Annual Report 2010 in PDF - BBA Aviation

Directors’
Corporate
Governance
Statement
continued
74 — Directors’ Report
5. An annual budgeting exercise is carried out to set targets for each
of the Group’s reporting units.
6. Detailed management accounts are submitted monthly to
management which measure actual performance against budget
and forecasts. The monthly forecasts of sales, profts and operating
cash are updated on a quarterly basis. The integrity of these
management accounts with the underlying fnancial records is
subject to review as part of the internal audit process. A monthly
report is provided to the Board, based on these management
accounts, highlighting key issues and summarising the detailed
fnancial information provided by the operating units.
7. Capital expenditure is controlled by means of budgets,
authorisation levels requiring the approval of major projects by the
Group directors and by post-investment appraisals. The lessons
learned from the post-investment appraisals are also shared with
members of senior management.
8. Defned procedures are laid down for investments, currency
and commodity hedging, granting of guarantees and use of
treasury products.
9. A detailed matrix defnes the levels of authority for the Group’s
senior executives and their direct reports in relation to acquisitions,
capital expenditure, commercial and employee contracts and
treasury matters. This matrix is authorised by the Audit Committee
on behalf of the Board and is reviewed on an annual basis.
Compliance with the authority matrix is reviewed as part of the
internal audit process.
10. All signifcant acquisitions and disposals of companies or
businesses are approved by the Board.
11. A Group policies manual sets out policies and procedures
concerning: business ethics, bribery and corruption, gifts and
entertainments, equal opportunities and anti-harassment
guidelines, competition law, legal policy, market disclosure and
communications and share dealing. A bi-annual review of
compliance with such policies by Group companies is carried out
and senior executives are also required to confrm compliance with
certain policies twice a year. Group policies are complemented by
divisional and company-led initiatives and are supplemented by
the Group’s Disclosure of Unethical Conduct Policy which includes
a 24-hour “hotline” available to all employees, supported by a
formal investigation protocol and regular reporting to the Audit
Committee as part of the twice yearly report to the Audit
Committee on Business Ethics and Compliance.
12. A Group Safety Management System Manual details policies,
standards and procedures which are applicable throughout the
Group. Further details about Health, Safety and Environmental
(HSE) matters are set out on pages 61 and 62 and on the BBA
Aviation website. Annual self-assessment and/or audits are carried
out at company level against these Group standards. An executive
summary HSE report is reviewed at each meeting of the Executive
Management Committee. The Board also receives this summary
HSE report in addition to updates on HSE activities. These reports
cover all Group companies and are prepared by the internal Group
HSE function. Senior managers’ performance and related f nancial
incentives are tied in part to their success against selected annual
HSE improvement objectives.
11. Shareholder Relations
The Board as a whole is routinely kept up to date on corporate
governance developments and the views of BBA Aviation’s major
shareholders. This was achieved in 2010 through regular meetings
between the Group Chief Executive, the Group Finance Director and
major shareholders, which are then reported to the Board as a whole.
The Board also receives formal written reports from its brokers
regarding the views of its principal shareholders following its
preliminary and half yearly results announcements and at other times
as appropriate. All non-executive directors, including the Senior
Independent Director, are available to meet with major shareholders
and in addition, prior to the AGM in 2010, the Chairman also contacted
the principal shareholders at that time, formally ofering them the
opportunity to raise any issues or questions. The Board considers that
its non-executive directors, including its current Senior Independent
Director, Nick Land, have a good level of understanding of the issues
and concerns of major shareholders, as required by the Code.
A programme of meetings with institutional shareholders, fund
managers and analysts takes place each year. The directors seek to
encourage a continuing dialogue. For example the Company held an
investor seminar in November 2010 attended by a range of
institutional shareholders, fund managers and analysts at which the
Group Chief Executive, Group Finance Director and business heads
spoke. The Company maintains contact as required with its principal
shareholders about directors’ remuneration in the same way as it does
for other matters.
The Company’s AGM is used as an opportunity to communicate
with private investors. It is intended that notice of the AGM and related
papers are sent to shareholders at least 20 working days before the
meeting. Michael Harper as Chairman of the Board and the
Nomination Committee, Nick Land as Chairman of the Audit
Committee and Senior Independent Director, and Mark Harper as
Chairman of the Remuneration Committee and CSR Responsible
Director will each be available to answer questions, as appropriate, at
the AGM. Shareholders are given the opportunity of voting separately
on each proposal. The Company counts all proxy votes cast in respect
of the AGM and makes available the proxy voting fgures (for, against,
at discretion and “vote withheld”) on each resolution. The voting
results of the AGM, together with the details of proxy votes cast prior
to the meeting, are made available on request and on the Company’s
website. The results of the AGM are announced to the market via a
Regulatory News Service.
Directors’ Corporate Governance Statement approved by the Board
on 1 March 2011 and signed on its behalf by:
Michael Harper
Chairman