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.
Operation of the board
The board sets the strategic objectives of the group, 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. The board monitors compliance with policies and achievement against objectives by holding management accountable for its activities through monthly and quarterly performance reporting and budget updates.
Board and committee meetings are held in an atmosphere of intellectual honesty of purpose, integrity and mutual respect, requiring reporting of the highest standard by management and direct, robust and constructive challenge and debate among board and committee members.
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; major changes to the group’s management and control structure; material investments or disposals; risk management strategy; sustainability and environmental policies; and treasury policies.
The board governs through clearly mandated board committees, accompanied by monitoring and reporting systems. 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 the meetings of all board committees are included in the papers distributed to all board members before the next board meeting.
Conflicts of interest
The directors are required to avoid situations where they have, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the company’s interests. In accordance with the Companies 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
The 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, bring independent judgement, and contribute to the formulation of strategy, policy and decision-making through their knowledge and experience of other businesses and sectors.
Information and training
The 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 the committees are provided with sufficient resources to undertake their duties. All directors have access to the advice of the Company Secretary. Independent professional advice is also available to directors in appropriate circumstances, at the company’s expense.
Following the appointment of new directors to the board, they are briefed on the duties they owe to the company as directors, and tailored induction programmes are arranged which involve industry specific training and include visits to the group’s businesses and meetings with senior management, as appropriate. New directors are briefed on internal controls at head office and business unit level and are advised of the legal and other duties they have as directors of a listed company as well as on relevant company policies and governance-related matters.
The company is committed to the continuing development of directors in order that they may build on their expertise and develop an ever more detailed 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 and 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 a number of other boards provided that they continue to demonstrate the requisite commitment to discharge effectively their duties to SABMiller. The nomination committee keeps under review the extent of directors’ other interests to ensure that the effectiveness of the board is not compromised by the extent of their external commitments. The board is satisfied that all of the non-executive directors commit sufficient time to their duties as directors of the company.
The board believes, in principle, in the benefit to the group of our executive directors and members of the executive committee accepting non-executive directorships of other companies in order to widen their experience and knowledge for the benefit of the company. Accordingly, subject to the agreement of the board, executive directors and members of the executive committee 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 roles of the Chairman and Chief Executive are separate with responsibilities divided between them, as formalised in a written statement of responsibilities approved by the board. The statement of responsibilities was last revised in light of Mr Manser’s appointment as Chairman and approved by the board in its meeting in January 2014.
Mr Elliott is the Deputy Chairman and Senior Independent Director, having succeeded Mr Manser on 18 December 2013 when Mr Manser was appointed as Chairman. Mr Elliott is a highly experienced business leader who is well placed to influence the governance of the company and to meet his responsibilities as Deputy Chairman and Senior Independent Director. He serves as an additional contact point for shareholders, and 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 Mr Elliott’s appointment and was approved by the board in its meeting in March 2014.
The board is kept informed of the views of shareholders through regular updates from the Chairman, the Deputy Chairman, 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. In the year under review, Mr Manser, acting at that time as the Deputy Chairman, hosted a meeting of the non-executive directors without the executive directors being present at which, among other things, the performance of the then Chairman, Mr Mackay, was discussed.
Board, committee and director performance evaluation
A formal and rigorous evaluation of the performance and effectiveness of the board and its principal committees is carried out each year, led by the Chairman and the Company Secretary, with input from the Deputy Chairman, and in consultation with other directors.
The performance of the Chairman is reviewed by the nomination committee and this review is shared with and considered by the board. The performance of the Chief Executive and Chief Financial Officer is reviewed by the Chairman and the nomination committee, and reported on to the board by the nomination committee. Each non-executive director’s performance is evaluated by the Chairman, in consultation with the Deputy Chairman, who in turn consults with the executive directors and the Company Secretary.
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 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 the director’s performance and that nine years’ continuous service does not compromise the director’s continuing independence.
The Company Secretary
The Company Secretary acts as secretary to the board and its committees.