolution.
Shareholders are being asked this year to approve updated
articles of association. These also include some changes to
the current provisions. An explanation is given in the notes
accompanying the Notice of the AGM. These are being
dealt with in a single resolution as the Board considers
changes to the company’s constitution to be a single issue.
The proxy votes for and against each resolution, as well as
abstentions, will be counted before the 1999 AGM and the
results will be made available at the meeting after
shareholders have voted on a show of hands.
It is our policy for all directors to attend the AGM if at all
possible. Whilst, because of ill health or other pressing
reasons, this may not always be achievable, in normal
circumstances this means the chairman of the Audit and
Remuneration committees is at the AGM and is available to
answer questions.
BT’s practice is to post the annual report and Notice of
AGM, given the large number of shareholders, in the most
cost-effective manner. We aim to give as much notice as
possible and at least 21 days, as required by our articles of
association. In practice, the Report and the Notice of AGM
are being sent to shareholders more than 20 working days
before the AGM.
Established procedures ensure the timely release of share
price sensitive information and the publication of financial
results and regulatory financial statements.
Statement of Business Practice
BT’s policy is to achieve best practice in our standards of
business integrity for all of our activities around the world.
To reinforce our determination to live up to these standards
BT has, over the year, reviewed its existing Statement of
Business Practice, which sets out the principles the group
will observe. This review included consultation with
individuals and groups, inside and outside the company.
The Statement now better reflects BT’s growing worldwide
operations and the increasing expectations in the areas of
corporate governance and business practice standards. It
also recognises the importance of our joint venture
partnerships and outlines how we work with our partners in
the creation of added value whilst working within high
standards of business practice. This new Statement is being
sent to every employee and it is on the company intranet
site. These high level principles are then linked into
everyday policies and principles by the operating units. A
confidential help line is available to employees who have
questions regarding the application of these principles. We
also continue to require our agents and contractors to apply
these principles when representing BT.
Pension fund
BT’s main pension fund – the BT Pension Scheme – is not
controlled by the Board, but by trustees who are company
and union nominees, with an independent chairman. The
trustees look after the assets of the pension fund, which are
held separately from those of the company. The pension
scheme funds can only be used in accordance with its rules
and for no other purpose.
Reporting
A statement by the directors of their responsibilities for
preparing the financial statements is included on page 57.