Marks and Spencer 2004 Annual Report Download - page 15

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Committees of the Board
The audit committee comprises Kevin Lomax (chairman),
Brian Baldock, Paul Myners, Jack Keenan and Dame Stella
Rimington, all of whom are independent non-executive
directors. Its primary function is to review the reporting of
financial and other information to shareholders, the systems
of internal control and risk management; and to maintain an
appropriate relationship with the Company’s auditors and to
review the effectiveness and objectivity of the audit process.
Additional items reviewed during the year include: food
stock accuracy, store assurance, international accounting
standards, assurance procedures for CSR reporting and the
updated fraud policy. Private meetings have also been held
separately with the external auditors and the Chief Internal
Auditor.
The audit committee keeps under review the independence
and objectivity of the external auditors,
PricewaterhouseCoopers (‘PwC’). An engagement and fee
approvals process is in place which requires prior committee
approval for some engagements and excludes others. In
some cases, the nature of the advice may make it more
timely and cost-effective to select PwC who already have a
good understanding of the Group. PwC may also be
appointed for consultancy work, but only after rigorous
checks, including competitive tender, to confirm they are the
best provider. PwC is also subject to professional standards
which safeguard the integrity of the auditing role performed
on behalf of shareholders. Details of this year’s fees are
given in note 3 on page 34 of the Annual Report.
The Board is confident that the collective experience of the
audit committee members enables them, as a group, to act
as an effective audit committee. The committee also has
access to the financial expertise of the Group and its
auditors and can seek further professional advice at the
Company’s expense if required. As part of overall non-
executive succession we also expect to recruit a new non-
executive director with recent and relevant financial
experience in order to refresh the skills and experience of
the committee as a whole.
The remuneration committee comprises Dame Stella
Rimington (chairman), Brian Baldock and Jack Keenan, all of
whom are independent, non-executive directors. Barbara
Cassani was a member until her retirement from the Board.
Its primary role is to ensure the executive directors and
senior management are fairly rewarded for their individual
contributions to the Group’s overall performance, giving due
regard to the financial and commercial health of the Group.
The remuneration for the non-executive directors is
determined by the Chairman and executive directors.
The Remuneration Report is set out on pages 16 to 23 of
the Annual Report.
The nomination committee comprises Luc Vandevelde
(Chairman), Brian Baldock, Kevin Lomax, Paul Myners, Jack
Keenan and Dame Stella Rimington, all of whom are
independent non-executive directors, with the exception of
the Chairman. It ensures that appropriate procedures are in
place for the nomination, selection, training and evaluation
of directors and for successional plans. It reviews Board
structure, size, composition and successional needs, thereby
keeping under review the balance of membership and that
the Board has the required blend of skills, knowledge and
experience.
During the year, candidate searches resulted in three
directors being appointed to the Board: one executive and
one non-executive recruited externally and one executive
promoted through our own successional planning. In each
case, appointments were made on merit and against
objective criteria.
We have recently announced that Luc Vandevelde has
informed the Board that, as a result of personal
commitments that he needs to honour earlier than
expected, he will retire from the Board as soon as a
successor has been found. Kevin Lomax, an independent
non-executive director, is leading the search for a new
Chairman on behalf of the nomination committee. The
committee has also commissioned searches for new non-
executive directors to address successional arrangements.
The nomination committee keeps under review any other
significant external appointments of the Chairman and
currently Luc Vandevelde, in addition to his part-time role as
Chairman of Marks & Spencer, is Managing Director of
Change Capital Partners, a private equity fund, and has
been a non-executive director of Vodafone Group plc since
September 2003 and of Carrefour SA since April 2004.
The committee has also reviewed the letter of appointment
for new non-executive directors. This sets out detailed
information including expected time commitment. Despite
the care taken in the recruitment of Barbara Cassani in
October 2003, her increasing commitments to London’s bid
for the Olympic Games for 2012, led to her retirement from
the Board in April 2004.
The corporate social responsibility (‘CSR’) committee
comprises Luc Vandevelde (chairman), Alison Reed, Paul
Myners, Jack Keenan, Graham Oakley and three members
of senior management. It provides the Board with an
overview of the social, environmental and ethical impacts of
the Group’s activities. Key CSR risks and opportunities are
identified in areas such as product safety, sustainable raw
materials, animal welfare, ethical trading, employment
policy, health and safety and community programmes.
Further information is given on page 17 of the Annual
Review and our first full CSR Report is available on the
Company’s website.