Corporate Governance.

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Committees of the Board

The Chief Executive’s Committee (CEC) is responsible for the recommendation to the board of strategic and operating plans and on making recommendations on matters reserved to the board where appropriate. It is also responsible for the executive management of the group’s businesses. The Committee is chaired by the Chief Executive and meets monthly (except in August). During the year it comprised the Chief Executive, the three other executive directors and eight senior executives of the company including four division directors; the Group Director, Corporate and Strategic Development; the Director, Group Systems, EHS and HR; the Deputy Director, Group EHS and HR; and the Group Legal Director.

The Audit Committee is a committee of the board whose purpose is to assist the board in the effective discharge of its responsibilities for financial reporting and corporate control. The Audit Committee meets quarterly and is chaired by Mr Thomson. It comprises all the independent non-executive directors with the group Chairman, the Chief Executive, the Group Finance Director and the external and internal auditors attending by invitation. A report from the Audit Committee on its activities is given in the Audit Committee Report. Mr Thomson has recent and relevant financial experience as former Finance Director of Smiths Group plc and, until April 2011, as President of the Institute of Chartered Accountants of Scotland. As referred to above, Mr Thomson will be retiring from the board in July 2011 at which time Mr Ferguson will take over as Chairman of the Audit Committee. Mr Ferguson has recent and relevant financial experience as former Chief Financial Officer of Lonmin Plc.

The Nomination Committee is a committee of the board responsible for advising the board and making recommendations on the appointment and, if necessary, dismissal of executive and non-executive directors. The Nomination Committee is chaired by Sir John Banham, the group Chairman, and also comprises all the independent non-executive directors. Mr Stevenson will take over the chairmanship of the Nomination Committee upon his appointment as group Chairman in July 2011. A report from the Nomination Committee on its activities is given in the Nomination Committee Report.

The Management Development and Remuneration Committee (MDRC) is a committee of the board which determines on behalf of the board the fair remuneration of the executive directors and the Chairman and assists the board in ensuring that the current and future senior management of the group is recruited, developed and remunerated in an appropriate fashion. The MDRC is chaired by Mr Walvis and comprises all the independent non-executive directors together with the group Chairman. The Chief Executive and the Director, Group EHS and HR attend by invitation except when their own performance and remuneration are discussed. Further details are set out in the Remuneration Report. As referred to above, Mr Walvis will be retiring from the board in July 2011 at which time Mr Roney will take over as Chairman of the MDRC.

Board and Committee Attendance

Attendance at the board and board committee meetings in 2010/11 was as follows:

Director Full Board   MDRC   Nomination Committee   Audit Committee
  Eligible to attend   Attended   Eligible to attend   Attended   Eligible to attend   Attended   Eligible to attend   Attended
Sir John Banham 7   7   5   5   7   7     4(1)
N A P Carson 7   7     5(1)     7(1)     4(1)
A M Ferguson 2   2   1   1   2   2   1   1
Sir Thomas
Harris
7   7   5   5   7   7   4   4
R J MacLeod 7   7             4(1)
L C Pentz 7   7            
M J Roney 7   7   5   5   7   7   4   4
W F Sandford 7   7            
T E P Stevenson 1   1   1   1   1   1    
D C Thompson 7   7   5   5   7   7   4   4
A M Thomson 7   7   5   5   7   7   4   4
R J W Walvis 7   7   5   5   7   7   4   4
(1) Includes meetings attended by invitation for all or part of meeting.

Relations with Shareholders

The board considers effective communication with shareholders, whether institutional investors, private or employee shareholders, to be extremely important.

The company reports formally to shareholders when its full year and half year results are published. These results are posted on Johnson Matthey’s website (www.matthey.com). At the same time, executive directors give presentations on the results to institutional investors, analysts and the media in London and other international centres. Live audiocasts of the results presentations in London and copies of major presentations are available on the company’s website. The company also holds an annual investor day for its institutional investors and analysts. At the 2011 Investor Day, the company presented the results of its ten year strategy review. Copies of the Investor Day presentations are posted on the company’s website.

Contact with Major Shareholders

Contact with major shareholders is principally maintained by the Chief Executive and the Group Finance Director, who ensure that their views are communicated to the board as a whole. The Chairman is also available to discuss governance and other matters directly with major shareholders. The board believes that appropriate steps have been taken during the year to ensure that the members of the board, and in particular the non-executive directors, develop an understanding of the views of major shareholders about the company. The board is provided with brokers’ reports at every board meeting and feedback from shareholder meetings on a six-monthly basis. The canvassing of major shareholders’ views for the board in a detailed investor survey is usually conducted every two years by external consultants. The board has taken the view that these methods, taken together, are a practical and efficient way both for the Chairman to keep in touch with major shareholder opinion on governance and strategy and for the Senior Independent Director to learn the views of major shareholders and to develop a balanced understanding of their issues and concerns. The Senior Independent Director and other non-executive directors are available to attend meetings with major shareholders if requested, however no such meetings were requested during the year.

Annual General Meeting

The company’s Annual General Meeting takes place in London and formal notification is sent to shareholders at least 20 working days in advance of the meeting. The directors are available for questions, formally during the Annual General Meeting and informally afterwards. Details of the 2011 Annual General Meeting are set out in the circular accompanying this annual report.

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