Vodafone 2011 Annual Report Download - page 57

Vodafone Group Plc Annual Report 2011 55
Governance
Compliance with the Combined Code
Our ordinary shares are listed in the UK on the London Stock Exchange. In
accordance with the Listing Rules of the UK Listing Authority, we confirm
that throughout the year ended 31 March 2011 and at the date of this
document we were compliant with the provisions of, and applied the
principles of, Section 1 of the 2008 FRC Combined Code on Corporate
Governance (the “Combined Code”). The Combined Code can be found on
the FRC website (www.frc.org.uk). This corporate governance section,
together with the “Directors’ remuneration” section on pages 62 to 73,
provides detail of how we apply the principles and comply with the
provisions of the Combined Code.
The FRC issued the new UK Corporate Governance Code in 2010, applicable
for financial years beginning on or after 29 June 2010. We will report on it for
the first time in our 2012 financial year and intend to be in compliance.
Corporate governance statement
We comply with the corporate governance statement requirements
pursuant to the FSA’s Disclosure and Transparency Rules by virtue of the
information included in this “Corporate governance” section of the annual
report together with information contained in the “Shareholder information”
section on pages 132 to 138.
Board organisation and structure
The role of the Board
The Board is responsible for the overall conduct of the Group’s business and
has the powers, authorities and duties vested in it by and pursuant to the
relevant laws of England and Wales and the articles of association of the
Company. The Board:
■ has final responsibility for the management, direction and performance
of our businesses;
■ is required to exercise objective judgement on all corporate matters
independent from executive management;
■ is accountable to shareholders for the proper conduct of the business; and
■ is responsible for ensuring the effectiveness of and reporting on our
system of corporate governance.
The Board has a formal schedule of matters reserved to it for its decision and
these include:
■ Group strategy and long-term plans;
■ major capital projects, acquisitions or divestments;
■ annual budget and operating plan;
■ Group financial structure, including tax and treasury;
■ annual and half-year financial results and shareholder communications;
■ system of internal control and risk management; and
■ senior management structure, responsibilities and succession plans.
The schedule is reviewed annually. It was last formally reviewed in March
2011 at which time, it was determined that no amendments were required.
Other specific responsibilities are delegated to Board committees which
operate within clearly defined terms of reference. Details of the
responsibilities delegated to the Board committees are given on pages 57
and 58.
Board meetings
The Board meets at least eight times a year and the meetings are structured
to allow open discussion. All directors participate in discussing strategy,
trading and financial performance and risk management. All substantive
agenda items have comprehensive briefing material which is circulated one
week before the meeting.
The following table shows the number of years directors have been on the
Board at 31 March 2011 and their attendance at scheduled Board meetings
they were eligible to attend during the year:
Years Meetings
on Board attended
Sir John Bond 6 8/8
John Buchanan 8 8/8
Vittorio Colao 4 8/8
Michel Combes 1 8/8
Andy Halford 5 8/8
Renee James (since 1 January 2011) <1 3/3
Alan Jebson 4 7/8
Samuel Jonah 2 8/8
Nick Land 4 8/8
Anne Lauvergeon 5 6/8
Simon Murray (until 27 July 2010) – 2/2
Stephen Pusey 1 8/8
Luc Vandevelde 7 8/8
Anthony Watson 5 8/8
Philip Yea 5 8/8
In addition to regular Board meetings, there are a number of other meetings
to deal with specific matters. Directors unable to attend a Board meeting
because of another engagement are nevertheless provided with all the
information relevant for such meetings and are able to discuss issues arising
in the meeting with the Chairman or the Chief Executive.
Division of responsibilities
The roles of the Chairman and Chief Executive are separate and there is a
division of responsibilities that is clearly established, set out in writing and
agreed by the Board to ensure that no one person has unfettered powers of
decision. The Chairman is responsible for the operation, leadership and
governance of the Board, ensuring its effectiveness and setting its agenda.
The Chief Executive is responsible for the management of the Group’s
business and the implementation of Board strategy and policy.
Board balance and independence
Our Board consists of 15 directors, 13 of whom served throughout the year.
At 31 March 2011, in addition to the Chairman, Sir John Bond, there were four
executive directors and nine non-executive directors. Renee James and
Gerard Kleisterlee were appointed as non-executive directors with effect
from 1 January 2011 and 1 April 2011 respectively. Simon Murray was a
member of the Board until his retirement at the annual general meeting
(‘AGM’) on 27 July 2010.
The Board welcomed the publication of the Davies Review on Women on
Boards in February 2011. It is our aspiration to have a minimum of 25%
female representation on the Board by 2015. Subject to securing suitable
candidates, we intend to effect the changes required to the Board’s
composition by recruiting additional directors and/or filling vacancies which
arise when directors do not seek re-election, by appointing new directors
who fit the skills criteria and gender balance which would meet the Board’s
aspirations. The FRC is currently consulting on changes to the UK Corporate
Governance Code which may result in the Code including a recommendation
We are committed to high standards of corporate governance which we consider are critical to business integrity
and to maintaining investors’ trust in us. We expect all our directors, employees and suppliers to act with honesty,
integrity and fairness. Our business principles set out the standards we set ourselves to ensure we operate lawfully,
with integrity and with respect for the culture of every country in which we do business.
Corporate governance