BT 2012 Annual Report Download - page 93

90 Governance
Telecommunications plc, has provided an indemnity in respect of a
similar group of people who would be covered by the above insurance.
Neither the insurance nor the indemnity provides cover where the
person has acted fraudulently or dishonestly.
Interest of management in certain transactions
During and at the end of 2012, none of BT’s directors was materially
interested in any material transaction in relation to the group’s
businessand none is materially interested in any presently proposed
material transactions.
Power to authorise conflicts
All directors have a duty under the Companies Act 2006 (the 2006 Act)
to avoid a situation in which he or she has or can have a direct or indirect
interest that conflicts or possibly may conflict with the interests of the
company. The company’s Articles of Association include provisions for
dealing with directors’ conflicts of interest in accordance with the 2006
Act. The company has procedures in place, which it follows, to deal with
situations where directors may have any such conflicts, which require
the Board to:
 consider each conflict situation separately on its particular facts
 consider the conflict situation in conjunction with the rest of their
duties under the 2006 Act
 keep records and Board minutes as to authorisations granted by
directors and the scope of any approvals given
 regularly review conflict authorisation.
General information
US Regulation
New York Stock Exchange
BT, as a foreign issuer with American Depositary Shares listed on the
New York Stock Exchange (NYSE), is obliged to disclose any significant
ways in which its corporate governance practices differ from the
corporate governance listing standards of the NYSE.
We have reviewed the NYSE’s listing standards and believe that our
corporate governance practices are consistent with them, with the
following exception where we do not meet the strict requirements set out
in the standards. These state that companies must have a nominating/
corporate governance committee composed entirely of independent
directors and with written terms of reference which, in addition to
identifying individuals qualified to become board members, develops
and recommends to the Board a set of corporate governance principles
applicable to the company. We have a
Nominating & Governance
Committee
whose terms of reference include governance and compliance
issues (see Nominating & Governance Committee Chairman’s report on
page 72). The
Nominating & Governance Committee’s terms of reference
are in line with the requirements set out in the standards. However, the
Committee is chaired by the Chairman, Sir Michael Rake, who is not
considered independent under the NYSE’s listing standards. The Board
and the
Nominating & Governance Committee are made up of a majority
of independent, non-executive directors.
The US Sarbanes-Oxley Act of 2002, (Sarbanes-Oxley Act) the
US Securities and Exchange Commission (SEC) and NYSE rules
require companies to comply with certain provisions relating to
their audit committee. These include the independence of audit
committee members and procedures for the treatment of complaints
regardingaccounting or auditing matters. We are fully compliant with
these requirements.
US Sarbanes-Oxley Act of 2002
BT has securities registered with the SEC. As a result, we must comply
with those provisions of the Sarbanes-Oxley Act applicable to foreign
issuers. We comply with the legal and regulatory requirements
introduced pursuant to this legislation, in so far as they are applicable.
The
Audit & Risk Committee includes members Phil Hodkinson and Nick
Rose who, in the opinion of the Board, are ‘audit committee financial
experts’ and who are independent (as defined for this purpose). The
Board considers that the Committee’s members have broad commercial
knowledge and extensive business leadership experience, having held
between them various prior roles in major business, Government,
financial management, treasury and financial function supervision and
that this constitutes a broad and suitable mix of business and financial
experience on the Committee.
The code of ethics adopted for the purposes of the
Sarbanes-Oxley Act is available at www.bt.com/ethics
The code applies to the Chief Executive, Group Finance Director and
senior finance managers.
Disclosure controls and procedures
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 & 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 concluded that BT’s
disclosure controls and procedures are also effective to ensure that the
information required to be disclosed by the company in reports that
it files under the Securities Exchange Act of 1934 (Exchange Act) is
recorded, processed, summarised and reported within the time periods
specified in the rules and forms of theSEC.
The Chief Executive and Group Finance Director have also provided the
certifications required by the Sarbanes-Oxley Act.
Internal control over financial reporting
BT’s management is responsible for establishing and maintaining
adequate internal control over financial reporting for the group
including the consolidation process. Internal control over financial
reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external reporting purposes in accordance with IFRS.
Management conducted an assessment of the effectiveness of internal
control over financial reporting based on the framework for internal
control evaluation contained in the Revised Guidance for Directors on
the UK Governance Code published by the Financial Reporting Council
(the Turnbull Guidance).
Directors’ information
Overview
BusinessStrategy
Performance
Governance
Financial statements
Additional information Overview
BusinessStrategy
Performance
Governance
Financial statements
Additional information