Attendance at meetings in 2011

Notes:

1. Ann Godbehere became a member with effect from 24 October 2011.

2. Dr Ana Maria Llopis ceased to be a member of the Committee following her retirement as a Non-Executive Director at the conclusion of the Annual General Meeting on 28 April 2011.

Sir Nicholas Scheele was unable to attend one meeting of the Nominations Committee due to a long-standing prior engagement.

The Chief Executive and Management Board member responsible for Human Resources regularly attend meetings by invitation but are not members.

The Nominations Committee is responsible for identifying candidates to fill vacancies on the Board. This process includes an evaluation of the skills and experience to be looked for in those candidates to ensure continuing Board balance. The selection process will generally involve interviews with a selection of candidates, using the services of external search firms specialising in board level recruitment to identify and shortlist appropriate candidates. This process was followed for the recruitment of Ann Godbehere, who was shortlisted by an external consultancy and interviewed by the Chairman and Executive Directors and by members of the Nominations Committee, which then recommended her appointment to the Board. The Committee and the Board specifically considered her other commitments and satisfied themselves that she was able to devote sufficient time to her role as a Non-Executive Director of the Company.

Further non-executive appointments remain under active consideration.

During 2011, the Committee also considered a report prepared by the Company Secretary on its effectiveness, as assessed during the evaluation of the Board in 2010, including a review of its membership, frequency of meeting and regular terms of business.

Terms of appointment to the Board

The Executive Directors have rolling contracts of one year. The Non-Executive Directors do not have service contracts with the Company but instead have letters of appointment. Since 2010, all Non-Executive Directors have terms of appointment of one year only which are considered for renewal around the time of the Company’s Annual General Meeting when, in accordance with the UK Corporate Governance Code, each Director is subject to election or re-election by the shareholders (see below). Details of the Company’s policy on Executive Directors’ service contracts and the terms of appointment for Non-Executive Directors are set out in the remuneration report.

The Board continues to take in to account the need for it progressively to refresh its membership over time. Non-Executive Directors will normally be expected to serve for six years. They may be invited to serve for longer, but service beyond nine years is unlikely. Any additional service beyond six years will be subject to particularly rigorous review.

Directors’ interests and indemnities

Further details of Directors’ contracts and letters of appointment, remuneration and emoluments, and their interests in the shares of the Company (including interests in share options and deferred shares) as at 31 December 2011 are given in the remuneration report. No Director had any material interest in a contract of significance (other than a service contract) with the Company or any subsidiary company during the year.

The Company has arranged appropriate insurance to provide cover in the event of legal action against its Directors and also provides indemnities to its Directors in accordance with the Company’s Articles of Association and to the maximum extent permitted by law. As at the date of this report, such indemnities are in force covering any costs, charges, expenses or liabilities which they may incur in or about the execution of their duties to the Company or to any entity which is an associated company (as defined in Section 256 of the Companies Act 2006), or as a result of duties performed by the Directors on behalf of the Company or any such associated company.

Board diversity

The Board recognises the benefits of diversity in its widest sense, both at Board level and throughout all levels within the organisation. Diversity takes many forms: gender is one aspect, but other important attributes to consider will include, for example, nationality and background.

For a number of years, the Company has benefited from the presence on its Board of female Non-Executive Directors. During its search for additional Non-Executive Directors in 2011, culminating in the appointment of Ann Godbehere, the Company made clear to its external search consultancies that male-only shortlists of candidates would not be accepted. The current level of female representation on the Board stands at 25 per cent, the 2015 aspirational target level of female representation on Boards for FTSE 100 companies, as set out in the report by Lord Davies entitled Women on Boards. The Company hopes to at least maintain, and possibly to increase, this level of representation when refreshing and renewing Board membership over the coming years. However, such aspirations will always be subject to the overriding need to ensure that appointments are made on merit and having regard to an appropriate balance of skills, experience, independence and knowledge required on the Board. The Board will continue to take into account diversity, in all its forms, when making appointments.

Lord Davies’s report also examines gender diversity at management levels below the Board. Whilst the Company has a number of initiatives to improve gender diversity at senior management levels, the Board recognises that these will take time to be reflected in the numbers of senior women in the Group. The recently appointed Group HR Director will be taking this forward in 2012.

The Board will continue to review and report further on the Company’s approach to diversity and related ambitions, particularly in the context of any developing guidance in this area.

Annual General Meeting 2012

The Company will be submitting all eligible Directors for re-election or, in the case of Ann Godbehere, election for the first time at this year’s Annual General Meeting on 26 April 2012.

Chairman

Richard Burrows

Executive Directors

Nicandro Durante (Chief Executive)
Ben Stevens (Finance Director and Chief Information Officer)
John Daly (Chief Operating Officer)

Non-Executive Directors

Karen de Segundo
Ann Godbehere
Robert Lerwill
Christine Morin-Postel
Gerry Murphy
Kieran Poynter
Anthony Ruys
Sir Nicholas Scheele

The Company’s Articles of Association provide that any Director who has been appointed by the Board since the last Annual General Meeting is required to retire from the Board at the next Annual General Meeting and, being eligible, may offer himself or herself for reappointment. Accordingly, Ann Godbehere will retire and offer herself for reappointment in accordance with these provisions.

Non-Executive Directors who serve for a total of more than six years are subject to a particularly rigorous review. This was done in 2011 in the case of Robert Lerwill and Sir Nicholas Scheele, both of whom have served in excess of six years, and Anthony Ruys, who will have served in excess of six years at the time of the 2012 Annual General Meeting.

The Chairman’s letter accompanying the Notice for this year’s Annual General Meeting confirms that the performance of the Directors being proposed for re-election continues to be effective and that they continue to demonstrate commitment to their roles as Non-Executive Directors, including commitment of the necessary time for Board and Committee meetings and other duties. Biographical details of the Directors are also provided.