BT is one of the world’s leading
providers of communications solutions and services operating
in 170 countries. A review of BT is given in the 'BT in review' section.
An interim dividend of 5.1 pence per share (2006:
4.3 pence) was paid on 12 February 2007. The directors
recommend a final dividend of 10 pence per share (2006:
7.6 pence) to be paid on 17 September 2007 to shareholders
on the register at the close of business on 24 August
2007. This makes a total dividend for the year of 15.1
pence per share (2006: 11.9 pence), an increase of 27%.
BT’s total shareholder return (TSR) performance
over the five financial years to 31 March 2007
Details of the current members
of the Board are shown on the 'Board of directors' section. All
served throughout the financial year, with the exception of Deborah Lathen
and François Barrault, who were appointed on 1 February
2007 and 24 April 2007 respectively.
Sir Anthony Greener served as a director and Deputy
Chairman until 30 September 2006. He was succeeded as
Deputy Chairman and senior independent director by Maarten
van den Bergh.
Sir Christopher Bland, Andy Green, Ian
Livingston and John Nelson retire from the Board by
rotation at the Annual General Meeting and being eligible,
offer themselves for re-election. Deborah Lathen and
François Barrault, having been appointed by the Board,
will retire and will be proposed for election.
Sir Mike Rake will succeed Sir Christopher Bland as
Chairman on 26 September 2007, when he joins the Board.
Sir Christopher steps down from the Board on 30 September
The letter of appointment of Maarten van den Bergh was
extended until 31 August 2009 on his appointment as
Deputy Chairman and is terminable by either party on
three months’ notice.
The letter of appointment of Deborah Lathen is for an
initial period of three years from 1 February 2007 and
is terminable by either party on three months’ notice.
Annual General Meeting
The Notice of the Annual General
Meeting to be held at 10.30 am on 19 July 2007 at The
Sage Gateshead, St Mary’s Square, Gateshead Quays, Gateshead
NE8 2JR is contained in the 'Notice of meeting' section.
It is BT’s policy to achieve for all our operations
best practice in our standards of business integrity.
The directors consider that BT has, throughout the year,
complied with the provisions set out in section 1 of
the 2003 Combined Code on Corporate Governance.
directors and board committees
The Board is currently made up of the part-time
Chairman, the Chief Executive,five other executive directors
and eight independent non-executive directors. It is
BT’s policy that the Board will comprise a majority
of independent non-executive directors. The roles of
the Chairman and the Chief Executive are separate. The
non-executive directors provide a strong, independent
element on the Board. Non-executive directors are appointed
initially for three years at the end of which the appointment
may be continued by mutual agreement. The Chairman and
the non-executive directors meet regularly without the
executive directors. The Chairman ensures the views
of shareholders are known to and appropriately considered
by the Board.
The Board’s principal focus is the overall strategic
direction, development and control of the group. A formal
statement of its role is available on the company’s
website. The Board meets at least nine times each year.
During summer 2006 the Board carried out a further evaluation
of Board and Board Committee performance and effectiveness.
As part of this process, the Chairman had one-to-one sessions with the directors; and the previous
Deputy Chairman, Sir Anthony Greener, met all directors
individually to review the Chairman’s performance.
To meet best corporate governance practice, Audit, Remuneration
and Nominating Committees have long been an established
part of BT’s system of governance. Each committee has
written terms of reference, which are available on the
company’s website. The Audit and Remuneration Committees
are made up entirely of independent non-executive directors.
The Board considers that several of the Audit Committee’s
members have recent and relevant financial experience.
The Audit Committee reviews the company’s published
financial results, the Annual Report & Form 20-F and
other published information for statutory and regulatory
compliance and reports its views to the Board. It recommends
the appointment, reappointment and remuneration of the
company’s external auditors and ensures that key partners
are rotated at appropriate intervals. The Board has
policies determining what non-audit services the company’s
external auditors can provide, in order to safeguard
their independence and objectivity.
The Nominating Committee ensures an appropriate balance
of experience and abilities on the Board, using this
evaluation to review the size and composition of the
Board and to recommend any proposed changes to the Board.
Equality of Access Board monitors the company’s compliance
with the Undertakings made to Ofcom following Ofcom’s
Strategic Review of Telecommunications. Its terms of
reference are also available on the company’s website.
The Chief Executive, Ben Verwaayen, chairs the Operating
Committee, which meets weekly.
The Board also has a Community Support Committee and
a Pension Scheme Performance Review Group.
and risk management
The Board is
responsible for the group’s systems of internal control and risk management and
for reviewing the effectiveness of those systems. Such systems are designed to
manage, rather than eliminate, the risk of failure to achieve business
objectives; any system can provide only reasonable and not absolute assurance
against material misstatement or loss.
BT has processes for identifying, evaluating
and managing the significant risks faced
by the group. These processes have been in place for the whole of the 2007
financial year and have continued up to the date on which this document was
BT’s management is responsible for
establishing and maintaining adequate internal control over financial reporting
for the group. Management has concluded that at 31 March 2007 the group’s
internal control over financial reporting was effective.