Directors' Report: Governance - British American Tobacco

Executive Directors’ external appointments
Executive Directors and members of the Management Board are
able to accept one substantive external Board appointment provided
that permission is respectively sought from the Board or Chairman.
The fees from such appointments are retained for a Director’s
own account, thereby recognising the increasing level of personal
commitment and expertise required for non-executive roles. None
of the Executive Directors or Management Board members currently
holds such an appointment.
Nicandro Durante, an Executive Director of the Company, is a
non-executive director of Reynolds American Inc (RAI) (an associated
undertaking of the Company) having been designated by Brown &
Williamson Holdings, Inc. (a wholly owned indirect subsidiary of the
Company), as its nominee to sit on the board of RAI. In accordance
with present arrangements, the Group received a fee of US$215,020
from RAI in respect of Nicandro Durante’s service in that role during
the year ended 31 December 2009.
Non-Executive Directors’ terms of appointment
The Non-Executive Directors do not have service contracts with the
Company but instead have letters of appointment. For Non-Executive
Directors appointed before 1 October 2007, the terms of appointment
of each such Director provide that he or she is appointed for a specified
term, being an initial period to the next Annual General Meeting after
appointment and, subject to reappointment at that meeting, for a
further period ending at the Annual General Meeting held three years
thereafter. Subsequent reappointment is subject to endorsement by
the Board and the approval of shareholders.
Following the implementation of the relevant provisions of the
Companies Act 2006, an appointment of a Non-Executive Director
made by the Company from 1 October 2007 is made on the basis
of a two year term; such appointment being subject to approval by
REMUNERATION REPORT
CONTINUED
shareholders in accordance with the terms of the provisions of the
Company’s Articles of Association relating to the rotation of Directors.
During 2009, the Board reviewed the terms of appointment for Non-
Executive Directors. In order to bring full alignment with the Company’s
Articles of Association, and to ensure that all Non-Executive Directors
(including those whose current terms are grandfathered under the
Companies Act 2006) are appointed on the same terms, it was agreed
by the Board that a new policy will be implemented during 2010. All
Non-Executive Directors will be placed on terms of appointment of one
year only. These would be considered for renewal around the time of the
Company’s Annual General Meeting each year, with the first appointments
being presented to the Board for its approval at the Board meeting
scheduled for 27 April 2010, to take effect immediately after the 2010
Annual General Meeting. This will become an annual exercise.
The date of appointment, the most recent reappointment and length
of service for each Non-Executive Director is shown in the table below.
Non-Executive Directors’ remuneration policy
The current fees structure for the Non-Executive Directors is shown below:
£
Basic fee 90,000
Supplements
– Senior Independent Director 25,000
– Audit Committee Chairman 25,000
– CSR Committee Chairman 20,000
– Remuneration Committee Chairman 20,000
The fees for the Non-Executive Directors are considered annually and
are determined in light of market best practice and with reference to
the time commitment and responsibilities associated with the roles.
The basic annual fee reflects the Board’s view of the inclusive nature
of the duties of the Non-Executive Directors which is reflected in its
Length of service
Date of last as at 2010 Annual
Date of reappointment General Meeting
Non-Executive Director appointment at AGM (Years)
Karen de Segundo 1 October 2007 30 April 2008 2.7
Robert Lerwill 1 January 2005 30 April 2009 5.4
Ana Maria Llopis 24 February 2003 30 April 2008 7.2
Christine Morin-Postel 1 October 2007 30 April 2008 2.7
Gerry Murphy 13 March 2009 30 April 2009 1.1
Anthony Ruys 1 March 2006 30 April 2008 4.2
Sir Nicholas Scheele 28 February 2005 30 April 2009 5.2
On termination, at any time, a Non-Executive Director is entitled to any accrued but unpaid Director’s fees but not to any other compensation.
88 British American Tobacco Annual Report 2009 Directors’ report: Governance