As an Executive Non-Departmental Public Body (NDPB), the Company’s control framework is set out in the Financial Memorandum (3735kb). The Financial Memorandum refers to the appropriate Government guidance on Corporate Governance, including Government Accounting. A revised Combined Code on Corporate Governance was published in July 2006. This is supported by the document ‘Internal Control: Guidance for Directors on the Combined Code’ (the Turnbull guidance)
As a matter of good practice the Company has, since 1995, adopted published corporate governance guidelines and has reported accordingly in the annual directors’ reports. This is despite the fact that the Company is not a listed Company of the type to which these requirements were directed. However, with the publication of the Combined Code in 1998, and subsequently the revised codes in 2003 and 2006, there area a number of matters with which, due to its status as a NDPB, the Company cannot comply.
The following exceptions from its provisions should therefore be noted:
- All appointments at Board level are made by the shareholders, consequently there is no Nominations Committee;
- for the same reason, there is no provision for re-election of executive directors;
- remuneration of the Chairman and Chief Executive is determined by the shareholders including arrangements relating to loss of office;
- remuneration packages of executive directors do not include a significant performance-related element;
- remuneration of non-executive directors is set by the shareholders.
As defined within Government Accounting, the Accounting Officer is charged, in the Accounting Officer Memorandum, with maintaining a sound system of internal control that supports the achievement of the Company’s policies, aims and objectives; and regularly reviewing the effectiveness of that system. The Accounting Officer is also responsible for signing the Statement on Internal Control. The latest version can be found in the 2006 Annual Report and Accounts (1088kb) .