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 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 make regular presentations to the board, enabling directors to explore and interrogate specific issues and developments in greater detail. In the ordinary course, 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. The demands of the AB InBev takeover offer were such that it was necessary to defer executive committee member presentations and that it was not feasible or appropriate to undertake scheduled regional visits to Europe and Africa in September and January, respectively. 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 and strategic 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 risk management activities at head office 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, including the Chairman, 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 the Chairman and all of the non-executive directors commit sufficient time to their duties as directors of the company. The Chairman and 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 Chief Executive, the Chief Financial Officer, the General Counsel and Corporate Affairs Director, and the Group 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. The board had previously intended to conduct an externally facilitated performance evaluation early in the tenure of our new Chairman, Jan du Plessis. However, as reported above, an extensive evaluation process would have absorbed significant board time and resources precisely when the board and management needed to focus all of their time and resources on the AB InBev takeover offer, and the takeover offer would have meant that the board would have had limited time to benefit from the findings of an external evaluation. We have therefore conducted an internal assessment of the board and its committees, led by our Deputy Chairman Guy Elliott, and report more fully on this evaluation below. If for any reason the takeover offer does not proceed to completion, the board intends then to conduct an externally facilitated evaluation.
Effectiveness assessments were conducted in respect of the board and the audit and remuneration committees, and the CARAC, and the performance of the Chairman, individual directors and the Group Company Secretary was also evaluated. For the board and relevant committees, questionnaires were prepared by the Group Company Secretary, and were considered by the respective board and committee members. The views of the members of the respective bodies were canvassed in full and frank discussion. The Chairman and Deputy Chairman considered and reviewed the performance of individual directors and of the Group Company Secretary, while the board, led by the Deputy Chairman (the Chairman having recused himself), reviewed the performance of the Chairman. The effectiveness assessments concluded that the board and its committees were operating effectively, and that the performance of the Chairman, individual directors and the Group Company Secretary was in each case satisfactory.
The most important task of the board in the year under review was its consideration of the AB InBev offer. The Chairman’s leadership of the board, throughout the negotiation of the offer in particular, was considered by the board (in his absence) to have been exemplary.
Notwithstanding the intense focus required on the offer from AB InBev, good progress was made in addressing each of the areas identified in the prior year review that could benefit from particular focus. Board agendas were further refined to facilitate focus on these matters, the incoming Chief Financial Officer introduced enhanced reporting on financial, operational and brand performance and the CARAC has enhanced its systematic oversight of the group’s strategic focus on key licence to trade risks faced by the company.
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 re-appointment 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 may be asked to stand for re-election but only 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 Group Company Secretary acts as secretary to the board and its committees and attended all meetings during the year under review. The current Group Company Secretary, Stephen Shapiro, was appointed in November 2014, having served as Deputy Company Secretary from 2002. He is also Deputy General Counsel.