The Board of Tesco PLC includes four independent non-executive directors and ten executive directors. The full Board meets every month while day-to-day and operational control is in the hands of the Executive Committee which comprises the executive directors and meets formally every week. Key aspects of the group's affairs are reserved for the decision of the full Board. These include the approval of financial statements, major acquisitions and disposals, authority levels for expenditure, treasury policies, risk management policies and succession plans for senior executives.
The company has an Audit Committee which meets three times a year whose terms of reference cover the points recommended by the Code. Its duties include monitoring internal control throughout the group, approving the group's accounting policies and reviewing the interim and annual financial statements before submission to the Board. The Committee is chaired by John Gardiner and consists entirely of non-executive directors.
The Remuneration Committee, also composed entirely of non-executive directors, is chaired by Baroness O'Cathain, and meets three times a year. The Committee's main responsibility is to ensure that the remuneration packages of the executive directors and other senior executives of the group are appropriate for their responsibilities, taking into consideration the overall financial and business position of the group. In addition, the Committee sets performance targets required for the incentive scheme and for the exercise of share options under the 1994 executive share option scheme.
The Nominations Committee, chaired by Sir Ian MacLaurin, is responsible for selecting and appointing the company's executive and non-executive directors and meets as required.
The assets of the pension funds established for the benefit of the group's employees are held separately from those of the group. The pension scheme for full-time employees is managed by trustees and the part-time scheme by the Equitable Life Assurance Society. The trustees of the full-time scheme include six executive directors, one senior manager and three members appointed from staff and pensioners. The assets of the fund are independently managed and there is no self-investment in Tesco shares or property occupied by the Tesco group.
The Board is committed to proper standards of corporate governance and will keep procedures under review as the Code develops.