Diageo's board and executive committee are therefore committed to achieving the highest standards of corporate governance, being a responsible corporate citizen in the communities in which we operate and applying the appropriate level of risk management when directing and controlling the business.
The activities of the board and executive committee as described in the Corporate Governance Report for the year ended 30 June 2009, underpin the company's commitment to achieving these aspirations.
We share the view, expressed in the preamble to the Code (as defined below), that good corporate governance will contribute to better company performance as it helps a board discharge its duties in the best interests of shareholders. Good governance will also facilitate efficient, effective and entrepreneurial management that can deliver shareholder value over the longer term.
The principal corporate governance rules applying to UK companies listed on the London Stock Exchange ("LSE") are contained in The Combined Code on Corporate Governance as updated and published by the Financial Reporting Council in June 2008 (the "Code") and the UK Financial Services Authority ("FSA") Listing Rules, which require companies listed on the Main Market of the LSE to describe, in their annual report, their corporate governance from two points of view: the first dealing generally with their adherence to the Code's main principles and the second dealing specifically with non-compliance with any of the Code's provisions. The two descriptions together are designed to give shareholders a picture of governance arrangements in relation to the Code as a criterion of good practice. Diageo has complied with both the main principles set out in section 1 of the Code and the provisions set out in section 1 of the Code throughout the year ended 30 June 2009. The Code is publicly available under the heading 'Corporate Governance' at the website of the Financial Reporting Council, www.frc.org.uk.
Diageo must also comply with corporate governance rules contained in the FSA Disclosure and Transparency Rules as well as certain related provisions in the Companies Act 2006 (the "Act").
As well as being subject to UK legislation and practice, as a company listed on the New York Stock Exchange ("NYSE"), Diageo is subject to the listing requirements of the NYSE and the rules of the Securities and Exchange Commission ("SEC"). Compliance with the provisions of the US Sarbanes-Oxley Act of 2002 ("SOX"), as it applies to foreign issuers, is continually monitored. Whilst the directors believe that the group's corporate governance policies are robust, changes have been and will continue to be made to ensure compliance with the rules that are in place at any point in time. Diageo follows UK corporate governance practice; differences from the NYSE corporate governance standards are summarised in the Corporate Governance Report for the year ended 30 June 2009 and on www.diageo.com under the 'Compliance' section.
The way in which the Code's principles of good governance and relevant provisions of SOX are applied is described within the Corporate Governance Report for the year ended 30 June 2009.
Board committees' terms of reference