Corporate Governance

A statement of the Company's corporate governance is contained in our Annual Report.

The following documents are available on this website:-

Terms of Reference of the Audit Committee
Terms of Reference of the Remuneration Committee
Terms of Reference of the Nomination Committee

The Board seeks to comply with established corporate governance best practice. The Company has complied throughout the year with the provisions of section 1 of the revised Combined Code on corporate governance issued by the Financial Reporting Council in June 2006 (“the Code”), with the exception of the provision relating to performance evaluation, for the reason stated below.

The Board

The Board, which met ten times during the year, is responsible for determining policy and business strategy, setting financial and other performance objectives and monitoring achievement. There is a formal schedule of matters specifically reserved for decision by the Board which includes:-

Setting Group strategy and approving the annual and capital expenditure budgets.
Reviewing performance in the light of the Group’s strategy, objectives and budgets.
Reviewing the Group’s systems of financial control and risk management.
Approving communications with shareholders.
Approving appointments to the Board and the position of Company Secretary.
Approving policies relating to Directors’ remuneration.
Approving the terms of reference for Board committees.

There is a clear division of roles between the Chairman and Chief Executive. The Chairman has responsibility for the conduct of Company and Board meetings and for ensuring that Directors are properly briefed to enable full, constructive Board discussions. The Chief Executive is required to develop and lead business strategies and processes for the furtherance of the Group.

The agenda for Board meetings are set by the Chairman in consultation with the Chief Executive, Finance Director and Company Secretary. Formal minutes of Board and Committee meetings are prepared and distributed as appropriate to each Director.

The Board currently consists of the Non-Executive Chairman, three Executive Directors and two Non-Executive Directors. Their names and biographical details are set out on Directors' Biographies. Each new appointee to the Board is required to stand for re-election at the next Annual General Meeting following their appointment. In addition, one third of the Board retires by rotation at each Annual General Meeting and each Director stands for re-election at least once every three years.

The Board believes that the Chairman and Non-Executive Directors are free from any business or other relationship which could materially interfere with the exercise of their independent judgement. They have no service contracts and, prior to the establishment of the Nomination Committee in 2004, their original selection was not made through a formal process. With the exception of Mr P E Selway-Swift, who has been a Director of the Company for more than nine years and retires and seeks re-appointment annually, their re-appointment is considered every three years by the Board and, if the Board recommends such reappointment, by the Company.

On appointment, Directors receive information about the Group, including the latest financial statements, the role of the Board and matters reserved for its decision, the terms of reference and membership of the Board committees and the Group’s corporate governance practices and procedures. Additionally the Chairman facilitates visits to key locations and meetings with senior executives.

To enable the Board to function effectively and allow it to discharge its duties, all Directors are given full and timely access to all relevant information, have free access to the advice and services of the Company Secretary and may receive independent advice at the expense of the Company.

The Company Secretary has the responsibility for ensuring that Board procedures are followed and for advising on governance matters. The appointment and removal of the Company Secretary is one of the matters reserved for the Board. The Company Secretary is also Secretary to the Audit, Remuneration and Nomination Committees.

Having undertaken a rigorous evaluation of the performance of the Board, its committees and individual

Directors during the year ended 31 March 2008, the Board considered that in view of the results and the implementation of the recommendations, a full detailed evaluation was not required for the year under review. Therefore, the Board limited the exercise to an evaluation of its performance using the formal process introduced by the Chairman during the year ended 31 March 2008. A summary of findings was reviewed by the Board and recommendations were implemented as appropriate. A performance evaluation of the Chairman was conducted by the Non-Executive Directors, taking into account the views of the Executive Directors.

None of the Executive Directors has any third party directorships outside of the Group.

Board Committees

The Board has delegated authority to a number of committees to deal with matters in accordance with written terms of reference, which are displayed on the Company’s website www.harvardplc.com. The Chairman of the committees attends the Annual General Meeting to answer questions from shareholders.

Audit Committee

This comprises the Non-Executive Directors, Mr P E Selway-Swift, Ms B P Blow and Mr A P Shearer. On 5 March 2009, Mr P E Selway-Swift retired as Chairman of the Committee and following the recommendations of the Nomination Committee, Mr A P Shearer was appointed as Chairman. Members of the Audit Committee have broad financial experience which the Board considers appropriate to enable the Committee to carry out its responsibilities.

The Audit Committee, which reports to the Board, is responsible for reviewing accounting policies and reporting requirements, ensuring the maintenance of accounting systems and controls and ensuring that the audit processes are effective.

The Committee monitors the controls that are in force and any perceived gaps in the control environment. It also considers and determines relevant action in respect of any control issues raised by the external auditors.

The Audit Committee met three times during the year. The external auditors and by invitation, the Finance Director attended all these meetings. The following matters were reviewed and discussed: -

The External Auditors’ Report to the Committee for the year ended 31 March 2008 and the Audit and Client Service Plans for 2009.
Issues raised by the Company’s review on the effectiveness of the internal control system and risk management.

Subsequent to the year end, the Audit Committee reviewed and discussed the External Auditors’ Report to the Committee for the year ended 31 March 2009.

The Audit Committee reviews the appointment and scope of the work of the external auditors and has recommended to the Board that UHY Hacker Young LLP be re-appointed as auditors at the next Annual General Meeting.

The Audit Committee undertakes an assessment of the auditors’ independence and determines the scope of the non-audit services, which currently is limited to advisory and compliance work and company secretarial services. UHY Hacker Young LLP do not advise the Group in respect of taxation matters or conduct due diligence assignments for potential acquisitions and they are not auditors of the Company’s principal overseas subsidiaries.

Remuneration Committee

This comprises the Non-Executive Directors, Mr P E Selway-Swift (Chairman), Ms B P Blow and Mr A P Shearer.

The principal duties of the Remuneration Committee, which met four times during the year, are to consider all aspects of Directors’ remuneration. Its policy is to establish remuneration packages, which enable the Company to attract, retain and motivate Directors with the necessary skills and experience. The Remuneration Committee considers that a part of Directors’ remuneration should be performance related and provides this through awards either under a Long-Term Incentive Plan, the Executive Share Option Scheme and following advice received from independent consultants, a cash bonus scheme. Full details of the remuneration policy are set out in the Remuneration Report.

The Remuneration Committee also considers the grant of share options under the Company’s Executive Share Option Scheme and awards of shares to senior employees under the Company’s Long-Term Incentive Plan. The policy of the committee is to grant share options to senior or other employees as part of a remuneration package that will motivate them to contribute to the success of the Company over the medium to long term.

Nomination Committee

This comprises Non-Executive Directors Mr P E Selway-Swift (Chairman) and Ms B P Blow. This committee, which reports to the Board, is primarily responsible for the appointment of Non-Executive Directors and succession planning. The committee held one formal meeting during the year to consider the appointment of Mr A P Shearer as Chairman of the Audit Committee.

The number of full Board meetings and principal committee meetings attended by each Director during the year was as follows:

	Board	Audit Committee	Remuneration Committee	Nomination Committee
(Number of meetings held)	(10)	(3)	(4)	(1)
D B Harris	10	n/a	1*	n/a
A D Rose	10	3*	n/a	n/a
P J Cannon **	2	n/a	n/a	n/a
M Ashley	10	n/a	n/a	n/a
P E Selway-Swift	9	3	4	1
B P Blow	10	3	4	1
A P Shearer	10	3	3	n/a

* By invitation.
** To date of retirement.