Barclays 2008 Annual Report Download - page 171

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Governance
Group Chief Executive, John Varley, helped to launch UK National
Branch Week by visiting the Coventry High Street branch. During the
course of the week, around 400 senior executives from the Group went
back to the floor to experience first hand the successes and challenges
colleagues in the branches are facing. Each day had a theme including
raising the profile of Barclays product range, employee benefits, the
importance of customer service, personal development and charity
fundraising. A number of Directors participated and worked alongside
cashiers, personal bankers and co-ordinators for the day.
John Varley also spent time giving presentations to colleagues on the
Group’s capital raising proposals. He kept colleagues up to date on how
market conditions were affecting Barclays and the decisions the Board
was taking in respect of the capital raising options that were available.
All colleagues were invited to attend the presentations in person or via
conference call and John Varley answered questions raised by colleagues
from around the world.
External matters
Directors are regularly briefed on market opinion and receive copies of
analyst research and press commentary. Further briefing material on
market conditions was sent to Directors during 2008 and Directors
continue to receive relevant publications to keep them up to date
with changing market opinion. Directors are invited to attend results
presentations to meet with analysts and investors to enhance their
awareness of market sentiment.
Statement on US Corporate Governance Standards
The statement required by NYSE is set out below.
Director independence
NYSE Rules require the majority of the Board to be independent.
The Code requires at least half of the Board (excluding the Chairman)
to be independent. The NYSE Rules contain detailed tests for determining
whether a Director is independent, whereas the Code requires the Board
to determine whether each Director is independent in character and
judgement and sets out criteria that may be relevant to that determination.
We follow the Code’s recommendations as well as developing best
practices among other UK public companies. The independence of
our non-executive Directors is reviewed by the Board on an annual basis
and it takes into account the guidance in the Code and the criteria we
have established for determining independence, which are described
on pages 161 and 162.
Board Committees
We have a Board Corporate Governance and Nominations Committee and
a Board HR and Remuneration (rather than Compensation) Committee,
both of which are broadly similar in purpose and constitution to the
Committees required by the NYSE Rules and whose terms of reference
comply with the Code’s requirements. As the Group Chairman was
independent on appointment, the Code permits him to chair the Board
Corporate Governance and Nominations Committee and be a member
of the Board HR and Remuneration Committee. Except for these
appointments, both Committees are composed solely of non-executive
Directors, whom the Board has determined to be independent. We follow
the Code recommendation that a majority of the Nominations Committee
should be independent non-executive Directors, whereas the NYSE Rules
state that the Committee must be composed entirely of independent
Directors. We comply with the NYSE Rules regarding the obligation to have
a Board Audit Committee that meets the requirements of Rule 10A-3 of
the US Securities Exchange Act, including the requirements relating to the
independence of Committee members. In April 2008, we made an Annual
Written Affirmation of our compliance with these requirements to the
NYSE. The Code also requires us to have a Board Audit Committee
comprised solely of independent non-executive Directors. However, we
follow the Code recommendations, rather than the NYSE Rules regarding
the responsibilities of the Board Audit Committee, although both are
broadly comparable. We also have a Board Risk Committee, comprised
of independent non-executive Directors, which considers and discusses
policies with respect to risk assessment and risk management.
Corporate Governance Guidelines
The NYSE Rules require domesticUS companies to adopt and disclose
corporate governance guidelines. There is no equivalent recommendation in
the Code but the Board Corporate Governance and Nominations Committee
has developed corporate governance guidelines, ‘Corporate Governance in
Barclays’, which have been approved and adopted by the Board.
Code of Ethics
The NYSE Rules require that domestic US companies adopt and disclose a
code of business conduct and ethics for Directors, officers and employees.
Rather than a single consolidated code as envisaged in the NYSE Rules,
we have a number of ‘values based’ business conduct and ethics policies
which apply to all employees. In addition, we have adopted a Code of Ethics
for the Group Chief Executive and senior financial officers as required by
the US Securities and Exchange Commission.
Shareholder approval of equity-compensation plans
The NYSE listing standards require that shareholders must be given the
opportunity to vote on all equity-compensation plans and material revisions
to those plans. We comply with UK requirements, which are similar to
the NYSE standards. However, the Board does not explicitly take into
consideration the NYSE’s detailed definition of what are considered
‘material revisions’.
Relations with Shareholders
Institutional investors
A key priority for the Board in 2008 was communicating with shareholders,
particularly ahead of the General Meeting in November 2008, and also
afterwards in order to provide further details to shareholders on the key
decision points during the capital raising process. In the normal course
of events, the Board aims to keep shareholders up to date and informed
about how the Company is performing and its strategy, whilst ensuring
that it listens to the opinions of major shareholders and takes their views
on board. Executive Directors and senior executives hold group and one
to one meetings with major investors to ensure we are communicating
effectively. Analyst research notes are distributed to Directors and our
corporate brokers provide regular feedback to the Board. The Investor
Relations team organise roadshows, seminars, conferences, presentations
and other activities that enable the Directors to interact with investors.
The Group Chairman, Senior Independent Director and Company
Secretary conduct a series of meetings with the corporate governance
representatives of our major institutional shareholders ahead of each
AGM. Meetings were held with our major institutional shareholders to
discuss the capital raising proposals.
Private shareholders
The Board has also tried to keep private shareholders up to date with
information about the capital raising proposals during 2008. In June 2008,
the Group Chairman sent a letter to shareholders regarding the Open
Offer, which took place in July. Personalised forms were also sent
to shareholders with a question and answer booklet to help explain
the details of the Open Offer and how to complete the forms. Further
documents were available on the Group’s website and sent to
shareholders on request. In November, the Group Chairman sent a letter
to shareholders and Notice of General Meeting, which set out the details
of the Capital Raising that required shareholder approval. A follow-up letter
was also sent to shareholders to inform them of developments and to
advise shareholders that all Directors would offer themselves for re-
election at the 2009 AGM and that the executive Directors had all agreed
to waive their bonus for 2008. An open letter to shareholders, clients,
customers and colleagues from the Group Chairman and Group Chief
Executive was released to the London Stock Exchange on 26th January
2009 ahead of the publication of the annual results announcement on
9th February 2009.
The change in the law that allows us to communicate electronically
with shareholders has enabled us to use less paper, which benefits the
environment and lowers distribution costs for the Group. All shareholder
documents are available electronically as soon as they are published but
shareholders can still receive communications in paper format if they wish.
This year we will continue to post the Annual Review, Notice of Meeting
and proxy forms to all shareholders.
We encourage shareholders to hold their shares in Barclays
Sharestore, where shares are held electronically in a cost-effective and
secure environment. Shareholders can use our e-view service to receive
their shareholder documents electronically and they can also use this
service to get immediate access to information relating to their personal
shareholding and dividend history. E-view participants can also change
their details and dividend mandates online and receive dividend tax
vouchers electronically.
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