Barclays 2004 Annual Report Download - page 25

Barclays PLC Annual Report 2004
The Board considers Sir Nigel’s continued chairmanship of the Board
HR and Remuneration Committee as essential for continuity. It will also
allow new members of the Committee to become fully effective while
the Board considers the succession to Chairman of the Committee.
Sir Richard Broadbent was appointed to the Board HR and Remuneration
Committee during the year and another member will be appointed
during 2005. The continued membership of both Sir Nigel and David
Arculus, who has served on the Committee since 1997, is considered
to be of particular importance in a period when the Group is
introducing a new long-term incentive plan.
Having considered the matter carefully, the Board has determined that
each of the non-executive Directors is independent. In line with the
Code’s recommendation, Sir Nigel will stand for re-election annually
by shareholders.
Board Committees
Specific responsibilities have been delegated to Board Committees,
which have access to independent expert advice at the Group’s expense.
The terms of reference for the principal Board Committees are available,
on request, from the Company Secretary and from the Company’s
website at www.barclays.com. The principal Board Committees are the
Board Audit Committee, the Board HR and Remuneration Committee,
the Board Corporate Governance and Nominations Committee and the
Board Risk Committee. Membership of each Committee is set out in the
Directors’ biographies on pages 16 to 18.
Board HR and Remuneration Committee
During 2004, the remit of the Board Remuneration Committee was
extended to include reviewing strategic Human Resources (HR) issues
and it was renamed the Board HR and Remuneration Committee.
The Committee, chaired by Sir Nigel Rudd, meets at least four times a
year. It considers matters relating to executive reward, including policy
for executive Directors’ and senior executives’ remuneration and their
individual remuneration awards. The Committee approves changes to
incentive and benefits plans applicable to senior executives and
governs employee share schemes. Details of the Committee’s role
in governing Directors’ rewards are set out in Barclays Report on
Remuneration on pages 27 to 39.
The Committee also reviews strategic HR issues including, but not
limited to, employee retention, motivation and commitment; Equality
and Diversity; significant employee relations matters and the
availability of talent for senior roles below executive Director level.
Board Corporate Governance and Nominations Committee
The role of this Committee was also revised during the year and
the remit extended to include corporate governance issues.
The Committee was consequently renamed the Board Corporate
Governance and Nominations Committee. While the Committee met
only once during 2004, it will in future meet at least three times a year.
The Committee is responsible for considering matters relating to the
composition of the Board, including the appointment of new Directors,
making recommendations to the Board as appropriate. It also reviews
annually the succession plans for the Chairman and Group Chief
Executive and other key Board positions. The Chairman of the Board
chairs the Committee, except when the Committee is considering the
Chairman’s succession, in which case the Senior Independent Director
chairs the Committee.
The Committee’s responsibilities were extended during the year to
cover corporate governance issues, including consideration of the
Group’s responses to important developments in corporate
governance and overseeing the annual performance evaluation of the
Board, each committee of the Board, the Chairman of the Board (led
by the Senior Independent Director), the Group Chief Executive and
individual Directors.
During 2004, the Committee reviewed the composition of the Board
and each of the Board Committees and determined its view of the
ideal mix of skills and experience required. It also reviewed the process
for appointing new Directors and appointed new external search
consultants to assist it in identifying potential new Directors.
In addition, the Committee reviewed and approved the approach
to Board, Board Committee and individual Director evaluation.
Board Audit Committee Chairman’s Statement
Membership
The Committee currently comprises four independent non-executive
Directors. During the year, the Board appointed Sir Andrew Likierman
as a member of the Committee and has determined him to be a
‘financial expert’ as defined by the US Sarbanes-Oxley Act of 2002 and
that he has ‘recent and relevant financial experience’ as recommended
by the Code.
Meetings
During 2004, the Committee met five times with senior management,
including the Group Chief Executive or Deputy Chief Executive, the
Vice-Chairman (Chris Lendrum), the Group Finance Director, the
Risk Director and the Internal Audit Director. The lead audit partner
of the external auditors, PricewaterhouseCoopers LLP, also attended
each meeting.
The Committee receives at each meeting comprehensive reports from
management and the internal and external auditors to enable it to
discharge its responsibilities. The key responsibilities of the Committee
are to approve and review the appointment and retirement of the
external auditors, as well as oversee their relationship with the Group
including consideration and approval of all audit and non-audit
services provided by the external auditor; to monitor the effectiveness
of and receive regular reports from the internal audit function; to
review the effectiveness of the Group’s risk management standards
and review reports on control issues of Group level significance; to
review the Group’s annual and interim financial statements, including
the effectiveness of the Group’s disclosure controls and procedures
and systems of internal control over financial reporting; to review
arrangements established by management for compliance with the
requirements of the Group’s regulators and to receive reports on the
effectiveness of the Group’s whistleblowing arrangements, as well as
reports on specific instances of whistleblowing. The Committee also
met privately with the external and internal auditors after each
Committee meeting.
The Committee also meets once a year specifically to review and
approve the audit plans for the following year for the external and
internal auditors.
Relationship with the External Auditors
The Committee annually appraises the effectiveness of the external
auditors. The evaluation process includes a questionnaire completed
by senior members of the Finance function. The results are then
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