AstraZeneca Annual Report and Form 20-F Information 2011

Corporate Governance ReportThe Board’s annual performance evaluation was previously externallyfacilitated in 2008. The Board intends to continue to comply with theUK Corporate Governance Code guidance that the evaluation shouldbe externally facilitated at least every three years.Re-election of DirectorsIn accordance with Article 66 of the Articles, all Directors retire ateach AGM and may offer themselves for re-election by shareholders.Accordingly, all the Directors will retire at the AGM in April 2012. TheNotice of AGM will give details of those Directors seeking re-election.AccountabilityRisk management and internal controlThe Non-Executive Directors have various responsibilitiesconcerning the integrity of financial information, internal controlsand risk management.The Board has overall responsibility for our system of internal controlsand risk management policies and is also responsible for reviewingtheir effectiveness. During 2011, the Directors have continued toreview the effectiveness of our system of controls, risk managementand our high-level internal control processes. These reviews haveincluded an assessment of internal controls, and in particular, financial,operational and compliance controls and risk management andtheir effectiveness, supported by management assurance of themaintenance of controls reports from GIA, as well as the externalauditor on matters identified in the course of its statutory audit work.The system is designed to manage rather than eliminate the risk offailure to achieve business objectives and can only provide reasonable(not necessarily absolute) assurance of effective operation andcompliance with laws and regulations.Underpinning these reviews is an annual ‘letter of assurance’ processby which responsible managers confirm the adequacy of their systemsof internal financial and non-financial controls, their compliance withGroup policies and relevant laws and regulations (including theindustry’s regulatory requirements), and that they have reported anycontrol weaknesses through our ‘continuous assurance’ process.The internal control framework has been in operation throughout 2011and continues to operate up to the date of the approval of this AnnualReport. The Directors believe that the Group maintains an effective,embedded system of internal controls and complies with the TurnbullReport guidance and, in the view of the Directors, no significantdeficiencies have been identified in the system.Further information about the ways in which we manage our businessrisks is set out in the Risk section from page 129, which also containsa list of the principal risks and uncertainties that we face.RemunerationInformation about our approach to remuneration and the role andwork of the Remuneration Committee, including our policy onexecutive remuneration, is set out in the Directors’ RemunerationReport from page 113.Relations with shareholdersIn our financial and business reporting to shareholders and otherinterested parties by means of quarterly, half-yearly and annualreports, we aim to present a balanced and understandableassessment of our strategy, financial position and prospects.We make information about the Group available to shareholdersthrough a range of media, including a fully integrated html corporatewebsite, astrazeneca.com, containing a wide range of data of interestto institutional and private investors. We consider our website to be animportant means of communication with our shareholders.The Company has been authorised by shareholders to placeshareholder communications (such as the Notice of AGM and thisAnnual Report) on the corporate website in lieu of sending papercopies to shareholders (unless specifically requested by shareholders).While recognising and respecting the fact that some of ourshareholders may have different preferences about how they receiveinformation from us, we will continue to promote the benefits ofelectronic communication given the advantages that this has overtraditional paper-based communications, both in terms of theconfigurability and accessibility of the information provided and theconsequent cost savings and reduction in environmental impactassociated with reduced printing and distribution costs.We have frequent discussions with institutional shareholders on arange of issues. These include individual meetings with some of ourlargest institutional shareholders to seek their views. Board membersare kept informed of any issues and receive regular reports andpresentations from executive management and our brokers in orderto assist them to develop an understanding of major shareholders’views about the Group. From time to time, we conduct an audit ofinstitutional shareholders to ensure that we are communicating clearlywith them and that a high-quality dialogue is being maintained. Theresults of this audit are reported to and discussed by the full Board.In November, we invited corporate governance representatives fromour largest institutional shareholders to a meeting attended by LouisSchweitzer, Chairman of the Board; Michele Hooper, seniorindependent Non-Executive Director and Chairman of the AuditCommittee; John Varley, Chairman of the Remuneration Committee;and Rudy Markham, member of the Remuneration Committee andthe Audit Committee. Although the meeting was primarily focusedon executive remuneration matters, it provided an opportunity forshareholders to raise any broader corporate governance issues fordiscussion as well.Board Committee membershipName Audit RemunerationNomination andGovernance Science Independent 1David Brennann/aBruce Burlington 3 3 3Jean-Philippe Courtois 3 3Jane Henney 2 3 3 3 3Michele Hooper 3 Chair 3 3Simon Lowthn/aRudy Markham 3 3 3Nancy Rothwell 3 3 Chair 3Louis Schweitzer 4 3 Chair n/aShriti Vadera 3 3John Varley Chair 3 3Marcus Wallenberg 3 ✘1As determined by the Board for UK Corporate Governance Code purposes.2Jane Henney retired from the Board on 28 April 2011.3Michele Hooper is the senior independent Non-Executive Director.4Louis Schweitzer was considered independent by the Board upon his appointment as Chairman. In accordance with the UK Corporate Governance Code, the test of independence is not appropriatein relation to the Chairman after his appointment.106 Corporate Governance ReportAstraZeneca Annual Report and Form 20-F Information 2011