Report & Accounts - JLT

Directors’ ReportDirectors’ Report28Jardine Lloyd Thompson Group plc Annual Report & Accounts 2005Corporate GovernanceDuring the year the Company has been in compliancewith the provisions as set out in Section 1 of theCombined Code on Corporate Governance issued bythe Financial Reporting Council in July 2003 (the "Code")except for the following:• Ken Carter was appointed Executive Chairman on26th November 2004, combining the roles ofChairman and Chief Executive. Following theappointment of Dominic Burke as Group ChiefExecutive on 1st December 2005, Ken Carter hasreverted to the role of Chairman. He will retire asChairman and also from the Board at the conclusionof the forthcoming Annual General Meeting at whichtime Geoffrey Howe, currently Senior IndependentDirector and Joint Deputy Chairman, will assumethe role of Chairman of the Board.• Following the retirement from the Board on 28th April2005 of Messrs. Chouraqui, Sermon and Lloyd, theCompany was in breach of the Combined Code asthe number of executive directors exceeded thenumber of non-executive directors. Following theretirement of Mr Hobson on 31st July, theappointment of Messrs MacAndrew and Keljik on1st July and 1st November 2005 respectively, and theresignation of Mike Hammond on 1st December2005, one half of the Board has been non-executiveand a majority of the non-executive directors areconsidered independent in the context of the Codeand its definitions. The four independent directors areGeoffrey Howe, Chris Keljik, Nick MacAndrew andBob Scott.• Rodney Leach (Joint Deputy Chairman) and SimonKeswick both served as non-executive directors andboth are directors of Jardine Matheson HoldingsLimited, which has a 30.39% interest in the Company.The relationship with Jardine Matheson is maintainedon an arms-length basis as detailed in note 32 onpage 96. However neither director can be regarded asindependent in the context of the Code.• The Board believes that the presence of Messrs Leachand Keswick on the Board and its committees(subject to re-election under the Articles) continues tobe appropriate and in the interests of shareholdersgenerally and does not detract from theirindependence and judgment on any relevant issue.• The non-executive directors bring to the Boarda broad range of experience and expertise.The knowledge held by Messrs Leach and Keswickbuilt from the long standing relationship betweenJardine Matheson and JLT continues to be ofparticular value.• The majority of the members of the Audit andCompliance and Remuneration committees areindependent. However, Rodney Leach and SimonKeswick both served on these committees during theyear, and therefore the Group did not comply with theCode in relation to the membership of the theseCommittees.Both the Board and the external auditors have safeguardsin place to prevent the compromise of the auditors’independence and objectivity. Details of services providedby the Group’s auditors are set out in note 8 on page 71.The Audit and Compliance Committee also have a policyon the engagement of external auditors and the supply ofnon-audit services to the Group, including an annualreview of the auditors’ independence.The external auditors also report regularly on the actionsthat they have taken to comply with professional andregulatory requirements and current best practice in orderto maintain that independence.The directors are able to consult the Company’s legal,financial and other professional advisers on any matterrelating to the Company’s affairs. Any director may makeuse of this facility subject to notifying the Chairman orFinance Director.If independent advice is sought, this is subject to priorconsultation with the Chairman or a non-executivedirector as appropriate. All directors also have access tothe advice and services of the Company Secretary.The Company maintains appropriate directors’ andofficers’ liability insurance in respect of legal actionsagainst its directors.