BT 2000 Annual Report Download - page 46

Corporate Governance
Annual report and Form 20-F 45
BT's policy is to achieve best practice in our standards of
business integrity in all our activities around the world.
This includes a commitment to follow the highest
standards of corporate governance throughout the BT
group. This section of the annual report describes how BT
has applied the principles set out in Section 1 of the
Combined Code on Corporate Governance (the Code).
The directors consider that, throughout the year, BT
has fully complied with the provisions set out in Section 1
of the Code.
The Board
The Board continues to meet every month, except in
August. Its principal focus is the overall strategic
direction, development and control of the group. Key
matters, such as approval of the group's strategic plans
and annual operating plan and budget, and monitoring the
company's operating and ¢nancial performance, are
reserved for the Board. These reserved matters are set out
in a formal statement of the Board's role. It is sent to all
directors, key senior executives and managers involved in
the management of the company's principal operations,
together with information on the authorities delegated by
the Board and the terms of reference and membership of
the principal Board and management committees.
BT's aim is for the Board to comprise approximately
two-thirds non-executive directors. Three of the twelve are
full-time executives. The Chairman is part-time. Eight of
the twelve current directors are non-executive. They are all
independent of the management of BT. Between them, the
non-executive directors bring experience and independent
judgement at a senior level of international business
operations and strategy, marketing, communications and
international a¡airs.
The non-executive directors provide a strong
independent element on the Board with Lord Marshall,
Deputy Chairman, as the senior independent member.
However, the Board operates as a single team.
Non-executive directors are appointed initially for
three years. Towards the end of that period, the Board will
consider whether to continue the appointment, which will
then become terminable on twelve months' notice from
either BT or the director. Appointments will be reviewed
again by the Board before the end of the sixth year.
Normally, appointments will be for a maximum of ten
years. The Deputy Chairman's contract was renewed for a
second three-year term from 1 April 1998. It may be
terminated on twelve months' notice.
All directors are required by the company's articles of
association to be elected by shareholders at the ¢rst annual
general meeting after their appointment. At least one third
of the other directors must seek re-election by the
shareholders each year. This can mean that directors are
not necessarily re-elected every three years. To comply
with the Code BT's policy is that, in practice, no director
stays in o¤ce for more than three years without re-election.
The Chairman and executive directors have service
agreements, which are approved by the Remuneration
Committee. Information about the periods of these contracts
is in the Report on directors' remuneration.
The Board has a procedure for directors, in furtherance
of their duties, to take independent professional advice if
necessary, at the company's expense. In addition, all
directors have access to the advice and services of the
Secretary, the removal of whom is a matter for the whole
Board. He advises the Board on appropriate procedures for
the management of its meetings and duties, as well as the
implementation of corporate governance and compliance in
the group.
On appointment, directors take part in an induction
programme when they receive information about BT, the
formal statement of the Board's role, the powers which
have been delegated to the company's senior managers and
management committees and latest ¢nancial information
about the group. This is supplemented by visits to key BT
locations and meetings with members of the Group
Executive Committee and other key senior executives.
Throughout their period in o¤ce they are updated on BT's
business, the competitive and regulatory environments in
which it operates and other changes, by written brie¢ngs
and meetings with senior BT executives. Directors are also
advised on appointment of their legal and other obligations
as a director of a listed company, both in writing and in
face-to-face meetings with the Secretary. They are reminded
of these obligations each year and are encouraged to attend
training courses at the company's expense.
Guidelines are in place concerning the content,
presentation and delivery of papers to directors for each
Board meeting, so that the directors have enough
information to be properly briefed.
Principal Board committees
The Chief Executive, Sir Peter Bon¢eld, chairs the
Group Executive Committee. The other members are the
Group Finance Director, the Group Managing Director
BT UK, the President and Chief Executive BT Worldwide
and BT Solutions, the Group Commercial Director and
Secretary, the Group Personnel Director, the Group
Director Strategy and Development, the Group
Communications Director, the Group Engineering