23:09 04 Jul 2015

1,078.00p

+0.09%

Governance

Babcock International Group is committed to achieving the highest standards of corporate governance. Today, it is more important than ever to demonstrate excellence in our approach to business ethics and internal control.

Please see the Governance section of our latest Annual Report.

Appointment and powers of Directors; Roles of Chairman, Chief Executive Officer and Senior Independent Director

The Board of Directors is collectively responsible to the Company’s shareholders for the long-term success of the Company. This responsibility includes matters of strategy, performance, resources, standards of conduct and accountability. The Board also has ultimate responsibility for corporate governance which it discharges either directly or
through its Committees and the Governance section of the Annual Report.

A Director is appointed by ordinary resolution (i.e. a simple majority of votes cast) at a general meeting of ordinary shareholders. The Board also has the power to appoint a Director, but any person so appointed must be stand for reappointment by shareholders at the first Annual General Meeting following his or her appointment by the Board.

Subject to the Company's Articles of Association, relevant statutory law and any directions given by shareholders in general meeting, the Directors, who may exercise all powers of the Company that are not required to be exercised by the Company in general meeting. In addition to this collective responsibility, the Chairman, Chief Executive and Senior Independent Director have clearly defined roles and a formal statement of these can be found here.

Board procedure

The Board holds a number of regular meetings each year, supplemented by ad hoc meetings from time to time for specific purposes, for example in connection with specific acquisitions. There are also Board Committees, details of which can be found on the Board Committees page.

Each year, the Board reviews its performance, the performance of its committees and individual Directors. This is done annually, with the support either of an independent facilitator or the Company Secretary in alternate years. The process involves individual confidential interviews with each Board member and other senior employees. The results of these interviews are reported to the Chairman and made available to the Board for discussion.

Information and training for Directors

The Company arranges for new Non-Executive Directors to receive detailed business briefings as regards the Group's operations and to make induction visits to the Group's principal sites. Director training for new directors, when appropriate, is arranged with external providers.

Non-Executive Directors may at any time make visits to Group businesses or operational sites, which are coordinated by the Group Company Secretary's office. The whole Board also visits at least one operational site each year. In addition, presentations on the Group's businesses and specialist functions are made regularly to the Board.

Board members receive copies of all minutes of meetings of the Group Executive Committee (which comprises the Group Chief Executive, Finance Director and Business Development Director as well as Divisional Managing Directors) and copies of the Divisions' monthly operating reports.

General director training is available to all Directors. The Group Company Secretary briefs Board members on significant changes in the law affecting their duties as directors.

Conflicts of interest

Babcock has adopted a formal procedure for the disclosure, review, authorisation and management of Directors' actual and potential conflicts of interest in accordance with the Companies Act 2006. The procedure requires Directors formally to notify the Board (via the Company Secretary) as soon as they become aware of any new actual or potential conflict of interest or when there is a material change in any of the conflicts of interest they have already disclosed. Any potential conflicts of interest notified by a Director are reviewed by the Board as soon as possible. The Board considers whether a conflict or potential conflict does, in fact, exist. If a conflict does, or could, exist, the Board will decide whether it is in the interest of the Company to authorise it and, if so, on what terms. In making their judgment on this, the other Directors have regard to their general duties to the Company. A register is maintained of all the disclosures made and the terms of any authorisations granted. Authorisations can be revoked, or the terms on which they were given varied, at any time if judged appropriate. Possible conflicts of interest authorised by the Board are reviewed annually. In the event of any actual conflict arising in respect of a particular matter, mitigating action would be taken (for example, non-attendance of the Director concerned at all or part of Board meetings and non-circulation to him of relevant papers).

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