Annual Report & Accounts 2006 - Euromoney Institutional Investor ...

CORPORATEGOVERNANCEThe Financial Reporting Council’s Combined Code oncorporate governance is part of the Listing Rules ofthe Financial Services Authority. The paragraphsbelow and in the Directors’ Remuneration Report onpages 25 to 37 set out how the company has appliedthe principles laid down by the Code. The companyhas substantially complied with the Code, save forthe exceptions disclosed in the directors’ compliancestatement on page 24.DirectorsThe board and its roleDetails of directors who served during the year areset out on page 21. The board comprisesthe chairman (Mr PM Fallon), managing director(Mr PR Ensor), 10 other executive directors and sixnon-executive directors. Two of the six non-executivedirectors are independent, one is the founder andex-chairman of the company, and the other three arealso directors of Daily Mail and General Trust plc, anintermediate parent company. There are clear divisionsof responsibility within the board such that no oneindividual has unfettered powers of decision. The boardalthough large does not consider itself to be unwieldyand believes it is beneficial to have representatives fromall key areas of the business at board meetings. Thereis a procedure for all directors in the furtherance oftheir duties to take independent professional advice,at the company’s expense. They also have access tothe advice and services of the company secretary.All directors submit themselves for re-election at leastonce every three years. Newly appointed directors aresubmitted for election at the first available opportunityafter their appointment.The board meets every two months and there isfrequent contact between meetings. Board meetingstake place in London and New York, and occasionallyin other locations where the group has operations.The board has delegated specific aspects of the group’saffairs, each of which operates within defined terms ofreference, to standing committees. Details of these areset out below. However, to ensure its overall controlof the group’s affairs, the board has reserved certainmatters to itself for decision. The board meetings areheld to set and monitor strategy, identify, evaluate andmanage material risks, to review trading performance,ensure adequate funding, examine major acquisitionpossibilities and approve reports to shareholders.Procedures are established to ensure that appropriateinformation is communicated to the board in a timelymanner to enable it to fulfil its duties.Executive committeeChaired by the company’s chairman, the executivecommittee also comprises the divisional directors of thegroup’s main businesses, together with the managingdirector and finance director. The committeeis responsible for the approval of acquisitions,divestments, capital expenditure and contractualcommitments below the level that the board hasreserved to itself for decision, and for certainoperational, administrative and other routine matters.The committee also regularly reviews and reports to theboard on the performance of the group’s businesses.At least 11 meetings are held each year and othersenior executives frequently attend by invitation.Nominations committeeThe nominations committee is responsible forproposing candidates for appointment to the boardhaving regard to the balance of skills and structure ofthe board and ensuring the appointees have sufficienttime available to devote to the role. The committeemeets when required and comprises PM Fallon(chairman of the nominations committee), PR Ensorand four non-executive directors; Sir Patrick Sergeant,The Viscount Rothermere, CJF Sinclair, and JC Botts(independent). The committee’s terms of referenceare available on the company’s web site.The nominations committee met formally during theyear to discuss the possible appointment of one ormore new executive directors, given Mr Bounous’resignation during the year, and to consider appointingan additional non-executive director.Remuneration committeeThe remuneration committee meets twice a yearand additionally as required. It is responsible fordetermining the contract terms, remuneration andother benefits for executive directors, includingperformance related profit share schemes. Thecommittee also recommends and monitors the levelof remuneration for senior management and for therest of the group. The composition of the committee,details of directors’ remuneration and interests in shareoptions, together with information on directors’ servicecontracts, are set out in the Directors’ RemunerationReport on pages 25 to 37. The committee’s terms ofreference are available on the company’s web site.Audit committeeDetails of the members and role of the auditcommittee are set out on page 23. The committee’sterms of reference are available on the company’sweb site.Tax and Treasury committeeDetails of the members and role of the tax andtreasury committee are set out in the Directors Reporton pages 11 and 12.20 Euromoney Institutional Investor PLC