BT 2005 Annual Report Download - page 55

and the group’s senior executives. As part of this
framework the development and implementation of
certain powers relating to group-wide policies and
practices are reserved to identified senior executives.
Relations with shareholders
Senior executives, led by the Chief Executive and the
Group Finance Director and including, as appropriate, the
other executive directors, hold meetings with the
company’s principal institutional shareholders to discuss
the company’s strategy, financial performance and
specific major investment activities. The Deputy
Chairman also attends, at his discretion and in
consultation with the Chairman and the Chief Executive,
meetings with shareholders during the year. The company
also maintains contact, when appropriate, through the
chairman of the Remuneration Committee and other senior
executives to discuss overall remuneration policies and
plans. Contact with institutional shareholders (and with
financial analysts, brokers and the media) is controlled by
written guidelines to ensure the protection of share price
sensitive information that has not already been made
generally available to the company’s shareholders. The
directors are provided with either full or summarised
reports and other written briefings from the company’s
major shareholders and analysts and are regularly
informed by the Secretary about the holdings of its
principal shareholders. The Secretary also surveys the
company’s retail shareholders about the quality of the
company’s shareholder communications and share
registration services.
We are continuing our policy that shareholders vote on
the annual report at the AGM. Shareholders will also again
be asked to vote on the Report on directors’
remuneration.
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 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 and at the end of the meeting. 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, Nominating 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. All external announcements are also reviewed
for accuracy and compliance requirements by a
committee of senior, functional executives, the Disclosure
Committee, which is chaired by the Secretary.
Statement of business practice
To reinforce our commitment to achieve best practice in
our standards of business integrity and ethics, 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. Copies are also sent to the
employees of newly acquired subsidiaries.
These high-level principles are supported by a
continuing and 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.
The helpline number is published externally. We also
continue to require our agents and contractors to apply
these principles when representing 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 funds’
assets can only be used in accordance with their
respective rules and for no other purpose.
Financial statements
A statement by the directors of their responsibilities for
preparing the financial statements is included in the
Statement of directors’ responsibility. The directors’
statement on going concern is on page 38 of the Financial
review.
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
applicable to foreign issuers. BT will comply with the legal
and regulatory requirements introduced pursuant to this
legislation, in so far as they are applicable to the group.
Given the narrow and prescriptive definition under the
relevant SEC rules, it is the opinion of the Board that the
Audit Committee does not include a member who is an
‘audit committee financial expert’. However, the Board
considers that the Committee’s members have broad
commercial experience and extensive business leadership,
having held various roles in accountancy, financial
management and supervision, treasury and corporate
finance and that there is a broad and suitable mix of
business, financial and IT experience on the Committee.
The Board and its committees are keeping the
appointment of a financial expert, as defined by US law,
under review.
The Chief Executive and Group Finance Director, after
evaluating the effectiveness of BT’s disclosure controls
and procedures as of the end of the period covered by this
Annual Report and Form 20-F, have concluded that, as of
such date, BT’s disclosure controls and procedures were
effective to ensure that material information relating to
BT was made known to them by others within the group.
The Chief Executive and Group Finance Director have also
54 BT Group plc Annual Report and Form 20-F 2005 Corporate governance