Tesco 2012 Annual Report Download - page 58

The Board holds at least one in-depth session a year focusing on one
of the Group’s key areas of business, with the aim of broadening and
deepening the Directors’ understanding of that business. In March
2011 the Board spent several days looking at the US operations and
in March 2012 the Board carried out an in-depth review of our UK
business. Board trips allow the Directors to view first-hand the progress,
development, challenges and direction of our businesses, as well
as meeting our teams in those businesses.
Board performance evaluation
The Board conducted an external Board evaluation during the year.
The review was led by an experienced facilitator and combined in-depth
interviews with each Director and a questionnaire completed by
members of the Board.
The results of the review were considered in detail by the Board. The
review recognised that with both a new Chairman and a new Chief
Executive appointed during the year this was a time of transition. The
Board welcomed the opportunity this presented to complete a broad
updating of governance and Committee structures. Overall, the review
suggested that there was good engagement between Board members
and that Board processes (including the performance of Committees,
a new forward agenda and the quality of information flows) were of
a good standard. There was a high level of alignment about the key
strategic issues facing Tesco.
An important part of the review was establishing criteria against which
the future performance of the Chairman, the Directors individually and
the Board as a team could be reviewed. The Board endorsed a set of
criteria under these headings as follows:
Board performance evaluation criteria
Chairman Board leadership and management
Coaching and development
Ensuring accountability
Directors Strategic orientation
Results orientation
Collaboration
Independence
Engagement
Board Balance
Alignment
Resilience
Energy
Openness
Efficiency
During the year ended 25 February 2012, the Board considered a wide
range of issues, including:
 receiving reports from key businesses within the Group;
 receiving regular reports on the financial position of the Group and
the various businesses within the Group;
 approving the budget and long-term plan for the Group;
 approving interim and full-year results;
 discussing and approving Group strategy;
 considering opportunities for business development;
 discussing risk management and controls within the Group, including
a detailed review of the Key Risk Register;
 receiving reports from the Remuneration Committee, Audit
Committee and Nominations Committee and other key committees
within the Group including the Compliance Committee and
Corporate Responsibility Committee;
 receiving reports on governance issues affecting the Group; and
 conducting a review of the effectiveness of the Board.
Directors’ conflicts of interest
The Company has comprehensive procedures in place to deal with any
situation where a Director has an actual or potential conflict of interest.
Under these procedures members of the Board are required to:
 consider each conflict situation separately on its particular facts;
 consider the conflict situation in conjunction with the rest of their
duties under the Companies Act 2006;
 keep appropriate records and Board minutes demonstrating any
authorisation granted by the Board for such conflict and the scope
of any approvals given; and
 regularly review conflict authorisations.
Training and development
All new Directors receive a personalised induction programme, tailored
to their experience, background and particular areas of focus, which is
designed to develop their knowledge and understanding of the Group’s
culture and operations. The programme has evolved over time to take
into account feedback from new Directors and the development of best
practice, and will usually include a combination of meetings with senior
management from across the Group, comprehensive briefing materials
and opportunities to visit the Group’s operations across the world.
The Chairman agrees the personalised induction plan for each new
Director and ensures that it meets the individual needs of that Director.
Directors also receive a tailored induction in relation to those Board
Committees they will serve on.
The need for Director development is regularly assessed by the
Nominations Committee and training sessions are arranged to help
upskill the Directors on a variety of areas relevant to the Group’s
business, including social, environmental and ethical issues. In the
last year the Board received training focusing, inter alia, on recent
corporate governance developments, risk reporting by Tesco Bank
and the challenges and opportunities offered by the internet. Further
training in a number of key areas is planned for the coming year.
Corporate governance
54 Tesco PLC Annual Report and Financial Statements 2012