BT 2010 Annual Report Download - page 62

60 BT GROUP PLC ANNUAL REPORT & FORM 20-F
THE BOARD
Introduction
BT Group plc is the listed holding company for the BT group of
companies: its shares are listed on the London Stock Exchange and
on the New York Stock Exchange in the form of American
Depositary Shares.
The directors submit their report and the audited financial
statements of the company, BT Group plc, and the group, which
includes its subsidiary undertakings, for the 2010 financial year.
The Review of the year on pages 10 to 40 forms part of this
report. The audited financial statements are presented on pages 87
to 144 and 149.
Corporate governance statement
We are committed to operating in accordance with best practice in
business integrity and maintaining the highest standards of
financial reporting, corporate governance and ethics. The directors
consider that BT has, throughout the year, complied with the
provisions set out in Section 1 of the 2008 Combined Code on
Corporate Governance (the Code) and applied the main principles
of the Code as described in pages 58 to 82 of this Report. The Code
and associated guidance can be found on the Financial Reporting
Council website at www.frc.org.uk/corporate/combinedcode.cfm
Directors
The names and biographical details of the directors are given on
pages 58 and 59 in Board of Directors and Operating Committee.
Changes to the composition of the Board from 1 April 2009 are
set out in the table below:
Maarten van den Bergh retired from the Board on 15 July 2009. He
was succeeded as Senior Independent Director by Rt Hon Patricia
Hewitt, who also became chair of the
Remuneration Committee
and the Pension Scheme Performance Review Group , and a
member of the
Nominating Committee .
Governance and role of the Board
The Board, which operates as a single team, is made up of the
part-time Chairman, the Chief Executive, two other executive
directors and six non-executive directors. All the non-executive
directors during the 2010 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. The Board
viewed the Chairman as independent at the time of his
appointment. In line with BT’s policy, the Board comprised a
majority of independent non-executive directors throughout the
2010 financial year.
The Board is ultimately responsible for the management of the
group’s operations in addition to discharging certain legal
responsibilities. It has final responsibility for the group’s strategy
and for overseeing the group’s performance. Its principal focus is on:
Strategy
Development
Growing shareholder value
Oversight and control
Corporate governance.
It approves BT’s:
values, ethics and business policies and practices
strategic plans
annual budget
capital expenditure and investments budgets
larger capital expenditure proposals
the overall system of internal controls, governance and
compliance authorities.
The Board also oversees controls, 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
at www.bt.com/board
The Board has agreed the corporate governance framework,
including giving authority to the 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.
The Board normally meets nine times each year as it did during
the 2010 financial year.
The roles of the Chairman and the Chief Executive are separate.
They are set out in written job descriptions, approved by the
Nominating Committee . As well as chairing the Board, the
Chairman consults the non-executive directors, particularly the
Senior Independent Director, 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 meetings at which they discuss matters without the
executive directors being present. With the Chief Executive and the
Company Secretary, the Chairman ensures that 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 BT in specified strategic
and Government relationships, as agreed with the Chief Executive,
and generally acts as the bridge between the Board and the
executive team, particularly on BT’s broad strategic direction. The
Chairman’s other current significant commitments are shown in
Board of Directors and Operating Committee on page 58. The
Chief Executive has final executive responsibility, reporting to the
Board, for the success of the group.
The Company 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,
corporate governance policies and practices and is responsible for
communicating and implementing them. He advises the Board on
appropriate procedures for the management of its meetings and
duties (and the meetings of the main committees), as well as
corporate governance and compliance within the group. The
appointment and removal of the Company Secretary is a matter for
the whole Board.
REPORT OF THE DIRECTORS
Former directors Date of change
Matti Alahuhta 31 May 2009
Maarten van den Bergh 15 July 2009
Hanif Lalani 7 January 2010
Deborah Lathen 31 January 2010
New director
Tony Ball 16 July 2009