The Combined Code provides that the board of directors of a United Kingdom public company should include a balance of executive and non-executive directors, with independent non-executive directors (excluding the Chairman) comprising at least one-half of the board. The Combined Code states that the board should determine whether a director is independent in character and judgement and whether there are any relationships or circumstances which are likely to affect, or could appear to affect, the director's judgement. The Directors support high standards of corporate governance.
The Board consists of seven directors, one Managing Director (Harry Hyman), one Non-Executive Chairman (Graeme Elliot) and five non-executive directors. PHP regards three of the non-executive directors (Alun Jones, Ian Rutter and Mark Creedy) to be independent within the meaning of the Combined Code.
PHP is committed to high standards of corporate governance and, for the year ended 31 December 2008 and to the date of this document, the Group has applied the principles and has complied with the provisions of the revised Combined Code published in June 2008, except that the Company does not have an internal audit function and directors are not appointed on specific terms of office.
The Combined Code recommends that a board of directors should appoint one of its independent nonexecutive directors to be the SID. The SID should be available to shareholders if they have concerns that the normal channels of chairman or Managing Director have failed to resolve or if such channel of communication is inappropriate. PHP's SID is Alun Jones. Alun Jones also chairs the Audit, Management Engagement, Remuneration and Nomination Committees.
The Board is currently assisted in fulfilling its responsibilities by five committees, being the audit, remuneration, nomination, management engagement and standing committees. The terms of reference for these committees are set out below.
The audit committee comprises Graeme Elliott, Alun Jones, Ian Rutter and Mark Creedy, though other directors may be invited to attend. The committee meets twice each year and the committee holds regular meetings with representatives of the Joint Managers, and with the external auditors.
The committee's main objectives are, inter alia: to monitor the probity of the Group's financial statements and the robustness of the financial, operational, compliance controls and systems of risk management relied on by the Group.
The committee also reviews any matters raised by the external auditors. The external auditors are invited to attend meetings regularly. The external auditors have unrestricted access to the members of the audit committee, and the committee ensures that meetings are used as an open avenue of communication between the external auditors and the Board. The committee receives regular updates and monitors the status of actions taken by management to address issues raised. The Joint Managers provide risk management reports to the Audit Committee on risk assessment and internal controls in place.
In respect of any firm of external auditors which are appointed by any Group company, the audit committee is responsible for recommending their appointment and termination; recommending their terms of reference; receiving regular reports, independently of the Joint Managers where necessary; determining their independence; monitoring their performance; and approving their fees.
The nomination committee comprises Alun Jones, Ian Rutter and Mark Creedy. It reviews from time to time the combination and balance of experience, core competencies and other attributes which the non-executive directors should bring to the board in discharging its role in nominating any new directors and in considering succession planning.
The remuneration committee comprises Alun Jones, Ian Rutter and Mark Creedy.
The remuneration committee determines appropriate levels of remuneration for Directors. The remuneration committee currently reviews the Directors' fees for increases at three yearly intervals.
Management Engagement Committee
The Management Engagement Committee comprises Alun Jones, Ian Rutter and Mark Creedy and reviews the terms of the Management Agreement and the performance of the Joint Managers.
The standing committee consists of Graeme Elliot, Harry Hyman and James Hambro.
The committee has the authority to and sets procedures to deal with the implementation of board decisions, routine business and to deal with any urgent items arising between scheduled board meetings not requiring debate.
Conflicts of interest
Following the changes to the Companies Act effective on 1 October 2008 and authorised in the Articles of Association, the Board as a whole introduced a new conflicts policy to formalise previous practice. This included briefing for Directors on their revised obligations with regard to conflicts including obligations for periodic reporting and updating of Directors' interests (and potential conflicts) and processes for the proper management of Directors' conflicts including the management of confidential information when a Director is conflicted and the behaviour to be adopted in such circumstances. The Board as a whole review and, if appropriate, approve any conflicts of interest. Any conflicted Director takes no part in related decisions.