Vodafone's Corporate Governance Report: A Detailed Analysis

This report analyzes Vodafone's corporate governance practices based on the UK Corporate Governance Code 2018. It examines Vodafone's approach to shareholder communication, board characteristics, and accountability components, including board evaluation and external auditors. The report assesses the company's compliance with specific provisions related to the separation of CEO/Chairman roles, the independence of board members, and the structure of remuneration. It identifies areas where Vodafone complies and does not comply with the code, providing evidence from the annual report and relevant provisions. The analysis also critically evaluates the company's adherence to the code's principles, highlighting any missing requirements and the reasons behind them. The report references key provisions and annual report pages to support its findings, offering a comprehensive overview of Vodafone's corporate governance framework and its alignment with best practices.

Assessment
(Vodafone)

1.)
Company purpose and
communication with
shareholders
Approach Implications
Communications with
shareholders (Culture,
purpose and strategy)
Provision 1*
Board must describe about risk
or opportunity for future
success, sustainability of
business model and ways
governance deliver to its
strategy.
Comply: followed (Pg. no. 44)
Company model several
scenario for each set of risk that
get assessed by local market,
group entities or senior leaders
which provide an insight over
the potential impact of risk so
that strategy can be
implemented effectively.
Provision 2*
Board must regularly assess and
monitor organisational culture
to ensure policies, practices or
behaviour must aligned with
company's purpose, value or
strategy. It also mention
company's approach to reward
workforce in annual report.
Comply: followed (Pg. no. 42)
Company invested more than
€60 million for providing
employee training to focus over
enhancing critical skills such as
e-commerce, digital marketing,
coding, analytics etc.
Provision 3*
Board must ensure that
company's purpose, value get
aligned with its culture, for this
The success of an
organisation is generally led
by a effective board of
directors as their main aim is
to promote the success as well
as long term sustainability,
creating value to shareholders
etc. But in order to ensure the
growth and success of an
organisation along with
providing value to the
stakeholder several provisions
are being formulated which
guide company over its
purpose, strategy and cultural
value which form up the core
value of company (Soltani
and Maupetit, 2015).
As per the annual report,
Vodafone follow all its
provisions related with the
communication with
stakeholder where it mainly
gather information from its
several stakeholders
regarding risk or their
concern discuss with senior
leaders in order to get insight
and take corrective action
over improvement.
Additionally, company also
focuses toward spending fund
over employees as it consider
them crucial for success
factor (Agyei-Mensah,
2016). These efforts support
them in engaging employees
in organisational affairs that
further help in effective
implementation of strategies.

chair should regularly seek
engagement of shareholder to
determine view on governance
and performance.
Comply: followed (Pg. no. 62)
Vodafone consider their people
critical to success for which it
invite them to participate in
online Global people Survey
where employees can share
their concern and aspiration.
1.
Board characteristics Approach
Did the Company comply with
the code? Explain/Provide
Evidence from the codes as
well as the VODAFONE
annual report
Implications
Separated roles of
CEO/Chairman
Provision 9*
The role of CEO and
Chairman should not
performed by same person
and in exception it must be
done by consult of board and
major shareholder and then
published over company
website.
Comply: followed (Pg. no.
62)
Vodafone maintains a clear
division of responsibility
among its Chairman as well as
Chief executive which are
distinct from one another.
Additionally the Chairman
holds up the tenure of 8 years
while CEO have a tenure of
less than one year.
The chairperson leads the
board and also help
responsible for overall
effectiveness in directing the
company. They also work
toward facilitating the
constructive board relations
and have several roles or
responsibility. In order to
fulfil those responsibilities
effectively it is crucial to
follow them in particular
criteria which are set by
provisions. It remains crucial
for every organisation to
mention those role and
responsibility in their annual
report (Hadjikyprianou,
2015).
Vodafone specified a detailed
infomrtaion regarding its key
persons or board memebers
along with their tenure and

Provision 14*
The main responsibility of
chairperson, board,
committees, chief executive
etc. must remain clear and set
in public which includes
number of meeting of board,
committee or individuals.
Comply: followed (Pg. no.
55)
Vodafone present all the roles
and responsibility of its
chairperson, board,
committees, chief executive
etc. publicly in its annual
report over page no. 55.
other details. Additionally it
also specified the roles they
perform and reason behind
their position as it is a part of
provision.
b.
Board characteristics Approach
Did the Company comply with
the code? Explain/Provide
Evidence from the codes as
well as the VODAFONE
annual report
Implications
Independence
(Number of
Independent board
members to executives)
Provision 10*
Board must specify each non-
executive director that consider
independent and their
circumstance in annual report.
Comply: followed (Pg. no.
55)
Vodafone has specified about
its senior independent director
in its annual report on page
number 56 with all its detail.
Provision 11*
As per this provision the half
of the board members except
chairperson should get
included in non-executive
The director that are
independent are consider to be
more helpful in term of
improving company's
management and operations.
In context of Vodafone, it
comply with provision 10 but
doesn't follow 11 provision. As
according to provision 11 it is
mentioned that their must be
around 50% of the board
member should be independent
but Vodafone only provide
33% of the board members are
being consider as independent
(Cuomo, Mallin and Zattoni,
2016).

