AstraZeneca Annual Report and Form 20-F Information 2011

Corporate Governance ReportOperation of the BoardThe Board is responsible for setting our strategy and policies,oversight of risk and corporate governance, and also monitorsprogress towards meeting our objectives and annual plans. The Boarddischarges these responsibilities through a programme of meetingsthat includes regular reviews of financial performance and criticalbusiness issues, and the formal annual strategy review day. TheBoard also aims to ensure that a good dialogue with our shareholderstakes place and that their issues and concerns are understoodand considered.The Board held seven meetings and its annual strategy review dayin 2011. With the exception of two Board meetings in September andthe strategy day in the same month, which were held at our site inWilmington in the US, all the meetings took place in London, UK.The Board is currently scheduled to meet six times and hold a strategyreview day in 2012, and will meet at such other times as may berequired to conduct business.As part of the business of each Board meeting, the CEO typicallysubmits a progress report on each key business area, giving detailsof progress against the goals the Board has approved. To ensurethat the Board has good visibility of the key operating decisions ofthe business, members of the SET routinely attend Board meetingson a rotational basis and Board members regularly meet othersenior executives throughout the year. The Board also receivesaccounting and other management information about our resources,and presentations from internal and external speakers on legal,governance and regulatory developments. At the end of Boardmeetings, the Non-Executive Directors meet without the ExecutiveDirectors present to review and discuss any matters that have arisenduring the meeting and/or such other matters as may appear to theNon-Executive Directors to be relevant in properly discharging theirduty to act independently.Board effectivenessComposition of the Board, succession planning and diversityThe Nomination and Governance Committee and, where appropriate,the full Board regularly review the composition of the Board and thestatus of succession to both senior executive management andBoard-level positions. Directors have regular contact with, and accessto, succession candidates for senior executive management positions.The Board aims to maintain a balance in terms of the range ofexperience and skills of individual Board members, which includesrelevant international business, pharmaceutical industry and financialexperience, as well as appropriate scientific and regulatory knowledge.The biographies of Board members set out from pages 100 to101 give more information about current Directors in this respect.The Board views gender, nationality and cultural diversity amongBoard members as important considerations when reviewing thecomposition of the Board. The Board recognises, in particular, theimportance of the debate about gender diversity, prompted by thepublication in the UK in February 2011 of the report by Lord Davies,‘Women on Boards’. Since the formation of AstraZeneca in 1999, theproportion of women Board members has been approximately 25%and the Board intends to continue with its current approach todiversity in all its aspects, while at the same time seeking Boardmembers of the highest calibre and with the necessary experienceand skills to meet the needs of the Company and its shareholders.Information about our approach to diversity in the organisation belowBoard-level can be found in the People section on page 41.The following changes to the composition of the Board have occurredduring the period covered by this Annual Report:> Shriti Vadera was appointed as a Non-Executive Director and amember of the Audit Committee with effect from 1 January 2011.> Jane Henney, a Non-Executive Director, retired from the Board on28 April 2011.Independence of the Non-Executive DirectorsDuring 2011, the Board considered the independence of eachNon-Executive Director for the purposes of the UK CorporateGovernance Code and the corporate governance listing standardsof the NYSE (Listing Standards). With the exception of MarcusWallenberg, the Board considers that all of the Non-ExecutiveDirectors are independent. Louis Schweitzer was considered bythe Board to be independent upon his appointment as Chairman;in accordance with the UK Corporate Governance Code, the testof independence is not appropriate in relation to the Chairman afterhis appointment.Marcus Wallenberg was appointed as a Director of Astra in May1989 and subsequently became a Director of the Company in 1999.Until September 2005, he was a member of the board of directorsand the Chief Executive Officer of Investor AB, which has a 4.02%interest in the issued share capital of the Company as at 2 February2012. Wallenberg family foundations remain Investor AB’s largestshareholders in terms of votes controlled. For these reasons, theBoard does not believe that Marcus Wallenberg can be determinedindependent under the UK Corporate Governance Code. However,the Board believes that he has brought, and continues to bring,considerable business experience and makes a valuable contributionto the work of the Board. In April 2010, Marcus Wallenberg wasappointed by the Board as a member of the Science Committee,reflecting his interest in innovation and R&D, knowledge of the historyof the Company and its scientific heritage and culture, and his broadexperience of other industries and businesses in which innovation andR&D are important determinants of success.The Board has also considered, in particular, the position of MicheleHooper who joined the board of UnitedHealth Group as a Non-Executive Director in 2007. The Board’s approval of this appointmentwas conditional on Michele Hooper resigning from the board ofUnitedHealth Group in the event of a conflict or non-independence.It is the Board’s view that Michele Hooper is independent and thatshe discharges her duties in a properly independent manner,constructively and appropriately challenging the Executive Directorsand the Board.Conflicts of interestThe Articles enable the Directors to authorise any situation in whicha Director has an interest that conflicts or has the potential toconflict with the Company’s interests and which would otherwise bea breach of the Director’s duty, under section 175 of the CompaniesAct 2006. The Board has a formal system in place for Directors todeclare such situations to be considered for authorisation by thoseDirectors who have no interest in the matter being considered. Indeciding whether to authorise a situation, the non-conflicted Directorsmust act in the way they consider, in good faith, would be most likelyto promote the success of the Company, and they may impose limitsor conditions when giving the authorisation, or subsequently, if theythink this is appropriate. Situations considered by the Board andauthorisations given are recorded in the Board minutes and in aregister of conflicts maintained by the Company Secretary andreviewed annually by the Board. The Board considers that thissystem continues to operate effectively.Appointments to the BoardThe Nomination and Governance Committee section on page 109gives information about the appointment process for new Directors.Newly appointed Directors are provided with comprehensivedocumentation containing information about the Group and theirrole as Non-Executive Directors. They also typically attend tailoredinduction programmes that take account of their individual skillsand experience.104 Corporate Governance ReportAstraZeneca Annual Report and Form 20-F Information 2011