Marks and Spencer 2006 Annual Report Download - page 36

34 Marks and Spencer Group plc
Corporate governance continued
Board the remuneration strategy and framework, giving due
regard to the financial and commercial health of the Company
and to ensure the executive directors and senior management
are fairly rewarded for their individual contributions to the
Company’s overall performance. The remuneration of the non-
executive directors is determined by the Chairman and the
executive directors.
The Remuneration Report is set out on pages 40 to 48 as
required by the Directors’ Remuneration Report Regulations 2002.
The Nomination Committee comprises Lord Burns (Chairman),
Jeremy Darroch, Steven Holliday, Jack Keenan, Kevin Lomax,
David Michels, Paul Myners and Louise Patten, the majority of
whom are independent non-executive directors. Paul Myners
was Chairman of the Nomination Committee until the completion
of the non-executive search in January 2006, which resulted
in the appointment of new directors to the Board. Anthony
Habgood was a member until he resigned from the Board on
30 August 2005. Louise Patten and Jeremy Darroch joined the
Committee on 1 February 2006 and David Michels on 1 March
2006. Kevin Lomax will retire from the Board and the Committee
on 31 August 2006. Its role is to ensure 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
the required blend of skills, knowledge and experience of
the Board.
In June 2005, following an external candidate search, Ian Dyson
was appointed Group Finance Director with responsibility for
Finance and International, increased from end October 2005 to
include IT, Logistics and Property. In November 2005, taking
into account the challenges and opportunities facing the
Company, Steven Sharp was appointed to the Board as
executive director with responsibility for Marketing, E-commerce
and Store Design and Development, having joined the Company
in May 2004. Appointments were made on merit and against
objective criteria to ensure that the Board maintains an
appropriate balance of skills and experience.
Paul Myners led the search for new non-executive directors
appointing an external firm to select candidates to meet
successional needs, provide consumer, retail and financial
experience and increase the Board’s diversity. A search
specification was circulated to all directors who were invited
to review the proposed candidate list. A shortlist was then
prepared for interview by Paul Myners and Stuart Rose and
preferred candidates then seen by a wider group of directors,
including Lord Burns. As a result the following appointments
were made to the Board: Jeremy Darroch and Louise Patten
on 1 February 2006 and David Michels on 1 March 2006.
In July 2005, we announced the resignation of Charles Wilson
as executive director effective October 2005 when he became
Chief Executive of Booker. In August 2005, we announced the
resignation of Anthony Habgood with immediate effect after he
had to resume, unexpectedly, the Executive Chairmanship of
Bunzl in June 2005.
Under the Company’s Articles of Association, all directors seek
election at their first AGM following appointment and all directors
are required to offer themselves for re-election at least every
three years. In addition, any director who is aged 70 or more is
required to retire and seek re-election annually.
The Corporate Social Responsibility (CSR) Committee
comprises Paul Myners (Chairman), Lord Burns, Jack Keenan
and Steven Sharp and seven members of management.
Alison Reed was a member until her retirement on 30 April
2005. Lord Burns will become Chairman in July 2006 following
Paul Myners’ retirement from the Board. The Committee
provides the Board with an overview of the social, environmental
and ethical impacts of the Group’s activities. Key CSR risks and
opportunities are reviewed in areas such as sustainable raw
materials, responsible use of technology, animal welfare, ethical
trading, employment policy, health and safety and community
programmes. Customers are increasingly asking for more
information about CSR issues and in January 2006 we launched
‘Look behind the label’ to tell customers about the special
qualities, many of them CSR based, that make Marks & Spencer
products unique. The continued progress we made in important
areas of CSR during the year was recognised by a number of
independent organisations. We were included in the Dow Jones
Sustainability and FTSE4Good indices and were ranked in the
top 20 companies in Business in the Community’s Corporate
Responsibility Index with a score of 95%. Further information is
given on page 18 and in our CSR report, available on our
website at www.marksandspencer.com/csrreport2006, which
includes more detail on processes and references to the United
Nations Global Reporting Initiative.