Barclays 2007 Annual Report Download - page 141

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Governance
Barclays PLC Annual Report 2007 139
Approval of financial statements
Barclays has in place a strong governance process to support its framework of disclosure controls and procedures. That process, in which the Board Audit
Committee plays a key role, is illustrated below.
Disclosure
Committee
Executive
Committee
Board Audit
Committee
Board
Legal and Technical
Review Committee
– Reviews and
agrees the Group’s
disclosures to ensure
they are appropriate
and correct
– Reviews and
evaluates the
Group’s disclosure
controls and
procedures
– Reports conclusions
to Executive
Committee and
Board Audit
Committee
– Receives a report on
the review of Group
internal controls
– Reviews the financial
statements prior to
approval by the Board
– Reviews Disclosure
Committee
conclusions and
provides further
challenge as
necessary
– Approves the results
announcement
and Annual Report
for publication and
ensures relevant
disclosures have
been made
– Reviews the
annual results
announcement and
Annual Report for
technical accounting,
legal and regulatory
compliance
– Reports its
conclusions to
the Disclosure
Committee
– Reviews Disclosure
Committee
conclusions and
provides further
challenge as needed
– Agrees annual results
announcement
and Annual Report
subject to Board
and Board Audit
Committee
approval
– CEO and FD take
opportunity to
challenge Executive
Committee members
The membership of the Disclosure Committee and its role is set out on
page 141. The Legal and Technical Review Committee is an accounting,
legal and regulatory compliance committee, which is responsible for
reviewing the Group’s financial reports and disclosures and for ensuring
they have been subject to adequate verification. Meetings are attended by
the Group’s external US lawyers and auditors. This governance process
ensures that there is sufficient opportunity for both management and the
Board to review and challenge the Group’s financial statements and other
significant disclosures before publication. It also provides assurance for
the certifications made by the Group Chief Executive and Group Finance
Director as required under the Sarbanes-Oxley Act 2002 and recommended
by the Turnbull Guidance on Internal Control. Further details of the Group’s
system of internal control and an assessment of its effectiveness may be
found on page 159.
Whistleblowing
Barclays takes any concerns of employees about the integrity
and honesty of other employees very seriously and will investigate
where appropriate. Information leaflets are distributed encouraging
employees to report any behaviours or actions that they reasonably
believe might be against accounting or regulatory requirements, as
well as our internal policies. Dedicated whistleblowing hotlines and
email addresses are in place so employees can talk about what has
happened, or is happening, directly and in confidence. The Board
Audit Committee receives reports of instances of whistleblowing and
any resulting investigations.
Board Audit Committee Chairman’s Statement
We had eight scheduled meetings in 2007 and the report set out
above describes in some detail how we used our meetings. Our
reviews of the control environment in each of our businesses in 2007
had a particular focus on those areas where the Group’s business is
expanding or which are deemed to be higher risk. We also continued
to review the controls around our key regulatory programmes, in
particular, Sarbanes-Oxley and Basel II. The second half of the year saw
significant disruption to the credit markets and we held two additional
meetings to review and consider the statements made by the Group
on its exposures to the sub-prime market. The Committee discussed
the timing and content of the statements and the process that had
been followed to prepare the statements, including the internal reviews
conducted. We also reviewed Barclays Capital’s control environment and
how effectively it had operated during the difficult market conditions.
In light of market events in 2007, in February 2008 we held a separate
session for Committee members on accounting for and valuation of
derivatives and complex investment banking instruments and
subsequently considered a report reviewing the loan impairment and
mark-to-market valuations ahead of the Group’s 2007 preliminary results.
Stephen Russell
Chairman of the Board Audit Committee
7th March 2008