Vodafone 2011 Annual Report Download - page 59

Vodafone Group Plc Annual Report 2011 57
Governance
Consequently, some changes in Board practice are being implemented,
including extending the duration of Audit Committee meetings and
allocating more time in the Board schedule for strategy discussions. The
Board will continue to review its procedures, its effectiveness and
development in the financial year ahead.
Re-election of directors
Although not required by the articles of association, in the interests of good
corporate governance the directors have resolved that, subject to the
recommendation of the Nominations and Governance Committee, they will
all submit themselves for re-election at each AGM. Accordingly, at the AGM
to be held on 26 July 2011, all the directors will offer themselves for
re-election with the exception of Sir John Bond who is retiring from the
Board. New directors seek election for the first time in accordance with the
articles of association.
Independent advice
The Board recognises that there may be occasions when one or more of the
directors feels it is necessary to take independent legal and/or financial
advice at the Company’s expense. There is an agreed procedure to enable
them to do so.
Indemnication of directors
In accordance with our articles of association and to the extent permitted by
the laws of England and Wales, directors are granted an indemnity from the
Company in respect of liabilities incurred as a result of their office. In respect
of those matters for which the directors may not be indemnified, we
maintained a directors’ and officers’ liability insurance policy throughout the
financial year. Neither our indemnity nor the insurance provides cover in the
event that a director is proven to have acted dishonestly or fraudulently.
Board committees
The Board has established an Audit Committee, a Nominations and
Governance Committee and a Remuneration Committee, each of which has
formal terms of reference approved by the Board. The Board reviews the
terms of reference for each of the committees on an ongoing basis and is
satisfied that they comply with the requirements of the Combined Code.
The terms of reference for all Board committees can be found on our website
at www.vodafone.com/governance or a copy can be obtained by application
to the Company Secretary at our registered office.
The committees are provided with all necessary resources to enable them
to undertake their duties in an effective manner. The Company Secretary or
her delegate acts as secretary to the committees. The minutes of committee
meetings are circulated to all directors.
Each committee has access to such information and advice, both from
within the Group and externally, at the Company’s cost as it deems
necessary. This may include the appointment of external consultants where
appropriate. Each committee undertakes an annual review of the
effectiveness of its terms of reference and makes recommendations to the
Board for changes where appropriate.
Audit Committee
The members of the Audit Committee during the year, together with a
record of their attendance at meetings which they were eligible to attend,
are set out below:
Meetings attended
Nick Land, Chairman and financial expert 4/4
John Buchanan 4/4
Alan Jebson 4/4
Anne Lauvergeon 3/4
The Audit Committee is comprised of financially literate members having the
necessary ability and experience to understand financial statements. Solely
for the purpose of fulfilling the requirements of the Sarbanes-Oxley Act and
the Combined Code, the Board has designated Nick Land, who is an
independent non-executive director satisfying the independence
requirements of Rule 10A-3 of the US Securities Exchange Act 1934 (the
‘Exchange Act’), as its financial expert on the Audit Committee. Further details
on Nick Land can be found in “Board of directors and Group management”
on page 53.
The Audit Committee’s responsibilities include:
■ overseeing the relationship with the external auditor;
■ reviewing our preliminary results announcement, half-year results and
annual financial statements;
■ monitoring compliance with statutory and listing requirements for any
exchange on which our shares and debt instruments are quoted;
■ reviewing the scope, extent and effectiveness of the activity of the Group
internal audit department;
■ engaging independent advisors as it determines is necessary and to
perform investigations;
■ reporting to the Board on the quality and acceptability of our accounting
policies and practices including, without limitation, critical accounting
policies and practices; and
■ playing an active role in monitoring our compliance efforts in respect of
Section 404 of the Sarbanes-Oxley Act.
At least twice a year the Audit Committee meets separately with the external
auditor, the Chief Financial Officer and the Group Audit Director without
other management being present. Further details on the work of the Audit
Committee and its oversight of the relationships with the external auditor
can be found under “Auditor” and the “Report from the Audit Committee”
which are set out on pages 60 and 61.
Nominations and Governance Committee
The members of the Nominations and Governance Committee during the
year, together with a record of their attendance at meetings which they were
eligible to attend, are set out below:
Meetings attended
Sir John Bond, Chairman 7/7
John Buchanan 7/7
Luc Vandevelde 7/7
Anthony Watson (from 26 July 2010) 5/5
The Nominations and Governance Committee’s key objective is to ensure
that the Board comprises individuals with the requisite skills, knowledge and
experience to ensure that it is effective in discharging its responsibilities. The
Nominations and Governance Committee:
■ leads the process for identifying and making recommendations to the
Board of candidates for appointment as directors giving full consideration
to succession planning and the leadership needs of the Group;
■ makes recommendations to the Board on the composition of the
Nominations and Governance Committee and the composition and
chairmanship of the Audit and Remuneration Committees;
■ regularly reviews the structure, size and composition of the Board
including the balance of skills, knowledge and experience and the
independence of the non-executive directors, and makes
recommendations to the Board with regard to any change; and
■ is responsible for the oversight of all matters relating to corporate
governance, bringing any issues to the attention of the Board.
During the financial year an external search was commissioned, using an
independent consulting firm which actively searches for female as well as
male candidates, for a non-executive director with relevant international
experience in the high-tech sector. Renee James was identified as a potential
candidate and subsequently recommended to the Board by the
Nominations and Governance Committee on the basis that she met the
desired criteria.
In February 2010 the Board initiated a succession planning process to search
for a new chairman. The independent consulting firm was provided with a
detailed brief of the desired candidate profile and their services were used
to conduct a thorough search to identify suitable candidates. The
Nominations and Governance Committee considered a list of potential