Barclays 2007 Annual Report Download - page 140

Corporate governance
Corporate governance report
138 Barclays PLC Annual Report 2007
Board Audit Committee
Stephen Russell (Chairman)
Fulvio Conti
Professor Dame Sandra Dawson
Sir Andrew Likierman
Sir Michael Rake (from 1st January 2008)
Secretary: Lawrence Dickinson
The Board Audit Committee terms of reference are available from
the Corporate Governance section at: http://www.aboutbarclays.com
There are a number of regular attendees at each meeting, including the
Group Chief Executive, Group Finance Director, Barclays Internal Audit
Director, Barclays Risk Director, Barclays General Counsel and the lead
external audit partner. The Board Audit Committee members meet with
the external auditors and the Barclays Internal Audit Director, without
management present, as part of most Committee meetings. Sir Andrew
Likierman continued in his role as ‘financial expert’ as defined by the
US Sarbanes-Oxley Act of 2002 and has ‘recent and relevant financial
experience’ as recommended by the Code, as a result of his accountancy
background and his career with HM Treasury. Since the year end, Sir Michael
Rake, a former Chairman of KPMG International, has been appointed a
member of the Committee.
Activities in 2007
The chart below illustrates how the Committee spent its time in 2007.
During 2007, the Committee:
– considered control issues of Group level significance for different areas
of the business;
– received reports on the control environment in each of the following
areas: Barclaycard, BGI, Barclays Commercial Bank, Western Europe,
Emerging Markets, GRCB IT, UK Retail Banking and Barclays Capital;
– reviewed the effectiveness and independence of the Group
statutory auditor;
– monitored the performance of the Internal Audit function;
– reviewed internal control and risk management systems;
– considered the provision of non-audit services by the Group statutory
auditor – more details can be found in the panel opposite;
– approved the re-appointment, remuneration and engagement letter
of the Group statutory auditor;
– reviewed the Annual Report and Accounts and Preliminary and Interim
Results;
– considered the effectiveness of internal controls over financial reporting;
– received reports from the external and internal auditors;
– reviewed the Global Internal Audit Plan;
– received regular reports on concerns raised by employees
(whistleblowing – more details can be found on page 139); and
– considered the Fraud Risk Control Framework.
The Committee also received regular updates during 2007 on:
– Basel II;
– MiFID;
– Sarbanes-Oxley compliance; and
– Sanctions compliance.
In February 2008, the Committee reviewed its activities in 2007
against its terms of reference and concluded that it had discharged
the responsibilities delegated to it under those terms of reference.
Board Audit Committee allocation of time
1
2
3
4
1 Internal control issues 9%
2 Financial results 33%
3 Internal audit matters 9%
4 External audit matters 9%
5 Business control environment 25%
6 Governance and compliance 14%
7 Other 1%
5
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Non-audit services policy
The Committee takes seriously its responsibility to put in place
safeguards to auditor objectivity and independence. It has therefore
established a policy on the provision of services by the Group’s
statutory auditor. The Policy describes the circumstances in which the
Auditor may be permitted to undertake non-audit work for the Group.
The Committee oversees compliance with the Policy and considers
and approves requests to use the Auditor for non-audit work.
Allowable non-audit services require pre-approval before they can be
carried out. For allowable services, the Committee has pre-approved
all assignments where the expected fee does not exceed £100,000,
or £10,000 in the case of certain taxation services. Any assignment
where the expected fee is above the relevant threshold requires
specific approval from the Committee or a member of the Committee.
The Company Secretary and his team deal with day-to-day
administration of the Policy, facilitating requests for approval by the
Committee. The Committee receives a report at each meeting on the
non-audit services provided by the Auditor and the Policy is reviewed
by the Committee annually. Details of the services that are prohibited
and allowed are set out below.
Services that are prohibited include:
– bookkeeping
– design and implementation of financial information systems
– appraisal or valuation services
– actuarial services
– internal audit outsourcing
– management and Human Resource functions
– broker or dealer, investment advisor or investment banking services
– legal, expert and tax services involving advocacy
Allowable services that may be approved include:
– statutory and regulatory audit services and regulatory
non-audit services
– other attest and assurance services
– accountancy advice and training
– risk management and controls advice
– transaction support
– taxation services
– business support and recoveries
– translation services