BT’s policy is to achieve best practice in our standards of business integrity for all our operations. This includes a commitment to maintaining the highest standards of corporate governance throughout the group. The directors consider that BT has, throughout the year, complied with the provisions of the Combined Code on Corporate Governance published by the UK Listing Authority.

The non-executive directors provide a strong independent element on the Board. Sir Anthony Greener, the Deputy Chairman, is the senior independent director. The non-executive directors bring experience and independent judgement, gained at the most senior levels, of international business operations and strategy, marketing, technology, communications and political and international affairs.

The principal Board committees are the:
Audit Committee*
Remuneration Committee*
Nominating Committee
Operating Committee

*Comprising solely independent non-executive directors.

Internal control 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 misstatements or loss.

Risk assessment and evaluation takes place as an integral part of the group’s annual strategic planning cycle. The group has a detailed risk management process which identifies the key risks facing the group and each business unit. These processes have been in place for the whole of the 2003 financial year and have continued up to the date on which this document was approved.