Barclays 2006 Annual Report Download - page 125

Barclays PLC
Annual Report 2006 121
Governance
2
The main area of focus for the Committee in 2006 was the process of
identifying and appointing a successor to Matthew Barrett as Chairman.
Sir Nigel Rudd led the Committee during this process and he reports on
it separately below. The Committee also received a report from the
Group Chief Executive on executive succession planning.
In late 2006, the Committee carried out a review of its effectiveness as
part of the overall Board Effectiveness Review. The review concluded
that the Committee continues to operate effectively.
Board Audit Committee
Number of
meetings Number of
eligible to meetings
attend attended
Member in 2006 in 2006
Stephen Russell (Chairman) 8 8
Fulvio Conti (from 1st September 2006) 3 3
Professor Dame Sandra Dawson 8 7
Sir Andrew Likierman 8 8
Robert Steel (to 11th October 2006) 6 5
Chairman’s Succession
During 2006, I was tasked with leading the Committee in the process
of selecting and recommending a successor to Matthew Barrett as
Chairman. On behalf of the Committee, I engaged a firm of external
recruitment consultants to identify potential candidates against the
specification for the role set out in the Chairman’s role profile and the
criteria we had established. We particularly wanted candidates with
a good understanding of the financial services industry and proven
ability as Chairman of a large publicly quoted company, whether in
the UK or globally.
The Committee reviewed a short-list of internal and external
candidates. Marcus Agius emerged as the candidate with the
experience and capability to succeed Matthew Barrett as Chairman.
I facilitated a series of meetings between Marcus, the Group Chief
Executive and members of the Committee before the Committee
recommended to the Board that we proceed with his appointment.
Marcus then met with other Directors and I am delighted that the
Board accepted the Committee’s recommendation to appoint him
as Chairman.
I would like to record my thanks to Matthew Barrett for his
assistance in ensuring a smooth transition to the new leadership
team. In Marcus Agius I believe we have found a worthy successor
as Chairman. He has a proven track record in financial services and
as Chairman of a major public company and I look forward to
working with him and supporting him in 2007.
Sir Nigel Rudd, DL
Deputy Chairman
8th March 2007
The Committee met eight times in 2006 and the table sets out
Committee members’ attendance. Fulvio Conti was appointed to the
Committee in September and Robert Steel left the Committee on
resigning from the Board in October. Sir Andrew Likierman continued
in his role as the designated ‘financial expert’ as defined by the US
Sarbanes-Oxley Act of 2002 and has ‘recent and relevant financial
experience’ as recommended by the Code. The Board’s assessment
is based on Sir Andrew’s accounting background and his career with
HM Treasury, further details of which can be found in his biography
on page 112. Fulvio Conti, who has held a number of Chief Financial
Officer positions during his career, brings additional, relevant financial
experience to the Committee.
The chart sets out how the Committee allocated its time at its meetings
during 2006.
A typical meeting of the Committee includes a report on control issues
of Group level significance, along with an in-depth review of the control
environment at one of the Group’s major businesses and progress
reports on any particular aspects of the Group’s control environment
that may have been requested by the Committee. It also includes a
report on the non-audit services provided by the auditor, an update on
regulatory compliance issues and any whistleblowing incidents and a
report from the Barclays Director of Internal Audit, including a private
session held without management present.
Stephen Russell, the Chairman of the Committee, reports on the
Committee’s activities in more detail below.
Board Audit Committee Chairman’s Statement
I am pleased to report to you on the Committee’s activities in 2006.
We met eight times in 2006. We also met privately with the external
and internal auditors after five of our meetings.
Our responsibilities as your Board Audit Committee are set out
in the Committee’s terms of reference, which are available at
www.investorrelations.barclays.com. I have set out below some
of the key activities of the Committee in 2006.
External Auditors
Our responsibilities include approving and reviewing the appointment
and retirement of the external auditors and overseeing their
relationship with the Group. In late 2006, we carried out our annual
evaluation of the effectiveness of the external auditors, using an
evaluation questionnaire, which was completed by senior members
of the Finance function. The results of the effectiveness review were
considered at our meeting in February 2007.
Other
1%
Financial results
27%
External audit matters
7%
Business control
environment
21%
Governance and
compliance
15%
Board Audit Committee allocation of time
Internal audit matters
16%
Internal control issues
13%