Vodafone 2013 Annual Report Download - page 68

Corporate governance (continued)
66 Vodafone Group Plc
Annual Report 2013
Other governance matters
Group policy compliance
Each Group policy is owned by a member of the Executive Committee
so that there is clear accountability and authority for ensuring the
associated business risk is adequately managed. Regional chief
executives and the senior leadership team member responsible for each
Group function have primary accountability for ensuring compliance
with all Group policies by all our markets and entities. Our Group
Compliance team and policy champions support the policy owners and
local markets in implementing policies and monitoring compliance.
All of the key Group policies have been consolidated into the Vodafone
Code of Conduct. This is a central ethical and policy document
applicable to all employees and those who work for or on behalf
of Vodafone. It sets out the standards of behaviour expected in relation
to areas such as insider dealing, bribery and raising concerns through
the whistle blowing process (known internally as “Speak Up”).
Going concern
The going concern statement required by the Listing Rules and the
Code is set out in the “Directors’ statement of responsibility” on page 84.
Political donations
No political donations under the Companies Act 2006 have been
made during the year. It is our Group policy not to make political
donations or incur political expenditure as those expressions are
normally understood.
US listing requirements
As Vodafone’s American depositary shares are listed on the NASDAQ
Stock Market LLC (‘NASDAQ’), we are required to disclose a summary
ofany material differences between the corporate governance
practices we follow and those of US companies listed on NASDAQ.
Vodafone’s corporate governance practices are primarily based
on UKrequirements but substantially conform to those required
of US companies listed on NASDAQ. The material differences are
as follows:
Independence
Different tests of independence for Board members are applied under
the Code and the NASDAQ rules. The Board is not required to take into
consideration NASDAQ’s detailed denitions ofindependence assetout
in the NASDAQ rules.
In accordance with the Code, the Board has carried out an assessment
based on the independence requirements of the Code and has
determined that, in its judgement, all of Vodafone’s non-executive
directors (who make up the majority of the Board) are independent
within the meaning of those requirements.
Committees
The NASDAQ rules require US companies to have a nominations
committee, an audit committee and a compensation committee, each
composed entirely of independent directors, with the nominations
committee and the audit committee each required to have awritten
charter which addresses the committee’s purpose and responsibilities,
and the compensation committee having sole authority and adequate
funding to engage compensation consultants, independent legal
counsel and other compensation advisors.
Our Nominations and Governance Committee is chaired by the
Chairman of the Board and its other members are independent non-
executive directors. Our Remuneration Committee is composed entirely
of independent non-executive directors.
The Audit and Risk Committee is composed entirely of non-executive
directors, each of whom (i) the Board has determined to be independent
based on the independence requirements of the Code and (ii) meets
the independence requirements of the Exchange Act. We have terms
of reference for our Nominations and Governance Committee, Audit and
Risk Committee and Remuneration Committee,each of which complies
with the requirements of the Code and is available for inspection on our
website (vodafone.com/governance). These terms of reference are
generally responsive to the relevant NASDAQ rules but may not address
all aspects of these rules.
Code of Conduct
Under the NASDAQ rules, US companies must adopt a code
of conductapplicable to all directors, ofcers and employees that
complies with thedenition of a “code of ethics” set out in section
406 ofthe Sarbanes-Oxley Act. Wehave adopted a Code of Ethics
that complies with section 406 which is applicable only to the senior
nancial and principal executive ofcers, and which is available on our
website (vodafone.com/governance). We have also adopted a separate
Code of Conduct which applies to all employees.
Quorum
The quorum required for shareholder meetings, in accordance with
our articles of association, is two shareholders, regardless of the
level of their aggregate share ownership, while US companies listed
on NASDAQ arerequired by the NASDAQ rules to have a minimum
quorum of 33.33% of the shareholders of ordinary shares for
shareholder meetings.
Related party transactions
In lieu of obtaining an independent review of related party transactions
for conicts of interests in accordance with the NASDAQ rules, we seek
shareholder approval for related party transactions that (i) meet certain
nancial thresholds or (ii) have unusual features in accordance with
the Listing Rules issued by the FCA in the United Kingdom (the ‘Listing
Rules’), the Companies Act 2006 and our articles of association.
Further, we use the denition of a “transaction with a related party”
as set out in the Listing Rules, which differs in certain respects from the
denition of “related party transaction” in the NASDAQ rules.
Shareholder approval
We comply with the NASDAQ rules and the Listing Rules, when
determining whether shareholder approval is required for
a proposedtransaction.
Under the NASDAQ rules, whether shareholder approval is required for
a transaction depends on, among other things, the percentage of shares
to be issued or sold in connection with the transaction. Under the
Listing Rules, whether shareholder approval is required for a transaction
depends on, among other things, whether the size of a transaction
exceeds a certain percentage ofthe size of the listed company
undertaking the transaction.