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Home > About Ofcom > Accountability > Annual Reports and Plans > Ofcom Annual Report 2007 - 08 > Corporate Governance
Corporate Governance
As an independent statutory corporation without shareholders, established under the Office of Communications Act 2002, Ofcom is not subject to the Combined Code on Corporate Governance published by the UK Listing Authority.
However, its principles provide a useful benchmark for all bodies wishing to make a statement about their corporate governance performance.
Ofcom has complied with the main principles of the Combined Code during the period 1 April 2007 to 31 March 2008. To this end, Ofcom will continue to adopt the principles of the code where it is either capable of doing so, or it is appropriate to do so, given its status as an independent statutory corporation.
Board Members’ remuneration
Details of Members’ remuneration are set out on pages 65 to 70.
Board
The Ofcom Board comprises both Executive and Non-Executive Members. The Chairman and Non-Executive Members of the Ofcom Board are appointed jointly by the Secretaries of State for Business, Enterprise and Regulatory Reform and for Culture, Media and Sport for a period of up to five years. Ofcom’s Nominations Committee has assisted both Departments by working with them in the selection process for the appointment of new Non-Executive Members. Executive Members of the Board are appointed by the Chairman and all of the independent Non-Executive Members. Members’ biographical details are set out on pages 52 and 53.
Ofcom has adopted a unitary Board model. The Board currently consists of six Non-Executive Members including the Chairman, who is responsible for running the Board, and two Executive Members including the Chief Executive. The Board is responsible and accountable for the discharge of Ofcom’s statutory functions and provides strategic leadership and manages overall control of Ofcom’s activities. Members’ duties and responsibilities are set out in a Members’ Code of Conduct. A register of Members’ interests is available on the Ofcom website.
For the purposes of adopting the principles of the Combined Code:
- the Board considers all of the Non-Executive Members to be independent of management and free of any business or other relationship which could materially interfere with the exercise of their judgement;
- the Board believes that the Members have, between them, a wide range of experience which ensures an effective Board to lead and control Ofcom;
- the Non-Executive Members comprise a majority of the Board. Millie Banerjee is regarded as being the senior Non-Executive Member for the purposes of the Combined Code;
- on appointment all Members are given a full induction on their responsibilities and thereafter receive further guidance and briefings as and when required;
- the Board meets at regular intervals during the year. The Board reserves certain matters to itself but otherwise delegates specific responsibilities to senior managers and committees. The role of executive management is to implement Board policies. The work of both the Board and Executive is informed by the contributions of a number of advisory bodies;
- the Board is supplied in a timely manner on a regular basis with information in a form and of a quality appropriate to enable it to discharge its functions; and
- all Members have access to the Secretary to the Corporation, who is responsible to the Board for ensuring that correct rules and procedures are followed. All Members have access to advice from independent professionals at Ofcom’s expense.
The Board undertook an evaluation of its performance during March 2008 utilising the services of external consultants, Egon Zehnder.
In general terms, the Chairman manages the Board to ensure that:
- Ofcom has appropriate objectives and an effective strategy;
- the Chief Executive’s team is able to implement the strategy;
- there are procedures in place to inform the Board of performance against objectives; and
- Ofcom is operating in accordance with the highest standards of corporate governance.
Ofcom’s Annual Report is sent to the Department for Business, Enterprise and Regulatory Reform which lays copies of it before each House of Parliament, to which Ofcom is accountable.
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