Role of the Board

The Board currently comprises 10 Directors, of whom seven, including the Chairman, are non-executive.

The Directors believe that the Board continues to include an appropriate balance of skills experience, independence and knowledge of the Company and retains the ability to provide effective leadership to the Group.

The Board is collectively responsible for the success of the Company and has a formal schedule of matters reserved for its decision which includes the matters summarised below.

• Determining the Group's strategic direction
• Approving annual budgets and financial reporting, including the annual and half-year results and interim management statements
• Approving interim, and recommending final, dividends
• Approving major acquisitions, disposals and capital expenditure
• Ensuring the necessary financial and human resources are in place to achieve objectives and review management performance
• Setting the Company's values and ethical standards
• Approving policies and systems for risk management and assurance

The Board reviewed its list of reserved matters in 2012 and, most recently, at its meeting in March 2013. The terms of reference of the Board and the Board Committees are displayed on the Company's website www.balfourbeatty.com