Annual Report and Accounts 2009 - BG Group

42
Directors’ Report: Corporate Governance
Governance
One of the outcomes of the global banking
crisis of 2008 was a sharp increase in
public scrutiny of the role of boards in
assessing and managing risk and reviewing
management performance.
In 2009, both the Walker Review and the
Financial Reporting Council (FRC) review
of the Combined Code on Corporate
Governance (the “Combined Code”) sought
to assess the extent to which existing
governance models provide shareholders
and directors with the appropriate oversight
of management activities.
www.bg-group.com
Effective governance lies at the
core of BG Group’s ability to
operate successfully in the global
business environment.
Sir Robert Wilson
Chairman
As a UK-listed company, BG Group is required to state whether it
has complied with the provisions in Section 1 of the Combined Code
2008 throughout the year and, where the provisions have not been
complied with, to provide an explanation.
BG Group is also required to explain how it has applied the principles
in Section 1 of the Combined Code which are set out below.
A central proposition of the Combined
Code is that boards should provide
entrepreneurial leadership within a
framework of controls designed to assess
and manage risk effectively. BG Group
supports that proposition. Effective
governance lies at the core of the Group’s
ability to operate successfully in the global
business environment. The main principles
of the Combined Code form the key
components of the Group’s approach
to corporate governance.
Organisation
and Structure
The Combined Code, which as part of the
FRC’s ongoing review is to be renamed the
‘UK Corporate Governance Code’, operates
on a ‘comply or explain’ basis. The Directors
consider that the Company complied with
the provisions set out in Section 1 of the
Combined Code throughout the year ended
31 December 2009.
The following pages are intended to give
shareholders a clear and comprehensive
picture of the Group’s governance
arrangements by reference to the principles
in the Combined Code as it currently applies.
Compliance with the Combined Code Governance Framework
A Directors
• The Board
• Chairman and Chief Executive
• Board balance and independence
• Appointments to the Board
• Re-election to the Board
• Information and professional development
• Performance evaluation
B Remuneration
• The level and make-up of remuneration
• Procedure
C Accountability and audit
• Financial reporting
• Internal control
• Audit Committee and auditors
D Relations with shareholders
• Dialogue with institutional shareholders
• Constructive use of the annual general meeting
BG GROUP SHAREHOLDERS
BOARD OF DIRECTORS
Internal Control
Framework
Independent
Assurance
Further details of the Group’s Governance Framework can be found on
pages 46 to 49.