Corporate governance

Board committees /

Terms of reference for all Board committees are regularly reviewed and are available on the Company’s website at www.aegisplc.com and from the company secretary on request.

Audit Committee

Simon Laffin is Chairman of the Audit Committee. He is a chartered management accountant and the Board is satisfied that he has appropriate recent and relevant financial experience to lead the Committee in its duties and deliberations. The other two members of the Committee are Charles Strauss and Martin Read. Biographical details of the members of the Audit Committee, all of whom are independent non-executive directors, are set out in the Board of directors.

At the invitation of its Chairman, meetings of the Committee were generally attended, in whole or in part, by the Chief Financial Officer, the external auditors, the company secretary and the head of Internal Audit. Several meetings were attended by John Napier (as interim Chief Executive Officer) and Jerry Buhlmann (as Chief Executive Officer). In addition, other members of senior management were invited to attend as necessary to provide updates and background information on matters considered by the Committee.

The Committee regularly meets with the auditors without executive directors or management present.

The Board considers that, through the Audit Committee, it has an objective and professional relationship with the Company’s external auditors.

Work carried out by the Committee during 2010, in accordance with its responsibilities, included:

  • monitoring the integrity of the Company’s financial statements and reviewing significant reporting judgements

  • monitoring the effectiveness of internal audit, risk management and controls, and considering progress reports from the risk committees and head of internal audit

  • reviewing the Company’s internal financial controls and procedures. Further details of the steps taken to update and improve the Company’s internal financial controls and procedures during the year are given within this section

  • reviewing the external auditors’ independence, objectiveness and effectiveness

  • approving the external auditors’ terms of engagement, the scope of the audit and the applicable levels of materiality

  • reviewing its own terms of reference

  • prior to the release of the preliminary announcement of the annual results, reviewing the year’s results and audit findings.

In reviewing the half year and annual financial statements the Committee focused in particular on:

  • any changes in accounting policies and practices

  • major judgemental areas

  • issues resulting from the external audit

  • the going concern assumption

  • compliance with accounting standards and the Combined Code

  • compliance with UK Listing Authority regulations and stock exchange and legal requirements.

Based on written reports submitted to it, the Committee reviewed with the external auditors the findings of their audit work, and confirmed that all significant matters had been satisfactorily resolved.

The Committee has responsibility for making recommendations to the Board in relation to the external auditors’ independence and monitors the policy on the engagement of the auditors for the supply of non-audit services. Details of amounts paid to the external auditors in respect of audit and non-audit services are given in Note 5 to the financial statements. The Committee has confirmed that the policy concerning rotation of the audit partner complies with current guidance issued by the Institute of Chartered Accountants in England and Wales.

The current overall tenure of the external auditor dates from 2004. The audit engagement partner rotates every five years. The Audit Committee recommends to the Board the appointment of the external auditor. There are no contractual obligations that restrict the Company’s current choice of external auditor.

The Committee has considered the balance between fees for audit and non-audit work for the Group in the year and concluded that the nature and extent of the non-audit fees do not present a threat to the external auditors’ independence.

Remuneration Committee

The Remuneration Committee is chaired by Lorraine Trainer. The other two members of the Committee are John Brady and John Napier. Both Lorraine Trainer and John Brady are independent non-executive directors and John Napier was considered to be independent on his appointment as Chairman in July 2008. The Combined Code on Corporate Governance suggests a remuneration committee should comprise at least three independent non-executive directors in addition to the chairman of the Board, however the Board considers the current composition of the Committee to be effective, efficient and appropriate to the Company’s needs.

Members of the Committee have no conflict of interest arising from cross directorships. Except as stated below members of the Committee have no personal financial interest, other than as shareholders, in the Committee’s decisions. John Napier’s remuneration as chairman following the expiry of his appointment as interim Chief Executive Officer was agreed by the Committee at a meeting in August 2010 attended by all non-executive directors other than John Napier.

Meetings of the Committee were generally attended, in whole or in part, by the Group human resources director, the company secretary and – following his appointment as Chief Executive Officer – by Jerry Buhlmann. Some meetings of the Committee were also attended, in part, at the invitation of the chairman, by the Chief Financial Officer. A representative of Deloitte LLP, independent remuneration consultants, attended one meeting. Apart from members of the Committee, no-one attending its meetings is present as of right and no-one (including members of the Committee) attends when their own remuneration is discussed.

The Committee usually meets at least three times a year and more frequently if required. It met 6 times in 2010. Its main responsibilities are:

  • determining and recommending the policy and framework for the remuneration of the Chairman, Chief Executive Officer and executive directors

  • within policy terms and in consultation with the Chairman, Chief Executive Officer and external advisers as appropriate, determining the total remuneration packages of the Chairman, Chief Executive Officer and other executive directors

  • considering proposals in relation to other senior executive management

  • overseeing the design of the Group’s share based long term incentive schemes, including approving the value of awards and overseeing the operation of performance conditions.

During the year the principal business of Committee meetings included the following:

  • determining the remuneration payable to Robert Philpott on his appointment to the Board

  • determining the remuneration payable to Jerry Buhlmann on his appointment as Group Chief Executive Officer

  • introducing a revised bonus scheme for Aegis Media

  • conducting the annual review of base salaries for executive directors and the Chief Executive Officer’s recommendation for his executive team based on review of actual performance

  • the consideration and approval of bonus payments for 2009

  • ongoing review and monitoring of performance conditions for vesting awards under the Group’s share option schemes and performance share plans

  • approving new awards under the Group’s performance share plans

  • reviewing the Group’s executive reward arrangements

  • determining the remuneration payable to John Napier following the expiry of his appointment as interim Chief Executive Officer

  • drafting of the Remuneration report

  • Considering the implications of forthcoming changes to the UK pension regime

  • reviewing the design of the Group’s share schemes.

Nomination Committee

The Nomination Committee comprises all of the non-executive directors together with the Chief Executive Officer and is chaired by the Chairman of the Board. The Committee meets as and when required but at least once a year.

The Committee is responsible for:

  • reviewing the Board structure, size and composition

  • identifying and nominating to the Board candidates for appointment or re-appointment as directors

  • reviewing the renewal or otherwise of terms of appointment for non executive directors, with any individual in question not taking part in the discussion.

During the year the principal business of the Committee’s meetings included considering and recommending to the Board the appointments of Jerry Buhlmann as Group Chief Executive Officer (for which the Committee used the services of an external search and recruitment consultancy) and of Robert Philpott and Harold Mitchell as executive directors.

Continue