Carphone Warehouse 2005 Annual Report Download - page 29

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Secretary and are published on the Company’s website. The Chairman of
the Committee updates the Board following each Committee meeting.
Nomination Committee
During the period the Committee comprised three independent Non-Executive
Directors, Sir Brian Pitman (Chairman), John Gildersleeve and Martin Dawes
and David Ross. It meets as and when required and met once formally
during the period. Every member attended this meeting, except that John
Gildersleeve did not attend the part of the meeting in respect of his own
proposed appointment as Non-Executive Chairman of the Company.
The Committee’s terms of reference comply with the Code and are
available from the Company Secretary on request and are published on
the Company’s website. The Committee is responsible for succession
planning at Board level, overseeing the selection and appointment of
Directors, regularly reviewing the structure, size and composition of the
Board and making its recommendations to the Board. It assists in
evaluating the commitments of individual Directors and the balance
of skills, knowledge and experience on the Board.
During the period, the work of the Committee reflected succession planning
and a consideration of appropriate appointments to the Board. In particular,
the Committee (excluding John Gildersleeve) carried out such work and
recommended that John Gildersleeve be appointed as Non-Executive
Chairman when Hans Roger Snook stands down as Chairman with effect
from the AGM. The full Committee also recommended the appointment of
David Goldie as an Executive Director with effect from the AGM.
The Committee did not use an external search consultancy nor open
advertising in respect of John Gildersleeve’s appointment, although the
Committee did follow the other principles of the Code in leading and
making recommendations to the Board. Given the level of experience
of John Gildersleeve and his existing knowledge of the Company, the
Committee determined that he was the best candidate for Non-Executive
Chairman and as such decided that it was not appropriate to look
externally for a suitable candidate. The Committee also determined that
John Gildersleeve satisfied the test of independence set out in the Code
on his appointment. Similarly, David Goldie was already an existing
member of senior management and the Committee determined that his
appointment was part of the Company’s orderly succession plans so as
to maintain the appropriate balance of skills and experience within the
Company on the Board.
Both of these recommendations were unanimously approved by the Board.
Risk management and internal control
The Group has established a risk management programme that assists
management throughout the Group to identify, assess and mitigate business,
financial, operational and compliance risks. The Board views management
of risk as integral to good business practice. The programme is designed to
support management’s decision-making and to improve the reliability of
business performance.
The risk management programme is supported by a dedicated team of risk
specialists, including internal auditors, who comprise the Group Risk and
Assurance function. To ensure that all parts of the Group have a good
understanding of risk, members of this team have conducted risk
workshops and reviews within each of the main operating divisions in the
past year, culminating in an assessment of key business risks by the
Executive Directors and senior management. These risk assessments have
been wide-ranging, covering risks arising from the regulatory environment,
strategy, counter-parties and organisational change associated both with
major projects and with acquisitions. The risk management process
operates throughout the Group, being applied equally to the main business
divisions and corporate functions.
The output from each annual assessment is a list of key strategic, financial,
operational and compliance risks. Associated action plans and controls to
mitigate them are also put in place where this is possible and to the extent
considered appropriate by the Board taking account of costs and benefits.
Changes in the status of the key risks and changes to the risk matrix are
reported regularly to the Audit Committee and at each Board Meeting.
The Directors have overall responsibility for the Group’s systems of
internal control and for reviewing their effectiveness. The Board delegates
to executive management the responsibility for designing, operating
and monitoring these systems. The systems are based on a process
of identifying, evaluating and managing key risks and include the risk
management processes set out above. The systems of internal control
were in place throughout the period and up to the date of approval
of the Annual Report and financial statements. The effectiveness of
these systems is periodically reviewed by the Audit Committee in
accordance with the guidance in the Turnbull Report. These systems
are also refined as necessary to meet changes in the Group’s business
and associated risks.
The systems of internal control are designed to manage rather than
eliminate the risk of failure to achieve business objectives. They can only
provide reasonable and not absolute assurance against material errors,
losses, fraud or breaches of laws and regulations.
The Board has conducted an annual review of the effectiveness of the
systems of risk management and internal control in operation during
the year and up to the date of the approval of the Annual Report and
financial statements. Controls required to mitigate such risks and any
significant control failings are reviewed by the Board through operational
reports from management.
Communication with investors
The Board believes it is important to explain business developments and
financial results to the Company’s shareholders and to understand any
shareholder concerns. The principal communication media used to impart
information to shareholders are news releases (including results
announcements) and Company publications. In all such communications,
care is taken to ensure that no price sensitive information is released.
The Chief Executive Officer and Chief Financial Officer have lead
responsibility for investor relations. They are supported by a dedicated
investor relations department that, amongst other matters, organises
presentations for analysts and institutional investors. There is a full
programme of regular dialogue with major institutional shareholders, fund
managers, analysts, retail brokers and credit investors, upon which the
Chairman ensures that the Board receives regular updates at Board
meetings. The Board also receives periodic reports on investors’ views of
the performance of the Group. All the Non-Executive Directors and, in
particular, the Chairman and Senior Independent Director, are available to
meet with major shareholders, if such meetings are required. Further
financial and business information is available on the Company’s website,
www.cpwplc.com.
The Company also communicates with shareholders through the Annual
General Meeting, at which the Chairman gives an account of the progress
of the business over the last year, and a review of current issues, and
provides the opportunity for shareholders to ask questions.
Corporate Governance continued 25