Barclays 2014 Annual Report Download - page 70

68 I Barclays PLC Annual Report 2014 barclays.com/annualreport
Governance: Directors’ report
As set out in the Risk review section of the Annual Report, a number of
matters were made public during the course of 2014 which related to
failings in the design and/or operation of certain controls other than
those over financial reporting. Whilst the matters were disclosed in
2014, many of the failings giving rise to those issues occurred in prior
periods. Management has assessed the specific control processes
impacted and concluded that these are now designed and operating
effectively. Areas of on-going control remediation are not considered to
constitute material control failings. In addition to the above matters, a
number of other issues are currently being analysed to assess their
potential to impact on the control environment and the materiality of
any such impact. Remediation plans will be defined and implemented,
where necessary.
Controls over financial reporting
A framework of disclosure controls and procedures is in place to
support the approval of the Group’s financial statements. The Legal and
Technical Review Committee is responsible for examining the Group’s
financial reports and disclosures to ensure that they have been subject
to adequate verification and comply with legal and technical
requirements. The Committee reports its conclusions to the Disclosure
Committee. The Disclosure Committee examines the content, accuracy
and tone of the disclosures and reports its conclusions to the Group
Executive Committee and the Board Audit Committee, both of which
debate its conclusions and provide further challenge. Finally, the Board
scrutinises and approves results announcements and the Annual
Report and ensures that appropriate disclosures have been made. This
governance process ensures both management and the Board are
given sufficient opportunity to debate and challenge the Group’s
financial statements and other significant disclosures before they are
made public.
Management’s report on internal control over financial reporting
Management is responsible for establishing and maintaining adequate
internal control over financial reporting. Internal control over financial
reporting is a process designed under the supervision of the principal
executive and principal financial officers to provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial statements for external reporting purposes
in accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union and issued by the International
Accounting Standards Board (IASB). Internal control over financial
reporting includes policies and procedures that pertain to the
maintenance of records that, in reasonable detail, accurately and fairly
reflect transactions and dispositions of assets; provide reasonable
assurances that transactions are recorded as necessary to permit
preparation of financial statements in accordance with IFRS and that
receipts and expenditures are being made only in accordance with
authorisations of management and the respective Directors; and
provide reasonable assurance regarding prevention or timely detection
of unauthorised acquisition, use or disposition of assets that could
have a material effect on the financial statements.
Internal control systems, no matter how well designed, have inherent
limitations and may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are
subject to the risk that internal controls may become inadequate
because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Management has assessed internal control over financial reporting as
of 31 December 2014. In making its assessment, management has
utilised the criteria set forth by 2013 COSO. Management concluded
that, based on its assessment, the internal control over financial
reporting was effective as of 31 December 2014. Our independent
registered public accounting firm has issued a report on the Group’s
internal control over financial reporting, which is set out on page 254.
The system of internal financial and operational controls is also subject
to regulatory oversight in the UK and overseas. Further information on
supervision by the financial services regulators is provided under
Supervision and Regulation in the Risk review section on pages 215
to 220.
Changes in internal control over financial reporting
There have been no changes in the Group’s internal control over
financial reporting that occurred during the period covered by this
report which have materially affected or are reasonably likely to
materially affect the Group’s internal control over financial reporting.
Remuneration
The Board has delegated responsibility to the Board Remuneration
Committee for the remuneration arrangements of the Chairman,
Executive Directors, other senior executives and other employees,
including Material Risk Takers, whose total remuneration exceeds an
amount determined by the Committee from time to time. A description
of the work of the Board Remuneration Committee and details of the
members of the Board Remuneration Committee can be found in the
Directors’ remuneration report on pages 77 to 110, which forms part of
the corporate governance statement.
Stakeholder engagement
The Board recognises the importance of engaging with stakeholders as
key to effective corporate governance and actively supports building
stronger and more engaged relationships. The Directors, in conjunction
with the senior executive team, have participated in various forms of
engagement throughout the year, covering a wide range of topics
including our strategy, financial performance and corporate
governance. Our shareholder communication guidelines, which
underpin all investor engagements, are available at barclays.com/
investorrelations.
We take care to identify our stakeholders and tailor our engagement
programme to ensure that our communications are correctly targeted
and distributed appropriately, broadly reflecting the geographic spread
of our equity ownership. For example, we have a New York based
Investor Relations (IR) team to facilitate engagement with North
American investors.
On a practical level, during 2014 we conducted a tracing process to
reunite over 14,000 shareholders, with their unclaimed dividends. By
the end of the year, we had returned over £2m of dividends to these
shareholders.
Our Annual General Meeting (AGM)
Our AGM continues to be a key date in the diary for the Board and the
senior executive team. It affords us our primary opportunity to engage
with shareholders, particularly our private shareholders, on the key
issues facing the Group and any questions they may have. The majority
of Directors, including the Chairman, were available for informal
discussion before and after the formal business of our 2014 AGM.
All resolutions proposed at the 2014 AGM, which were considered on a
poll, were passed with votes for ranging from 76.01% to 99.88% of the
total votes cast. The 2014 AGM marked the first binding vote on the
Group’s remuneration policy as required by the Companies Act 2006.
This resolution was passed with 93.21% of votes registered in favour.
The 2015 AGM will be held on Thursday 23 April 2015 at the
Royal Festival Hall in London. The Notice of AGM can be found in
a separate document, which is sent out at least 20 working days before
the AGM and also made available at barclays.com/agm. Voting on the
resolutions will again be by poll and the results will be announced
via the Regulatory News Service and made available on our website
on the same day. We encourage any shareholders that are unable to
attend on the day to vote in advance of the meeting
via barclays.com/investorrelations/vote.
How we comply