Vodafone 2009 Annual Report Download - page 54

52 Vodafone Group Plc Annual Report 2009
responsibilities as a director. The Board is confident that all its members have the
knowledge, ability and experience to perform the functions required of a director of
a listed company.
On appointment, individual directors undergo an induction programme covering,
amongst other things:
the business of the Group;•
their legal and regulatory responsibilities as directors of the Company; •
briefings and presentations from relevant executives; and •
opportunities to visit business operations. •
If appropriate, the induction will also include briefings on the scope of the internal
audit function and the role of the Audit Committee, meetings with the external
auditor and other areas the Company Secretar y deems f it, considering the director’s
area of responsibility. The Company Secretary provides a programme of ongoing
training for the directors, which covers a number of sector specific and business
issues, as well as legal, accounting and regulatory changes and developments
relevant to individual director’s areas of responsibility. Throughout their period in
office, the directors are continually updated on the Group’s businesses and the
regulatory and industry specific environments in which it operates. These updates
are by way of written briefings and meetings with senior executives and, where
appropriate, external sources.
The Company Secretary ensures that the programme to familiarise the non-
executive directors with the business is maintained over time and kept relevant to the
needs of the individuals involved. The Company Secretary confers with the Chairman
and senior independent director to ensure that this is the case.
Performance evaluation
Performance evaluation of the Board, its committees and individual directors
takes place on an annual basis and is conducted within the terms of reference of
the Nominations and Governance Committee with the aim of improving
individual contributions, the effectiveness of the Board and its committees and the
Group’s performance.
The Board undertakes a formal self-evaluation of its own performance. This process
involves the Chairman:
sending a questionnaire to each Board member for completion; •
undertaking individual meetings with each Board member on Board •
performance; and
producing a report on Board performance, using the completed questionnaire and •
notes from the individual meetings, which is sent to and considered by the
Nominations and Governance Committee before being discussed with Board
members at the following Board meeting.
The evaluation is designed to determine whether the Board continues to be capable
of providing the high level judgement required and whether, as a Board, the directors
are informed and up to date with the business and its goals and understand the
context within which it operates. The evaluation also includes a review of the
administration of the Board covering the operation of the Board, its agenda and the
reports and information produced for the Board’s consideration. The Board will
continue to review its procedures, its effectiveness and development in the financial
year ahead.
The Chairman leads the assessment of the Chief Executive and the non-executive
directors, the Chief Executive undertakes the performance reviews for the executive
directors and the senior independent director conducts the review of the performance
of the Chairman by having a meeting with all the non-executive directors together and
individual meetings with the executive directors and the Company Secretary. Following
this process, the senior independent director produces a written report which is
discussed with the Chairman.
The evaluation of each of the Board committees is undertaken using an online
questionnaire that each member of the committees and others who attend
committee meetings or interact with committee members are required to complete.
The results of the questionnaires are discussed with the Chairman of the Board and
the members of the committees.
section 175 of the Companies Act 2006, the Company’s articles of association
include a general power for the directors to authorise any matter which would or
might otherwise constitute or give rise to a breach of the duty of a director under
this section, to avoid a situation in which he has, or can have, a direct or indirect
interest that conflicts or may possibly conflict, with the interests of the Company.
To this end, procedures have been established for the disclosure of any such
conflicts and also for the consideration and authorisation of these conflicts by
the Board, where relevant. The directors are required to complete a conflicts
questionnaire, initially on appointment and annually thereafter. In the event of a
potential conflict being identified, details of that conflict would be submitted to the
Board (excluding the director to whom the potential conflict related) for
consideration and, as appropriate, authorisation in accordance with the Companies
Act 2006 and the articles of association. Where an authorisation was granted, it
would be recorded in a register of potential conflicts and reviewed periodically. On
an ongoing basis, directors are responsible for notifying the Company Secretary if
they become aware of actual or potential conflict situations or a change in
circumstances relating to an existing authorisation. To date, no conflicts of interest
have been identified.
The names and biographical details of the current directors are given on pages 48,
49 and 50. Changes to the commitments of the directors are reported to the Board.
Under the laws of England and Wales, the executive and non-executive directors are
equal members of the Board and have overall collective responsibility for the
direction of the Company. In particular, non-executive directors are responsible for:
bringing a wide range of skills and experience to the Group, including independent •
judgement on issues of strategy, performance, financial controls and systems of
risk management;
constructively challenging the strategy proposed by the Chief Executive and •
executive directors;
scrutinising and challenging performance across the Group’s business; •
assessing risk and the integrity of the financial information and controls of the •
Group; and
ensuring appropriate remuneration and succession planning arrangements are in •
place in relation to executive directors and other senior executive roles.
Board effectiveness
Appointments to the Board
There is a formal, rigorous and transparent procedure, which is based on merit and
against objective criteria, for the appointment of new directors to the Board. This is
described in the section on the Nominations and Governance Committee set out on
page 53. Samuel Jonah was identified as a potential candidate by internal sources
and subsequently recommended to the Board by the Nominations and Governance
Committee on the basis of his wealth of business experience in Africa, particularly
South Africa and Ghana where Vodafone has made important investments recently.
Michel Combes and Steve Pusey were proposed for appointment to the Board
following assessment of their performance and their potential contribution by the
Nominations and Governance Committee and the whole Board subsequently
discussed the proposal before their appointments were confirmed.
Information and professional development
Each member of the Board has immediate access to a dedicated online team room
and can access monthly information including actual financial results, reports from
the executive directors in respect of their areas of responsibility and the Chief
Executive’s report which deals, amongst other things, with investor relations, giving
Board members an opportunity to develop an understanding of the views of major
investors. These matters are discussed at each Board meeting. From time to time, the
Board receives detailed presentations from non-Board members on matters of
significance or on new opportunities for the Group. Financial plans, including budgets
and forecasts , are regularly discussed at Board meetings. The non- executive directors
periodically visit different parts of the Group and are provided with briefings and
information to assist them in performing their duties.
The Chairman is responsible for ensuring that induction and training programmes are
provided and the Company Secretary organises the programmes. Individual directors
are also expected to take responsibility for identifying their training needs and to take
steps to ensure that they are adequately informed about the Company and their
Corporate governance continued