Board process

The Board governs through a number of statutory Board Committees – the Audit, Remuneration and Nominations Committees – to which certain responsibilities and duties are delegated. These Committees are properly authorised under the constitution of the Company to take decisions and act on behalf of the Board within the parameters laid down by the Board. The Board is kept fully informed of the work of these Committees and any issues requiring resolution will be referred to the full Board as appropriate. A summary of the operations of these Committees is set out below.

The effectiveness of the Audit, Remuneration and Nominations Committees is underpinned by their Non-executive Director membership which provides independent insight on governance matters. Copies of each of the Committee's Terms of Reference are available below. The Board is serviced by the Company Secretary who reports to the Chairman in respect of his core duties to the board.

Nominations Committee

The Nominations Committee leads the process for Board appointments, re-election and succession of Directors, as well as making recommendations for the membership of statutory committees. The Committee is chaired by Mr Reid and its members during the year were aMr Allen, Mr Chase, Mrs Cook, Mr Davies, Dr Einsmann, Mr Hydon, Ms McCall and Sir Terry Leahy. The Company Secretary also attends in his capacity as Secretary of the Committee. Where matters discussed relate to the Chairman, the Senior Independent Non-executive Director chairs the meeting. The Nominations Committee met in April 2008 to discuss the ongoing shape and capability of the Board. As well as reviewing the performance and development of the Executive Directors and the senior executive levels below the Board, the Committee also regularly reviews board structure, size, composition, working arrangements and capability, and considers succession plans for Executive and Non-executive Directors.

View the Nominations Committee Terms of Reference (PDF 31KB).

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 which can be found in the Annual Report and Financial Statements.

View the Remuneration Committee Terms of Reference (PDF 38KB).

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 non-audit work, as well as to review the programme of Internal Audit. The membership of the Committee is composed entirely of 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 won 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 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.

View the Audit Committee Terms of Reference (PDF 62KB).

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 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.

Executive Committee

The Board delegates responsibility for formulating and implementing the Group’s strategic plan and for management of the Group to the Executive Committee, which comprises of seven Executive Directors and is chaired by the Chief Executive. The Committee, which is not a statutory committee, has authority for decision-making in all areas except those set out in the Schedule if Matters Reserved for Board Decision and meets formally every week. A number of senior executives also attend the Committee and their valuable operational experience helps broaden the debate. Their attendance also facilitates the communication of the Committee’s decisions to the rest of the Group. The Company Secretary also attends in his capacity as Secretary to the Committee.

The Executive Committee is responsible for implementing Group strategy and policy and for monitoring the performance and compliance of the business, drawing on the work of relevant Committees, and reporting on these matters in full to the Board.

The Committee has set up further non-statutory Committees – including the Finance, Compliance and Corporate Responsibility Committees – and operational groups which have responsibility for implementing the key elements of the Group’s strategic plan and managing its UK and international operations, joint ventures, property acquisitions, finance, funding and people matters. These Committees and groups have as members an appropriate mixture of Executive Directors and senior management from relevant functions.

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