Governance and ethics

Our governance framework

Modern society demands transparency and high levels of integrity from its companies – and we welcome that.

Our governance framework enables us to operate efficiently and aims to ensure that our performance complies with or exceeds legal and regulatory requirements. 

The Board of Telefónica O2 Europe seeks to comply with best practice in corporate governance, helped by a system of internal controls and integrated auditing. Chairman and Chief Executive Officer Peter Erskine also sits on the Board of Telefónica, S.A., which is ultimately responsible for our standards of governance.

Members of the Board are in charge of Company strategy, structure and competent management and provide leadership within the framework of our internal controls.

They aim to be alert to any current or future risks, including those of a social, environmental and ethical nature. We report regularly to the Board on such matters, to ensure that it considers both financial and corporate responsibility issues. Our goal is to minimise events or trends that could undermine our operations or diminish the reputation of the O2 brand.

Directors are advised to declare at Telefonica O2 Europe Board meetings if they have a conflict of interest and cannot vote on a particular issue, unless the Articles permit them to do so. In addition, we have established an ethical code – which we call our Business Principles – which govern the way we work with each other.

We measure our employees’ conduct against our Business Principles to ensure that integrity and accountability are inbuilt at all levels. We also ask every employee to respect the values that underpin the O2 business.

We make no political donations. But we consider it essential to engage with political parties, Members of Parliament and civil servants on matters of policy that interest the Government and the public.

During the year we started sharing best practice in corporate governance across the Group. O2’s Business Principles and the Telefónica ethics code were merged into a single code called the Telefónica Business Principles. This will now be rolled out to the entire Telefónica Group.

In 2006 we brought together the O2 businesses, including Telefónica O2 Czech Republic, under a common system of governance. We began to integrate our Business Principles, insurance programme, Risk Management and corporate responsibility procedures to allow us to keep to an O2-wide standard of compliance.

In January 2007 the extended O2 business was renamed Telefónica O2 Europe plc. The Board comprises the Chairman and Chief Executive Officer, ten Executive Directors and seven Non-Executive Directors.

A new Governance and Ethics Board Committee was set up under the chairmanship of Richard Poston, Director of Corporate Affairs, in early 2007. One of its responsibilities is to inform the Board of any material social and environmental opportunities or issues facing the business, replacing the previous Executive Committee in this role.

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