There are usually six scheduled board meetings a year; additional board meetings are held to consider particular projects where necessary.
The Corporate Governance report, published as part of the annual report, sets out individual directors’ attendance at board and committee meetings and at the annual general meeting.
The work of the board
The board brings leadership to the group and sets strategic objectives, determines investment policies, agrees on performance criteria, and delegates to management the detailed planning and implementation of those objectives and policies in accordance with appropriate risk parameters determined by the board. The board monitors achievement against objectives and compliance with policies by holding management accountable for its activities through monthly and quarterly performance reporting and budget updates. The board receives regular briefings from the Chief Executive, the Acting Chief Financial Officer, the General Counsel and Corporate Affairs Director, and from the Group Company Secretary on legal, regulatory and corporate governance matters. Other members of our executive committee (regional managing directors and directors of key group functions) make regular presentations to the board, enabling directors to explore and interrogate specific issues and developments in greater detail. The board also schedules visits to our regions, normally holding two meetings a year outside the UK, allowing directors the opportunity to meet in-country management. A number of the presentations made by management during the year are shown in the table below. At the end of each board meeting, the non-executive directors meet without management present.
Matters reserved for the board
There is a schedule of matters which are dealt with exclusively by the board. These include approval of ﬁnancial statements; the group’s business strategy; the annual capital expenditure plan; major capital projects; significant changes to the group’s management and control structure; material investments or disposals; risk management strategy; sustainability and environmental policies; and treasury policies.
Each standing board committee has speciﬁc written terms of reference issued by the board and adopted in committee. The terms of reference of the audit, remuneration and nomination committees are available on our website. All committee chairmen report orally on the proceedings of their committees at the next meeting of the board, and the minutes of all board committee meetings are circulated to all board members.
Conflicts of interest
Our directors are required to avoid situations where they have, or can have, a direct or indirect interest that conflicts, or may conflict, with the company’s interests. As permitted by theCompanies Act 2006, the articles of association of the company allow the board to authorise potential conflicts of interest that may arise and to impose such limits or conditions as it thinks fit. Procedures are in place for the disclosure by directors of any potential conflicts and for the appropriate authorisation to be sought if a conflict arises.
The roles of executive and non-executive directors
Our executive directors are responsible for proposing strategy and for making and implementing operational decisions. Our non-executive directors complement the skills and experience of the executive directors. They bring independent judgement and constructive challenge to the boardroom and contribute to the formulation of strategy, policy and decision-making through their collective wealth of knowledge and experience of other businesses and sectors.
Information and training
Our Group Company Secretary is responsible for advising the board, through the Chairman, on matters of corporate governance. The board and its committees are supplied with full and timely information, including detailed financial information, to enable directors to discharge their responsibilities, and for the committees to undertake their duties. All directors have access to the advice of the Group Company Secretary. Independent professional advice is also available to directors in appropriate circumstances, at the company’s expense.
When directors join the board, tailored induction programmes are arranged which involve industry specific training and include visits to the group’s businesses and, as appropriate, meetings with senior management. New directors are also briefed on their duties to the company and their obligations as directors of a listed company, on internal controls at head office and business unit level and on relevant company policies and governance related matters.
The company is committed to the continuing development of directors to help them build on their expertise and develop an ever deeper understanding of the business and the markets in which group companies operate. Members of board committees are encouraged to attend internal and external briefings and courses on aspects of their respective committee specialisms. Regular updates on relevant legal, regulatory, corporate governance and technical developments are presented to committee members at each meeting and, as appropriate, to the full board. The Chairman considers the training and development needs of the board and discusses these with the respective directors as necessary.
Non-executive directors may serve on other boards provided that they continue to demonstrate the requisite commitment to discharge their duties effectively to SABMiller. The nomination committee keeps under review the extent of directors’ other interests to ensure that their external commitments do not compromise the effectiveness of the board and do not give rise to conflicts of interest. The board is satisfied that all of the non-executive directors commit sufficient time to their duties as directors of the company; the non-executive directors standing for election or re-election have confirmed that they have sufficient time to fulfill their respective obligations to the company.
