Corporate governanceReuters is committed to high standards ofcorporate governance and has compliedthroughout <strong>1999</strong> with the principles ofcorporate governance set out in Section 1 ofthe Combined Code (the Code) except inthose limited areas noted below and in theRemuneration Report.THE BOARDAs at 31 December <strong>1999</strong> the Boardcomprised six executive directors, includingthe Chief Executive, and seven independentnon-executive directors, including theChairman who is responsible for running theBoard. As at 11 February 2000 there werefive executive directors and eight nonexecutivedirectors. The Board has notidentified a senior independent non-executivedirector, as specified by the Code, because itconsiders such an appointment to beunnecessary at present. Each year thedirectors, other than the Chairman, meet toreview the role and performance of theChairman and once a year the Chairman andthe non-executive directors meet to reviewthe performance of the executive directors.The Board is scheduled to meet at least sixtimes a year and, in addition, it has an annualstrategy review meeting. A schedule ofmatters reserved for the Board’s decisionincludes the approval of annual and interimresults, corporate objectives, strategy and theannual budget, significant transactions andmatters relating to share capital. The directorsare bound by the company’s articles ofassociation to pay due regard to the ReutersTrust Principles. The Board views these ascentral to the company’s standing andcommercial success and works closely withthe Reuters Founders Share CompanyLimited to safeguard them. The TrustPrinciples and other relevant information areset out on page 78.Regular and ad hoc reports and presentationsto the Board and its committees ensure thedirectors are supplied, in a timely fashion,with the information they need. They alsohave access to the company secretary andthey may take independent professionaladvice at the company’s expense, although nosuch advice was sought during <strong>1999</strong>.Non-executive directors are appointed for aterm of six years, subject to agreement afterthree years that the term should continue. Alldirectors are subject to election by shareholdersat the first opportunity after their appointmentand to re-election thereafter at intervals of nomore than three years. Non-executivedirectors receive a series of briefings aboutReuters when they join the Board and theyperiodically visit Reuters offices throughoutthe world where they are briefed on variousaspects of the company’s operations. Trainingfor executive directors is available asappropriate and a training programmedesigned for Reuters in conjunction with theInstitute of Directors is run for directors ofthe company and its subsidiaries.Authority is delegated to the Chief Executivefor implementing the strategy and formanaging the group. In discharging hisresponsibility, the Chief Executive workswith a Group Executive committee whichduring <strong>1999</strong> comprised all the executivedirectors, Geoffrey Weetman (Director ofHuman Resources), Stephen Mitchell(General Counsel) and Philip Green sincejoining the company as Chief Executive ofReuters Trading Systems in September <strong>1999</strong>.The company is organised into three businessdivisions, Reuters Information, ReutersTrading Systems (renamed in 2000 asReuters Trading Solutions) and ReutersVentures (renamed in 2000 as Reuterspace).A global sales and operations group wasresponsible for the sale, installation, deliveryand support of most divisional productsduring <strong>1999</strong>. This group was largely broughtwithin Reuters Information division inFebruary 2000. Instinet continues to operateas an autonomous subsidiary.BOARD COMMITTEESThe Board has also delegated specificresponsibilities to its committees whoseterms of reference it sets. The maincommittees are the Audit Committee(Chairman: Charles Sinclair), theRemuneration Committee (Chairman: BobBauman) and the Nomination Committee(Chairman: Sir Christopher Hogg). Themembers of the Audit and RemunerationCommittees are Sir Christopher Hogg, BobBauman, Sir John Craven, DennisMalamatinas (since 1 January 2000), RobertoMendoza, Dick Olver, Charles Sinclair andSir David Walker. These directors and theChief Executive are the members of theNomination Committee.The Finance Director and the Deputy FinanceDirector attend all the Audit Committeemeetings. All executive directors are invitedto attend. The Audit Committee meets at leasttwice a year and reviews the half year andannual results before their approval by theBoard. In doing so, the Committee focuses onany change in accounting practice, majorareas of judgement, the going concernassumption and compliance with accountingprinciples and regulatory requirements, and itensures the annual report presents a balancedand understandable assessment of thecompany’s financial position and prospects.The Committee may examine whateveraspects it deems appropriate of the group’sfinancial affairs, its internal and externalaudits and its exposure to risks of a legal orregulatory nature. It keeps under review theeffectiveness of Reuters system of accountingand internal financial controls, for which thedirectors are responsible (see page 31). TheCommittee reviews the plans and findings ofthe internal and external auditors with themeach year. The auditors have unrestrictedaccess to the Audit Committee. The AuditCommittee recommends the appointment ofthe company’s external auditors.The Remuneration Committee meets at leastfour times a year. Its role is to agree aframework of policies and to determinewithin it all remuneration and benefits forthe executive directors. In addition, theCommittee decides on any otherremuneration issue which affects the interestof shareholders and is involved in setting thelevels and principles in executiveremuneration policy. The Committee hasaccess to professional advice inside andoutside the company. In framing itsremuneration policy the Committee has givenfull consideration to the provisions of Section1B of and Schedule A to the Code. Theremuneration report prepared by the Board isset out on pages 24–30. In preparing thereport, the Board has followed the provisionsof Schedule B to the Code.The Nomination Committee makesrecommendations to the Board about future22 Reuters Group <strong>PLC</strong> Annual Report <strong>1999</strong>
appointments of non-executive directors, theChairman and the Chief Executive andconsiders recommendations from the ChiefExecutive to the Board about futureappointments of executive directors.RELATIONS WITH SHAREHOLDERSThe executive directors meet regularly withinstitutional shareholders and analysts.Investor relations departments in London andNew York are dedicated to improvingcommunications between the company andits shareholders. The company’s annualgeneral meeting is used as an opportunity tocommunicate with private investors. At itsannual general meeting in <strong>1999</strong> the companyannounced the level of proxies lodged oneach resolution and the balance for andagainst the resolution after it had been dealtwith on a show of hands. The companyproposes to continue with this practice at thisyear’s annual general meeting.INTERNAL CONTROLS <strong>AND</strong>FINANCIAL <strong>REPORT</strong>INGIn accordance with the transitionalarrangements which apply in respect ofcompliance with principle D.2 of the Codeon internal control the Board has decided thatfor <strong>1999</strong> it will continue to report on internalfinancial control pursuant to the guidance fordirectors on internal control and financialreporting that was issued by the RuttemanWorking Group in December 1994 (seepage 31).The Board has studied the recommendationsof the Turnbull Committee published on 27September <strong>1999</strong> and has adopted revisedprocesses to allow it to report on internalcontrols in the 2000 Annual Report.Reuters Group <strong>PLC</strong> Annual Report <strong>1999</strong> 23
Change language