Annual Report and Accounts 2006 - DCC plc

38corporate governanceThe Board of DCC continues to becommitted to maintaining the higheststandards of corporate governance.The following report describes howDCC has applied the principles set outin Section 1 of the Combined Code onCorporate Governance.The Board of DirectorsRoleThe Board of DCC is responsible forthe leadership, strategic direction andoverall management of the Group andhas a formal schedule of mattersspecifically reserved to it for decision,which covers key areas of the Group’sbusiness including approval offinancial statements, budgets(including capital expenditure),acquisitions and dividends. The Boardhas delegated responsibility for themanagement of the Group, throughthe Chief Executive, to executivemanagement. There is a clear divisionof responsibilities between theChairman and the Chief Executive,which is set out in writing and hasbeen approved by the Board. Certainadditional matters are delegated toBoard Committees.CompositionThe Board consists of four executiveand seven non-executive Directors.Brief biographies of the Directors areset out on pages 6 and 7.Non-executive Directors are appointedby the Board for an initial term ofthree years and the expectation isthat they will be invited to serve asecond three-year term. The Boardmay also invite non-executiveDirectors to serve an additional periodthereafter. The terms and conditionsof appointment of non-executiveDirectors are set out in their letters ofappointment, which are available forinspection at the Company’sregistered office during normal officehours and at the Annual GeneralMeeting of the Company.Following appointment, Directors aresubject to re-election at the nextAnnual General Meeting. At least onethird of the Directors retire at eachAnnual General Meeting and all of theDirectors are subject to re-election atleast every three years. Non-executiveDirectors who have served on theBoard for more than nine years aresubject to annual re-election.All of the Directors bring independentjudgement to bear on issues ofstrategy, risk, performance, resources,key appointments and standards.The Board has recently evaluatedthe independence of each of its nonexecutiveDirectors. In the case ofAlex Spain, Tony Barry and PaddyGallagher, the Board gave dueconsideration to the fact that theyhave served on the Board for morethan nine years from the date of theirfirst election. The Board has concludedthat all of the non-executive Directorsare independent of management andfree of any relationships which couldinterfere with the exercise of theirindependent judgement.The Board has appointed MichaelBuckley as the Senior IndependentDirector. Mr. Buckley is available toshareholders who have concernsthat cannot be addressed throughthe Chairman or the ChiefExecutive/Deputy Chairman.Board proceduresThere is an established procedure forDirectors to take independentprofessional advice in the furtheranceof their duties if they consider thisnecessary. All Directors have accessto the advice and services of theCompany Secretary who is responsibleto the Board for ensuring that Boardprocedures are followed and thatapplicable rules and regulations arecomplied with.The Board recognises the need forDirectors, in particular new Directors, tobe aware of their legal responsibilitiesas directors and, in addition, theBoard ensures that Directors are keptup to date on the latest corporategovernance guidance and bestpractice. There is a full, formal andtailored induction process for newnon-executive Directors, whichincludes detailed presentations onthe Group’s operations.MeetingsThe Board holds regular meetings andthere is contact as required betweenmeetings in order to progress theGroup’s business. During the year, theBoard held nine meetings. Individualattendance at these meetings is setout in the table on page 40.RemunerationDetails of remuneration paid to theDirectors are set out in the Report ofthe Remuneration Committee onpages 44 to 47.Board CommitteesAudit CommitteeThe Audit Committee comprisesthree non-executive Directors,Bernard Somers (Chairman), RóisínBrennan and Paddy Gallagher. TheBoard has determined that BernardSomers is the Committee’s financialexpert. The Committee met fivetimes during the year. Individualattendance at these meetings is setout in the table on page 40.The Chief Executive/DeputyChairman, Chief Financial Officer,Head of Enterprise Risk Management,Group Internal Auditor, other Directorsand executives and representatives ofthe external auditors may be invitedto attend all or part of any meeting.The Committee also meets separatelywith the external auditors and withthe Group Internal Auditor withoutexecutive management present.The role and responsibilities of theAudit Committee are set out in its