Approved by the Board of BT Group plc on: 3 April 2019

The BT Compliance Committee (BTCC) is a sub-committee of the Board Audit & Risk Committee (in turn a committee of the Board of BT Group plc) from which it derives its authority.

1. Membership

1.1. The committee shall be made up of at least three independent non-executive directors.

1.2. Only members of the committee have the right to attend committee meetings. However, other individuals may be invited to attend for all or part of any meeting as and when appropriate. The committee chair may also invite specialist functional experts to its meetings as required by the agenda, including, Customer Facing Unit (CFU) and Technology representatives, governance and compliance representatives and representatives of other Corporate Units, including internal audit, finance and HR.

1.3. Members of the committee shall be appointed by the Board Audit & Risk Committee or the BT Group plc Board.

1.4. The Board Audit & Risk Committee shall appoint the committee chair who shall be an independent non-executive director of BT Group plc. In the absence of the committee chair and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting. The Chair of the Board shall not be the committee chair.

2. Secretary

2.1. The Company Secretary or their nominee shall act as secretary of the committee.

3. Quorum

3.1. The quorum necessary for the transaction of business shall be two, one of whom must be the committee chair or their nominee.

4. Frequency of meetings

4.1 The committee shall meet at least three times a year, and otherwise as required.

5. Notice of meetings

5.1. Meetings of the committee shall be called by the Company Secretary or their nominee, at the request of the committee chair or any of its members.

5.2. Unless otherwise agreed, notice of each meeting confirming the venue, time and date shall be sent to each member of the committee and any other person required to attend before the date of the meeting. The agenda of items to be discussed and supporting papers shall be sent to committee members and to other attendees as appropriate.

6. Minutes of meetings

6.1 The secretary shall minute the proceedings and resolutions of all committee meetings, including the names of those present and in attendance.

6.2 An extract of the draft minutes of each meeting of the committee in relation to compliance with the Commitments and the Governance Protocol will be sent to Ofcom within a reasonable time after each committee meeting. The minutes will be a fair, true and accurate summary of each meeting.

7. Duties

7.1 The committee reviews:

i. BT’s compliance with the Commitments and the Governance Protocol as set out in section 19.4 of the Commitments and sections 7.13 – 7.15 of Part A of the Governance Protocol (extracts attached for reference in the Annex), as may be amended from time to time;

ii. whether the culture in BT and the behaviours of BT people in relation to the Commitments and Governance Protocol are conducive to BT’s compliance with them and to delivery of the Digital Communications Review (DCR) objectives; and

iii. the extent to which metrics published by Ofcom in relation to the DCR are being achieved and the objectives identified by Ofcom in the DCR Final Statement are being met.

7.2 The role and purpose of the committee, in relation to BT, is to:

i. review the content of the Code of Practice for BT Employees;

ii. review alleged breaches of the Commitments and the Governance Protocol by BT and determine in each case whether a breach has occurred and whether it is trivial or serious;

iii. review complaints relating to BT’s compliance with the Commitments and the Governance Protocol including those made by:

(i) British Telecommunications plc (BT plc) or Openreach employees to BT’s confidential helpline and access routes established for general purposes;

(ii) BT’s customers; and/or

(iii) Ofcom, and determine in each case whether a breach has occurred and whether it is trivial or serious and if the committee determines that a breach relates to the Openreach Division, it shall notify the Openreach Board Audit, Risk and Compliance Committee (OBARCC) of its finding;

iv. report back to complainants regarding the outcome of their complaints including whether the committee considers that a breach of the Commitments or the Governance Protocol by BT has taken place;
v. review and assess whether the Commitments are delivering the anticipated outcomes; and

vi. carry out any other functions specified as being within the remit of the committee in the Commitments or in relation to the compliance framework surrounding the DCR as requested by the Board Audit & Risk Committee.

7.3 The committee shall be responsible for informing Ofcom if it identifies that there has been a breach of the Commitments or the Governance Protocol by BT.

7.4 The committee may of its own initiative:

i. request support in reviewing aspects of BT’s compliance with the Commitments and the Governance Protocol; and

ii. suggest to BT remedial action to ensure its compliance with the Commitments and the Governance Protocol.

