Vodafone 2009 Annual Report Download - page 58

56 Vodafone Group Plc Annual Report 2009
Committees
NYSE rules require US companies to have a nominating and corporate governance •
committee and a compensation committee, each composed entirely of
independent directors with a written charter that addresses the committees’
purpose and responsibilities.
The Company’s Nominations and Governance Committee and Remuneration •
Committee have terms of reference and composition that comply with the
Combined Code requirements.
The Nominations and Governance Committee is chaired by the Chairman of the •
Board and its other members are non-executive directors of the Company.
The Audit Committee is composed entirely of non-executive directors whom the •
Board has determined to be independent and who meet the requirements of Rule
10A-3 of the Securities Exchange Act.
The Company considers that the terms of reference of these committees, which are
available on its website at www.vodafone.com/governance, are generally responsive
to the relevant NYSE rules but may not address all aspects of these rules.
Corporate governance guidelines
Under NYSE rules, US companies must adopt and disclose corporate •
governance guidelines.
Vodafone has posted its statement of compliance with the Combined Code on its •
website at www.vodafone.com/governance. The Company has also adopted a
group governance and policy manual which provides the first level of the
framework within which its businesses operate. The manual applies to all directors
and employees.
The Company considers that its corporate governance guidelines are generally •
responsive to, but may not address all aspects of, the relevant NYSE rules.
The Company has also adopted a corporate Code of Ethics for senior executives,
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/governance.
Report from the Audit Committee
The Audit Committee assists the Board in carrying out its responsibilities in
relation to financial reporting requirements, risk management and the
assessment of internal controls. The Audit Committee also reviews the
effectiveness of the Company’s internal audit function and manages the
Company’s relationship with the external auditors.
The composition of the Audit Committee is shown in the table on page 53 and
its terms of reference can be found on the Vodafone website (www.vodafone.
com/governance). By invitation of the Chairman of the Audit Committee, the
Chief Executive, the Chief Financial Officer, the Group Financial Controller, the
Director of Financial Reporting, the Group Audit Director and the external
auditors also attend the Audit Committee meetings. Also invited to attend
certain meetings are relevant people from the business to present sessions on
issues designed to enhance the Audit Committee’s awareness of key issues and
developments in the business which are relevant to the Audit Committee in the
performance of its role.
During the year ended 31 March 2009, the principal activities of the Audit
Committee were as follows:
Financial reporting
The Audit Committee reviewed and discussed with management and the
external auditors the half-year and annual financial statements, focusing on,
without limitation, the quality and acceptability of accounting policies and
practices, the clarity of the disclosures and compliance with financial reporting
standards and relevant financial and governance reporting requirements. To
aid their review, the Audit Committee considered reports from the Group
Financial Controller and the Director of Financial Reporting and also reports
from the external auditors, Deloitte LLP, on the scope and outcome of their
half-year review and annual audit.
Risk management and internal control
The Audit Committee reviewed the process by which the Group evaluated its
control environment, its risk assessment process and the way in which
significant business risks were managed. It also considered the Group Audit
Director’s reports on the effectiveness of internal controls, significant identified
frauds and any identified fraud that involved management or employees with
a significant role in internal controls. The Audit Committee was also responsible
for oversight of the Group’s compliance activities in relation to section 404 of
the Sarbanes-Oxley Act.
Internal audit
The Audit Committee monitored and reviewed the scope, extent and
effectiveness of the activity of the Group internal audit department and
received reports from the Group Audit Director which included updates on
audit activities and achievement against the Group audit plan, the results of any
unsatisfactory audits and the action plans to address these areas, and resource
requirements of the internal audit department. The Audit Committee held
private discussions with the Group Audit Director at each meeting.
External auditors
The Audit Committee reviewed and monitored the independence of the
external auditors and the objectivity and effectiveness of the audit process and
provided the Board with its recommendation to the shareholders on the
reappointment of Deloitte LLP as external auditors. The Audit Committee
approved the scope and fees for audit and permitted non-audit services
provided by Deloitte LLP.
Private meetings were held with Deloitte LLP to ensure that there were no
restrictions on the scope of their audit and to discuss matters without
management being present.
Audit Committee effectiveness
The Audit Committee conducts a formal review of its effectiveness annually,
giving consideration to, amongst other things, frequency, timings and adequacy
of the meetings, composition, adequacy of resources and interaction with
management and concluded this year that the Audit Committee’s performance
was effective and the Audit Committee had fulfilled its terms of reference.
Nick Land
On behalf of the Audit Committee
Corporate governance continued