Following is a summary of Diageo’s governance structure at the highest level. For full details, and further information on our board members and governance, please see the governance section of our annual report.
The Diageo board consists of a chairman, chief executive, chief operating officer, chief financial officer and six independent non-executive directors.
The board, in full session and through its committees (audit, nomination and remuneration), makes decisions, reviews and approves key policies and decisions of the company, in particular in relation to:
- Group strategy and operating plans
- Corporate governance
- Compliance with laws, regulations and the company’s Code of Business Conduct
- Business development, including major investments and disposals
- Financing and treasury
- Appointment or removal of directors and the company secretary
- Risk management
- Financial reporting and audit
- Corporate citizenship, ethics and the environment
In line with the Companies Act 2006, which sets out directors’ general duties concerning conflicts of interest and related matters, the board has agreed an approach and adopted guidelines for dealing with conflicts of interest and has added responsibility for authorising conflicts of interest to the schedule of matters reserved to itself.
Each year, the board reviews its performance and that of its committees and the individual directors. Following an external review last year, this year the board carried out an internal performance review, which involved a written questionnaire followed by the chairman holding individual meetings with both executive and non-executive directors. For more information on the outcomes of the evaluation, please see the governance section of our annual report.
The non-executive directors, all of whom the board has determined are independent, are experienced and influential individuals from a range of industries, backgrounds and countries. Their diverse mix of skills and business experience is a major contribution to the proper functioning of the board and its committees, ensuring that matters are fully debated and that no individual or group dominates the board’s decision-making processes. Through the nomination committee, the board ensures that plans are in place for the succession of both executive and non-executive directors. These plans consider gender and diversity as well as business skills and experience.
There is a formal induction programme for new directors; they meet with the executive committee members individually and receive orientation training from the relevant senior executive in relation to the group and our business. This includes training on our assurance processes, environmental and social policies, corporate responsibility policies and practices, and governance matters. Following this initial induction, appropriate business engagements are arranged for the directors on an ongoing basis.
As chief executive, Paul Walsh is responsible for implementing the strategy agreed by the board and for managing the group. He is supported in his role by the executive committee.
Committees and working groups
The chief executive appoints and chairs the executive committee, which consists of the individuals responsible for the key components of the business: the regions where Diageo operates, Global Supply and global functions.
The chief executive has also created other committees with ongoing remits to oversee certain areas and functions. They are:
- Audit and risk committee: accountable for internal control and risk management as well as reviewing the effectiveness of the compliance and ethics programme
- Corporate citizenship committee: accountable for managing our Sustainability & Responsibility Strategy
- Finance committee: responsible for advising on funding strategy, capital structure, management of financial risks as well as related policies and control procedures
- Filings assurance committee: responsible for implementing and monitoring the company’s compliance with relevant UK, US and other regulatory reporting and filing provisions.
Diageo also has executive working groups that are chaired by an executive member and include senior managers. These create policy to recommend to the executive committee and board when appropriate. The groups relating to sustainability and responsibility matters report to the corporate citizenship committee and include an alcohol in society working group, chaired by the director of corporate relations, and an environmental working group, chaired by the president of Global Supply and global procurement.
For more information on the governance arrangements for sustainability and responsibility issues, please see the approach and performance section of this report.