Vodafone 2001 Annual Report Download - page 14

12 CORPORATE GOVERNANCE continued
Vodafone Group Plc
Annual Report & Accounts
for the year ended
31 March 2001
Com m ittees of th e Board
The standing Board committees are the Audit Committee, the Nominations Committee and the Remuneration Committee.
The Audit Committee, which usually meets on three occasions in the year, is chaired by Paul Hazen and the other members of the Committee
are Josef Ackermann, Michael Boskin and Sir David Scholey. Ian MacLaurin and Klaus Esser served on this Committee during the year.
Under its terms of reference the Committee is required, amongst other things, to review the scope and extent of the activity of the Group Internal
Audit Department, to monitor the relationships with external auditors, to review the Company’s statutory accounts and other published financial
statements and information, to monitor compliance with statutory and listing requirements for any exchange on which the Group’s shares are
quoted and to institute special projects or other investigations as it sees fit.
The Nominations Committee meets as required and was chaired until his retirement from the Board by Sam Ginn. The responsibility of
chairmanship of this Committee has now passed to Ian MacLaurin. Sir Alec Broers, Chris Gent, Arun Sarin and Henning Schulte-Noelle also
serve on this Committee. Penny Hughes and Charles Schwab left the Committee during the year. The Committee, which provides a formal and
transparent procedure for the appointment of new directors to the Board, generally engages external consultants to advise on prospective
Board appointees.
The Remuneration Committee was chaired by Ian MacLaurin until his re-appointment as Chairman of the Company on 23 May 2000, when
the Chairmanship was transferred to Sir David Scholey. Ian MacLaurin and Sir David Scholey are joined on this Committee by Michael Boskin,
Penny Hughes and Jürgen Schrempp. Penny Hughes will chair the Committee from 1 August 2001. Sam Ginn and Don Fisher served on this
Committee during the year. The Board’s Report to Shareholders on Directors’ Remuneration on pages 14 to 22 provides further information on
this Committee.
In ternal con trol
Introduction
The Board has established procedures to implement in full the Turnbull Guidance “Internal Control: Guidance for Directors on the Combined
Code” for the year under review and to the date of approval of the annual report and accounts. These procedures, which are subject to regular
review, provide an ongoing process for identifying, evaluating and managing the significant risks faced by the Group.
Responsibility
The Board has overall responsibility for the system of internal control. A sound system of internal control is designed to manage rather than
eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material
misstatement or loss.
Control Structure
The Board sets the policy on internal control that is implemented by management. This is achieved through a clearly defined operating structure
with lines of responsibility and delegated authority. This is managed on a day to day basis by the Executive Committee chaired by the Chief
Executive.
Written policies and procedures have been issued which clearly define the limits of delegated authority and provide a framework for management
to deal with areas of significant business risk. These policies and procedures are reviewed and where necessary updated at meetings of the
Group Policy Committee chaired by the Chief Executive.
The Board formally approves the Group Treasury Policy, which sets appropriate limits to mitigate treasury risks.
The Board separately reviews the most significant risks facing the Group, their potential impact and likelihood of occurrence and the control
strategies put in place to mitigate those risks.
Control Environment
The Group’s operating procedures include a comprehensive system for reporting information to the directors. This system is properly documented
and regularly reviewed.
Budgets are prepared by subsidiary management and subject to review by both regional management and the directors. Forecasts are revised
on a quarterly basis and compared against budget. When setting budgets and forecasts management identifies, evaluates and reports on the
potential significant business risks.
The Group Operational Review Committee, chaired by the Group Chief Operating Officer, and the Board review management reports on the
financial results and key operating statistics.
Emphasis is placed on the quality and abilities of our people with continuing education, training and development actively encouraged through a
wide variety of schemes and programmes.
Directors are appointed to associated undertakings and attend the board meetings and review the key financial information of those
undertakings. Clear guidance is given to those directors on the preparation that should take place before these board meetings and their
activity at the board meeting. It is the Group’s policy that its auditors are appointed as auditors of associated companies, where possible.
The acquisition of any business requires a rigorous analysis of the financial implications of the acquisition and key performance figures.
A sensitivity analysis takes place of the key assumptions made in the analysis. Post investment appraisals of the Group’s investments are
conducted on a periodic and timely basis.
A Treasury Report, with details of treasury borrowings and investments, is distributed electronically on a daily basis.
The Board reviews a half yearly report detailing any significant legal actions faced by Group companies.
The Group Policy Committee monitors legal, environmental and regulatory matters and approves appropriate responses or amendments to
existing policy.