Compass Group Annual Review 2006

Summary corporate governance report

The Board is committed to high standards of corporate governance and for the year ended 30 September 2006 the Company complied with all the provisions of the Combined Code.

Board structure

The Board currently consists of the Chairman, five independent non-executive directors and two executive directors. Subject to election and re-election at the 2007 Annual General Meeting, the Board will consist of the Chairman, four independent non-executive directors and three executive directors. Biographical details are set out in the Board of directors.

The Board meets regularly and has a formal schedule of matters reserved for its decision. All directors have access to the services of the Company Secretary. Any directors wishing to take independent advice may do so at the Company’s expense. Appropriate training is available to all directors on appointment and on an on-going basis as required.

The roles of Chairman and Chief Executive are separate and the Board has agreed their respective responsibilities. The Chairman is responsible for the effective functioning of the Board. The Chief Executive is responsible for the day-to-day management of the Group and is supported by an Executive Committee which normally meets monthly and comprises the executive directors and key senior managers.

All of the non-executive directors are considered by the Board to be independent in character and judgement including Peter Cawdron who, having been a director for more than nine years, has decided to retire from the Board at the conclusion of the 2007 Annual General Meeting.

Company Secretary

The Company Secretary, Tim Mason, is responsible for advising the Board, through the Chairman, on all governance matters. The directors have access to the advice and services of the Company Secretary.

Audit Committee

The Committee comprises Steve Lucas (Chairman), Peter Blackburn and Sven Kado. The Committee met six times during the year.

The Committee’s primary responsibilities include; reviewing the Company’s published financial statements and formal announcements relating to financial performance, reviewing the effectiveness of the Company’s internal financial controls and risk management systems, monitoring the effectiveness of the internal audit function, recommending the appointment and removal of the external auditors and reviewing the Company’s arrangements whereby employees may in confidence raise any concerns regarding possible wrongdoing.

The Committee reviews annually the effectiveness and independence of the external auditors and has developed a policy on the provision of services by the external auditors in order to safeguard their objectivity and independence.

Remuneration Committee

The Committee comprises Peter Cawdron (Chairman), Sir Roy Gardner, Val Gooding (until 31 December 2006), Sven Kado and Steve Lucas. The Committee met five times during the year. The Summary directors’ remuneration report can be viewed by clicking here.

Nomination Committee

The Committee comprises Sir Roy Gardner (Chairman), Peter Blackburn, Peter Cawdron and Val Gooding (until 31 December 2006). The Committee met once during the year.

The Committee’s primary responsibilities include; carrying out formal selection processes and making recommendations to the Board on the appointment and reappointment of directors, making recommendations to the Board on the suitability of candidates for the role of Senior Independent Director and membership of the Audit and Remuneration Committees.

The Committee met during the year to consider the appointment of a new Chief Executive and the Board accepted the Committee’s recommendation that Richard Cousins be appointed as successor to Michael Bailey. Following the year end, the Board has accepted the Committee’s recommendations that Sir Ian Robinson and Gary Green be appointed as directors.

Corporate Responsibility Committee

The Committee comprises Sir Roy Gardner (Chairman), Richard Cousins, Andrew Martin, Steve Lucas, the Company Secretary, Director of Human Resources and Director of Corporate Policy & Communications.

The Committee’s primary responsibilities include; overseeing the production of an annual Corporate Responsibility Report, Health, Safety and Environmental practices, business conduct, the promotion of employee engagement and diversity and community investment.

Disclosure Committee

The Committee comprises the Finance Director, the Company Secretary and certain senior managers. The Committee meets as required to deal with matters concerning public announcements and the Company’s obligations to the UK Listing Authority.

Relations with shareholders

The Company reports formally to shareholders twice a year, with the interim and preliminary final results. The Chief Executive and the Finance Director give presentations of these results to institutional investors, analysts and the media. They may also be accessed on the Company’s website, www.compass-group.com.

The Chief Executive and Finance Director meet regularly with institutional investors to discuss strategy and financial performance. The Chairman maintains regular contact with the Group’s major shareholders. The Chairman and other non-executive directors are available to meet with investors to discuss corporate governance issues. These meetings facilitate an on-going understanding of the views and any concerns of the Company’s major shareholders and they are reported to the Board.

Other than in exceptional circumstances all directors attend the Annual General Meeting and are available to answer shareholders’ questions. There is normally a trading update and shareholders are given the opportunity to meet the directors informally afterwards.

The Company has a dedicated Investor Relations Department and this is a primary point for contact with investors throughout the year.