Chairman and Chief Executive
There is a clear division of the responsibilities between the running of the Board and executive responsibility for running the business, so that no one person has unfettered powers of decision-making. The Board has an established policy which sets out the key responsibilities of the Executive Chairman and Chief Executive. A clear separation is maintained between the responsibility of the Chairman and the Chief Executive, as detailed below:
Chairman
- Setting a vision for Vedanta, formulating its strategy and creating a growth pipeline of profitable business opportunities
- Providing leadership to the Board and ensuring its effectiveness
- Ensuring that there is effective communication with shareholders
- Facilitating the effective contribution of Non-executive Directors
- Overseeing corporate governance arrangements in compliance with the Code
Chief Executive
- Developing the executive team
- Supporting the Executive Chairman in the delivery and implementation of strategy
- Optimising the Group’s assets and management and allocation of resources
- Supporting the Executive Chairman in effective communication with various stakeholders
- Creating and maintaining a sound control environment
Relationship Agreement
At the time of listing, the Company and Volcan, the majority shareholder, entered into an agreement (‘the Relationship Agreement’) to regulate the ongoing relationship between them. The principal purpose of the Relationship Agreement is to ensure that the Group is able to carry on business independently of Volcan, the Agarwal family and their associates.
Under the terms of the Relationship Agreement, the Board and Nominations Committee will at all times consist of a majority of Directors who are independent of Volcan and the Agarwal family, whilst the Remuneration and Audit Committees shall at all times comprise only Non-executive Directors.
Volcan is entitled to nominate for appointment as Director such number of persons as is one less than the number of Directors who are independent of Volcan, the Agarwal family and their associates. The Board considers these to be adequate safeguards in that independent Non-executive Directors make up a majority of the Board and Vedanta’s ability to operate independently of Volcan is protected by the Relationship Agreement.
Directors’ Dealings in Shares
The Company has a policy based on the Model Code published in the Listing Rules, which covers dealings in securities and applies to Directors and senior management. A comprehensive insider list is maintained and all participants are notified of close periods.
Induction and Continuing Professional Development
Appropriate induction is provided to all Directors on appointment to the Board and programmes of continuing professional development are arranged as required, taking into consideration the individual qualifications and experience of the Directors.
Directors undertake visits to operations and have discussions with local management. All Directors have access to the advice and services of the Company Secretary, who is responsible to the Board for ensuring that Board procedures are followed.
All Directors have access to the Company’s professional advisers whom they can consult where they find it necessary in order to better discharge their responsibilities. No Director took such professional advice during the year. The Directors attend other update briefings in order to familiarise themselves with new regulatory requirements.
Performance Evaluation
During the year, the performance of the Board, its main committees and the individual Directors were formally and rigorously evaluated under the leadership and direction of the Chairman. A questionnaire was circulated to Directors concerning their individual performance and that of the Board as a whole and its main committees.
Responses were collated and summarised, open and frank Board discussions held concerning the results and issues raised were addressed.
The evaluation process concluded that the Board as a whole and its main committees had functioned effectively during the year and that the individuals had also performed well, with each member making a significant contribution to the Company. The mix of skills and experience on the Board was felt to be appropriate.
As in previous years, the Non-executive Directors, led by the Senior Independent Director, considered as part of the evaluation process the performance of the Chairman and provided him with feedback.