BOC Report and accounts 2005 - Alle jaarverslagen

64 The BOC Group plc Annual report and accounts 2005
Corporate governance
The BOC Group is committed to business integrity, high ethical values and professionalism in all its activities.
As an essential part of this commitment, the board supports the highest standards of corporate governance.
Combined Code on Corporate Governance
BOC has applied the principles contained in Section 1 of the Combined Code on Corporate Governance issued
by the Financial Reporting Council and has complied throughout the year with the provisions set out therein as
they applied to the company.
US Sarbanes-Oxley Act of 2002
BOC has securities registered in the US and, as a result, is required to comply with the provisions of the Sarbanes-
Oxley Act of 2002 (Sarbanes-Oxley) that apply to foreign private issuers.Whilst the company already has a robust
corporate governance framework in line with best practice under UK standards, the requirements of Sarbanes-
Oxley were considered and adjustments made to comply with Sarbanes-Oxley as far as it applies to BOC.
The board continues to monitor the implementation of the rules to ensure continued compliance.
As recommended by the US Securities and Exchange Commission (SEC), BOC has established a disclosure
committee.The committee comprises the Group finance director, Group legal director and representatives from
the finance, company secretarial, treasury, investor relations, risk management and human resources functions.
The committee meets regularly. It is responsible for overseeing and advising on the disclosure process for the
quarterly announcements and on the content and form of the annual report and Form 20-F.To permit the signing
of the certifications required by Sarbanes-Oxley the committee makes recommendations to the executive
management board on the adequacy of Group disclosure controls and procedures.
New York Stock Exchange Corporate Governance Listing Standards
The New York Stock Exchange (NYSE) has in place listing standards related to the corporate governance practices
of listed companies. BOC, as a foreign private issuer with American Depositary Shares listed on the NYSE, is
required to comply with certain of these rules, in particular as they relate to audit committees, and must disclose
any significant ways in which its corporate governance practices differ from those followed by US domestic
companies under the NYSE listing standards.At this time BOC does not believe that there are any significant
differences in the corporate governance practices followed by the company as compared to those followed by US
domestic companies, except that the membership of the nomination committee is not composed entirely of
independent non-executive directors.The membership of the nomination committee is however in line with the
Combined Code on Corporate Governance, which permits membership of this committee to be composed of a
majority of independent non-executive directors.
The board
There are 12 members of the board namely the chairman, five executive directors and six non-executive directors
who collectively have responsibility for leadership of the company.This is considered to be the optimum size for the
board, providing a balance between executive management and non-executives and bringing a good mix of skills
and experience.As has been demonstrated during 2005 changes to the board’s composition can be managed
without undue disruption.The directors holding office at the date of this report and their biographical details are
given on pages 8 and 9.The executive directors are the chief executive, Group finance director and the three chief
executives of the lines of business. Kent Masters was appointed chief executive, Industrial and Special Products and
a member of the board on 1 March 2005 in place of John Walsh who resigned from the board on 1 March 2005.
Alan Ferguson joined the company as Group finance director on 15 September 2005 and was appointed to the
board on 30 September 2005 in place of René Médori who resigned on 31 May 2005.
The board believes that executive directors and members of the executive management board can gain
valuable experience and knowledge by taking on non-executive directorships of other listed companies. Such
appointments are subject to review by the nomination committee and approval of the board and, unless otherwise
agreed, only one non-executive directorship may be held in a FTSE100 company. Executives are permitted to
retain any fees in respect of such external appointments, details of which are set out in the report on remuneration
on page 76.
The roles of chairman and chief executive have been separate since 1994. Rob Margetts as chairman leads the
board, ensuring that each director, particularly the non-executive directors, is able to make an effective contribution.
He monitors, with assistance from the company secretary, the information distributed to the board to ensure that
it is sufficient, accurate, timely and clear. He meets twice a year with the non-executive directors without the
executive management present. Between meetings, the chairman has responsibility for maintaining the integrity and
effectiveness of the board.This requires his interaction with the chief executive between board meetings, as well as
his contact with other board members and shareholders.Tony Isaac as chief executive maintains day-to-day
executive management responsibility for the Group’s operations, implementing Group strategies and policies
agreed by the board.The division of responsibilities between the chairman and chief executive has been agreed by
the board.