BT 2005 Annual Report Download - page 54

Meetings attendance
The following table shows the attendance of directors at
meetings of the Board and Audit, Remuneration and
Nominating committees during the 2005 financial year.
Board
Audit
Committee
Remuneration
Committee
Nominating
Committee
(Attendance is shown only for a committee
member)
Number of meetings/
Director 14 4 5 4
Sir Christopher Bland 14 4
Maarten van den Bergh 12 4 5 4
Clay Brendish 14 3
Pierre Danon
a
11
Andy Green 14
Sir Anthony Greener 13 4 5 4
Lou Hughes
b
522
Margaret Jay 12 4
Hanif Lalani
c
2
Ian Livingston 13
John Nelson 13 3 3
Paul Reynolds 13
Carl Symon 14 4 5
Ben Verwaayen 14
a
Resigned as a director on 28 February 2005
b
Granted unpaid leave of absence by the Board from 1 September 2004 to
30 June 2005 to lead the civil reconstruction effort for the US Government
in Afghanistan
c
Appointed a director from 7 February 2005
Operating Committee
The Chief Executive, Ben Verwaayen, chairs the Operating
Committee, which meets weekly. The other members are
the Group Finance Director, the Chief Executives of BT
Retail, BT Wholesale and BT Global Services and the Chief
Broadband Officer. The Secretary attends all meetings.
The Group Strategy and the Group HR Directors normally
attend each meeting. The Committee has collective
responsibility for running the group’s business end-to-
end. To do that, it develops the group’s strategy and
budget for Board approval, recommends to the Board the
group’s capital expenditure and investments budgets,
monitors the financial, operational and customer quality
of service performance of the whole group, reviews the
group’s risks register, allocates resources across the group
within plans agreed by the Board, plans and delivers
major cross-business programmes and reviews the senior
talent base and succession plans of the group. Within the
group’s corporate governance framework, approved by
the Board, the Operating Committee is empowered to
approve up to limits after which Board approval is
required, capital expenditure, disposals of fixed assets,
the making of investments by the group and divestments.
It is authorised to delegate these approvals, up to its own
limits, to senior executives.
Internal control and risk management
The Board is responsible for the group’s systems of
internal control and risk management and for reviewing
the effectiveness of those systems. Such systems are
designed to manage, rather than eliminate, the risk of
failure to achieve business objectives; any system can
provide only reasonable and not absolute assurance
against material misstatement or loss.
The Board also takes account of significant social,
environmental and ethical matters that relate to BT’s
businesses and reviews annually BT’s corporate social
responsibility. The company’s workplace practices,
specific environmental, social and ethical risks and
opportunities and details of underlying governance
processes are dealt with in Our people and Our
commitment to society.
BT has processes for identifying, evaluating and
managing the significant risks faced by the group. These
processes have been in place for the whole of the 2005
financial year and have continued up to the date on which
this document was approved. The processes are in
accordance with the Turnbull guidance for directors
published in the UK in September 1999.
Risk assessment and evaluation takes place as an
integral part of the group’s annual strategic planning
cycle. The group has a detailed risk management process,
culminating in a Board review, which identifies the key
risks facing the group and each business unit. This
information is reviewed by senior management as part of
the strategic review. The group’s current key risks are
summarised in Risk factors of this document.
The key features of the risk management process
comprise the following procedures:
&senior executives, led by the Secretary, review the
group’s key risks and have created a group risk
register, describing the risks, owners and mitigation
strategies. This is reviewed by the Operating Committee
before being reviewed and approved by the Board.
&the lines of business carry out risk assessments of their
operations, have created registers relating to those
risks, and ensure that the key risks are addressed.
&senior management report regularly to the Group
Finance Director on the operation of internal controls
in their area of responsibility.
&the Chief Executive receives annual reports from senior
executives with responsibilities for major group
operations with their opinion on the effectiveness of
the operation of internal controls during the financial
year.
&the group’s internal auditors carry out continuing
assessments of the quality of risk management and
control. Internal Audit reports to the management and
the Audit Committee on the status of specific areas
identified for improvement. Internal audit also
promotes effective risk management in the lines of
business operations.
&the Audit Committee,onbehalf of the Board, considers
the effectiveness of the operation of internal control
processes and procedures in the group during the
financial year, including the review of reports from the
internal auditors and from the external auditors, and
reports its conclusions to the Board. The Audit
Committee has carried out these actions for the 2005
financial year.
New subsidiaries acquired during the year have not
been included in the above risk management process.
They will be included for the 2006 financial year.
Material joint ventures and associates, which BT does
not control, outside the UK have not been dealt with as
part of the group for the purposes of this internal control
assessment.
The Board has approved the formal statement of
matters which are reserved to it for consideration,
approval or oversight. It has also approved the group’s
corporate governance framework, which sets out the high
level principles by which the group is managed and the
responsibilities and powers of the Operating Committee
Corporate governance BT Group plc Annual Report and Form 20-F 2005 53