BT 2003 Annual Report Download - page 57

Corporate governance
asked to vote on the company’s remuneration policy
at previous AGMs.
It is part of our policy to involve shareholders fully
in the affairs of the company and to give them
the opportunity at the AGM to ask questions about
the company’s activities and prospects. We also give
the shareholders the opportunity to vote on every
substantially different issue by proposing a separate
resolution for each issue. The Board’s opinion is that
the re-election and the fees of the auditors are
inter-related matters and should therefore be dealt with
in one resolution.
The proxy votes for and against each resolution,
as well as abstentions, will be counted before the AGM
and the results will be made available at the meeting
after the shareholders have voted on each resolution
on a show of hands.
It is our policy for all directors to attend the AGM
if at all possible. Whilst, because of ill health or other
pressing reasons, this may not always be possible, in
normal circumstances this means that the chairman of
the Audit and Remuneration Committees is at the AGM
and is available to answer relevant questions.
The Annual Review and, if requested, the Annual
Report and Form 20-F, together with the Notice of the
AGM, are sent to shareholders in the most
cost-effective fashion, given the large number of
shareholders. We aim to give as much notice as
possible and at least 21 clear days, as required by
the company’s articles of association. In practice, these
documents are being sent to shareholders more than
20 working days before the AGM.
Established procedures ensure the timely release
of share price sensitive information and the publication
of the company’s financial results and regulatory
financial statements.
Non audit services provided by the external
auditors
As a result of regulatory or similar requirements, it is
necessary to employ the company’s external auditors
for certain non-audit work. In order to maintain
the independence of the external auditors, the Board
has determined policies as to what non-audit services
can be provided by the company’s external auditors
and the approval processes related to them. Under
those policies work of a consultancy nature will not be
offered to the external auditors unless there are clear
efficiencies and value added benefits to the company.
The Audit Committee monitors the level of non-audit
fees paid to the external auditors.
Statement of business practice
To reinforce our commitment to achieve best practice
in our standards of business integrity, BT has a written
statement of business practice (The Way We Work).
The statement covers all our operations and reflects
the expectations in the area of corporate governance
and business practice standards. A copy of the
statement has been sent to every employee and is
also available on the company’s intranet site.
These high-level principles are supported by
a comprehensive communications programme and
online training. A confidential helpline and e-mail
facility are also available to employees who have
questions about the application of these principles.
We also continue to require our agents and contractors
to apply these principles when representing BT.
Political donations
It has always been BT’s policy that no company in
the group shall make cash contributions to any political
party. This policy continues. However, the Companies
Act 1985 requires companies to obtain shareholder
authority before they can make donations to EU
political organisations (which includes UK political
parties). The definition of political donations used in
the Act is very much broader than the ordinary sense
in which these words are used. As a result, it covers
activities which form part of normal relationships
between BT and the political machinery. These
activities are not designed to support any political party
or to influence public support for a particular party and
would not be thought of as political donations in
the everyday sense of these words. They are entirely
non-political in nature and are designed so that BT can
make MPs and others aware of key industry issues and
matters affecting the company.
The authority we are requesting from shareholders
at the AGM is not designed to change the company’s
stated policy of not making cash contributions. It will,
however, ensure that BT acts within the provisions
of the current UK law when carrying out the above
activities. They are carried out on an even-handed
basis related broadly to the major UK political parties’
electoral strength and the company believes that they
make an important contribution to the success of BT.
Pension funds
BT’s two main pension funds – the BT Pension Scheme
and the BT Retirement Plan – are not controlled by
the Board but by separate trustees who are company
and union nominees, under independent chairmen.
The trustees look after the assets of the funds, which
are held separately from those of the company.
The pension schemes’ funds can only be used in
accordance with their respective rules and for no
other purpose.
Reporting
A statement by the directors of their responsibilities
for preparing the financial statements is included in
the Statement of directors’ responsibility on page 73.
US Sarbanes-Oxley Act of 2002
BT has securities registered with the US Securities and
Exchange Commission (SEC). As a result, BT is obliged
to comply with those provisions of the Sarbanes-Oxley
Act (the ‘‘Act’’) applicable to foreign issuers. BT will
comply with the legal and regulatory requirements
introduced pursuant to this new legislation, in so far
as they are applicable to the group.
In accordance with the recommendations issued by
the SEC, BT has established a Disclosure Committee
comprising appropriate senior executives which reports
to the Chief Executive and Group Finance Director.
56 BT Annual Report and Form 20-F 2003