Investors

Corporate Governance

Compliance with the Combined Code on Corporate Governance

Throughout the year ended 30 April 2010 the Company has been in compliance with the provisions set out in Section 1 of the June 2008 FRC Combined Code on Corporate Governance (the ‘Combined Code’) except, as specified below, as regards the nomination of a Senior Independent Director and the composition of the Audit and Remuneration Committees. The Board continues to endorse and apply the principles of good corporate governance reflected in the Combined Code and in accordance with the Combined Code; a narrative statement of how the Company has applied the provisions of the Combined Code is set out below.

The Board of Directors
The Board comprises Mr T D Melville-Ross, Group Chairman, Mr P T Idzik, Group Chief Executive, two other Executive Directors and five Non-Executive Directors. There is a separation of the roles and responsibilities of the Chairman and the Group Chief Executive. The Board has considered carefully the need to appoint a Senior Independent Director and concluded that Ms L I Baldry should be nominated as Senior Independent Director once she has had the opportunity to acquaint herself fully with the Company.

The Directors submit themselves for election at the first AGM after their appointment and for re-election at least every three years thereafter. Details of the Directors submitting themselves for re-appointment at the AGM on 17 September 2010 are shown on page 39 of the Annual Report.

As Chairman, Mr T D Melville-Ross is not considered independent, and, owing to the fact that they have been nominated by SAS Saint George Participations, Mr F Piédelièvre, Mr P G M Derrey and Mr F Tardan are not considered independent, but the other Non-Executive Directors are considered by the Board to be independent of management and free from any business or other relationships that could materially interfere with the exercise of their independent judgement. Non-Executive Directors are appointed for periods of up to three years renewable for further periods in appropriate cases. Biographies of the Non-Executive Directors appear on pages 24 to 25 of the Annual Report demonstrate the calibre and breadth of experience they provide to the Company, which complements the industry experience of the Executive Directors. Through the Company Secretary, all Directors can, if they so wish, take independent advice at the expense of the Company.

The Board has a formal schedule of matters reserved to it for decision that includes:

• Approval of annual budgets and strategic plans;
• The establishment of new businesses or businesses in new geographical areas;
• Acquisitions and disposals, major capital projects and material contracts; and
• Changes to the Group’s capital, corporate or management structure.

All Directors receive written reports prior to each Board meeting that enable them to take informed decisions on the corporate and business issues which they are considering. The Company Secretary is responsible to the Board for ensuring that its procedures are followed and is available to individual Directors for advice on those procedures.

The Company Secretary supports the Chairman and Group Chief Executive in ensuring new Directors receive appropriate training and induction to the Company and that on-going training for Directors is provided when a need for such training is identified as part of the Board’s annual evaluation process.

Board evaluation
The Board conducted a formal evaluation of its performance and of the principal board Committees during the year under the leadership of the Chairman and the respective Committee chairmen. The Board and each Committee has concluded that its performance and that of its individual members is satisfactory and is aligned with the Company’s strategic objectives and the interests of shareholders.

Board Committees
The Board has established the following Committees details of which are set out below, each with defined terms of reference, procedures, responsibilities and powers. Each Committee reviews its terms of reference and effectiveness at least annually. The minutes of Committee meetings are sent to all Directors and oral reports of Committee activities are given at Board meetings. The terms of reference of the Board Committees are available, on request, from the Company Secretary.

Audit Committee

The Audit Committee is chaired by Mr P G M Derry and comprises, Mr P G M Derrey, Ms A Lesniak and Ms L I Baldry. Although Mr P G M Derrey is not considered to be an independent Non-Executive Director, the Board considers that in view of his recent and relevant experience and ability to devote the necessary time to the role, he is the best person to chair the Committee.

The external auditors, the Chairman, the Group Chief Executive, the Group Finance Director and the Head of Internal Audit normally attend meetings of the Committee and the Committee also meets separately with the external auditors without management present. The Audit Committee discharges its responsibilities by meeting at least three times a year to:

• Review the interim and annual financial statements prior to submission to the Board;
• Keep under review the operation and effectiveness of the Company’s internal financial control and accounting policies;
• Monitor and review the effectiveness of the Company’s operational and compliance controls and risk management;
• Review the nature and extent of non-audit services provided by the external auditors; and
• Review internal audit plans and reports.

