1 Eric Ni.o i (49) Erc N co Wa5 aopo nted to the Boad . l99l .rs a Nof ere.Jt!e Dre.toi be(omnq €xetut,/eCharran l^ l"y 1999 Urt l0 Apr 1999, re,,!.s Group C'ltl Exe{Liiie 1r: !_ ied I(Lr5 Hold Esr p.,uB), \,;' c. l'eIr.ec lro- R.\rn:'€e l.lac
Corporate Governance EMI remains committed to high standards of corporate go€mance. lhe Board considers that the Company has, throughout the yeat complied with the Code prwisions set out in Section 1 of the Combined Code issued by the Commiftee on Corporate Go\€rnance, apart from those relating to the length of Directo6' service contracts, which are discussed in the Remuneration Repon (on page 33). ln accordance with guidance issued by the London Stod Exchange, the statement on pages 26 and 27 regarding the Companys system of internal control is limited to internal financial controls. Ernst & Young have reMewed the Company's statement as to its compliance wth the Combined Code, in so far as it relates to those parts of the Combined Code which the UK Listing Authority specifies for their review, and their report is set out on page 37. The remainder of this section provides an explanation of hcnrrr EMI applies the principles of good governance which are set out in the Combined Code. The Board The Board of EMI cunently comprises four Executile Directors and five Non-executive Directors. All of the I'lon€xecutle DiEctors are considered to be independent of management and free from any business or other relationship which could material! interfere wrth the exercise of their independent judgement. As reflected in their biographies, which appear on page 24, the DirectoB hare a wide range of experience in muhinational and consumer orientated businesses. fte Board therefore has a balanced range of experience. Mr Eric Nicoli is both Chairman and the senior executive officer of the Company Mr Nicoli took over these posittons followng Sir Colin Southgates retirement after the conclusion of the 1999 Annual General Meeting. Dayto-day executive responsibility for the running of the Company3 two main businesses lies wth Mr Ken Berry as Chief Executive Officer, EMI Recorded Music, and with Mr Martin Bandier as Chief Executive Officet EMI Music Publishing, Given the importance of the roles of Mr Berry and Mr Bandier, the Board consideB that the appointment of an executive chairman, who brings complementary skills and experience and to whom the divisional chief executive officers report, is the most effective structure for EMI and is in the best interesB of both the Company and its shareholders. The Board also considers that the nature and level of matters reserved for decision, erther to the Board as a whole or to standing committees of the Board, appropriately limit the authority of the Chairman and reflect the fact that the posts of chairman and senior executilte officer are combined in one person. It is the Boards policy that, so long as the Chairman is also the senior executive officer of the Company, the independent Nonexecutive Directo6 should comprise a numerical majority of the Board and that the senior independent Non-€xecutive Director should also be either sole or joint Deputy Chairman. Sir Dominic cadbury is the senior independent Non€xecutive Directot haMng succeeded Sir Peter Walte6, vvho retired at the conclusion of the 1999 AGM. Sir Dominic became the sole Deputy Chairman following the resignation of Mr Simon Duffy on 31 December 1999. Prior to then, Sir Dominic and Mr Duffy were joint Deputy Chairmen. Mr Dufry was also Group Finance Dircctor and has been succeeded in that role by Mr Tony Bat6, who combines his naru mponsibilitig with his preMous role as Executive Vice President and Chief Financial Officer, EMI Recorded Music. The appointment of Directo6 and executive appointmena wthin the Board are considercd by the Board as a rrvhole based on recommendations from the Nomination Committee. The Articles of Association include a requirement that all Directors should submit themset!€s for reelection by the shareholdeB at least once every three years. The Board meets at least six times each year, with additional meetings or contact betl^/een meetings as necessary The programme for each year is approred by the Board and. cunently, involves reviarvs of strategy and the operations and results of the two marn business units, as well as the approval of annual budges and medium-term plans. Actual results for the Group and individual business units are reported to all Directos each month. At least once each year the Board meets at the premises of one of the Groups business operations, to allow for presentations by, and more detailed discusions with, local management. These procedures, together with other regular and ad hoc reports, are antended to ensure that the Board is supplied in a timely manner with information appropriate to enable it to discharge its duties. lhe Board has delegated certain matte6 to standing committees, details of which are set out belcMi. Horvgrer, to ensure its overall control of the Companys affairs, the Board has resened certain matteB to itself for decision. lhese include the Groups nrategic plans and annual operatrng budgeb, sgnificant acqursitions or disposals of companies, businesses or asets, and signfficant contractual commitmen6 or items of expenditure, together with policies relating to the Groups treasury function, pensions, major lrtigation, employee share schemes, and environmental and ethical isues. All Directom have access to the services and advice of the Company Secretary and there are also procedures for Director to obtain independent professional advice at the cost of the Company in appropriate circumstances.
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