Standard Life Investments

Press Release

Vodafone Group PLC Annual General Meeting statement

28  July  2017

Mr Chairman, Ladies and Gentlemen

My name is Deborah Gilshan and I am a Governance and Stewardship Director at Standard Life Investments.  On behalf of our clients, we manage 465 million shares in Vodafone and have voted those shares against the resolution to reappoint PricewaterhouseCoopers (PwC) as the company’s auditors and against the resolution to determine their remuneration.

Deborah Gilshan

During the year, the Board’s Audit and Risk Committee was notified by the PwC partner leading the audit of Vodafone that a company, for which a number of PwC partners were acting as administrators, was considering litigation against Vodafone. In our opinion, the appointment of PwC as administrators to this company after their appointment as auditors of Vodafone created a conflict, regardless of whether litigation against Vodafone is pursued. We understand that PwC considers no actual conflict exists to their position as Vodafone’s auditors. We disagree.

Confidence in, and independence of, auditors and the accounting profession has been dented by scandals, many of which are linked to the global financial crisis. Such an environment requires the highest standards of probity to rebuild trust. We appreciate the quality of the audit services provided by PwC and their engagement with us on this issue. However, we believe they, and the wider accounting profession, need to better balance their commercial interests with the ethical standards applied to conflicts, perceived or real.

For the record, we do not have any concerns with how the Board’s Audit and Risk Committee dealt with the situation they were presented with. Indeed, we applaud them for their reporting on this and for the extra work they undertook during the year in dealing with it, as detailed in the annual report.

Thank you.