Compliance with the Principles of Good Governance and Code of Best Practice as appended to the Listing Rules of the Financial Services Authority (the ‘Combined Code’). Introduction
The UK Listing Authority requires all listed companies to disclose how they have applied the principles of good governance and complied with the provisions set out in section 1 of the July 2003 FRC Combined Code (the ‘Code’). Although there is no requirement for an AIM-quoted company to comply with the Code, the Directors of Tottenham Hotspur plc (the ‘Company’) have in recent years adopted it as best practice wherever practical and applicable to the size and operation of the Company. However in the year to 30 June 2010 the Company has not been able to comply with the provisions set out in section 1 of the code for part of the year because subsequent to 19 January 2009 there was only one Non-Executive Director, Sir K E Mills, following the resignation of Lord Davies of Abersoch. As a result the Company has not been able to comply with principles A3, B2 and C3 for the year, which recommend that the Board should include a balance of Executive and Non-Executive Directors and that the Remuneration and Audit Committees should comprise at least two independent Non-Executives. There are currently two Executive Directors (D P Levy and M J Collecott); and the Board considers that it is adequate for two Executive Directors to deal with the management of the Public Limited Company (PLC) and four Executives of the Football Club. Following the resignation of Lord Davies, the Group currently only has one Non-Executive Director, Sir K E Mills. The Board consider that Sir K E Mills has the ability and authority to ensure the current make up of the Board is appropriate for the Group and its shareholders. There are three further principles that the Company does not currently comply with nor does the Board envisage it will comply with in the next year: • Principle A.2 states that there should be a clear division of responsibilities at the head of the Company between the running of the Board and the executive responsibility for the running of the Company’s business. The roles of Chairman and Chief Executive are currently combined. As Chairman and Chief Executive, D P Levy is responsible for running both the Board and the Group’s business. In the Board’s view the independent Non-Executive Director has the ability and authority to ensure the Group and its shareholders are not disadvantaged by this combination of roles; • Principle A.4 states that there should be a nomination committee which should lead the process for Board appointments and make recommendations to the Board. The Board considers that a nomination committee is not appropriate due to the relatively small size of the Board; and • Principle A.6 states that the Board should undertake a formal and rigorous annual evaluation of its own performance and that of its committees and individual Directors. The Board does not feel it necessary to operate a formal Board evaluation policy because, due to the frequency with which the Board meets (as noted below), any issues concerning the performance of an individual Director would be promptly identified and, if necessary, rectified. Furthermore, Provision A.3 states that the Board should state its reasons if it determines that a Director is independent notwithstanding the existence of relationships or circumstances which may appear relevant to its determination, including if the Director has had a material business relationship with the Company as a senior employee of a body that has such a relationship with the Company.
The Board and its Directors
The Executive and Non-Executive Directors are named above. Further details about the Directors are contained within ‘The Club’ section of the Club’s website tottenhamhotspur.com. Non-Executive Directors are appointed for an initial term of a year and their service contracts provide for a notice period of three months. They are independent of management and free fro