72 BAE Systems Annual Report 2017 Chairman’s governance letter Contents Chairman’s governance letter 72 Governance highlights 73 Directors’ duties 74 Board governance 76 Board of directors 78 Board information 80 Governance disclosures 81 Audit Committee report 82 Corporate Responsibility Committee report 87 Nominations Committee report 90 Remuneration Committee report 91 Dear Shareholders, The importance of having a clearly defined This year, we decided to widen the circle of strategy for management to pursue and the contact with Board members by inviting a right culture to guide behaviour and drive small group of shareholders to engage directly performance to implement the strategy with the Board in an informal gathering to remains a priority focus for the Board, as discuss the requirements of shareholders in I highlight in the Chairman’s letter in this general, and to review BAE Systems in report (see pages 10 to 12). particular. The meeting proved to be valuable Effective engagement with our stakeholders is to both parties and we will continue this equally an essential part of good governance, practice in the years ahead. with particular emphasis on shareholders Our second additional measure was to invite and customers. shareholders to a more formal morning Our shareholder contact is typically through meeting with our non-executive directors our investor relations team on a day-to-day and Chief Executive for a brief presentation basis, which is supplemented by face-to-face by each of the non-executive committee meetings with our major shareholders by our chairs on our remuneration, audit and Chief Executive and Group Finance Director corporate responsibility policies and at the time of our annual and half-year results. procedures. The presentations were followed To ensure that our performance is viewed in by an open question and answer session, the context of our broader Board policy, as which enabled shareholders to probe more Chairman, I try to meet with our major deeply into the methods and mindsets of shareholders at least once a year to discuss the non-executive team. Feedback on this governance, strategy, culture and succession. session was particularly positive, and we will continue to conduct this type of meeting on Our Senior Independent Director is, of course, a two-yearly basis or when there is material available to speak to shareholders at all times change in Board membership. if an alternative or additional channel of communication is required.