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We have a number of governance practices and structures
in place designed to ensure that the Company is run in
a responsible fashion in the best interests of its shareholders
and other stakeholders. |
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These measures make a significant
contribution towards our profile
as a socially and environmentally
responsible company —
they contribute toward the implementation
of our policies and provide
the monitoring systems needed
to check on our performance.
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Combined Code Statement |
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During the financial year, we complied with the requirements
of Section (1) of the Combined Code of Corporate Governance.
The Code forms part of the listing rules of the UK Listing
Authority. We recognise the importance of, and are committed
to, high standards of Corporate Governance. The principles
of good governance adopted by the Company have been applied
in the following way: |
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Board of Directors |
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Our Board currently comprises
the Chairman, the Chief Executive,
the Finance Director and three
Non-Executive Directors who
are considered by the Board
to be independent of management.
The Directors have a diverse
range of backgrounds that provide
an experienced Board to lead
and control the Group. All of
the Directors have access to
the Company Secretary and may
take independent professional
advice at the Company's expense.
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Non-Executive Directors are
appointed for an initial term
of three years and each Director
may receive appropriate training
as necessary. The Board meets
at least 11 times a year. Members
of the Board receive detailed
proposal papers in advance of
meetings, together with management
presentations to facilitate
proper consideration and debate
of matters brought before it.
The Board is primarily responsible
for the strategic direction
of the Group. The Board will
only undertake major strategic
initiatives involving significant
cost or perceived risk once
they have been fully evaluated.
The Board receives regular progress
reports and details on routine
matters such as financial performance
and current trading in each
of our business divisions. |
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The Board has established three core-standing committees
with defined terms of reference as follows: |
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Audit
Committee —
This Committee is responsible
for providing the Board
with independent and objective
assurance on the control
environment across the
Group; for ensuring that
the subsidiary companies
are subject to an internal
audit of the required
quality; and for making
recommendations to the
Board on the appointment
of auditors and the audit
fee. It also reviews the
performance of our auditors
to ensure an objective,
professional and cost
effective relationship
is maintained. |
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The Committee is also responsible for the proper
reporting of the financial performance of the Group
and for reviewing financial statements before publication. |
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In line with best pratice the Audit Committee
Terms of Reference are available for download. |
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Nominations
Committee
— Comprising the
Chairman and the Non-Executive
Directors, the Committee
is responsible for monitoring
and reviewing the composition,
balance and expertise
of the Board and for reviewing
and recommending appointments
to the Board. |
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In line with best pratice the Nomination Committee
Terms of Reference are available for download. |
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Remuneration
Committee
— Comprising the
Non-Executive Directors,
the Committee's aim is
to ensure that the Executive
Directors are rewarded
for their contribution
to the Group and motivated
to enhance the return
to shareholders. The Remuneration
Committee is responsible,
on behalf of the Board,
for our policy on the
grant of share incentives
to Executive Directors
and other senior management
as well as the specific
remuneration and benefits
packages for Executive
Directors. |
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In line with best pratice the Remuneration Committee
Terms of Reference are available for download. |
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Re-election of Directors |
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Our Articles of Association require one-third of the
Board to retire and submit themselves for re-election
each year. At the present time no Director has held office
for more than three years since their last election or
re-election. |
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Relationship with
Shareholders and Bondholders |
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We maintain an active dialogue with our investors through
a planned programme of investor relations activities.
It is a key component of its corporate communications
programme and is headed by the Finance Director. The Chairman
and Chief Executive also attend the majority of these
shareholder meetings. |
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The investor relations programme includes formal presentations
in the UK and overseas (where appropriate) on full-year
and interim results. We also hold one-to-one meetings
between institutional investors and senior management. |
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Feedback from these meetings (including the non-attributed
views of major institutional shareholders) is reported
back to the Board as a whole. The Company Secretary is
charged with bringing to the attention of the Board any
material matters of concern raised by the Company's stakeholders,
including private investors. |
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Communication with investors takes place through the
Annual and Interim Reports and via the Group website (www.woolworthsgroupplc.com).
In addition, the Annual General Meeting, at which all
of the Directors intend to be present, provides an important
opportunity for communication with both institutional
and private shareholders. |
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Accountability and Audit |
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Internal Control |
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Our Board of Directors has overall responsibility for
the system of internal control and for reviewing its effectiveness.
The effectiveness of our systems of internal control are
reviewed by the Audit Committee on behalf of the Board. |
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The Board considers risk assessment and control to be
fundamental to achieving its corporate objectives within
an acceptable risk/reward profile, and confirms that there
is an ongoing process for identifying and evaluating the
significant risks faced by the Group and the effectiveness
of related controls. This process is regularly reviewed
by our Audit Committee to ensure that it is in accordance
with the Turnbull Committee's guidance on internal control.
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The key procedures in place to enable this responsibility
to be discharged are: |
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The Board of Directors: |
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has approved a set
of policies, procedures
and frameworks that are
designed to facilitate
the operation of effective
internal control. They
include the provision
of quality internal and
external reporting and
compliance with applicable
laws and regulations.
These are periodically
reviewed and updated; |
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regularly reviews our
strategy and the strategies
of the subsidiary companies; |
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reviews and assesses
our key risks at least
annually; |
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reviews performance
through a comprehensive
system of reporting. This
is based on an annual
budget with monthly business
reviews against actual
results, analysis of variances,
key performance indicators
and regular forecasting; |
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has well-defined policies
governing appraisal and
approval of capital expenditure
and treasury operations; |
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seeks assurance that
effective control is being
maintained through regular
reports from the Audit
Committee and the Internal
and External Audit functions. |
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Each Operating Company Board: |
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maintains systems for the continuous identification
and evaluation of significant risks resulting from
their strategies and their areas of the business; |
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self certifies that they are clearly accountable
for establishing and monitoring internal
controls
within their business; that processes are in place
to provide reasonable assurance that material
business
risks are identified and managed appropriately;
that internal controls have been effected
and that
they comply with Group policies; and reports on
any control weaknesses or breakdown considered
as
material to the Group; |
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reviews and monitors
the effectiveness of the
system of internal control
through reports from our
Internal and External
Audit functions. |
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Internal Audit Function: |
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Internal Audit is responsible for providing the
Board with independent and objective assurance on
the control environment across the Group and for
ensuring that the subsidiary companies are subject
to internal audit of the required quality. |
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