Approved by the BT Group plc Board on: 31 March 2020
The Board controls the business but delegates day to day responsibility to the Chief Executive. There are, however, a number of matters which are required to be, or in the best interests of the Company should be, decided by the Board of directors. These are known as the matters reserved to the Board.
Any reference in this document to matters delegated to Board Committees shall not fetter the discretion of the Board to make decisions in its own right.
Matters reserved for the Board
The Board is ultimately responsible for the strategy, and overseeing the performance of, the Company and its subsidiaries (the “Group”).
The Board’s focus is on:-
- Growing shareholder value
- Oversight and control
- Corporate governance
In support of this focus the following matters are reserved for the Board to approve or monitor:
1.1 Promoting the long-term sustainable success of the business, generating value for shareholders and contributing to wider society.
1.2 Assessing and monitoring the Company’s purpose, values and ethics.
1.3 Assessing and monitoring the culture, setting the tone at the top, and ensuring the culture is aligned with the Company’s purpose, values and strategy.
1.4 Approval of strategic plans and strategic objectives, as proposed by the Chief Executive.
1.5 Responding to shareholder activism or any takeover or merger approach.
1.6 Approval of any issues of significant strategic importance to the Group.1
2.1 Approval of the Group Annual Budget and Medium Term Plan (including capital expenditure) and any changes which result in an increase in aggregate expenditure.
2.2 Approval of capital expenditure projects over £100m.
2.3 Approval of investments (i.e. acquisitions, disposals or joint ventures including assets or business activities, or outsourcing arrangements):
2.3.1 with a consideration/value over £100m (and any additional funding that would result in the revised aggregate being over £100m);
2.3.2 of significant strategic importance to the Group; or
2.3.3 at the request of the Chief Executive or Group Chief Financial Officer.
2.4 Approval of customer or supplier contracts, bids and tenders of significant strategic importance or which are referred at the discretion of the Chief Executive.
2.5 Approval of the Annual Report and Accounts, Form 20-F, Regulatory Financial Statements, half-yearly report and interim trading statements.
2.6 Oversight of the Group’s operational and financial performance.
2.7 Approval of the dividend policy.
2.8 Declaration of any interim or special dividend and recommendation of the final dividend for shareholder approval.
2.9 Approval of the Group’s target credit rating.
2.10 Approval of external financing by issue of equity or rights to equity (except under employee share plans) by the Company or any Group subsidiary.
2.11 Approval of the Group’s tax and treasury strategies, including the annual debt funding plan.
2.12 Approval of material matters in relation to accounting reporting and major changes to accounting policies or practices.
2.13 Approval of the pension funding valuation for the BT Pension Scheme.
2.14 Approval of pensions policy or benefit provision changes or augmentations (including any related Rule amendments) impacting future pension benefits payable of over £100m.
2.15 Approval of reduction of capital, share issues (except under employee share plans) and share buy backs over £100m.
3. Risk management, internal control and audit
3.1 Oversight of risk management and internal control systems.
3.2 Approval of the appointment and removal of external auditors of the Company, on the recommendation of the Audit & Risk Committee, to in turn be put to shareholders for approval.
4.1 Approval of resolutions and corresponding documentation to be put to shareholders at a general meeting.
4.2 Approval of circulars, prospectuses and listing particulars.
4.3 Ensuring a satisfactory dialogue with shareholders and that the Board understands the views of its shareholders.
5. Board membership and other appointments
5.1 On the recommendation of the Nominations Committee:
5.1.1. Approval of the appointment or removal of directors.
5.1.2. Selection of the Chair of the Board, Chief Executive and Senior Independent Director.
5.1.3. Approval of composition and membership of Board committees.
5.1.4. Approval of the continuation in office of directors of the Company as appropriate and the recommendation to shareholders of their election or re-election.
5.1.5. Approval of the appointment or removal of the Chair, CEO, BT nominee directors and non-executive directors of Openreach Limited.
5.1.6. Approval of the appointment and removal of the Chair and the other Trustee Directors of the BT Pension Scheme.
5.2. Approval of directors’ external appointments.
5.3. Approval of appointment or removal of the Secretary of the Company.
5.4. Oversight of appointments and removals from the Executive Committee and other senior direct reports to the Chief Executive.
6.1. On the recommendation of the Remuneration Committee:
6.1.1. Determining the Group’s remuneration policy to be put to shareholders for approval.
6.1.2. Approval of the introduction of new employee share schemes and major changes to existing employee share schemes to be put to shareholders for approval.
6.2. Determination of the remuneration of Non-Executive Directors of the Company (excluding the Chair) on the recommendation of the Chair and the Executive Directors.
7. Corporate governance matters
7.1. Establishing BT’s governance framework and approving material changes to the authority delegated by the Board.
7.2. Approval of the terms of reference of Board committees and any material changes to them.
7.3. Oversight of activities of the Board committees and the Colleague Board through reports from committee chairs and the designated workforce non-executive director.
7.4. Considering the balance of interests between shareholders, colleagues and other stakeholders, including customers, suppliers, the community, regulators and Government.
7.5. Authorising conflicts of interest for any directors where permitted by the Company’s Articles of Association.
7.6. Ensuring that there is a formal and rigorous annual evaluation of the performance of the Board, its Committees, the Chair and individual Directors.
7.7. Approval of any changes to the Company’s listing or its status as a plc.
8. Other matters
8.1 Oversight of health, safety and wellbeing policies and performance.
8.2 Oversight of material matters relating to industrial/employee relations.
8.3 Approval of BT’s Share Dealing Code policy and changes thereto.
8.4 Approval of the overall level of Directors' & Officers' insurance and approval of any indemnity given by the Company to Directors or Officers.
8.5 Approval of the political donations policy and changes thereto.
8.6 Oversight of major public policy, regulatory and compliance issues including matters which would have a significant impact on the Group's reputation.
8.7 Approval of any changes to this schedule of matters reserved to the Board.
1 Items of significant strategic importance are decisions which:
a) have a direct impact on:
- the Group’s funding position, including share price, credit rating and our ability to raise capital;
- the Group’s reputation or integrity; and/or
- the Group’s ethical standards;
b) constitute a material deviation from the approved corporate strategy; or
c) the Chair or Chief Executive deem necessary for a Board discussion.