The UK Listing Rules stipulate that listed companies must include in their annual report a statement of whether the company has complied with all the relevant provisions of the UK Corporate Governance Code (the Code), which can be found at www.frc.org.uk
During 2014, it has not been possible to comply fully with the Code. The notes below are intended to assist with the evaluation of the Group’s compliance during 2014 and to explain areas of non-compliance and the processes put in place to support the continuation of best governance principles. CORPORATE GOVERNANCE | GOVERNANCE REPORT > CONTINUED
B: EFFECTIVENESS C. ACCOUNTABILITY D. REMUNERATION
E. RELATIONS WITH SHAREHOLDERS
for Helge Lund was planned by the Company Secretary in early 2015 and will be reported in the 2015 Annual Report. Each year, the Directors receive a number of teach-ins in order to update and refresh their skills and knowledge. During 2014, a Non-Executive Directors’ site visit programme was established to support familiarity with the Group’s operations. Details of some of the development activities provided in 2014 are set out on pages 52 and 53. The Directors also met individually with the Company Secretary (in consultation with the Chairman), to discuss and agree their training and development needs.
B.5 INFORMATION AND SUPPORT
The Directors have full access to the advice and services of the Company Secretary and may obtain independent professional advice at the Company’s expense if they believe it may be required in the furtherance of their duties.
The Company Secretary is responsible to the Board on a number of issues and full details of the Company Secretary’s responsibilities are published at
www.bg-group.com/governance The removal of the Company Secretary is a matter for the Board as a whole. Guidelines are in place and are subject to frequent review concerning the content, timeliness and presentation of Board and Committee papers from management to ensure that the Board is briefed effectively. During 2014, the required format for Board reports was updated to provide Directors with enhanced qualitative narrative. B.6 EVALUATION
In 2014, performance evaluations of the Board, its Committees and individual Directors were carried out internally. External evaluation last took place in 2012 and will take place again in 2015, now Mr Lund has joined the Board. The 2014 evaluation considered independence, conflicts of interest, balance of skills, knowledge of the Company and all types of diversity. Further details of the evaluation, together with recommendations for 2015, can be found on page 51. In support of transparency and best practice, a tender process will be held for Board evaluation services ahead of the 2015 external evaluation of the Board.
As part of this internal evaluation, the Non-Executive Directors evaluated the performance of the Chairman. Following the evaluation, the Directors concluded that the Board and its Committees operated effectively and that each Director continues to contribute effectively and demonstrate commitment to their role (including the necessary time commitment).
C.1 FINANCIAL AND BUSINESS REPORTING
A statement of the Directors’ responsibilities regarding the Financial statements, including the status of the Group as a going concern, is set out on page 81, with an explanation of the Group’s strategy and business model, together with relevant risks and performance metrics, which are set out on pages 2 to 41. A further statement is provided on page 81, confirming that the Board considers that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s position, performance, business model and strategy.
In undertaking their respective roles, the Board and the Audit Committee noted the output of The Sharman Inquiry on going concern and liquidity risk assessments and, in late 2014, the publication of a new version of the Code which will apply to the Group for the year ending 31 December 2015. Further details on these considerations are set in the Audit Committee report on page 56. C.2 RISK MANAGEMENT AND INTERNAL CONTROL
The Board has carried out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. Further details can be found on pages 34 to 41. The Board determines the Company’s risk appetite and has established risk management and internal control systems. At least annually, the Board undertakes a review of their effectiveness. Further details are set out on pages 58 and 59.
BG Group operates a reasonable, rather than absolute, assurance system designed to manage, rather than eliminate, the risk of failure to achieve business objectives.
C.3 AUDIT COMMITTEE AND AUDITOR
The Audit Committee report on pages 56 to 59 sets out details of the composition of the Committee, including the expertise of members, and outlines how the Committee has discharged its responsibilities during 2014.
The Board has delegated a number of responsibilities to the Audit Committee, including: oversight of the Group’s financial reporting processes; management of the external auditor; and management of internal
D.1 THE LEVEL AND COMPONENTS OF REMUNERATION
The Remuneration report on pages 62 to 77 outlines the activities of the Committee during 2014 and sets out the Company’s Directors’ Remuneration Policy table, including relevant remuneration components and how they support the achievement of the strategic objectives of the Group. The Annual Remuneration Report outlines the implementation of remuneration during 2014 (including salary, bonus and share awards) and payments for loss of office paid to Directors.
The Board believes that the Group’s current Remuneration Policy, as approved by shareholders at the 2014 AGM, remains appropriate and fit for purpose.
D.2 PROCEDURE
The Board has delegated a number of responsibilities to the Remuneration Committee, including the setting of the Group’s overall remuneration policy and strategy, as well as the remuneration arrangements for the Executive Directors, EMC and GLT. Full details are set out in the terms of reference for the Committee published at
www.bg-group.com/remunerationcommittee
During 2014, no individual was present when their own remuneration was being discussed.
E.1 DIALOGUE WITH SHAREHOLDERS
The Board recognises that meaningful engagement with its institutional and retail shareholders is integral to the continued success of the Company. Throughout 2014, members of the Board have sought actively to engage with shareholders on a number of occasions, through meetings, presentations and roadshows.
E.2 CONSTRUCTIVE USE OF GENERAL MEETINGS
The AGM will be held on 5 May 2015 and is an opportunity for shareholders to vote on certain aspects of Group business, in person. The Board values the AGM as an opportunity to meet with those shareholders able to attend and to take their questions.
The Notice of AGM is sent to all shareholders who have requested to receive hard copy documentation
STR A TE G IC R EP O R T C O R P O R A TE GO V ER N A N C E FI N A N C IA L S TA TE M EN TS SH A R EHOL D ER IN FOR M A TION