Vodafone 2007 Annual Report Download - page 74

72 Vodafone Group Plc Annual Report 2007
Corporate Governance
continued
each time the Company publishes such documentation on its website.
Shareholders may also appoint proxies and give voting instructions
electronically.
The principal communication with private investors is through the provision
of the Annual Review and Summary Financial Statement and the AGM, an
occasion which is attended by all the Company’s directors and at which all
shareholders present are given the opportunity to question the Chairman and
the Board as well as the Chairmen of the Audit, Remuneration and
Nominations and Governance Committees. After the AGM, shareholders can
meet informally with directors.
A summary presentation of results and development plans is also given at
the AGM before the Chairman deals with the formal business of the meeting.
The AGM is broadcast live on the Group’s website, www.vodafone.com, and a
recording of the webcast can subsequently be viewed on the website. All
substantive resolutions at the Company’s AGMs are decided on a poll. The
poll is conducted by the Company’s Registrars and scrutinised by Electoral
Reform Services. The proxy votes cast in relation to all resolutions are
disclosed to those in attendance at the meeting and the results of the poll
are published on the Company’s website and announced via the regulatory
news service. Financial and other information is made available on the
Company’s website, www.vodafone.com, which is regularly updated.
Political Donations
Prior to the 2006 AGM, the Board annually sought and obtained shareholders’
approval to enable the Group to make donations to EU Political Organisations
or incur EU Political Expenditure, under the relevant provisions of the Political
Parties, Elections and Referendums Act 2000 (“PPERA”). The approval given
restricted such expenditure to an aggregate limit of £100,000 in the period of
12 months following the date of the AGM.
At last year’s AGM, held on 25 July 2006, the directors sought and received a
renewal of shareholders’ approval for a period of three years (until the AGM in
2009) to enable the Group to make donations to EU Political Organisations or
incur EU Political Expenditure, under the PPERA. The approval given restricted
such expenditure for each year until the AGM in 2009 to an aggregate
amount of £100,000 (£50,000 in respect of donations to EU Political
Organisations and £50,000 in respect of EU Political Expenditure).
The Group has made no political donations during the year.
Although the directors have received shareholders’ approval for a three-year
period, as with previous annual approvals, the Group has no intention of
changing its current policy and practice of not making political donations and
will not do so without the specific endorsement of shareholders. The Board
obtained the approval on a precautionary basis to avoid any possibility of
unintentionally breaching the PPERA.
Auditors
Following a recommendation by the Audit Committee and, in accordance
with Section 384 of the Companies Act 1985, a resolution proposing the re-
appointment of Deloitte & Touche LLP as auditors to the Company will be put
to the 2007 AGM.
In their assessment of the independence of the auditors and in accordance
with the US Independence Standards Board Standard No. 1, “Independence
Discussions with Audit Committees”, the Audit Committee receives in writing
details of relationships between Deloitte & Touche LLP and the Company
that may have a bearing on their independence and receives confirmation
that they are independent of the Company within the meaning of the
securities laws administered by the SEC.
In addition, the Audit Committee pre-approves the audit fee after a review of
both the level of the audit fee against other comparable companies,
including those in the telecommunications industry, and the level and nature
of non-audit fees, as part of its review of the adequacy and objectivity of the
audit process.
In a further measure to ensure auditor independence is not compromised,
policies were in place throughout the year to provide for the pre-approval by
the Audit Committee of permitted non-audit services by Deloitte & Touche
LLP. Where there was an immediate requirement for permitted non-audit
services to be provided by Deloitte & Touche LLP which were not
pre-approved by the Audit Committee, the policies provided that the Group
consulted with the Chairman of the Audit Committee, or in his absence
another member, for pre-approval. Since the year end, the Audit Committee
has amended the pre-approval policies and procedures for the engagement
of the Group’s auditors to provide non-audit services. The Audit Committee
has pre-approved certain specific permitted services that can be engaged by
Group management subject to specified fee limits for individual
engagements and fee limits for each type of specific service permitted. The
provision under the policy for the Chairman of the Audit Committee, or in his
absence another member, to pre-approve services which were not pre-
approved by the Audit Committee remains.
In addition to their statutory duties, Deloitte & Touche LLP are also employed
where, as a result of their position as auditors, they either must, or are best
placed to, perform the work in question. This is primarily work in relation to
matters such as shareholder circulars, Group borrowings, regulatory filings
and certain business acquisitions and disposals. Other work is awarded on the
basis of competitive tender.
During the year, Deloitte & Touche LLP and its affiliates charged the Group
£7 million (2006: £4 million) for audit and audit-related services and a further
£3 million (2006: £4 million) for non-audit assignments. An analysis of these
fees can be found in note 4 to the Consolidated Financial Statements.
US Listing Requirements
The Company’s ADS are listed on the NYSE and the Company is, therefore,
subject to the rules of the NYSE as well as US securities laws and the rules of
the SEC. The NYSE requires US companies listed on the exchange to comply
with the NYSE’s corporate governance rules but foreign private issuers, such
as the Company, are exempt from most of those rules. However, pursuant to
NYSE Rule 303A.11, the Company is required to disclose a summary of any
significant ways in which the corporate governance practices it follows differ
from those required by the NYSE for US companies. A summary of such
differences is set out below.
The Company has also adopted a corporate Code of Ethics for senior
executive, financial and accounting officers, separate from and additional to
its Business Principles. A copy of this code is available on the Group’s website
at www.vodafone.com.
Differences from the New York Stock Exchange
Corporate Governance Practices
Independence
The NYSE rules require that a majority of the Board must be comprised of
independent directors and the rules include detailed tests that US companies
must use for determining independence. The Combined Code requires a
company’s board of directors to assess and make a determination as to the
independence of its directors. While the Board does not explicitly take into
consideration the NYSE’s detailed tests, it has carried out an assessment
based on the requirements of the Combined Code and has determined in its
judgement that all of the non-executive directors are independent within
those requirements. As at the date of this Annual Report, the Board
comprised the Chairman, three executive directors and ten non-executive
directors.