Peachtree 2013 Annual Report Download - page 66

Conflicts of interest
Under the Companies Act 2006 a director must avoid a situation
where they have, or could have, a direct or indirect interest that
conflicts, or possibly may conflict with Sage’s interests. The Act allows
directors of public companies to authorise conflicts and potential
conflicts, where appropriate, where the articles of association contain
a provision to this effect. The articles of association give the directors
authority to approve such situations and to include other provisions to
allow conflicts of interest to be dealt with. In order to address this issue,
at the commencement of each Board meeting, the Board considers a
register of interests and potential conflicts of directors and gives, when
appropriate, any necessary approvals.
There are safeguards which will apply when directors decide whether
to authorise a conflict or potential conflict. First, only directors who
have no interest in the matter being considered will be able to take the
relevant decision, and secondly, in taking the decision, the directors
must act in a way they consider, in good faith, will be most likely
to promote Sage’s success. The directors are able to impose limits
or conditions when giving authorisation if they think this is appropriate.
These procedures on conflict have been followed throughout the year
and the Board considers the approach to operate effectively.
Board evaluation
The Board recognises the importance of reviewing its practices
and performance on a regular basis. To achieve this, the Board has
evaluated its performance and that of its committees and individual
members. In the past, the Board has evaluated its performance
in a number of different ways including the completion of detailed
questionnaires and discussions between individual directors and the
Chairman. Having sought the assistance of an independent third party
in its evaluation in 2012, and having regard to changes in the Board
composition during the year, the Board evaluation in 2013 was carried
out by the Chairman through correspondence and interviews with each
director. Following this review, a summary of the results of the evaluation,
together with the Chairman’s observations and recommendations,
was prepared and shared with all members of the Board. The main
outcome of the evaluation this year was to shape and define the Board’s
objectives for the coming year, continuing the focus on Group strategy
and ensuring the structures, capabilities and reporting are in place
to achieve the Board’s goals. The Chairman’s performance was
evaluated by the Senior Independent Director through correspondence
and discussion with the Chairman and the other independent
non-executive directors.
Committees of the Board
The three committees of the Board deal with specific aspects of Sage’s
affairs. These committees are the Audit Committee, the Nomination
Committee and the Remuneration Committee. The Company Secretary
acts as secretary to all the committees. Further details on each of these
committees can be found on the remainder of this page and on pages
65 to 68.
Board and committee meeting attendance
Director
Board
meetings
Audit
Committee
meetings
Nomination
Committee
meetings
Remuneration
Committee
meetings
Donald Brydon 7/7 –3/3 5/6
Guy Berruyer 7/7 – – –
Paul Harrison 6/61– – –
Tamara Ingram 6/623/322/225/52
Ruth Markland 7/7 4/4 3/3 6/6
Ian Mason 7/7 3/432/335/63
Mark Rolfe 7/7 4/4 3/3 6/6
Jonathan Howell 1/141/141/141/14
Neil Berkett 0/050/150/150/15
Notes:
1 Retired from the Board on 16 August 2013
2 Retired from the Board and Board committees on 31 July 2013
3 Unable to attend due to a prior commitment
4 Joined the Board and Board committees on 15 May 2013
5 Joined the Board and Board committees on 5 July 2013 – unable to attend
Committee meetings due to a critical illness in the family
Audit Committee
Jonathan Howell is Chair of the Audit Committee and, as a member
of the Institute of Chartered Accountants in England and Wales and
the CFO of a FTSE 250 company, is considered by the Board to
have the recent and relevant experience required by the UK Corporate
Governance Code 2012. Other members of the Committee are
independent Non-executive Directors Ruth Markland and Neil Berkett
who have a wide range of relevant business experience. The Board is
satisfied that the Committee has the resources and expertise to fulfil
its responsibilities.
Committee objectives and responsibilities
The objective of the Committee is to oversee Sage’s financial reporting,
risk management and internal controls procedures and the work of its
internal and external auditors.
The Committee’s main responsibilities, as set out in its terms of
reference, are to review and advise the Board on:
– The interim and annual financial statements, the accounting policies
used and whether significant financial judgements are sound;
– The effectiveness of the internal controls environment and risk
management procedures, including whistleblowing procedures; and
– The nature and extent of significant financial and business risks to
Sage and the mitigation of these risks.
In addition, the Committee is responsible for:
– Reviewing and approving the nature and scope of external and
internal audit work, the results of such audit work and the related
responses from management;
– Monitoring compliance with the policy on non-audit services;
– Ensuring the external auditors are effective and independent; and
– Making recommendations to the Board on external auditor
remuneration and reappointment.
The Committee terms of reference, which can be found on our website,
are reviewed annually and have been updated to reflect the recent
changes to the UK Corporate Governance Code 2012, requiring
a determination of whether the Annual Report & Accounts, taken
as a whole, is fair, balanced and understandable. The Committee is
satisfied that the terms of reference enable it to fulfil its responsibilities.
Corporate governance report continued
64 The Sage Group plc | Annual Report & Accounts 2013