The Audit Committee also reviews the scope and cost of both internal and external audit and makes a recommendation to the Board regarding re-appointment of the external auditors.

As part of its role in relation to the provision of non-audit services by the external auditors, the Audit Committee agrees with the external auditors which types of work the external auditors are permitted to undertake and monitors the nature and extent of non-audit work undertaken by the external auditors.

In forming their opinion of the independence and objectivity of the external auditors, the Audit Committee takes into account the safeguards operating within Deloitte LLP and that the objectivity of the audit engagement partner and audit staff has not been impaired. This includes details of changes in external audit executives in the audit plan in accordance with the external auditor’s policy on rotating audit executives. In particular, the senior statutory auditor became lead partner in 2009 after the rotation of the previous audit partner. Regard is given to the nature of remuneration received for other services provided by Deloitte LLP to the Company and, inter alia, confirmation is sought from them that the fee payable for the annual audit is adequate to enable them to fulfil their obligation in relation to the scope of the audit.

The Board considers that the members of the Audit Committee as a whole have sufficient recent and relevant experience to carry out the functions of the Committee and has not identified a particular member of the Committee as having such experience.

Nomination Committee
The Nomination Committee is chaired by the Chairman and comprises the Chairman, the Group Chief Executive, Mr F Piédelièvre, Ms A Lesniak and Ms L I Baldry.

The Committee meets as and when required to:

• Review the structure, size and composition of the Board and make recommendations as to any changes;
• Keep under review the leadership needs of the Company and consider succession planning for Directors and other senior executives;
• Assist in identifying and become involved in the selection process for candidates to fill Board vacancies; and
• Evaluate the time required to be spent by the Non-Executive Directors and ensure that what is required of them is clearly specified.

Remuneration Committee
The Remuneration Committee is chaired by Ms A Lesniak and comprises Ms A Lesniak, the Chairman, Ms L I Baldry and Mr F Piédelièvre. Although Mr F Piédelièvre is not considered to be an independent Non-Executive Director, the Board considers that it is appropriate that he be a member of the Remuneration Committee in order that the views of SAS Saint George Participations, as a substantial shareholder in the Company, are reflected in the deliberations of the Committee. The Committee meets at least once a year and considers, for recommendation to the Board, Company policy on remuneration and conditions of service, and, within the terms of the agreed policy, approves the composition and level of remuneration of Executive Directors, the Chairman and such other members of the Executive Management as it is designated to consider.

When the Committee considers matters relating to an individual, that person is not present nor does that person act in relation to any matters relating to him.

The remuneration report is on pages 30 to 38 of the Annual Report.

Meetings
During the year there were nine Board meetings, five Audit Committee meetings, four Remuneration Committee meetings and one Nomination Committee meeting. Attendance at these meetings by individual Directors of the relevant committees is given in the table below:

^(a) P J Stone resigned on 30 April 2010
^(b) A Lesniak was appointed Chairman of the Remuneration Commitee in November 2009
^(c) F Piédelièvre was appointed to the Remuneration Commitee in November 2009
^(d) P G M Derrey was a member of the Remuneration Commitee until November 2009
^(e) G Rickert was appointed as an Executive Director on 27 May 2009
^(f) L I Baldry was appointed as Non-Executive Director on 1 April 2010
* R G Rickert additionally attended all the Audit Committee meetings during the year

Relations with shareholders
The Company reports formally to shareholders twice each year, when its half-year and full-year results are announced. The AGM takes place in London and all the Directors who are able to attend are available, formally at the meeting and informally afterwards, for questions.

The Group Chief Executive and Group Finance Director hold regular meetings throughout the year with institutional investors and analysts.

Statement of Directors’ responsibilities in respect of the financial statements
The Directors are responsible for preparing the Annual Report and financial statements. The Directors are required to prepare financial statements for the Group in accordance with International Financial Reporting Standards as adopted by EU (‘IFRSs’). Company law requires the Directors to prepare such financial statements in accordance with IFRSs, the Companies Act 2006 and Article 4 of the IAS Regulation.

