Carphone Warehouse 2009 Annual Report Download - page 33

www.cpwplc.com 29
Directors’ Report – Governance
Directors’ Report – Governance
Corporate Governance
Introduction
The Board of Directors recognises the
importance of high standards of
corporate governance. This Report and
the Remuneration Report set out on
pages 33 to 38 explain that the Company
has complied during the period with the
principles contained in Section 1 of the
2006 Combined Code on Corporate
Governance (“Code”). In accordance
with the Listing Rules issued by the
Financial Services Authority, the relevant
parts of this Report have been reviewed
by the auditors and their opinion is
contained in the Independent Auditors’
Report on page 41.
Board of Directors
Composition of the Board
There are currently two Executive
Directors and six Non-Executive
Directors (including the Non-Executive
Chairman). Biographies of each of the
Directors, their responsibilities and Board
Committee memberships are set out on
page 28. The following changes to the
Board have taken place since last year’s
Annual Report:
On 31 July 2008 David Goldie and
Andrew Harrison stood down as
Executive Directors and Adrian Martin
stood down as a Non-Executive Director.
On 7 December 2008, David Ross
resigned as Deputy Non-Executive
Chairman.
Between the period of 30 March 2008
and 31 July 2008, the Board comprised
four Executive Directors and eight
Non-Executive Directors (including the
Non-Executive Chairman and Non-
Executive Deputy Chairman). Following
David Goldie, Andrew Harrison and
Adrian Martin standing down, the number
of Executive Directors decreased to
two and the number of Non-Executive
Directors decreased to seven. Following
the resignation of David Ross on
7 December 2008, the number of
Non-Executive Directors reduced to six.
Between the period of 30 March 2008
and 31 July 2008, six of the Non-
Executive Directors (excluding the
Non-Executive Chairman and the
Non-Executive Deputy Chairman)
were considered to be Independent
Non-Executive Directors. They were
Sir Brian Pitman, Baroness Morgan,
David Manseld, Steven Esom,
Adrian Martin and David Grigson.
Following Adrian Martin standing down,
the number of Non-Executive Directors
(excluding the Non-Executive Chairman
and the Non-Executive Deputy Chairman)
considered to be Independent
Non-Executive Directors reduced to ve.
Charles Dunstone is the Chief Executive
Ofcer, John Gildersleeve is Non-
Executive Chairman and Sir Brian Pitman
is the Senior Independent Director.
All Directors are subject to election by
shareholders at the rst Annual General
Meeting following appointment and
thereafter to re-election at least every
three years. Both Executive Directors
have a service contract that can be
terminated by either the Company or the
Director on 12 months’ notice or less.
The Non-Executive Directors have three
year periods of appointment, the terms
of which are substantially in the same
format as suggested by the Code, with
three month notice periods and no
compensation for loss of ofce. Further
details on each Director’s remuneration,
including the dates of their contracts
with the Company, are set out in the
Remuneration Report on pages 33 to 38.
Board meetings
The Board meets formally at least six
times a year, with additional meetings
as required. All Board papers are sent
out on a timely basis with sufcient
information for the Directors to be able
to discharge their duties. The Board met
formally six times during the period
(including a strategy day). All Directors
formally attended these meetings with
the exception of Steven Esom who
was absent from the meeting held on
20 May 2008 due to a prior engagement
that could not be changed. The Company
Secretary ensures that all Board papers
are sent out to non-attending Directors
and that, where possible, any comments
they have are received beforehand
so that they can be expressed at
the meeting.
Operation of the Board
The wide range of experience and
expertise of the Non-Executive Directors,
combined with the skill sets of the
Executive Directors, provides vast
experience of retailing, mobile and xed
line telecommunications and general
business experience, strong personal
skills and independence of thought and
perspective. The overriding responsibility
of the Board is to provide entrepreneurial
and responsible leadership to the Group
within a framework of prudent and
effective controls. These controls allow
for the key issues and risks facing the
business to be assessed and managed.
The Board determines the overall
strategic direction for the Group, reviews
management performance and ensures
that the necessary nancial and human
resources are in place to enable the
Group to meet its objectives. The Board
is comfortable that the necessary
controls and resources exist within the
Group to enable these responsibilities
to be met. The Board ensures that
the Directors, and in particular the
Non-Executive Directors, develop an
understanding of the views of major
shareholders about the Company. The
Company regularly communicates with
major shareholders and has a dedicated
internal investor relations department.
Briengs on market activity, together with
the views of shareholders and analysts
on the Company, are also regularly
provided to the Board.
There is a clear and documented division
of responsibilities between the roles of
the Chairman and the Chief Executive
Ofcer. There are also documented
schedules of matters reserved to the
Board and matters delegated to
Committees of the Board. Such reserved
matters include decisions on strategic
and policy issues, the approval of
published nancial statements and major
acquisitions and disposals, authority
levels for expenditure, treasury and risk
management policies. Strategic and
policy issues are reviewed annually at a
combined Board and senior executive
strategy day.
Performance evaluation
During the period the balance of skills,
knowledge and experience of the
Directors was reviewed. The Board, and
each individual Director, also undertook
performance evaluations. Using the
Higgs ‘Suggestions for Good Practice’ as
guidance, the individual Directors initially
completed separate questionnaires. The
results were collated for and analysed by
the Chairman, the Senior Independent
Director, the Chief Executive Ofcer and
the Board as a whole. The areas covered
included the roles of the Executive and
Non-Executive Directors, the Board, the
Board Committees, the Chairman of the