Combined Code compliance statement

Bottling AppletiseBrewery scenePilsener beer

The company has complied with the overwhelming majority of the provisions set out in Section 1 of the Combined Code during the period under review. The provisions with which the company has not complied, the period of non-compliance, and the reasons for non-compliance are set out below.

  1. The Combined Code required that there should be a balance of executive and non-executive directors on the board. For the period under review, the board was made up of 13 directors, of whom two were executive directors. As a result of the company’s acquisition of Miller Brewing Company from Altria in 2002, Altria became the largest shareholder in the company, and Altria entered into a relationship agreement with the company which determined, amongst other things, the size and composition of the board. The agreement limited the size of the board to a maximum of 13 directors, of whom two were required to be executive directors, up to three were required to be directors nominated by Altria and up to eight were required to be non-executive directors (other than those directors nominated by Altria). The agreement also provided that, unless otherwise agreed with Altria, the number of directors on the board would be reduced to a maximum of 11 within two years of completion of the Miller transaction (that is, by 9 July 2004). The company believes that this board structure has been effective in managing the company to the benefit of all its shareholders.
  2. The Combined Code required that a majority of non-executive directors should be independent of management and free from any business or other relationship which could materially interfere with the exercise of their independent judgement. During the year under review four out of 11 non-executive directors were considered to be independent according to the applicable definitions in all the jurisdictions in which the company operates. The relationship agreement with Altria made it difficult for the company to comply with this aspect of the Combined Code.
  3. The Combined Code required that remuneration committees should consist exclusively of non-executive directors who are independent of management and free from any business or other relationship which could materially interfere with the exercise of their independent judgement. During the period under review Lord Renwick and Mr Kahn served on this committee.

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