director whom the board
consider them independent.
Comply: unfollow (Pg. no.
56, 57)
The annual report of Vodafone
include detail about the its
board members where each one
is specified with their own role
and responsibilities. But the
chairman doesn't form the part
of non-executive directors and
it only maintain a 33% of
members are independent.
2.
Accountability
components
Approach
Did the Company comply with
the code? Explain/Provide
Evidence from the codes as
well as the VODAFONE
annual report
Implications
Board evaluation
(when was the last
time the firm took an
external perspective
to this)
Provision 18*
The board must set out
resolution to elect director
along with specific reason, why
their contribution and their
importance to company's long
term sustainable success.
Comply: VAR p69
As per the information
presented on pg no 69 the non-
executive director are
submitted to re-election except
one person named as Samuel
Jonah.
Provision 21*
There should be annual
evaluation of board,
committee, individual director
An organisation must perform
reglar internal and external
evaluation in order to ensure that
each factors must get aligned with
the policies and practices of
organisation which leads to its
success. These evaluation must be
consider by maintaining a balance
between skills and knowledge,
independence as well as
experience of board persons
(Haji, 2014). Vodafone mainly
not comply with some of the
provisions that are listed. But the
most importantly the chairman do
not evaluate the result of board
evaluation which is mentioned in
provision 21. From this it has
been found that the chairman are
not fulfilling their roles and
responsibility effectively.

and chairperson's performance.
Comply: followed, VAR p69
Vodafone conduct annual
evaluation of board committee
performance that facilitate by
third party once every three
year.
Provision 22*
The chairperson should take
corrective action by
recognising strength for
addressing weaknesses of
board whenever developing
need identified.
Comply: unfollowed VAR
p69
As per the annual report of
Vodafone, committee reviews
are assessed by Raymond
Dinkin who has no link with
company and a external person
who is appointed by Company
Secretary
3.
Accountability
components
Approach
Did the Company comply with
the code? Explain/Provide
Evidence from the codes as
well as the VODAFONE
annual report
Implications
External Auditors
(who are the auditor
of the firm, what is
the time scale of
There is not such provision are
available for the external
auditors within the UK CG
code 2018.
The external auditing rotation is
crucial for an organisation as it
increase the independence of
auditor (Zalata and Roberts,

their contract)
Note: The external auditors of
Vodafone are PwC which was
appointed by its shareholders in
July 2014 that are valid up to
31st of March 2020.
2016). In UK it is consider that
each organisation must audit the
rotation of firm with in the
duration of 10 years as increased
in this duration may bring
familiarity and result into loss of
company. Vodafone also hire
external auditor, which it hire in
year 2014 JULY that are named
as PWC that will work for
Vodafone till march 2020.
4.
Remuneration
characteristics
Approach
Did the Company comply with
the code? Explain/Provide
Evidence
Implications
Structure of
Remuneration
(Components of Pay/
Clawback/ Long-term
targets)
Provision 32*
Board should form up a
remuneration committee for its
independent non-executive
director that will be three in
large company and two in
small firms.
Comply: followed, VAR p77
In annual report of Vodafone,
there is a letter of remuneration
by chairman where it is
mentioned that committee
follow the three year term.
Provision 37*
Policies related with
remuneration policies and
scheme should follow the
override formulaic outcome. It
must include provision that
help company to recover or
Remuneration policies and
practices are mainly designed
to support strategy and help in
achieving the long term
sustainability. Executive
remunerations must be aligned
with the organisation's purpose
or value. As per the annual
report of Vodafone chief
director of company is consider
as the part of top ten FSTE 100
CEOs (Tricker and Tricker,
2015). His remuneration is
increased by the 26% by the
company which is showed in
the annual report. Despite of
this there are certain criteria
where company is not able to
cover its losses. Therefore, it
required to focus over
controlling the board
remuneration practices
including its policies and claws
backs.

share award and specify the
circumstance of their
appointment.
Comply: followed, VAR p81
The annual bonus target of
company are insensitive,
therefore only disclose after
financial year completion and
in case of loss the bonus get
recovered up to three year after
payment data. Additionally,
share award get recover up to
two year after relevant vesting
date.
Structure of
compensation
committee (nb of
independent board
members)
Provision 39*
Contract period should be of
one year or less, in case to be
offer for longer it must ensure
that the compensation doesn't
be result into poor performance
to director.
Comply:
No evidence are available.
5. Assess the firm complies with all code all UK code’s principles, and critically evaluate, if
the company, is missing any of the code requirements and whether it is explaining the
reason behind that? (10 marks)
From the evaluation performed over the annual report of Vodafone it has been
identified that the company mainly comply with the majority of provisions that are decided
by the corporate governance for the organisations mainly operating in UK. But despite of this
there are some provision which are not followed by Vodafone, these are Provision
39* ,Provision 22*, Provision 11* etc. as not such evidence are found in the report.

REFERENCES
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