Statements of compliance
UK Corporate Governance Code compliance
The Board considers that WPP complied in all material
respects throughout 2015 with the provisions of the
UK Corporate Governance Code.
Internal control
WPP operates a system of internal control, which is
maintained and reviewed in accordance with the UK
Corporate Governance Code and the FRC guidance
on risk management and internal control.
How we comply
For ease of reference we have structured this section around the main principles of the UK Corporate Governance Code.
Leadership
The role of the Board
The Board is collectively responsible for promoting the success of the Company by directing and supervising the
Company’s policy and strategy and is responsible to share owners for the Group’s financial and operational performance
and risk management. Responsibility for the development and implementation of Group policy and strategy and for
day-to-day management issues is delegated by the Board to the Group chief executive and Group finance director. The list of matters reserved to the Board can be downloaded from the website wpp.com/wpp/investor.
During 2015, the Board met six times formally and held 17 committee meetings throughout the year.
| Attendance of directors at meetings |
Board |
Audit Committee |
Compensation Committee |
Nomination and Governance Committee |
| Roberto Quarta (Chairman)1,4 |
6 |
8 |
4 |
3 |
| Sir Martin Sorrell |
6 |
– |
– |
– |
| Paul Richardson |
6 |
8 |
– |
– |
| Philip Lader1,3 |
3 |
5 |
– |
2 |
| Roger Agnelli2,6,7 |
6 |
8 |
4 |
2 |
| Jacques Aigrain |
6 |
8 |
5 |
– |
| Charlene Begley |
6 |
8 |
– |
4
|
| Colin Day3 |
3 |
5 |
4 |
– |
| Ruigang Li6 |
4 |
– |
3 |
1 |
| Nicole Seligman6 |
6 |
– |
5
|
– |
| Daniela Riccardi2,6 |
5 |
– |
3 |
1 |
| Jeffrey Rosen3 |
3 |
5 |
4 |
2 |
| Hugo Shong5,6 |
6 |
5 |
4 |
4 |
| Sir John Hood |
6 |
– |
5 |
– |
| Tim Shriver2 |
5 |
– |
5 |
3 |
| Sally Susman |
6 |
– |
– |
3 |
| Sol Trujillo6 |
6 |
7 |
4 |
– |
The role of the chairman
The Board is chaired by Roberto Quarta, who chairs the Nomination and Governance Committee and is a member of the Compensation Committee and attended all meetings of the Audit Committee at the invitation of its chairman. The chairman provides the leadership of the Board and is the main point of contact between the Board and the CEO. The chairman represents the Board in discussions with share owners and investor bodies, ensures that systems are in place to provide directors with timely and accurate information, represents the Company in external gatherings, and is also responsible for the Board governance principles. He has
led the Board evaluation process, restructuring of the committee membership, and the ongoing emphasis on management development and CEO and senior management succession planning.
The role of the senior independent director
The senior independent director is Nicole Seligman who is available to share owners and acts as a sounding board for the chairman and as an intermediary for the other directors
with the chairman, when necessary. The senior independent director’s role includes responsibility for the chairman’s appraisal and succession. The Board announced the appointment of Nicole Seligman as senior independent director on 4 April 2016, following the recommendation of the Nomination and Governance Committee and succeeding Jeffrey Rosen who retired at the 2015 AGM. Nicole Seligman was appointed to the Board in January 2014 and has served on the Compensation Committee and attends the other committee meetings at the invitation of the chairmen of those committees.
Non-executive directors
The non-executive directors have a diverse range of skills, experience and backgrounds. As detailed in their biographies, the non-executive directors work across the globe in media and advertising, investment banking and investment management, pharmaceuticals, logistics and bioenergy, airlines, FMCG, international management consulting, private equity and angel investing, business education, manufacturing, consumer products and retail management, internet start-ups, government and non-profit organisations. They provide constructive challenge and assistance to the Group chief executive in developing the Group’s strategy. All directors have access to the services
of the Company Secretary and may take independent professional advice at the Company’s expense in conducting their duties. The Company provides insurance cover for its directors and officers.
Effectiveness
The composition of the Board
The Board is composed of 13 directors. Two current members are executive directors and 11, including the chairman, are non-executive directors. The independence
of each non-executive director is assessed annually
by the Board. The Board has confirmed that all of the
non-executives standing for re-election at the 2016
AGM continue to demonstrate the characteristics
of independence.
Succession: Board and committee membership
The following changes to the Board’s roles and
composition took place during 2015 and early 2016:
- Nicole Seligman has succeeded Jeffrey Rosen as the senior independent director.
- Jacques Aigrain has succeeded Colin Day as chairman of the Audit Committee. Jacques Aigrain has been a member of the Audit Committee since joining the Board in May 2013.
- Roberto Quarta succeeded Philip Lader as chairman of the Group and as chairman of the Nomination and Governance Committee.
- Roger Agnelli, who was a member of the Audit Committee, tragically died on 19 March 2016.
Time commitment
Letters of appointment for non-executive directors do not set out a fixed time commitment for Board attendance and duties but give an indication of the likely time required. It is anticipated that the time required by directors will fluctuate depending on the demands of the business and other events.
