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60 Marks and Spencer Group plc Annual report and financial statements 2009 Directors’ report
Corporate governance
continued
Arrangements have been made, in conjunction with PwC, for audit
partner rotation in accordance with the recommendations of the
Auditing Practices Board. In 2008/09 Stuart Watson succeeded
Ranjan Sriskandan, who had been in place since 2003/04, as lead
audit engagement partner.
The Committee has recommended to the Board that PwC be
proposed for reappointment by shareholders at the AGM on 8 July
2009 when the Committee Chairman will be available to answer
any audit-related questions.
As authorised by shareholders at the AGM on 9 July 2008, the
Committee determined the level of audit and non-audit fees for
2008/09 for the external auditors on behalf of the Board. Details are
given in note 4 to the financial statements.
Internal audit Internal audit's work is focused on areas of priority
as identified by the Group Risk Profile and in accordance with an
annual audit plan approved each year by the Audit Committee
and by the Board. The Board receives a full report from internal
audit each year on the department’s work and findings and regular
updates on specific issues. The Committee monitors and assesses
the role and effectiveness of internal audit on behalf of the Board.
In January 2009 the Committee approved proposals for
structural changes to internal audit as part of the Head Office review.
Internal audit will continue to focus on key business risks. Senior
management will update the Audit Committee directly on the
controls and risk management systems operating in their areas
of responsibility.
Committee performance review In February 2009 Committee
members completed a questionnaire electronically to rate their
performance. An unattributed executive summary was then
distributed to all members for discussion.
The 2008/09 review has confirmed that:
– the Committee focuses its time effectively on the priority issues
and the extra meeting has enabled more direct input from senior
management; and
– The Committee’s increased oversight of risks has enabled it to
gain a greater understanding of management’s response to the
economic downturn.
The Committee has set itself some key actions for 2009/10 to:
– increase focus on risk assessment and mitigating controls by
management to achieving financial and non-financial KPIs during
the economic downturn;
– spend more time directly with senior management to hear how
they are responding to audit findings; and
– challenge the risks and controls relating to the development of
financial and other IT systems to make sure our investment is
well spent.
Board and Committee attendance
On 28 March 2009 the Board comprised 10 directors as set out below. Jan du Plessis joined the Board as a non-executive director on
1 November 2008. Lord Burns retired as Chairman on 1 June 2008, when Sir Stuart Rose was appointed Executive Chairman and
Sir David Michels was appointed Deputy Chairman. Steven Esom retired as an executive director on 1 July 2008. See individual committee
reports on pages 58 to 60 for details of their membership.
The following table sets out the number of meetings of the Board and its governance committees during the year and individual
attendance by Board and committee members at those meetings.
Nomination and Remuneration Audit
Name of director Board Governance Committee Committee Committee
ABABABAB
Chairman
Sir Stuart Rose 10 10 2 2––––
Deputy Chairman
Sir David Michels 10 10224455
Executive directors
Kate Bostock 10 10––––––
Ian Dyson 10 10––––––
Steven Sharp 10 10––––––
Non-executive Directors
Jeremy Darroch 10 10 2 2 – – 5 5
Martha Lane Fox 10 10224455
Steven Holliday(1) 109214454
Louise Patten 10 102244––
Jan du Plessis 6600––22
A = Maximum number of meetings the director could have attended.
B = Number of meetings the director actually attended.
1 Steven Holliday was unable to attend meetings of the Board and Nomination and Governance Committee on 25 June 2008 and the Audit Committee on 29 October 2008
due to overseas business commitments with National Grid. Steven reviewed the relevant papers and provided comments in advance to the Chairman, or Committee Chairman
as appropriate.
2 Lord Burns attended the Board meetings held on 6 and 19 May 2008.
3 Steven Esom attended the Board meetings held on 6 and 19 May and 25 June 2008.