Carphone Warehouse 2007 Annual Report Download - page 28

be expressed at the meeting. Other Directors, the Company Secretary,
the Group Director of Human Resources, the Head of Compensation and
Benefits and advisors attended by invitation only. A detailed description
of the Committee’s remit and work during the period is contained in the
Remuneration Report on pages 25 to 30. Its terms of reference comply with
the Code, are available on request from the Company 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 the following Non-Executive
Directors: John Gildersleeve (Chairman), David Ross, Sir Brian Pitman and
Adrian Martin. The Committee meets as and when required and met once
formally during the period to discuss succession planning and a consideration
of appropriate appointments to the Board. The Committee also met in April
2007 where it considered and recommended that David Grigson be appointed
as an Independent Non-Executive Director. Spencer Stuart was used as an
external search consultancy for the appointment of future Independent Non-
Executive Directors and their work was carried out in conjunction with potential
candidates sourced by the Group directly. In April 2007 the appointment of
David Grigson was then unanimously approved by the Board.
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.
Insurance Compliance Committee
The Committee is chaired by Baroness Morgan and is attended by Adrian
Martin and senior executives. The role of the Committee is to review the
Group’s compliance with regulatory matters concerning the sale of insurance
products to customers and to provide the Non-Executive Directors, through
Baroness Morgan, with visibility of compliance issues. The Committee met
formally three times during the period. The Chairman of the Committee also
updates the Board following each Committee meeting.
Telecoms Regulatory Committee
The Committee is chaired by David Mansfield and is attended by David Goldie,
the Company Secretary and other senior executives. The role of the Committee
is to review the Group’s compliance with fixed line regulatory matters, consumer
regulation across the fixed and mobile businesses including Trading Standards,
Data Protection and Advertising Standards, and to provide the Non-Executive
Directors, through David Mansfield, with visibility of these compliance issues.
The Committee met formally twice during the period. The Chairman of the
Committee also updates the Board following each Committee meeting.
Other Committees
The Company also intends to create a new Group Finance Committee during
the next year to formalise the regular meetings held between senior executives
of the group finance, tax, treasury and legal departments. Further details will be
provided in next year’s Annual Report.
Risk management and internal control
The Company has established a risk management programme that assists
management throughout the Company 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 Company have a good
understanding of risk, members of this team have conducted risk workshops
Corporate Governance continued
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 Company,
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 and this
was approved by the Audit Committee and the Board.
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 Company. 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.
The Carphone Warehouse Group PLC Annual Report 2007
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