The board firmly believes in the benefit to the group of our executive directors and members of the executive committee accepting non-executive directorships of other companies to widen their experience and knowledge. Accordingly, subject to the agreement of the board, executive directors and executive committee members are permitted to accept external non-executive board appointments and to retain any fees received from those appointments.
Roles of the Chairman, Chief Executive, Deputy Chairman and Senior Independent Director
The Chairman and Chief Executive have separate roles and the division of responsibilities between them is set out in a written statement of responsibilities approved by the board.
The Senior Independent Director serves as an additional contact point for shareholders. He is also available to fellow non-executive directors, either individually or collectively, to discuss any matters of concern in a forum that does not include the Chairman, the executive directors or other members of the management team. The statement of responsibilities of the Deputy Chairman and Senior Independent Director was last revised following Guy Elliott’s appointment and was approved by the board in its meeting in March 2014.
Our Chairman and Deputy Chairman are both available to consult with shareholders throughout the year. The board is kept informed of the views of shareholders through regular updates from the Chairman, the Deputy Chairman, the General Counsel and Corporate Affairs Director, and the Company Secretary, as well as through regular circulation to the board and the inclusion in the board papers of reports on comments from, and exchanges with, shareholders, investor bodies and analysts.
Board, committee and director performance evaluation
Performance evaluations are carried out each year and are reported in the subsequent annual report. With the current Chairman’s tenure coming to an end at the AGM in July, the board intends to conduct an externally facilitated performance evaluation next year, early in the tenure of Jan du Plessis.
For the year ended 31 March 2015 a formal and rigorous evaluation of the performance of the board and its main committees (audit committee, remuneration committee and CARAC) has been carried out. To facilitate rich, open and frank discussion the evaluation was performed by way of interview with directors and aided by a tailored agenda. These interviews were led by Guy Elliott, our Senior Independent Director and Stephen Shapiro, our Group Company Secretary. The performance evaluation of the board committees was carried out through a tailored questionnaire. Following the interviews and the return of the questionnaires reports were compiled and presented to the respective committees and the board.
The performance of board members was reviewed and appraised by the Chairman and the Senior Independent Director, in consultation with the Group Company Secretary. In reviewing the performance of the board and its committees, the Chairman and the Senior Independent Director both concurred that, measured against the principal duties expected of them, the board and its standing and ad hoc sub-committees continued to operate effectively, including in their support of management, in monitoring of performance, and in maintaining the board’s strategic oversight. The performance of each of the directors was considered to be more than satisfactory, with each director having applied him or herself diligently and been fully engaged in the discharge of his or her responsibilities.
The results of the performance and effectiveness assessment processes were reviewed in full and approved by the board. Matters identified as requiring more focus in the coming year included senior executive succession planning and talent development, and ensuring additional time on the board’s agenda to focus on the most important issues (such as deep dives into major markets, brand performance, innovation and plans to improve performance in markets facing headwinds). As noted above, it was also suggested that the CARAC’s terms of reference be revised.
A review of the performance of the Group Company Secretary was carried out by the Chairman and Deputy Chairman, on behalf of the board, and it concluded that both before and after the change in office holder on 1 November 2014, the performance of the Group Company Secretary has been effective.
All directors, except for John Manser, John Manzoni and Howard Willard, will be standing for election or re-election at this year’s annual general meeting. The nomination committee confirmed to the board that each of the existing directors offering themselves for election or re-election continues to perform effectively and to demonstrate commitment to their role and that it believes that Javier Ferrán and Dave Beran who are offering themselves for election for the first time, will bring considerable strategic, financial and international experience to the board.
Retirement of directors
The company’s articles of association require that new directors are subject to election at the first annual general meeting following their appointment, and that directors are subject to retirement and re-election by shareholders every three years. The reappointment of non-executive directors is not automatic. However, the board has determined that all directors will stand for re-election annually. Independent non-executive directors who have served for nine years will only be asked to stand for re-election if the board remains satisfied both with their performance and that nine years’ continuous service has not compromised their continuing independence.
The Company Secretary
The Company Secretary acts as secretary to the board and its committees.