Corporate governance.

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The following sections explain how the Company applies the main and supporting principles and the provisions of the UK Corporate Governance Code issued by the Financial Reporting Council (the “Corporate Governance Code”). The Board confirms that throughout 2011 the Company has complied with the relevant provisions of the Corporate Governance Code save as detailed below.

The Board /

All directors are collectively responsible for the overall success of the Company and for the creation of long-term shareholder value. Executive directors have direct responsibility for business operations, whereas the non-executive directors have a responsibility to bring independent, objective judgement to bear on Board decisions. This includes constructively engaging with and challenging management, helping in the development of the Company’s strategy, satisfying themselves on the adequacy of the reporting and management information standards and reviewing the effectiveness of the executive management.

Throughout 2011 the Board comprised ten directors – the Chairman, four executive directors and five independent non-executive directors. Following the retirement of Robert Philpott, formerly CEO of Synovate, on 31 December 2011 the Board comprises nine directors. Details of the current directors and their biographies are set out in the Board of directors. The directors have a broad range of expertise and experience, which we believe contributes significantly to the effectiveness of the Board.

Each of the non-executive directors has confirmed that they have been throughout the year, and continue to be, independent of the management of the Group and free from any business or other relationship that could materially affect the exercise of their independent judgement. The Chairman was independent at the time of his appointment.

The other significant commitments of the Chairman are set out in his biography in the Board of directors.

The Board believes, in principle, in the benefit of executive directors and other senior employees accepting external non-executive directorships in order to broaden their skills and knowledge for the benefit of the Company. The Board’s policy on external appointments is designed to ensure that employees remain able to discharge their responsibilities to the Group. Directors and employees are usually permitted to retain any fees in respect of such appointments.

Directors must not vote in respect of any contract or other proposal in which they (or any person connected with them) have a material interest otherwise than by virtue of their interests in securities of the Company. The Articles of Association were amended by shareholders at the 2009 Annual General Meeting to address the new statutory provisions regarding directors’ duties in relation to conflicts of interest which came into force on 1 October 2008 under the Companies Act 2006. The Company has taken steps to ensure compliance with the new law on conflicts of interest and has procedures in place to identify and deal with any conflict situations should they arise. Those procedures have operated effectively throughout 2011. They include procedures for the Board to authorise any conflicts that may arise if necessary and a regular review of all such actual and potential conflicts (last undertaken in March 2012).

To avoid potential conflicts of interest, non-executive directors are required to consult with the Chairman before taking up any additional external appointments.

Charles Strauss is the senior independent director and he is responsible for undertaking the annual review of the Chairman’s performance and chairing the Nomination Committee when considering the role of Chairman. He is available to shareholders if they need to convey concerns to the Board other than through the Chairman or Chief Executive Officer.

In accordance with the Articles of Association directors appointed to the Board since the previous annual general meeting, those who have not been subject to re-election at the previous two years’ annual general meetings and non-executive directors who have served nine years or more on the Board are all required to retire (and may offer themselves for re-election) at the next annual general meeting. See further the section on re-election of directors in the Directors’ report. No Board appointments were made in 2011.

The roles of Chairman and Chief Executive Officer are performed by separate individuals in accordance with the Corporate Governance Code. The division of responsibilities between the Chairman and Chief Executive Officer is set out in formal responsibility statements which have been agreed by the Board.

The Chairman’s role includes responsibility for:

The composition and effective leadership of the Board in reviewing and agreeing the recommended strategic plans and operating budgets
Ensuring the Board receives relevant and timely information
Ensuring that appropriate and related objectives are established for the Chief Executive Officer and his direct reporting team
Reviewing overall executive performance
Maintaining effective communication with shareholders
Supporting the Chief Executive Officer.

The Chief Executive Officer’s role includes responsibility for:

Developing, agreeing and executing the Group’s strategic plan
Establishing clear operational performance objectives with senior colleagues
Leading the executive management team
Leading the management of relationships with external stakeholders including the business community, the City, shareholders, potential investors and the public
Keeping the Board informed of all relevant matters.
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