Tesco 2006 Annual Report Download - page 26

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24 Tesco plc
Corporate governance continued
Specialist functions such as the Corporate and Legal
Affairs department and the Trading Law and Technical
department provide assurance and advice on legal
compliance, health and safety, and SEE matters. These
functions report on their work on a regular basis and
escalate matters as appropriate.
• Corporate Responsibility Committee The Committee
is chaired by the Company Secretary and membership
is made up of senior managers from across the business.
It meets at least four times a year to support, develop
and monitor policies on SEE issues, reviewing threats and
opportunities for the Group. We have, this year, decided to
monitor our corporate responsibility work and KPIs under
aspecific ‘Community’ segment on our Steering Wheel.
The Board formally discussed the work of the Committee
twice in the last year. The Executive Committee regularly
discusses SEE matters.
• Management In our fast moving business, trading is
tracked on a daily and weekly basis, financial performance
is reviewed weekly and monthly, and the Steering Wheel is
reviewed quarterly. All key businesses in the Group operate
aSteering Wheel and report against target KPIs on a
quarterly basis enabling management to measure
performance.
All major initiatives require business cases, normally
covering a minimum period of five years. Post-investment
appraisals, carried out by management, determine the
reasons for any significant variance from expected
performance.
Relations with stakeholders
Listening and engaging helps us fully understand the issues
that are important to our stakeholders. We learn from their
experience, identify new risks and opportunities and ensure
that our long-term strategy is sustainable. We might not be
able to satisfy all stakeholder concerns all the time but through
engagement we can do our best to balance competing
demands. We know that customers need to be able to trust
our business and they will only trust us if we do the right thing
by all our stakeholders. Our programme of engaging with
stakeholders, including customers, staff, suppliers, investors,
non-governmental organisations and others is set out in more
detail in the Corporate Responsibility Review and on our
website. We carry out external research to help us understand
how well we are communicating with these groups.
Weare committed to maintaining a good dialogue with
shareholders through proactively organising meetings and
presentations as well as responding to a wide range of
enquiries. We seek shareholder views on a range of issues from
strategy to corporate governance and discuss SEE issues with
the socially responsible investment community. We recognise
the importance of communicating appropriately any significant
Company developments. This shareholder communication is
mainly co-ordinated by the Investor Relations department.
During the year, the Group met with 78 of its leading
shareholders representing over 45% of the issued shares of
the Company. To complement this programme, the Chairman
meets with major shareholders independently from the
Executive team. Shareholders are also offered the opportunity
to meet with the Senior Independent Non-executive Director.
The Board is kept informed of the views of shareholders
through regular updates.
Inevitably institutional shareholders may be in more regular
contact with the Group than others, but care is exercised to
ensure that any price-sensitive information is released to all
shareholders, institutional and private, at the same time in
accordance with applicable legal and regulatory requirements.
We regard the AGM as an excellent opportunity to
communicate directly with all shareholders. The whole Board
attends the meeting and are available to answer questions
from shareholders present. In order to encourage shareholder
participation, in line with the Myners recommendations, we
offer electronic proxy voting and voting through the CREST
electronic proxy appointment service. At our AGM last year,
all resolutions were voted by way of electronic poll. We will be
using electronic polling again this year as it is a more efficient
and fairer process, ensuring that each vote represents the
number of shares held.
Every shareholder may choose to receive a full Annual Report
and Financial Statements or the Annual Review and Summary
Financial Statement. At the half-year, all shareholders receive
an Interim Report. These reports, together with publicly-made
trading statements, are available on the Group’s website,
www.tesco.com/corporateinfo
Compliance
The Board considers that Tesco PLC complied in all respects
with the 2003 Revised Combined Code on Corporate
Governance for the year ended 25 February 2006.