Corporate governance report

The chairman is responsible for the leadership of the Board and ensuring its effectiveness, for effective communication with shareholders and for facilitating the effective contribution of the non-executive directors and their constructive relationship with the executive directors.

The chief executive is responsible for the day-to-day business of the Group, and is supported by the Operating Board, which includes the finance director and the managing directors of the main businesses and shared services functions. Members of the Operating Board meet informally with the chairman and non-executive directors and regularly attend and present at Board meetings when relevant agenda items are under consideration.

There is in place a procedure under which the directors, in furtherance of their duties, are able to take independent professional advice, if necessary, at the Company’s expense. The company secretary, who has been appointed by the Board, is responsible for advising the Board on all corporate governance matters and for ensuring that Board procedures are followed and all directors have access to this professional advice. The company secretary ensures that the Board receives regular briefings on corporate governance matters and company legislation.

A formal evaluation of the performance of the Board and its committees was conducted during the year. The functioning of the Board, Board processes and interaction with management were discussed and opportunities for improvement were considered. In addition the audit and remuneration committees conducted internal reviews of their effectiveness taking into account the views of senior management and external advisers working with these committees. Individual appraisals of directors have been undertaken by the chairman. Under the leadership of the senior independent director, the non-executive directors met without the chairman present to appraise the chairman’s performance taking account of any views expressed by the executive directors.

All directors are subject to re–election by shareholders at the first opportunity after their appointment and, thereafter, in accordance with the Company’s Articles of Association. All directors will be required to submit themselves for re-election at least once every three years. Terry Duddy and John Coombe will retire at the Annual General Meeting to be held on 2 July 2008 and will be eligible for re-election.

The letters of appointment for non-executive directors, including the chairman, are available for inspection by any person at the Company’s registered office during normal business hours and at the Annual General Meeting (for 15 minutes prior to the meeting and during the meeting).