Governance

Risk is inherent in our activities and it is essential to manage it well. Risk management is a powerful way to identify, measure and manage uncertain future events that could threaten our assets, revenue, brand, reputation or shareholder value. It also helps us to identify and seize opportunities to strengthen our business.

We have created a framework that links governance, corporate responsibility and our own business principles - the high ethical standards expected of everyone in the Company - into one consistent approach. More information about corporate governance and related issues are included in the 2005 O2 plc Annual Report and Financial Statements.

Our internal control framework helps us to provide a good service to our customers, improve quality continuously and aim for excellence. We were placed sixth among UK companies in a Government league table of the best performers in corporate governance.

We support the Disclosure Guidelines on Social Responsibility, laid out by the Association of British Insurers, to make sure we are managing the significant social, environmental and ethical risks that may affect us. We review a Group-wide risk register every month to set out and measure the key risks we face, and we have similar registers in each operating business.

The Combined Code (Turnbull Section) guides our internal control policy and procedures. We manage social, environmental and ethical risks by assessing their potential impact, likelihood and our appetite to manage them, and develop strategies to mitigate them. Controls are scrutinised as part of a cyclical risk-based audit approach overseen by our Audit Committee.

The Board is responsible for the success of the Company and it provides leadership within this framework of internal controls.