Carphone Warehouse 2008 Annual Report Download - page 42

30 The Carphone Warehouse Group PLC Annual Report 2008
Directors’ Report: Governance
Corporate Governance continued
At each of its meetings the Committee reviewed and considered reports
from the Group Director of Risk and Business Assurance on the status
of the Group’s risk management systems, findings from the internal audit
function concerning internal controls, and reports on the status of any
weaknesses in internal controls identified by the internal or external auditors.
Remuneration Committee
The Committee currently comprises the following independent Non-
Executive Directors: Sir Brian Pitman (Chairman), Adrian Martin,
David Mansfield, Steven Esom, Baroness Morgan and David Grigson.
The Committee met formally four times during the period and each
member attended every meeting. Other Directors, the Company Secretary,
the Group Director of Human Resources, and advisors attended by
invitation only. A detailed description of the Committee’s remit and work
during the period is contained in the Remuneration Report on pages 32
to 38. Its terms of reference comply with the Code, are available on
request from the Company Secretary and are published on the Company’s
website. The Chairman of the Committee updates the Board following
each Committee meeting.
Nomination Committee
During the period the Committee comprised the following Non-Executive
Directors: Sir Brian Pitman (Chairman), John Gildersleeve, David Ross,
Adrian Martin and Baroness Morgan. The Committee meets as and when
required to discuss succession planning and consideration of appropriate
appointments to the Board. As reported in last year’s Annual Report, the
Committee met prior to the appointment of David Grigson, when such
appointment was considered and recommended by the Committee. No
formal meetings were required during the period because it was decided
that the previously approved succession planning was satisfied for the
period and no new appointments were proposed during the period.
The Committee’s terms of reference comply with the Code and are
available from the Company Secretary on request and are published
on the Company’s website. The Committee is responsible for succession
planning at Board level, overseeing the selection and appointment
of Directors, regularly reviewing the structure, size and composition
of the Board and making its recommendations to the Board. It assists
in evaluating the commitments of individual Directors and the balance
of skills, knowledge and experience on the Board.
Insurance Compliance Committee
The Committee is chaired by Baroness Morgan and is attended by
Adrian Martin, Andrew Harrison and other senior executives. The role of
the Committee is to review the Group’s compliance with regulatory matters
concerning the sale of insurance products to customers and to provide the
Non-Executive Directors, through Baroness Morgan and Adrian Martin, with
visibility of compliance issues. The Committee met formally three times during
the period. The Chairman of the Committee also updates the Board following
each Committee meeting.
Consumer Regulation Compliance Committee
(formally Telecoms Regulatory Committee)
The Committee is chaired by David Mansfield and is attended by David
Goldie, the Company Secretary and other senior executives. The role
of the Committee is to review the Group’s compliance with fixed line
regulatory matters, consumer regulation across the fixed and mobile
businesses including Trading Standards, Data Protection and Advertising
Standards, and to provide the Non-Executive Directors, through David
Mansfield, with visibility of these compliance issues. The Committee met
formally three times during the period. The Chairman of the Committee
also updates the Board following each Committee meeting.
Group Finance Committee
The Committee is chaired by David Grigson and is attended by Adrian
Martin, Roger Taylor, the Company Secretary and other senior executives.
The role of the Committee is to review and monitor the Group’s key
accounting, tax, treasury and legal matters and to provide the Non-
Executive Directors, through David Grigson and Adrian Martin, with
visibility of these issues. The Committee’s remit supplements the work
carried out by the Audit Committee. The Committee met formally once
during the period. The Chairman of the Committee also updates the
Board following each Committee meeting.
Risk management and internal control
The Company has established a risk management programme that assists
management throughout the Company to identify, assess and mitigate
business, financial, operational and compliance risks. This function was
further enhanced during the period by the creation of a Group Risk and
Business Assurance Committee that brings together senior executives
with operational responsibility to identify and manage any key risks to the
Group. The Board views management of risk as integral to good business
practice. The programme is designed to support management’s decision-
making and to improve the reliability of business performance.
The risk management programme is supported by a dedicated team of
risk specialists, including internal auditors, who comprise the Group Risk
and Business Assurance function. To ensure that all parts of the Group
have a good understanding of risk, members of this team have conducted
risk workshops and reviews within each of the main operating divisions in
the past year, culminating in an assessment of key business risks by the
Executive Directors and senior management. These risk assessments
have been wide-ranging, covering risks arising from the regulatory
environment, strategy, counter-parties and organisational change
associated both with major projects and with acquisitions. The risk
management process operates throughout the Group, being applied
equally to the main business divisions and corporate functions.
The output from each annual assessment is a list of key strategic,
financial, operational and compliance risks. Associated action plans and
controls to mitigate them are also put in place where this is possible and
to the extent considered appropriate by the Board taking account of costs
and benefits. Changes in the status of the key risks and changes to the
risk matrix are reported regularly to the Audit Committee and at each
Board Meeting.
The Directors have overall responsibility for the Group’s systems of
internal control and for reviewing their effectiveness. The Board delegates
to executive management the responsibility for designing, operating
and monitoring these systems. The systems are based on a process
of identifying, evaluating and managing key risks and include the risk
management processes set out above.
The systems of internal control were in place throughout the period and
up to the date of approval of the Annual Report and financial statements.
The effectiveness of these systems is periodically reviewed by the Audit
Committee in accordance with the revised guidance in the Turnbull Report.
These systems are also refined as necessary to meet changes in the Group’s
business and associated risks. The systems of internal control are designed
to manage rather than eliminate the risk of failure to achieve business
objectives. They can only provide reasonable and not absolute assurance
against material errors, losses, fraud or breaches of laws and regulations.
The Board has conducted an annual review of the effectiveness of the
systems of risk management and internal control in operation during the
year and up to the date of the approval of the Annual Report and financial
statements and this was approved by the Audit Committee and the Board.