BT 2007 Annual Report Download - page 53

BOARD COMPOSITION AND ROLE
The names and biographical details of the directors are given on
pages 49 to 51 in Board of Directors and Operating
Committee. All served throughout the financial year, with the
exception of Deborah Lathen, who was appointed to the Board
on 1 February 2007, and Franc¸ois Barrault, who was appointed
to the Board on 24 April 2007. Sir Anthony Greener served as a
director until 30 September 2006. The Board, which operates as
a single team, is currently made up of the part-time Chairman,
the Chief Executive, five other executive directors and eight
non-executive directors. All of the non-executive directors
during the 2007 financial year met, and continue to meet, the
criteria for independence set out in the Combined Code and are
therefore considered by the Board to be independent. In line
with BT’s policy, the Board comprised a majority of independent
non-executive directors throughout the 2007 financial year.
The Board’s principal focus is the overall strategic direction,
development and control of the group. In support of this, the
Board approves the group’s values, business practice policies,
strategic plans, annual budget, capital expenditure and
investments budgets, larger capital expenditure proposals and
the group’s overall system of internal controls, governance and
compliance authorities. It also has oversight and control of the
group’s operating and financial performance and reviews the risk
register. These responsibilities are set out in a formal statement
of the Board’s role which is available on the company’s website.
The Board has agreed the group’s corporate governance
framework, including empowering the company’s key
management committee, the Operating Committee, to make
decisions on operational and other matters. The roles and
powers of this committee are set out below. A statement of
their powers and the authorities delegated to individual
members of the Operating Committee is available on the group’s
intranet site.
Historically the Board met every month, except in August. The
standard Board cycle changed in the 2006 financial year to nine
meetings each year. The Board met eleven times during the
2007 financial year including two ad hoc meetings to consider
time-critical matters.
The roles of the Chairman and the Chief Executive are
separate. They are set out in written job descriptions, approved
by the Nominating Committee. In addition to chairing the Board,
the Chairman is responsible for consulting the non-executive
directors, particularly the Deputy Chairman, on corporate
governance issues, matters considered by the Nominating
Committee, which the Chairman chairs, and the individual
performance of the non-executive directors. The Chairman and
the non-executive directors hold regular dinners at which they
discuss matters without the executive directors being present.
With the Chief Executive and the Secretary, the Chairman
ensures the Board is kept properly informed, is consulted on all
issues reserved to it and that its decisions are made in a timely
and considered way that enables the directors to fulfil their
fiduciary duties. The Chairman ensures that the views of the
shareholders are known to the Board and considered
appropriately. He represents the company in specified strategic
and Government relationships, as agreed with the Chief
Executive, and generally acts as the bridge between the Board
and the company’s executive team, particularly on the group’s
broad strategic direction. The Chairman’s other current
significant commitments are shown in Board of Directors and
Operating Committee above. The Chief Executive has final
executive responsibility, reporting to the Board, for the success
of the group.
The Secretary manages the provision of timely, accurate and
considered information to the Board for its meetings and, in
consultation with the Chairman and Chief Executive, at other
appropriate times. He recommends to the Chairman and the
Chief Executive, for Board consideration where appropriate, the
company’s corporate governance policies and practices and is
responsible for their communication and implementation. He
advises the Board on appropriate procedures for the
management of its meetings and duties (and the meetings of
the company’s principal committees), as well as the
implementation of corporate governance and compliance within
the group. The appointment and removal of the Secretary is a
matter for the whole Board.
BT’s non-executive directors
The Nominating Committee has agreed and periodically reviews
the combination of experience, skills and other attributes which
the non-executive directors as a whole should bring to the
Board. This profile is used by the Committee, when the
appointment of a non-executive director is being considered, to
assess the suitability of candidates put forward by the directors
and outside consultants. Short-listed candidates meet the
Committee, which then recommends to the Board candidates for
appointment.
The non-executive directors provide a strong, independent
element on the Board. Between them, they bring experience
and independent judgment, gained at the most senior levels of
international business operations and strategy, finance,
marketing, technology, communications and political and
international affairs.
Maarten van den Bergh, the Deputy Chairman, is the senior
independent director. In this capacity and his capacity as the
chairman of the Remuneration Committee, he meets with BT’s
major institutional shareholders. He is available to discuss
matters with institutional shareholders where it would be
inappropriate for those discussions to take place with either the
Chairman or the Chief Executive.
Non-executive directors are appointed initially for three years,
subject to three months’ termination notice from either BT or
the director. At the end of the first three years the appointment
may be continued by mutual agreement. Each non-executive
director is provided, upon appointment, with a letter setting out
the terms of his or her appointment, including membership of
Board committees, the fees to be paid and the time
commitment expected from the director. The letter also covers
such matters as the confidentiality of information and the
company’s share dealing code.
Principal Board committees
The Operating Committee, the company’s key management
committee, meets weekly and is chaired by the Chief Executive.
The other members are the Group Finance Director and the
Chief Executives of BT Retail, BT Wholesale, BT Global Services
and Group Strategy and Operations. The Secretary attends all
meetings and the Group HR Director normally attends meetings.
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 risk
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
Report of the Directors Corporate governance
52 BT Group plc Annual Report & Form 20-F