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.
- 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.
- 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.
- 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
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