Whilst as an unlisted plc there is no requirement for the Company to comply with the Combined Code, the directors believe that throughout the year and up to the date of the approval of the accounts the Company had complied with the provisions of the Combined Code throughout the year, with the following exceptions:
- A majority of non–executive directors, excluding the chair, were not, as defined by the Combined Code, independent. Given the close relationship between management and the Group’s shareholder, the Scott Trust, as described above, the Board has no current plans to increase to a majority the independent director representation on the Board. The Scott Trustees have considered and approved the composition of the Board.
- The chair also chairs the remuneration committee. In the Board’s view, the presence of Dame Liz Forgan, chair of the Scott Trust, at all remuneration committee meetings ensures the Combined Code objective is met.
- Appraisal of Board members and review of effectiveness of the Board and its committees will take place on a biennial basis with the intervening year used to review progress on actions identified during the respective appraisals and reviews. The Board have reviewed the appraisal processes and consider the biennial review outlined above to be effective.
- Biennial reviews of the effectiveness of the Board and nominations committee did not take place during the year. There have been a number of key changes in membership of the Board, including the appointment of a new Group chief executive, a new managing director of Guardian News & Media and three new non-executive directors. These changes have provided the opportunity to develop new ways of working for the Board. In the circumstances it was considered too early in 2006/07 to undertake a biennial effectiveness review of the Board and certain committees and these reviews are scheduled for 2007/08.
- Current executive directors’ contracts do not contain details of compensation commitments should there be an early termination of the contract. The remuneration committee intend to include appropriate compensation commitments clauses in the contracts of new executive directors.
- During the 2006/07 financial year none of the members of the audit committee had recent and relevant financial experience as defined by the Combined Code. This has been addressed by the appointment of Nick Backhouse in April 2007.