8. Reporting responsibilities

8.1. The committee will be provided with management reports for the formal meetings, including reports detailing compliance with the Commitments and the Governance Protocol, updates on specific compliance issues from time to time and Communication Provider complaints received by BT in relation to the Commitments and the Governance Protocol.

8.2. The committee chair shall regularly report to the Board Audit & Risk Committee and the BT Group plc Board on matters within its duties and responsibilities, including BT’s compliance with the Commitments and the Governance Protocol, including details of breaches and complaints. The committee shall make whatever recommendations to the Board Audit & Risk Committee it deems appropriate on any area within its remit where action or improvement is needed.

8.3. The committee shall conduct an annual review of BT’s compliance with the Commitments and the Governance Protocol and its handling of customer complaints and representations, and the committee chair shall present this to the Board Audit & Risk Committee.

8.4. The committee shall publish a report annually on its activities.

9. Other matters

The committee shall:

9.1. have access to sufficient resources in order to carry out its duties, including access to the company secretarial team for assistance as required;

9.2. be provided with appropriate and timely training, including an induction programme for new members and on an ongoing basis for all members;

9.3. give due consideration to relevant laws and regulations, the provisions of the UK Corporate Governance Code and the requirements of the Listing Rules, Prospectus Rules and Disclosure Guidance and Transparency Rules and any other applicable rules, as appropriate;

9.4. arrange for periodic reviews of its own performance and Terms of Reference, and recommend any changes it considers necessary to the Board Audit & Risk Committee or Board for approval; and

9.5. implement an information retention policy in relation to information relating to its activities under the Commitments with the effect that such information is retained for a period of at least six years.

10. Authority

10.1 The committee is accountable to:

i. the Board Audit & Risk Committee and will report to it, or refer matters to it and

ii. Ofcom – in accordance with the commitment to notify Ofcom of any breaches it identifies and to provide extracts of minutes of its meetings.

10.2 The committee is authorised by the Board:

i. through the Company Secretary to seek information it requires from any employee of the company in order to perform its duties; and

ii. in consultation with the Company Secretary, and where necessary to fulfil its duties, to obtain any relevant external legal or other professional advice.

Definitions

Words and expressions used in these Terms of Reference shall have the following meanings:

  • BT means BT plc and any of its subsidiaries or holding companies, or any subsidiary of such holding companies, as defined by section 1159 Companies Act 2006, but excluding Openreach Limited and the Openreach CFU; 
  • Commitments means the Commitments annexed to BT’s Notification to Ofcom pursuant to section 89C Communications Act 2003, dated 10 March 2017 and as varied from time to time thereafter; 
  • DCR Final Statement means the statement “Delivering a more independent Openreach”, published by Ofcom on 13 July 2017; 
  • Governance Protocol means the Governance Protocol annexed to BT’s Notification to Ofcom pursuant to section 89C Communications Act 2003, dated 10 March 2017 and as varied from time to time thereafter; and 
  • Openreach Division means Openreach Limited and the Openreach CFU.  

Annex

Extract from the ‘Commitments of BT Plc and Openreach Limited to Ofcom’

19.4 BT shall identify a compliance body (which shall not be the OBARCC) with the role of reviewing compliance by BT with these Commitments and the Governance Protocol, as set out in the Governance Protocol.

Extract from Part A of the ‘Governance Protocol’

7.13 The BT compliance body identified pursuant to paragraph 19.4 of the Commitments (the BT Compliance Body) shall have a majority of independent members and be chaired by a non-executive director of BT Group plc.

7.14 An extract of the minutes of each meeting of the BT Compliance Body in relation to compliance with the Commitments and this Governance Protocol shall be sent to Ofcom within a reasonable time of each such meeting. Such minutes shall be a fair, true and accurate summary of each meeting.

7.15 BT plc shall inform the BT Compliance Body and the BT Compliance Body shall inform Ofcom if it identifies that there has been a breach by BT plc of the Commitments or this Governance Protocol. The BT Compliance Body shall notify the OBARCC if it determines that there has been a breach of the Commitments or this Governance Protocol, in so far as such breach relates to the Openreach Division. The OBARCC shall include the details of any such breach in the Openreach Report.