Experian 2007 Annual Report Download - page 44

Combined Code
The Board of Experian is responsible for the Group’s
system of corporate governance. The Board is committed
to good governance and to maintaining the highest
standards of integrity in all the Group’s activities. This
statement describes how the Company has applied the
main and supporting principles set out in Section 1 of the
Combined Code on Corporate Governance published by
the UK Financial Reporting Council in July 2003 and
amended in July 2006 (the “Code”). Experian complied
with the Code’s provisions throughout the period from
listing on 11 October 2006 until 31 March 2007 except
that: (1) John Peace did not meet fully the independence
criteria set out in the Code on his appointment as
Chairman, (2) the Board and its committees did not for
the whole period comply with the requirements in respect
of the number of independent non-executive directors,
and (3) no formal evaluation of the Board’s performance
or that of its committees or individual directors’
performance was undertaken. These matters are
explained later in this statement.
The Board
At the date of this report, the Board consists of a
Chairman, a Chief Executive Officer, a Chief Financial
Officer and seven non-executive directors. The names and
biographical details of the directors areshown on pages
38 and 39 of this report.
The Chairman, John Peace, did not meet fully the
independence criteria set out in the Code on his
appointment as he was previously the Group Chief
Executive of GUS plc. The nomination committee of GUS
plc which recommended his appointment was strongly of
the opinion that his appointment was in the best interests
of Experian and its shareholders in view of his unrivalled
experience of Experian’s business and markets and the
need for the Chairman to have a close working
relationship with Experian’s Chief Executive Officer and its
experienced global management team. As a consequence,
the position was not openly advertised and external
search consultants werenot instructed. The Board of
Experian endorses this view.
Don Robert and Paul Brooks remained Chief Executive
Officer and Chief Financial Officer of Experian respectively
following demerger also on the recommendation of the
nomination committee of GUS plc. Mr Robert served on
the Board of GUS plc. They both had extensive knowledge
and experience of the businesses from the period prior to
the demerger in October 2006 and had demonstrated
exceptional skills and leadership in their current roles.
Six of the seven non-executive directors are determined by
the Board to be independent in character and judgment
with no relationships or circumstances which could affect,
or appear to affect, their judgment. David Tyler was the
Group Finance Director of GUS plc and so is not
considered independent. The non-executive directors are
appointed for three-year renewable terms. Sir Alan Rudge
is the senior independent director. Four of the
independent non-executive directors were appointed with
effect from 1 January 2007 and a fifth was appointed
with effect from 1 April 2007. The Company therefore
complied with the Code’s requirement that not less than
half the Board (excluding the Chairman) comprise
independent non-executive directors from 1 January 2007
onwards.
The Board plans to have six scheduled meetings each year
and may meet more frequently as required. It had three
scheduled meetings and one ad-hoc meeting in the
period from listing until 31 March 2007. One of these
meetings took place in Costa Mesa in California,
otherwise they were held in Dublin, Ireland. It is inevitable
that there will be occasions when circumstances arise to
prevent directors from attending meetings. In such
circumstances, the usual practice is for the absent director
to review the Board papers and convey any views on
specific issues to the Chairman. The time commitment
expected of non-executive directors is not restricted to
Board and Committee meetings. They are available for
consultation on specific issues falling within their
particular fields of expertise and additional time is spent
visiting the Group’s businesses and meeting informally
with the Chairman and executive directors. Together the
non-executive directors bring an objective viewpoint and
range of experience to the Company which ensures that
no individual or group of individuals is able to dominate
the Board’sdecision making.
Thereis a formal schedule of matters specifically reserved
to the Boardfor decision. The Board establishes overall
Group strategy, approves the Group’s operating budget
and monitors performance through the receipt of monthly
reports and management accounts. The approval of
significant acquisitions and divestments is a matter
reserved for the Boardalthough it delegates to the Boards
of the Company’s principal operating subsidiaries the
responsibility for approving smaller acquisitions and
disposals. The monetary limits of such delegations are
formally documented and the exercise of such delegated
authorities are reported to the Boardat each of its
meetings. Therearealso authority levels covering capital
expenditure which can be exercised by the Boards of the
Company’s principal operating subsidiaries. Beyond these
levels of authority, projects are referred to the Board for
approval. Other matters reserved for the Board include:
•Approval of interim and annual financial statements.
•Treasury policies.
•Internal controls and risk management.
•Succession planning.
•Corporate responsibility.
The division of responsibilities between the Chairman and
the Chief Executive Officer is clearly established, set out in
writing and agreed by the Board. The Chief Executive
Officer is responsible for day to day management and
performance of the Group’s businesses. The Chairman’s
role is to ensure good corporate governance which
includes leading the Board and ensuring its effectiveness
in all aspects of its role. For scheduled Board meetings,
the agenda includes reports from the Chief Executive
Officer and the Chief Financial Officer. The January
meeting focuses on strategy, the March meeting deals
with the approval of operating budgets for the coming
financial year,while the May and November meetings
cover the approval of preliminary and interim financial
statements respectively. Members of senior management
42 |Experian Annual Report 2007
Introduction | Business review | Governance |Financial statements
Corporate governance