Tesco 2008 Annual Report Download - page 23

Tesco PLC Annual Report and
Financial Statements 2008 21
Remuneration Committee The Remuneration Committee’s role is to
determine and recommend to the Board the remuneration of the Executive
Directors. It monitors the levels and structure of remuneration for senior
management and seeks to ensure that they are designed to attract,
retain and motivate the Executive Directors needed to run the Company
successfully. Mr Allen chairs the Committee, which is composed entirely
of independent Non-executive Directors. The other Committee members
for the year ended 23 February 2008 were Mr Chase, Mrs Cook, Mr Davies
and Dr Einsmann. At the invitation of the Committee the Chairman of the
Board normally attends meetings and the Chief Executive attends
as appropriate. Representatives of the Group’s Personnel and Finance
functions also attend as appropriate to provide support. The Company
Secretary also attends in his capacity as Secretary of the Committee.
The Committee met seven times this year. Each year it conducts a review
of the Committee’s own effectiveness and its Terms of Reference. The
responsibilities of the Remuneration Committee and an explanation of
how it applies the Directors’ remuneration principles of the Combined
Code, are set out in the Directors’ Remuneration Report on pages 25 to 38.
Audit Committee The Audit Committee’s primary responsibilities are
to review the financial statements, to review the Group’s internal control
and risk assurance processes, to consider the appointment of the external
auditors, their reports to the Committee and their independence, which
includes an assessment of their appropriateness to conduct any non-audit
work, as well as to review the programme of Internal Audit. The membership
of the Committee is composed entirely of independent Non-executive
Directors. Mr Hydon, who has recent and relevant financial experience,
is the Chairman of the Committee. The other Committee members for the
year ended 23 February 2008 were Mr Chase, Mr Davies and Ms McCall.
At the invitation of the Committee, the Chairman of the Board, the
Finance Director and his representatives, the Head of Internal Audit, the
Corporate and Legal Affairs Director, other relevant Executive Directors
and representatives of the external auditors regularly attend meetings.
The Company Secretary also attends in his capacity as Secretary of the
Committee. The Committee met five times this year. Each year the
Committee conducts a review of its own effectiveness and its Terms
of Reference.
The Committee has regular private meetings with the external auditors
during the year. The need for training is kept under review and the annual
agenda ensures time is dedicated to technical updates which are generally
provided by external experts. This year training was provided on accounting
and reporting developments in IFRS, IFRIC, IAS, FRS, UITF and Audit
Standards. Training is also provided to meet specific individual needs of
Committee members.
Board performance evaluation The Board regularly reviews its own
performance. During the year ended 23 February 2008, a formal evaluation
of the performance of the Board was conducted with the assistance of an
external independent consultant. The process included in-depth interviews
with each Director and the Company Secretary and a detailed review of
the minutes and supporting papers for the meetings of the Board and its
main Committees. The review confirmed the high level of professionalism
in the strategic and entrepreneurial leadership of the Company, a sound
governance framework and practices compliant with the Combined Code.
The Chief Executive reviews the performance of each Executive Director.
The Chairman reviews the performance of the Chief Executive and each
Non-executive Director. During the year, the Chairman met with the Non-
executive Directors, without the Executive Directors present, to discuss
Board issues and how to build the best possible team. The Senior
Independent Non-executive Director met with the Non-executive Directors
in the absence of the Chairman, to assess the Chairman’s effectiveness.
The Board scheduled eight meetings in the year ended 23 February
2008 and ad hoc meetings were also convened to deal with matters
between scheduled meetings as appropriate. The table above shows the
attendance of Directors at regular Board meetings and at meetings of
the Nominations, Remuneration and Audit Committees during the year.
Board Nominations Remuneration Audit
Members’ attendance during the year ended 23 February 2008 meetings Committee1Committee Committee
Number of meetings held 817 5
Non-executive Directors
Mr D E Reid (Chairman) 81––
Mr C L Allen CBE 817–
Mr R F Chase CBE (Senior Independent Director) 8165
Mrs K Cook 816–
Mr E M Davies CBE 6153
Dr H Einsmann 716–
Mr K J Hydon 81–5
Ms C McCall 8––2
Executive Directors
Sir Terry Leahy 81––
Mr R W P Brasher 8–––
Mr P A Clarke 8–––
Mr A T Higginson 8–––
Mr T J R Mason 8–––
Miss LNeville-Rolfe CMG 8–––
Mr D T Potts 7–––
Note: Directors leave the meeting where matters relating to them are being discussed. It is expected that all Directors attend Board and Committee meetings unless they are prevented from doing so
by prior commitments and that all Directors will attend the AGM.
1 The Nominations Committee meeting for 2007/8 was held on 9 April 2008.