International Accounting Standard 1 requires that financial statements present fairly for each financial year the Company’s financial position, financial performance and cash flows. This requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting Standards Board’s ‘Framework for the Preparation and Presentation of Financial Statements’. In virtually all circumstances, a fair presentation will be achieved by compliance with all applicable IFRSs. Directors are also required to:

• Properly select and apply accounting policies;
• Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
• Provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial performance; and
• Make an assessment of the Company’s ability to continue as a going concern.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company, for safeguarding the assets, for taking reasonable steps for the prevention and detection of fraud and other irregularities and for the preparation of a Directors’ report and Directors’ remuneration report which comply with the requirements of the Companies Act 2006.

The Directors are responsible for the maintenance and integrity of the Company website, in so far as it relates to the financial statements. Legislation in the United Kingdom governing the preparation and dissemination of financial statements differs from legislation in other jurisdictions.

Statement on internal control and risk management
The Board takes ultimate responsibility for the Group’s system of internal control and risk management. The system of control is designed to enable the Board to govern and manage the business to achieve the Group’s risk management objectives. A system of internal control can provide reasonable but not absolute assurance against misstatement or loss.

The Board conducts an annual review of the effectiveness of the system of internal control and risk management. The review is informed in a number of ways: Our internal Audit function provides an independent opinion on the operation of controls through the delivery of its audit programme; the Group Director of Risk Management and Compliance provides a report that explains developments in the system of internal control over the preceding 12 months; and managers within the organisation, who have responsibility for the operation of the system of internal control, provide assurance that it operates through ongoing management review processes.

The principal elements of the Group’s system of internal control and risk management are:

• The Board and its various Committees have defined financial authorities and operational responsibilities which are designed to enable effective decision making and organisational control;
• An organisation and management structure operates across the business to enable the delivery of services to our clients and operational control of business activities;
• Global policies and procedures which define expected standards and behaviours are being embedded across the Group. Our global policy framework includes policies on Finance, Operations, People and Business Controls;
• Group Infrastructure functions: Finance, Human Resources and Global Technology Services have been centralised and are working to improve the standardisation of their respective operational procedures across the global operations;
• A formal risk identification process takes place to evaluate and manage the significant risks faced by the Group in accordance with requirements of the Combined Code and Turnbull Guidance on internal control. A Group risk register identifies the risks the business faces, their potential impact, likelihood of occurrence and the key controls and action plans to mitigate these risks;
• The Group Risk Management Committee meets quarterly to review the management of risk arising out of the Group’s activities and to monitor the status of key risks and actions;
• Each of the Group’s regional businesses has a management team which together with respective regional Risk Committees meets to consider significant commercial matters, including risk management and internal control, for the DTZ subsidiaries in their geographic regions;
• DTZ has standardised procedures for the delivery of its main services. These procedures are progressively being rolled out across our global operations. The operation of these procedures provides assurance on the standard of our service delivery. In the UK, these procedures are audited to the ISO9001 quality standard;
• An internal audit function, which is subject to the controlling direction of the Audit Committee provides the Audit Committee with an independent assessment of the Group’s system of internal control, through reviewing how effectively key risks are being managed, and assists management in the effective discharge of their responsibilities by carrying out independent appraisals and making recommendations for improvement. Internal audit reviews and testing activities are outsourced to BDO;
• Certain aspects of the Group’s activities are also subject to regulatory control by external bodies such as the FSA; and
• The Audit Committee assists the Board in discharging its responsibility to review the system of internal control.

The system of internal control has been in place in DTZ Holdings plc for the year ended 30 April 2010, and up to the date of the approval of the annual report and accounts.

Health & safety
The Company recognises that the maintenance of high standards of health & safety management is imperative to ensure the welfare of its employees. Clients are also placing a greater emphasis on health & safety when deciding which service providers they will work with. DTZ is committed to continuously improving its health & safety performance and has now attained OHSAS 18001 accreditation in the UK which is a reflection of the Company’s investment in health & safety management.

Managing the environment
The Company regards the promotion of an environmental strategy as an important element in operating a successful business, not only to minimise its impact on global resources but also to maintain good investor and client relations.

We have continued to implement significant improvements to help us reduce our negative impact on the environment. This has included the introduction of improved waste streaming and recycling, energy efficiency measures and the development of advice and support services to our clients. We also successfully attained ISO14001 certification for our environmental management system in Sweden as well as maintaining compliance with the standard in the UK.

Approved by the Board of Directors and signed on behalf of the Board.

Philip Cook
Company Secretary
13 July 2010