Annual Report and Accounts 2010

Corporate governance statement

The Board is fully committed to high standards of governance and corporate responsibility throughout the Group. The Board supports the principles of corporate governance contained in the 2008 edition of the Combined Code on Corporate Governance which is appended to the Listing Rules of the Financial Services Authority (the 'Combined Code'), as supplemented by the Disclosure and Transparency Rules, all of which applied throughout 2010. These, together, set out the governance rules which apply to all UK companies which are listed on the London Stock Exchange.

The Board also supports the new UK Corporate Governance Code (the 'Governance Code') which applies to the Company for the 2011 reporting period. The Governance Code was the subject of a thorough review by the Board in September 2010 in order to ensure an early understanding of the new main Principles and Code Provisions for compliance by the Company with effect from 1 January 2011. A copy of the Governance Code is available to download from the FRC Web site: www.frc.org.uk.

This Report on Corporate Governance together with the Remuneration Report are intended to explain how the Company has applied the principles of the Combined Code, how it proposes to apply the updated principles set out in the Governance Code, and to provide an insight into how the Board and management run the business for the benefit of shareholders. The Chairman's Statement and the Group Chief Executive's Review seek to present a balanced assessment of the Company's position and prospects.

Statement of compliance

For the year ended 31 December 2010, the Company complied with all the provisions of the Combined Code including the Principles set out in Section 1, and with the provisions of the Disclosure and Transparency Rules on Audit Committees and Corporate Governance Statements (DTR 7).

The Board and its Committees

As at the date of this Report the Board consists of nine Directors, namely: the Chairman, three Executive Directors and five Independent Non Executive Directors. Their names, responsibilities and other details appear in Board of Directors. Changes in the Board composition since 31 December 2009 are set out in Statutory, Regulatory and Other Formal Information.

The Board met on 13 occasions during the year. Details of the attendance of each Director are set out in the table in Corporate Governance Report.

Directors make every effort to attend all Board and Committee meetings, as evidenced by the attendance records over several years. Where exceptionally, a Director is unable to attend a meeting, it is Board policy that the Chairman and/or the Group Company Secretary will, as soon as possible, brief the Director fully on the business transacted at the meeting and on any decisions that have been taken. In addition, the views of the Director are sought ahead of the meeting and conveyed to it by the Chairman and/or the Secretary as appropriate.

The Board discharges its responsibilities by providing strategic and entrepreneurial leadership of the Company, within a framework of prudent and effective controls and a culture of openness and transparency, which enables opportunities and risks to be assessed and managed. It sets the Company's strategic aims, ensures that the necessary financial and human resources are in place for the Company to meet its objectives and reviews management performance. The Board also defines the Company's values and standards and ensures that its obligations to its shareholders and other stakeholders are clearly understood and met.

As set out in our 2010 Corporate Responsibility Report, the Board is committed to providing a safe place in which our employees and sub-contractors can work and to high standards of environmental management. The Board receives detailed reports on health, safety and environmental matters at each Board meeting in respect of the Company's operations in the UK, North America and Spain.

The following documents are available for review on the Company's Web site www.taylorwimpeyplc.com/InvestorRelations/CorporateGovernance:

• Schedule of matters specifically reserved for the decision of the Board;
• Terms of Reference of the Board Committees: Audit, Nomination and Remuneration, which outline their objectives and responsibilities and which define a programme of activities to support the discharge of those responsibilities; and
• Board policies covering operational, compliance and stakeholder matters.

All Directors have access to the advice and services of the Group Company Secretary and General Counsel. The Board has an established procedure whereby Directors may take independent professional advice at the Company's expense where they judge it necessary to do so in order to discharge their responsibilities as Directors.

The Board took detailed advice during the year with regard to the refinancing of its existing debt facilities. This included a £950m Revolving Credit Facility with a syndicate of banks; the issue of £250m 10.375% Senior Notes due in 2015; and the agreement of a £100m facility with the Prudential/M & G UK Companies Financing Fund. These were utilised in repaying certain existing facilities and the mutual termination of the existing Override Agreement, all of which was completed in December 2010. Advice was provided to the Board by specialist restructuring advisers N M Rothschild & Sons Limited ('Rothschild'), Lloyds Banking Group ('LBG') and the Company's legal advisers, Slaughter and May. Representatives of Rothschild attended the relevant part of meetings of the Board dealing with these matters.

Prior to its annual budget review process, the Board received presentations from the Home Builders Federation on a number of aspects relating to the UK market.

All businesses and employees are expected to operate at all times to the highest standards of integrity and conduct in all matters concerning the Group. Accordingly there is a Code of Business Conduct, which sets out the standard for individual dealings both internally and externally.

The Board has been briefed by the Group Company Secretary on the implications of the Bribery Act 2010 and is considering the implementation of further policies and procedures as necessary, in order to comply with this new legislation.