CRH Annual Report 2007 PERFORMANCE AND GROWTH

Corporate Governance continued• reviewing the economicimportance of the Group tothe external auditors andassessing whether thatimportance impairs, or appearsto impair, the external auditors’judgement or independence.The Group has a policygoverning the conduct of nonauditwork by the auditors.Under that policy, the auditorsare prohibited from performingservices where the auditors:• may be required to audittheir own work;• participate in activities thatwould normally be undertakenby management;• are remunerated througha ‘success fee’ structure,where success is dependenton the audit; or• act in an advocacy rolefor the Group.Other than the above, the Groupdoes not impose an automatic banon the Group auditors undertakingnon-audit work. The auditors arepermitted to provide non-auditservices that are not, or are notperceived to be, in conflict withauditor independence, providingthey have the skill, competenceand integrity to carry out thework and are considered bythe Committee to be the mostappropriate to undertake suchwork in the best interests of theGroup. The engagement of theexternal auditors to provide anynon-audit services must be preapprovedby the Audit Committeeor entered into pursuant to preapprovalpolicies and proceduresestablished by the Committee.The Group audit engagementpartner rotates every five years.Details of the amounts paid to theexternal auditors during the yearfor audit and other services areset out in note 4 to the financialstatements on page 72.The Finance Committee advisesthe Board on the financialrequirements of the Group and onappropriate funding arrangements.The Nomination Committee assiststhe Board in ensuring that thecomposition of the Board andits Committees is appropriateto the needs of the Group by:• assessing the skills, knowledge,experience and diversity requiredon the Board and the extent towhich each are represented;• establishing processes forthe identification of suitablecandidates for appointmentto the Board; and• overseeing successionplanning for the Board andsenior management.To facilitate the search forsuitable candidates to serve asnon-executive Directors, theCommittee uses the servicesof independent consultants.During 2007, the Committeeidentified, and recommended tothe Board, a suitable candidate forappointment as a non-executiveDirector. The Committee alsoreviewed succession planningat senior management level inthe four operating Divisions.The Remuneration Committee,which consists solely of nonexecutiveDirectors considered bythe Board to be independent:• determines the Group’s policyon executive remuneration;• determines the remunerationof the executive Directors;• monitors the level andstructure of remuneration forsenior management; and• reviews and approves the designof all share incentive plans.The Committee receives advicefrom leading independent firmsof compensation and benefitconsultants when necessaryand the Chief Executive is fullyconsulted about remunerationproposals. The Committee overseesthe preparation of the Reporton Directors’ Remuneration.In 2007, the Committee determinedthe salaries of the executiveDirectors and awards under theperformance-related incentiveplans; set the remuneration ofthe Chairman; and reviewedthe remuneration of seniormanagement. It also approvedthe award of share options tothe executive Directors and keymanagement and the conditionalallocation of shares under thePerformance Share Plan.A Succession Committeehas been appointed to makerecommendations to the Board inrelation to the appointment of anew Chief Executive to succeedMr. Liam O’Mahony, whoseretirement at the end of 2008 hasbeen announced. The membersof this committee are Mr. KieranMcGowan, Mr. Nicky Hartery, Mr.Jan Maarten de Jong, Mr. DavidKennedy and Mr. Terry Neill.Corporate Social ResponsibilityCorporate Social Responsibility isembedded in all CRH operationsand activities. Excellence inenvironmental, health, safetyand social performance is a dailykey priority of line management.Group policies and implementationsystems are summarised onpages 8 and 9 and are describedin detail in the CSR Report on theGroup’s website, www.crh.com.During 2007, CRH was againrecognised by several key ratingagencies as being among theleaders in its sector in respectof sustainability performance.Code of Business ConductThe CRH Code of BusinessConduct is applicable to all Groupemployees and is supplemented bylocal codes throughout the Group’soperations. The Code is availableon the Group’s website,www.crh.com. Regional hotlinefacilities are in place, to enableemployees to report suspectedbreaches of the Code. TheBoard recently approved a newCode of Business Conduct,which will be rolled out to theoperating companies duringthe course of 2008.Communications withShareholdersCommunications with shareholdersare given high priority andthere is regular dialogue withinstitutional shareholders, as wellas presentations at the time ofthe release of the annual andinterim results. Conference callsare held following the issuanceof trading statements and majorannouncements by the Group,which afford Directors theopportunity to hear investors’reactions to the announcementsand their views on other issues.Trading statements are issued inJanuary and July. Major acquisitionsare notified to the StockExchanges in accordance with therequirements of the Listing Rules.In addition, development updates,giving details of other acquisitionscompleted and major capitalexpenditure projects, are issuedin January and July each year.During 2007, the Board receivedreports from management on theissues raised by investors in thecourse of presentations followingthe annual and interim results.The Group’s website,www.crh.com, provides the fulltext of the Annual and InterimReports, the Annual Report onForm 20-F, which is filed annuallywith the United States Securitiesand Exchange Commission,trading statements and copiesof presentations to analysts andinvestors. News releases aremade available in the News &Media section of the websiteimmediately after release tothe Stock Exchanges.The Company’s Annual GeneralMeeting affords individualshareholders the opportunity toquestion the Chairman and theBoard. Notice of the Annual GeneralMeeting is sent to shareholdersat least 20 working days beforethe meeting. At the meeting,after each resolution has beendealt with, details are given ofthe level of proxy votes lodged,the balance for and against that44 CRH