BT 2009 Annual Report Download - page 55

ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS OVERVIEW
REPORT OF THE DIRECTORS
53BT GROUP PLC ANNUAL REPORT & FORM 20-F
REPORT OF THE DIRECTORS THE BOARD
BT’s non-executive directors
The Nominating Committee has agreed and reviews from time to
time the combination of experience, skills and other attributes
which the non-executive directors as a whole should bring to the
Board. This profile is used by the Committee, when the
appointment of a non-executive director is being considered, to
assess the suitability of candidates. Short-listed candidates meet
the Committee, which then recommends to the Board candidates
for appointment.
The non-executive directors provide a strong, independent
element on the Board. Between them, they bring experience and
independent judgment, gained at the most senior levels of
international business operations and strategy, finance, marketing,
technology, communications and political and international affairs.
In his capacity as Deputy Chairman, and as the chairman of the
Remuneration Committee , Maarten van den Bergh is available to
meet from time to time with BT’s major institutional shareholders.
He is able to discuss matters with these shareholders where it would
be inappropriate for those discussions to take place with either the
Chairman or the Chief Executive.
Non-executive directors are appointed initially for three years,
subject to three months’ termination notice from either BT or the
director. At the end of the first three years the appointment may be
continued by mutual agreement. Each non-executive director is
provided, upon appointment, with a letter setting out the terms of
his or her appointment, including membership of Board
committees, the fees to be paid and the time commitment
expected from the director. The letter also covers such matters as
the confidentiality of information and BT’s share dealing code.
Main Board committees
The Operating Committee , the key management committee, meets
weekly and is chaired by the Chief Executive. The other members
are the Group Finance Director and the Chief Executives of BT
Retail, BT Wholesale, BT Global Services, BT Design and BT Operate.
The Company Secretary attends all meetings and the Group HR
Director normally attends the meetings. The Committee has
collective responsibility for running the group’s business. To do
that, it develops BT’s strategy and budget for Board approval,
recommends to the Board capital expenditure and investments
budgets, monitors financial, operational and customer quality of
service performance, reviews the risk register, allocates resources
across BT within plans agreed by the Board, plans and delivers
major programmes and reviews the senior talent base and
succession plans. Within BT’s corporate governance framework,
approved by the Board, the
Operating Committee can approve, up
to limits beyond which Board approval is required, capital
expenditure, disposals of fixed assets, investments and
divestments. It can delegate these approvals, up to its own limits,
to senior executives.
To meet best corporate governance practice, the
Audit
Committee
, the Remuneration Committee and the Nominating
Committee
have long been an established part of BT’s system of
governance. Each committee has written terms of reference, which
are available on our website. The Report of the Audit Committee,
the Report of the Nominating Committee and the Report on
directors’ remuneration are on pages 54 to 69. This year, for the
first time, a Report of the Committee for Responsible and
Sustainable Business is included on page 56. The
Equality of Access
Board
(EAB) was established on 1 November 2005, as part of the
Undertakings given by BT to Ofcom following Ofcom’s strategic
review of telecommunications, to monitor, report and advise BT on
BT’s compliance with these Undertakings. The EAB is a committee
of the Board, which formally approved the formation of the EAB
and its terms of reference. As required by the Undertakings, the
EAB comprises five members: Carl Symon, a BT non-executive
director and chairman of the EAB; a BT senior executive, Himanshu
Raja, Chief Financial Officer, BT Design; and three independent
members: Sir Bryan Carsberg, Stephen Pettit and Dr Peter Radley.
The EAB reports regularly to the Board. Its terms of reference are
available on BT’s website.
The Board also has a
Pension Scheme Performance Review
Group
.
New York Stock Exchange
BT, as a foreign issuer with American Depositary Shares listed on the
New York Stock Exchange (NYSE), is obliged to disclose any
significant ways in which its corporate governance practices differ
from the corporate governance listing standards of the
NYSE.
We have reviewed the NYSE’s listing standards and believe that
our corporate governance practices are consistent with them, with
the following exception where we do not meet the strict
requirements set out in the standards. These state that companies
must have a nominating/corporate governance committee
composed entirely of independent directors and with written terms
of reference which, in addition to identifying individuals qualified
to become board members, develops and recommends to the
Board a set of corporate governance principles applicable to the
company. We have a
Nominating Committee chaired by the
Chairman, Sir Michael Rake, but this does not develop corporate
governance principles for the Board’s approval. The Board itself
approves the group’s overall system of internal controls,
governance and compliance authorities. The Board and the
Nominating Committee are made up of a majority of independent,
non-executive directors.
The Sarbanes-Oxley Act of 2002, the US Securities and Exchange
Commission (SEC) and NYSE introduced rules on 31 July 2005
requiring us to comply with certain provisions relating to the
Audit
Committee
. These include the independence of Audit Committee
members and procedures for the treatment of complaints regarding
accounting or auditing matters. We are fully compliant with these
requirements.