Corporate Governance
Directors' Report on Corporate Governance
Tesco PLC is committed to the highest standards of corporate governance as we recognise that strong governance is crucial in helping the business to deliver its strategy, generating shareholder value and safeguarding our shareholders’ long-term interests.
Below Board level, the company fosters a strong culture of good
governance, including maintaining high ethical standards and strong
personal integrity. This is formalised in the Group Code of
Business Conduct which sets out our expectations of employees
clearly. All businesses within the Group are required to monitor
their compliance with the Group governance framework and this
information is reviewed at Board level.
Compliance with the Combined Code
The Combined Code on Corporate Governance sets out guidance in the
form of principles and provisions on how companies should be
directed and controlled to follow good governance practice. The
Financial Services Authority (FSA) requires companies listed in the
UK to disclose, in relation to Section 1 of the Combined Code, how
they have applied the principles and whether they have complied
with its provisions throughout the financial year. Where the
provisions have not been complied with companies must provide an
explanation for this.
The Board considers that Tesco PLC complied in full with the
Combined Code principles of Corporate Governance and Code of Best
Practice for the whole of the year ended 27 February 2010, with the
exception of provision A.3.2, in respect of which the company was
not in compliance for part of the year. Provision A.3.2 requires
that at least half of the Board, excluding the Chairman, should
comprise Non-executive Directors determined by the Board to be
independent. The Board recognises the importance of a balanced
board with an appropriate level of independence. Due to unexpected
changes to the Board in the previous year, with the resignation of
Carolyn McCall and Mervyn Davies as Non-executive Directors, the
Board was not in balance at the beginning of the year. At that
stage, Ken Hanna’s impending appointment to the Board had
already been announced, and he joined the Board with effect from 1
April 2009, at which point the Board became balanced and once again
fully compliant with provision A.3.2.
Further information on the Combined Code provisions can be found
at www.frc.org.uk.
Full details of our latest Corporate Governance report can be found in the Annual Report and Financial Statements
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Updated 02/09/2010 : 16:49
