| Wed 26 Mar 2003, 14:24 | | Liberty International PLC - Statements on Corporat |
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International 2003 Annual General Meeting
Liberty International PLC
(Registration number UK3685527)
ISIN Code: GB0006834344
JSE Code: LBT
Issuer Code: LILI I
Statements on Corporate Governance made at Liberty International 2003 Annual
General Meeting
The following statements were made at today"s Annual General Meeting of Liberty
International.
Extract from text of speech of Mr Donald Gordon, Liberty International Chairman
"Corporate Governance
Corporate governance matters have been taking a high profile recently
particularly following the publication of the Higgs Review.
My Chairman"s Statement dated 12 February 2003 comments on pages 10 and 11 of
the Annual Report 2002 in front of you on some of the most significant
recommendations in the Higgs Review. My overall view is that many of the
recommendations of the Higgs Review could if implemented be seriously damaging
to UK business in general. My views have been widely reported in the national
press along with those of many other FTSE 100 chairmen and interested parties
who share similar views.
The Higgs Review has yet to be enshrined and in any event is not applicable to
the 2002 year. We have however made substantial representations to the
authorities with a view to ameliorating many aspects of the Higgs Review.
In the light of the considerable attention currently being placed on corporate
governance issues, I have asked Mr Robin Baillie, Senior Independent Director of
Liberty International, to make a statement on behalf of the Board on corporate
governance for the purposes of this meeting."
Mr Baillie then presented the following statement:
"Corporate Governance Statement for the Liberty International Annual General
Meeting 2003
I would like to reiterate statements made in Liberty International"s Annual
Report 2002 on the subject of corporate governance, and make some additional
comments relevant to today"s Annual General Meeting.
General comments
Liberty International"s annual corporate governance statement is contained on
pages 99 to 101 of the Annual Report for 2002.
Liberty International has always placed a high priority on sound corporate
governance and has benefited enormously from a well-balanced Board structure,
combining a professional executive team with experienced and knowledgeable non-
executives dedicated to the overall success of the business and actively
involved in major decisions.
The effectiveness of the company"s corporate governance is demonstrated by a
track record of business and financial performance which, over the last decade,
has significantly exceeded that of its peer group of major listed property
companies.
The group is committed to and has exercised high standards of corporate
governance in all its operations. The company is required to comply with "The
Combined Code - Principles of Good Governance and Code of Best Practice" ("the
Code") which forms part of the UK Listing Authority"s Listing Rules, or to
explain in which areas it does not comply with the Code.
Compliance with the Code in 2002
The Board believes that, other than as set out in the statement - where full
explanations are given, as specified by the Code - the company has applied the
principles and complied with the provisions set out in Section 1 of the Code
throughout the accounting period under review. On the basis of the explanations
given, the Board is entirely satisfied that Liberty International is in
compliance with the requirements of the Code.
At the year end, the Board comprised the Chairman, Mr Donald Gordon, six
Executives and seven non-executive Directors. Three non-executive Directors, Mr
Buchanan, Mr Rapp and I, are considered by the Board to be fully independent of
management, and free from any business or other relationship which could
materially interfere with the exercise of their independent judgement. Mr
Burgess is a Partner of Jones Day Gouldens, a firm of lawyers which has on a few
occasions advised Liberty International. Mr Bramson retired as Senior Partner
of Nabarro Nathanson in 2001 and now acts as a consultant to that firm of
lawyers which advises the Liberty International group on property matters.
However, the Board is confident that, in both cases, the relationships do not
interfere with the exercise of their independent judgement.
Independence is a state of mind. It is not determined by ticking boxes. It
derives from the character and the integrity of the individual concerned.
I would also like to comment on the position of Donald Gordon, the Chairman,
which has for some time been that of full-time Chairman, neither executive nor
non-executive. This modus operandi is in fact endorsed by the Higgs Review as
an appropriate interpretation of the role of a Chairman.
Mr Gordon sits on the Remuneration Committee, which in our view is entirely
necessary for the business as remuneration packages and incentivisation are a
vital area in which any Chairman would expect to be involved. He is one of four
members and the Committee is chaired by me, the Senior Independent Director. In
respect of his own remuneration, Mr Gordon quite properly recuses himself from
the discussion. His remuneration is therefore set by the other Remuneration
Committee members, who take into account all relevant factors including
comparative data from other companies and his substantial contribution to the
business"s success. Overall, the group"s remuneration levels for the Chairman
and executive directors are considered to be around the median of FTSE 100 and
FTSE mid-cap real estate companies (source - PIRC 2003 report, page 15).
The views of NAPF and PIRC
The Board has noted reports issued by the National Association of Pension Funds
Voting Issue Service (NAPF) and by Pensions Investment Research Consultants Ltd
(PIRC) in respect of this year"s Annual General Meeting.
These reports have generally disregarded and in some cases misquoted the
explanations which the Company has given. The NAPF report has recommended to
its subscribers that shareholders abstain from the resolution to re-elect as
Directors Donald Gordon, Chairman, Graeme Gordon and Michael Rapp. The PIRC
report has recommended to its subscribers that shareholders should oppose the re
elections of Graeme Gordon and Michael Rapp, oppose the reappointment of the
auditors, oppose the Remuneration Report, and abstain from the adoption of the
Report and Accounts and the re-election of the Chairman and Founder of the
Company, Donald Gordon.
Without at this stage wishing to provide a full critique of what I believe to be
the manifest misjudgements contained in the PIRC report, the Board considers its
views to be extreme, not in the best interests of shareholders, unhelpful to the
proper governance of the company and that the recommendation to abstain from
adopting the Report and Accounts is both irresponsible and flawed."
ENDS
Press Enquiries:
Liberty
International PLC:
Donald Gordon Chairman +44 (0)20 7960 1201
David Fischel Chief Executive +44 (0)20 7960 1207
Public Relations:
UK: Michael Sandler Hudson Sandler +44 (0)20 7796 4133
SA: Matthew College Hill +44 (0)20 7457 2020
Gregorowski Associates
26 March 2003
