Barclays 2011 Annual Report Download - page 42

Corporate governance report continued
Board Audit Committee Chairman’s Report
Accountability
Sir Michael Rake, Chairman of the Board Audit Committee, gives his personal view of the Board Audit Committee’s activities during 2011.
Member Independent
Meetings
eligible to
attend
Meetings
attended
Sir Michael Rake (Chairman) I1212
Alison Carnwatha I12 9
Fulvio Conti
a
I1211
Simon Fraser I1212
Sir Andrew Likierman I1212
Secretary
Lawrence Dickinson
Key
OA on appointment
I independent
a unable to attend certain meetings owing to prior commitments
Chairman’s overview of 2011
The Board Audit Committee has seen another extremely busy year,
with its agenda shaped by both external and internal factors. Continuing
economic uncertainty and, in particular, the situation in the Eurozone,
influenced our areas of focus. Furthermore, the aftermath of the 2008
financial crisis has seen our regulators adopt what they describe as a
more intensive and intrusive approach to supervision, and this changing
regulatory environment has shaped our discussions around internal
controls, regulatory compliance and financial reporting.
This year I have visited the Group’s operations in Spain and New York,
attending meetings of the local subsidiary audit committees. I met
regularly with the Chief Internal Auditor during 2011 and have been
actively engaged in the recruitment of the new Chief Internal Auditor,
who took up post in January 2012. I also regularly interact with the lead
audit partner of our external auditors. I have this year met a number of
times with representatives of our regulators in both the UK and the US
to discuss our approach to internal controls, regulatory compliance and
specific financial reporting matters, including a tri-lateral meeting with
our UK regulator and our auditor. After each Committee meeting,
I present a written report to the Board of the main issues that the
Committee discussed and I am available should any Director wish
to discuss any particular issues with me in more detail.
There are some areas of potential overlap between the Committee’s
remit and that of the Board Risk Committee, of which I am also a
member. Via the Company Secretary, I have sought to ensure that those
areas of overlap, such as the risks and controls associated with our
capital and liquidity positions, are managed appropriately, with each
Committee viewing the issues through its particular lens.
Who is on the Committee?
Membership of the Committee and attendance at meetings held in 2011
are shown in the table. Sir Andrew Likierman and I are the designated
financial experts on the Committee for the purposes of the US Sarbanes-
Oxley Act, although each member of the Committee has a depth of
financial expertise and collectively, the Committee has considerable
financial and financial services experience on which to draw. Having
worked at KPMG throughout my career until 2007, I have significant
experience of accounting and auditing issues from a UK and global
perspective. Sir Andrew is currently Chairman of the National Audit Office
and is also Dean of the London Business School, following a career at
HM Treasury. Fulvio Conti has many years of financial and accounting
experience and his knowledge and experience of the economic and
political situation in the Eurozone has proved particularly valuable to our
deliberations at both Committee and Board level. Alison Carnwath brings
many years of experience of both the financial services sector and
corporate finance from her career at Schroders. Simon Fraser has a
background in financial services and, as a fund manager, brings insight
and perspective as a user of financial statements.
This year, I asked some members of the Committee to take on particular
additional responsibilities. Simon Fraser has been engaged with
management on the Group’s approach to Treating Customers Fairly.
Sir Andrew Likierman has been more closely involved in monitoring the
Group’s internal control framework, working with management to
review control issues of Group level significance.
The Committee members meet privately with me ahead of each
Committee meeting, which gives me the opportunity to learn of and
understand any particular issues that individual members may wish
to raise during Committee meetings.
What are our responsibilities?
In summary, the Committee’s role is to:
– monitor the integrity of the Group’s financial reporting and satisfy
itself that any significant financial judgements made by management
are sound;
– monitor the Group’s internal controls, including internal financial
controls; and
– monitor and review the activities and performance of the internal
and external auditor, including monitoring their independence
and objectivity.
The Committee’s full Terms of Reference are available from the corporate
governance section of our website.
How did we discharge our responsibilities in 2011?
We met 12 times in 2011 and the chart on page 42 shows how we
allocated our time. Our meetings are attended by management,
including the Chief Executive, Group Finance Director, Chief Internal
Auditor, Chief Risk Officer, Group General Counsel and Head of
Compliance. This year we have been particularly interested in interacting
with senior management below the Board and Executive Committee
level and meetings have been attended by the chief executives of the
business units, along with representatives of the control functions at
both Group and business unit level.
The external auditor attends each meeting and the Committee also holds
regular private sessions with the Chief Internal Auditor and the external
auditor. These sessions, which are not attended by management, allow
us to discuss any issues of emerging concern in more detail directly with
the audit teams.
40 Barclays PLC Annual Report 2011 www.barclays.com/annualreport