Development
On joining WPP, non-executive directors are given
an induction which includes one-to-one meetings with management and the external auditors, briefings on the duties of directors of a Jersey company, the Share Dealing Code, WPP Code of Conduct and the UK Corporate Governance Code. The induction also covers the Board committees that a director will join. All directors are fully briefed on important developments in the various business activities which the Group carries out worldwide and regularly receive extensive information concerning the Group’s operations, finances, risk factors and its people, enabling them to fulfil their duties and obligations as directors. The directors are also frequently advised on regulatory and best practice requirements which affect
the Group’s businesses on a global basis. One Board meeting a year is held in a location other than London
or New York. In 2015, the Board met in Beijing, where it received briefings from all the heads of the Group’s Asia Pacific operations. In 2016, in Berlin, the Board will
review the Group’s European operations.
Evaluation
WPP undertakes an annual review of the Board, its committees and individual directors. The annual evaluation of the Board’s and all committees’ effectiveness was commenced at the end of 2015 following the appointment of the new chairman and the realignment of the committee memberships. As outlined in the Nomination and Governance Committee report, an evaluation process is being externally facilitated. Our expert’s observations from these discussions and meetings are
being reviewed by the Board with proposals being made
to the full Board as to improving Board effectiveness.
The results of the evaluation will be considered in the 2015 Sustainability Report to be published shortly and discussed as part of the ongoing dialogue with share owners.
Re-election
The directors submit themselves for annual re-election
at each AGM, if they wish to continue serving and are considered by the Board to be eligible. Directors may be appointed by share owners by ordinary resolution or by
the Board on the recommendation of the Nomination and Governance Committee and must then stand for re-election at the next AGM, where they may be re-elected by ordinary resolution of the share owners.
With only specific exceptions to ensure Board continuity, non-executive directors shall not stand for re-election after they have served for the period of their independence, as determined by applicable UK and US standards and which is nine years.
Diversity
WPP recognises the importance of diversity, including gender, at all levels of the Group as well as the Board.
WPP is committed to increasing diversity across its subsidiaries and supports the development and promotion
of all talented individuals. As at 31 December 2015,
women comprised 29% of the WPP Board and 33%
of non-executive directors, 31% of Board members
and executive leaders in the subsidiaries, 46% of senior managers and 54% of total employees. As at the date
of this report, women comprised 31% of the WPP Board and 36% of non-executive directors.
Directors’ conflicts of interest
The Company’s Articles of Association permit the Board
to consider and, if it sees fit, to authorise situations where
a director has an interest that conflicts, or may possibly conflict, with the interests of the Company (Situational Conflicts). The Board has a formal system in place for directors to declare Situational Conflicts to be considered for authorisation by those directors who have no interest
in the matter being considered. In deciding whether
to authorise a Situational Conflict, the non-conflicted directors must act honestly and in good faith with a
view to the best interests of the Company and they may impose limits or conditions when giving the authorisation, or subsequently, if they think this is appropriate.
Any Situational Conflicts considered, and any authorisations given, are recorded in the relevant minutes. The prescribed procedures have been followed in deciding whether, and on what terms, to authorise Situational Conflicts and the Board believes that the systems it has in place for reporting and considering Situational Conflicts continue to operate effectively.
Remuneration
Non-executive directors do not participate in the Company’s pension, share option or other incentive plans.
The Board considers that the non-executive directors’ remuneration conforms with the requirements of the UK Corporate Governance Code.
The fees payable to non-executive directors represent compensation in connection with Board and Board committee meetings and where appropriate for devoting additional time and expertise for the benefit of the Group
in a wider capacity.
Details of directors’ remuneration and service contracts form part of the report of the Compensation Committee.
Relations with share owners
Dialogue with share owners
The relationship with share owners, potential share
owners and investment analysts is given high priority
by the Company.
The Company has a well-developed and continuous program to address the needs of share owners, investment institutions and analysts for a regular flow of information about the Company, its strategy, performance and competitive position. Given the wide geographic distribution of the Company’s current and potential share owners, this program includes regular visits to investors, particularly
by the Group chief executive, the Group finance director, the deputy Group finance director and the head of investor relations, in the UK, Continental Europe and the major financial centres in North America and also in Asia Pacific and Latin America. The Company’s chairman meets with investors and regularly consults with investors’ governance representatives and advisory bodies. The Company provides a preliminary announcement, an interim management statement at the end of the first and third quarters that includes a trading update, an interim report at half year
and a trading update and presentation at the AGM.
The Company ensures that it has a proper dialogue
with share owners and their representative bodies through executive and non-executive directors in relation to remuneration and corporate governance matters. In 2015, the chairman held extensive rounds of discussions with share owners and advisory groups regarding senior executive compensation, and CEO and Board succession planning. The chairman and senior independent director provide thorough feedback to the Board on issues raised with them by share owners.
WPP’s website, wpp.com, provides current and historical financial information, including trading statements, news releases and presentations and the Company’s statement of its corporate governance practices.
The Annual General Meeting
The 2016 AGM will be held on Wednesday 8 June 2016
at 12 noon at Pullman Hotel London St Pancras,
100-110 Euston Road, London NW1 2AJ. A separate notice convening the meeting is distributed to share
owners and will be published on WPP’s website, wpp.com. All resolutions for which notice has been
given will be decided on a poll.