BT 2011 Annual Report Download - page 70

67BT GROUP PLC ANNUAL REPORT & FORM 20-F 2011
REPORT OF THE DIRECTORS
REPORT OF THE DIRECTORS
REPORT OF THE NOMINATING & GOVERNANCE COMMITTEE
Introduction
During the year it was agreed that the Committee should be
renamed the
Nominating & Governance Committee and, in addition
to its existing remit, examine governance and compliance issues. It
was also agreed that five regional governance committees (RGCs)
would be established as sub-committees of the Committee.
The
Nominating & Governance Committee is chaired by the
Chairman. The other members are Tony Ball, Clay Brendish, Eric
Daniels, Patricia Hewitt and Phil Hodkinson.
Five of its six members are independent non-executive directors.
Although he is not independent, the Board believes that Sir Michael
Rake, as Chairman of the Board, is the most appropriate person to
chair the Committee. He would not participate in the selection and
appointment of his successor. The Company Secretary and, where
appropriate, at the invitation of the Chairman, the Chief Executive
attend the Committee’s meetings.
Committee role
The Committee’s terms of reference are available from the Company
Secretary and are posted on our website at www.bt.com/committees.
The
Nominating & Governance Committee ensures an appropriate
balance of experience and abilities on the Board, reviews the size and
composition of the Board and recommends any proposed changes to
the Board.
It also determines and reviews BT’s governance policies including
corporate governance, ethics, business principles, international
trading regulation issues and data protection. The Committee met
four times during the 2011 financial year.
Committee activities
Nominating
The Committee keeps under review the need to refresh the Board,
prepares a description of the specific experience and skills needed
for an appointment, considers candidates who are put forward by
the directors and external consultants, and recommends to the
Board the appointments of all directors after having met short-
listed candidates. It makes recommendations to the Board on
whether to reappoint non-executive directors at the end of terms of
office. It also reviews the time required from the Senior Independent
Director and other non-executive directors to carry out their duties
and advises the Board on succession planning for the positions of
the Chairman, Deputy Chairman and/or Senior Independent
Director, Chief Executive and all other Board appointments.
The Committee reviewed the make-up and size of the Board and its
committees, the overall governance framework, considered a proposal
for the annual re-election of all directors and the appointment of
external facilitators to carry out the next Board evaluation.
The Committee recommended:
•the appointment of both Patricia Hewitt and Eric Daniels be
extended for three years following the expiry of their respective
initial three year terms
•the appointment of Nick Rose as a non-executive director to
strengthen the Board capability in the assessment of audit and
risk issues, as he had held senior executive positions in various
industries
•the appointment of Jasmine Whitbread as a non-executive
director to bring valuable experience to the Board on corporate
responsibility, an area where she has held senior positions both in
the UK and globally
•the appointment of Carl Symon be extended for one year
following the expiry of a nine year term and having reviewed his
independence
•the continuation of the Chairman in his role, having served for
three years, following a review of his performance as part of the
Board evaluation.
All appointments are subject to automatic termination in the event
of a director not being re-elected by shareholders at the AGM.
Governance and compliance
The Committee receives regular reports on the effectiveness of and
compliance with, BT’s governance policies, reviews the corporate
governance and decision making structure and processes
throughout the group, including the regional approach to
governance. It reviews the processes for, and effectiveness of, the
whistleblowing procedures within BT and adopted a code of ethics
for BT’s Chief Executive, Group Finance Director and senior finance
managers as required by the Sarbanes-Oxley Act. The Committee
monitors corporate governance developments around the world
and their impact on the business. It reviews the policy on where BT
does business, the training and communication of governance and
compliance, and the approach to appointments on subsidiaries and
associated companies and conflicts of interest.
The Committee:
•recommended the formation of five RGCs namely: UK and
Republic of Ireland; US and Canada; Latin America; Europe,
Middle East and Africa; and AsiaPac and agreed their terms of
reference;
•received a first report in relation to the establishment of each RGC;
•received a summary of the roll-out of BT’s ethics “adequate
procedures” programme: and
•reviewed the new whistleblowing procedures and confidential
hotline.
The minutes of the
Nominating & Governance Committee meetings
are sent, at their request, to directors who are not members of the
Committee, where appropriate to do so.
Board evaluation
A review was carried out in March and April 2010 by the Chairman
and Company Secretary through a questionnaire and discussion and
the results were discussed by the Board. A number of actions were
implemented to address the points raised, namely:
•a review was undertaken of the composition of the Board and its
Committees. A number of changes have been proposed which
have been implemented;
•the remit of the Audit & Risk Committee has been extended to
cover greater focus on risk management; and
•regular updates and training have been provided to the Board
which have covered areas such as the UK Bribery Act 2010 and
governance developments, and updates on particular areas of
BT’s business operations.
Following the Board evaluation, the Chairman reviewed the
performance of each director and his own performance was reviewed
by the Senior Independent Director in face-to-face meetings.
The Committee agreed that the next annual Board evaluation
would be carried out using an external facilitator. Boardroom
Review have been appointed and have begun a series of interviews
which will lead to a report for discussion by the Board and an
agreed set of actions.
A separate survey about
Audit & Risk Committee effectiveness was also
carried out and the outcome of the survey is in that Committee’s report.
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