Tesco 2012 Annual Report Download - page 54

Corporate governance
Introduction from the Chairman
Our approach to governance begins with the recognition that it is not a
set of rules but the framework supporting the core values which define
what is and what is not acceptable. It is an expression of the way we
want to conduct ourselves which informs actions and decisions whether
or not there is a specific rule for the situation, and which supports the
culture and behaviours that we wish to foster.
We are introducing a number of changes to our governance framework
from the beginning of 2012/13 to keep it aligned with this vision and
relevant to our growing business. The main features of the new
arrangements, which are described more fully below, are:
 a revised definition of Matters Reserved to the Board;
 an updated delineation of the roles of Chairman and Chief Executive;
 updated and expanded terms of reference for Board Committees;
 the elimination of a number of existing Committees and the creation
of one new Committee to oversee Corporate Responsibility; and
 clarification of the role and structure of the independent Board of
Tesco Bank and its relationship with the PLC Board.
A governance framework requires appropriate processes to support
it, which achieve a balance between prompting thoughtful judgement
when required and not stifling commercial behaviour through
delay, risk aversion or rigidity. The new governance framework has
given us the opportunity also to review the processes which support
and underlie it and we are introducing a number of improvements
in 2012/13.
Governance also requires the active and committed engagement of
Board and management. The development of the Board, to ensure that
its skills, balance and experience are optimum, is a continuous process
and the developments of the past year are described more fully below.
The Executive Committee and its supporting governance framework
and processes have also been developed during the year by the Chief
Executive, Philip Clarke.
We believe that these changes will enhance the way that the Group
operates. Our aim is to ensure that the Group continues to benefit from
structures and processes which support effective strategic debate and
questioning; appropriate monitoring of performance; the capacity to
formulate the right questions; and the strength to hold difficult
questions on behalf of shareholders.
Sir Richard Broadbent
Chairman
“Governance provides the framework
supporting the core values which define
what is and what is not acceptable. It informs
our actions and decisions and supports
the culture and behaviours that we wish
tofoster.”
Sir Richard Broadbent
Chairman
IN THIS SECTION
50 Introduction from the
Chairman
GOVERNANCE STRUCTURES
51 Governance structures
51 Compliance with the UK
Corporate Governance Code
DIRECTORS AND BOARD
RESPONSIBILITIES
52 Board composition
and independence
52 Election of Directors
52 Explanation of the roles
of Chairman, CEO, SID,
Non-executive Directors
and Company Secretary
53 Diversity
53 Board responsibilities
54 Board performance evaluation
55 Board attendance
COMMITTEE INFORMATION
56 Nominations Committee
57 Remuneration Committee
58 Audit Committee
MANAGEMENT OF THE GROUP
59 Executive Committee
60 Risk management and internal
controls including Tesco Bank
62 Whistle-blowing
62 Anti-corruption
62 Code of Business Conduct
SHAREHOLDERS
63 Relations with stakeholders
63 The Tesco PLC AGM
50 Tesco PLC Annual Report and Financial Statements 2012