Group governance
The Board is responsible for the governance of the Group, its overall strategic direction and the success of Xstrata.
The Board focuses on strategic issues, financial performance, risk management and critical business issues; it also has a formal schedule of matters specifically reserved to it for decision. These reserved matters which are documented in a comprehensive regime of authorisation levels and prior approval requirements for key corporate decisions and actions, are reviewed and updated annually by the Board. Such matters reserved to the Board include, but are not limited to, approval of budgets and business plans, major capital expenditure, major acquisitions and disposals, and other key commitments.
Chairman and Chief Executive
A clear separation is maintained between the responsibilities of the Chairman and the Chief Executive. This is documented in a statement approved by the Board. The Chairman is responsible for leadership of the Board and creating the conditions for overall Board and individual director effectiveness while the Chief Executive is responsible for overall performance of the Group including the responsibility for arranging the effective day-to-day management controls over the running of the Group.
Board balance and independence
Of the eight non-executive directors, six are considered by the Board to be independent of management and free from any business or other relationship which could materially interfere with the exercise of their independent judgement and two, Willy Strothotte and Ivan Glasenberg are directors of Glencore International AG ('Glencore'). Willy Strothotte is Chairman and Ivan Glasenberg is Chief Executive Officer of Glencore. The Board has considered these associations and considers the industry expertise and experience of these directors beneficial to the Group.
David Rough is the Deputy Chairman and the Senior Independent Director. His role and responsibilities as the Senior Independent Director are detailed in and formalised by Board resolution and, in summary, are that he should be available to shareholders to discuss their concerns where the normal channels would not be appropriate for this purpose, to have contact with analysts and major shareholders to obtain a balanced understanding of their issues and concerns, to chair the Nominations Committee and to lead the Board and director appraisal process.
Xstrata's adherence to the principles and provisions of the UK Combined Code on Corporate Governance is set out in the corporate governance report in the 2009 Annual Report, together with an explanation of key governance policies and procedures. Xstrata holds an annual general meeting (AGM) in Switzerland each year, at which shareholders are able to put questions, make recommendations or express opinions to the Board.
Committees of the Board
There are four formally constituted committees of the Board: Audit, Nominations, Remuneration and Health, Safety, Environment and Community (HSEC). The terms of reference for each committee are available under Management on this website. For further information on these committees, including membership and terms of reference, areas of responsibility and key activities in 2009 are provided in the 2009 Annual Report.
Commodity Businesses
The Board is also responsible for approving the annual business plans of each Commodity Business. While Commodity Businesses are given a high degree of autonomy to pursue their business objectives, their plans are approved by the Board and they operate within Xstrata's Business Principles and Group Policies.