Annual report 2010 - Imperial Tobacco Group

and supplemented by our Non-Executive Directors who bringa wide range of business and financial expertise to the Board,for example, from the wider FMCG, financial and legal sectorstogether with specific regional knowledge.We believe the Board remains well balanced andappropriately constituted. The Board currently has 10Directors: our Non-Executive Chairman, three ExecutiveDirectors and six independent Non-Executive Directors.Mr J-D Comolli, who resigned from the Board with effectfrom 14 September 2010, was not classified by theCompany as independent for the purposes of the Codewhen determining the composition of our Board andits Committees, due to his Chairmanships of certainsubsidiaries within our Group and his provision ofconsultancy services.Dr P H Jungels is our Senior Independent Director withwhom we encourage shareholders to raise any concerns.Following its annual evaluation (page 65) and review ofpotential conflicts of interest, the Board concluded at itsmeeting in September 2010 that all our Non-ExecutiveDirectors continue to contribute effectively and constructivelyto Board debate. This evaluation also concluded that ourNon-Executive Directors continue to objectively challengeand robustly question management and at all times havethe best interests of our stakeholders in mind. We, therefore,confirm that, with the exception of Mr Comolli (until hisresignation on 14 September 2010) and our Chairman (whowas only required to meet the independence criteria of theCode on appointment), our Non-Executive Directors remainindependent as defined in the Code.To address the provisions of Section 175 of the CompaniesAct 2006 (the Act) relating to conflicts of interest, our Articlesof Association allow the Board to authorise situations inwhich a Director has, or may have, a conflict of interest.Our procedures require Directors to give notice of anypotential situational and/or transactional conflict. Any suchnotifications are considered at the following Board meetingand, if considered appropriate, situational conflicts areauthorised. We do not allow any Director to participate insuch considerations or to vote regarding their own conflicts.Balance of Executive andNon-Executive DirectorsSince adopting these procedures the Board has consideredand authorised a number of situations all of which relateto the holding of external directorships and have beenentered in our Conflicts Register. No actual conflicts havebeen identified. The Board considers that these proceduresoperate effectively.As part of our annual review process we reviewed andreconsidered all situations entered in the Conflicts Registerat our Board meeting in September 2010. We intend toperform this review and reconsideration annually.Following the above notifications and annual reviewthe Board is satisfied there is no compromise to theindependence of those Directors who have boardappointments or relationships with companies outside theGroup. In order to underpin his independence we enteredinto an agreement with Mr B Setrakian on 25 June 2008 tominimise the risk of any conflict of interest between Dewey& LeBoeuf LLP, of which he is a partner, and the Company.This agreement remains in full force and effect and the Boardconfirms his compliance with its terms and, therefore, hiscontinued independence.Nominations CommitteeIain NapierChairman4 Appointments to the Board: How rigorous is ourprocedure for the appointment of new directors tothe Board?MembersMr I J G Napier, ChairmanDr K M BurnettMr J-D Comolli(to 14 September 2010)Mr M H C HerlihyDr P H JungelsMr C F Knott (to 17 July 2010)Ms S E MurrayMr B SetrakianMr M D WilliamsonMr M R Phillips (General Counsel& Company Secretary (from 1October 2010 Group Corporate andLegal Affairs Director), acts asSecretary to the Committee)1No.Chairman 1Executive363Non-Executive663