Carphone Warehouse 2001 Annual Report Download - page 19

Introduction
The Board recognises the importance of high standards of corporate governance. This report and the Remuneration Report set out on pages
19 to 21 explain how the Company complies with the key corporate guidance set out in the Combined Code appended to the Listing Rules.
Compliance with the Combined Code
The Company has been in compliance with the requirements of the Combined Code and the Turnbull Report since listing on the London
Stock Exchange except in the following areas:
As Chairman, Chief Executive Officer and largest shareholder, Charles Dunstone is responsible for running both the Board and the
Group’s business. However, the Board includes four Non-Executive Directors and it is the Board’s view that they have the ability and authority
to ensure that the combination of his roles and his shareholding does not work to the disadvantage of the Company and its shareholders.
Up until 30 November 2000, the Board comprised two Non-Executive and six Executive Directors, being a lower number of Non-
Executives than is recommended under the Combined Code. This was addressed by the appointment of Adrian Martin on 30 November
2000 and the appointment of Sir Brian Pitman on 17 January 2001.
On his appointment, Adrian Martin was also appointed to the Audit Committee which had until that date consisted of two Non-
Executive Directors and as such did not comply with the Combined Code.
These periods of non-compliance with the Combined Code reflect the time spent by the Board endeavouring to find additional Non-
Executive Directors of sufficient calibre for their views to carry significant weight in the Board’s decisions.
Board
The Company has a well balanced Board. There are six Executive Directors and four Non-Executive Directors. Directors' names and brief
biographies are set out on pages 14 and 15.
Charles Dunstone is the Chairman and Chief Executive Officer and Sir Brian Pitman has been the Senior Independent Director since his
appointment on 17 January 2001. Prior to this date John Gildersleeve was the Senior Independent Director.
The Board considers that each of the Non-Executive Directors is independent of management and free from any business or other
relationship which could materially interfere with the exercise of their independent judgement.
The Board meets at least 10 times a year, receiving key briefing papers before each meeting. The Board is responsible to the
shareholders for the proper management of the Company and its subsidiaries. It sets out and monitors the Group’s strategy, reviews its
trading performance, examines major capital expenditure, formulates policy on key issues, ensures adequate funding and reports to
shareholders where appropriate.
The Board has underlined its commitment to internal control in the Group by setting clear operating guidelines for all of its businesses,
and monitoring key performance indicators and risks on a monthly basis.
Board Committees
The Board has established three principal committees to consider various aspects of the Group’s operations in more detail than would be
the case within full Board meetings. Details of the members of each committee are given on page 15.
I Audit Committee
The Audit Committee comprises four Non-Executive Directors and is chaired by Adrian Martin. The Committee meets at least three
times a year together with the Group’s internal audit and risk management team and the Group’s external auditors. Terms of reference
for the Committee include reviewing the annual accounts and interim statements, ensuring compliance with generally accepted
accounting principles and satisfying itself as to the adequacy and effectiveness of the Group’s internal control procedures. It receives
reports from both internal and external auditors on a regular basis.
II Remuneration Committee
The Remuneration Committee comprises three Non-Executive Directors and is chaired by John Gildersleeve. The Committee meets at
least twice a year. Terms of reference include making recommendations to the Board on the Group’s framework of executive
remuneration and determining on behalf of the Board specific remuneration packages for the Executive Directors and senior
management. It also approves contractual terms and incentives including executive share option awards for the Executive Directors
and other senior management. The Board’s Remuneration report is set out on pages 19 to 21.
III Nomination Committee
The Nomination Committee comprises two Non-Executive Directors and David Ross and is chaired by Des Wilson. It has advised on the
appointments of Adrian Martin, Sir Brian Pitman and Jim Dale in the period and generally advises on Board appointments as required
and the composition of the Board.
Relations with Shareholders
The Company maintains a regular dialogue with institutional shareholders primarily in the periods following announcements of results.
The importance of maintaining a regular dialogue with shareholders is recognised in order to ensure that the Group’s strategy is understood
and that concerns are addressed in a constructive way.
The Annual General Meeting will be used as a forum to communicate with individual investors and is an opportunity to raise with the
Directors issues concerning the Group’s operations and performance. Investor information including financial results, press releases and
management presentations are available on The Carphone Warehouse website, www.carphonewarehouse.com.
Corporate governance
The Carphone Warehouse Group PLC Annual Report 2001 17