Differences from NASDAQ corporate governance practices

Vodafone is exempt from many of NASDAQ’s corporate governance practices other than the requirements regarding the disclosure of a going concern audit opinion, submission of a listing agreement, notification of material non-compliance with NASDAQ corporate governance practices and the establishment and composition of an audit committee and a formal written audit committee charter. The practises that Vodafone follow in lieu of NASDAQ’s corporate governance rules are as follows:


The NASDAQ rules require that a majority of the Board must be comprised of independent directors and the rules include detailed definitions that US companies must use for determining independence. The UK Corporate Governance Code ('the Code') requires a company's board of directors to assess and make a determination as to the independence of its directors. While the Board does not explicitly take into consideration NASDAQ's detailed definitions, it has carried out an assessment based on the requirements of the Code and has determined in its judgement that all of the non-executive directors are independent within those requirements. As at the date of the 2017 Annual Report, the Board comprised the Chairman, two executive directors and nine non-executive directors.


Under NASDAQ rules, US companies are required to have a nominations committee, an audit committee and a compensation committee, each composed entirely of independent directors with the nominations committee and audit committee required to have a written charter that addresses the committees' purpose and responsibilities. The Company's Nominations and Governance Committee and Remuneration Committee have terms of reference and compositions that comply with the Code's requirements. The Nominations and Governance Committee is chaired by the Chairman of the Board, and its other members are non-executive directors of the Company. The Remuneration Committee is composed entirely of non-executive directors whom the Board has determined to be independent. The Company's Audit and Risk Committee is composed entirely of non-executive directors whom the Board has determined to be independent and who meet the requirements of Rule 10A-3 of the Securities Exchange Act. The Company considers that the terms of reference of these committees, which are available on its website, are generally responsive to the relevant NASDAQ rules but may not address all aspects of these rules.

Code of Conduct

Under NASDAQ rules, US companies must adopt a code of conduct applicable to all directors, officers and employees. The Company has adopted a Code of Conduct, which applies to all employees.  In addition, a Code of Ethics has been adopted in compliance with Section 406 of the US Sarbanes Oxley Act, which is applicable to the senior financial and principal executive officers.


Under NASDAQ rules, companies are required to have a minimum quorum of 33.33% of the outstanding shares of a company's common voting stock for shareholder meetings. However, the Company’s articles of association provide for a quorum for general shareholder meetings of two shareholders, regardless of the level of their aggregate share ownership.

Related Party Transactions

NASDAQ rules require companies to conduct appropriate reviews of related party transactions and potential conflicts of interest via the company’s audit committee or other independent body of the board of directors. The Company is subject to extensive provisions, under the Listing Rules issued by the Financial Conduct Authority in the UK (the ‘Listing Rules’), governing transactions with related parties, as defined therein, and the Companies Act 2006 also restricts the extent to which companies incorporated in England and Wales may enter into related party transactions. The Company’s articles of association contain provisions regarding disclosure of interests by the directors and restrictions on their votes in circumstances involving conflicts of interest. In lieu of obtaining an independent review of related party transactions for conflicts of interests, but in accordance with the Listing Rules, the Companies Act 2006 and the Company’s articles of association, the Company seeks shareholder approval for related party transactions that meet certain financial thresholds or where transactions have unusual features. The concept of a related party for the purposes of NASDAQ’s rules differs in certain respects from the definition of a transaction with a related party under the Listing Rules.

Shareholder Approval

NASDAQ requires shareholder approval for certain transactions involving the sale or issuance by a listed company of common stock. Under the NASDAQ rules, whether shareholder approval is required for such transactions depends, among other things, on the number of shares to be issued or sold in connection with a transaction, while the Company is bound by the provisions of the Listing Rules in the UK, which state that shareholder approval is required, among other things, when the size of a transaction exceeds a certain percentage of the size of the listed company undertaking the transaction. In accordance with the articles of association, the Company also seeks shareholder approval annually for issuing shares and to dis-apply the pre-emption rights that apply under law in line with limit guidelines issued by investor bodies.