Company News

Centrica Board Composition Non-Executive Directors

Centrica plc’s Board has decided to extend Paul Rayner’s term as a Non-Executive Director through to December 2014.

As reported in its 2012 Annual Report and Accounts, Paul Rayner was due to step down from the Board in December 2013 following nine years’ service as Chairman of the Audit Committee and Non-Executive Director. However, following the announcement that Sir Roger Carr will step down as Chairman, the Board has agreed that it would be appropriate for the new Non-Executive appointment to be made by the new Chairman. The decision follows consultation with a number of the Group’s major shareholders.

While both Paul Rayner and Mary Francis will exceed their nine-year terms, the Board remains committed to good governance, particularly with regard to the UK Corporate Governance Code.

Grant Dawson

General Counsel & Company Secretary

Enquiries:

Centrica Investor Relations: +44 (0)1753 494900

Centrica Media Relations: +44 (0)800 107 7014

Background

You may have seen the announcement by Centrica plc that I shall be standing down as Chairman, on or before the May 2014 AGM, to take up the role as Chairman of BAE Systems plc.

I will have been Chairman of Centrica for ten years.

The search for my replacement, led by Mary Francis as The Senior Independent Director, is now under way, with the ambition of selecting the new Chairman by the last quarter of 2013.

In May 2013, the departure from the Centrica Board of Andrew Mackenzie, due to his appointment as CEO of BHP Billiton, necessitated an early replacement of upstream skills and experience. This been successfully achieved by the appointment of Michael Linn, the President of LINN Capital LLC, who joined the Board in June 2013.

In the 2012 Annual Report and Accounts, I confirmed that Mary Francis would extend her term of office on the Board through to a maximum of December 2014 to ensure the retention of corporate memory during a period of change. This was in the knowledge of Andrew Mackenzie’s departure, but before my own had been confirmed.

New Development since the Publication of the 2012 Annual Report

Paul Rayner is due to step down from the Board in December 2013 following nine years’ service as Chairman of the Audit Committee and Non-Executive Director. In the Annual Report and Accounts his departure was confirmed as December 2013.

Under normal circumstances the search for Paul Rayner’s replacement would be instructed in the third quarter of 2013 with a view to appointment in the fourth quarter.

As I shall be stepping down as Chairman, I believe it would be appropriate for the new Non-Executive appointment to be made by the new Chairman once he or she has taken up the role and determined the talents, skills and experience necessary for Paul Rayner’s replacement.

In these circumstances, and after consultation with a number of major shareholders, the Board has decided that it is appropriate to extend Paul Rayner’s term as a Non-Executive Director through to December 2014, thereby exceeding the nine year rule by just over one year.

The Board consulted with shareholders, recognising that in 2014 Centrica would be in breach of best governance practice by having two directors serving for a tenth year.

The Board remains committed to good governance, particularly with regard to the UK Corporate Governance Code. While both Paul Rayner and Mary Francis will exceed their nine-year terms the Board earlier this year confirmed that they remained independent in character and judgement and this assessment will continue to be reviewed.

Non-Executive Board Composition

Chairman

Sir Roger Carr

Senior Independent Director & Chairman, Corporate Responsibility Committee

Mary Francis*

Chairman, Remuneration Committee

Lesley Knox

Chairman, Audit Committee

Margherita Della Valle

Non-Executive Director

Paul Rayner*

Non-Executive Director

Ian Meakins

Non-Executive Director

Michael Linn
(joined June 2013)

Non-Executive Director

Andrew Mackenzie
(resigned May 2013 to become CEO BHP Billiton)

* Nine years in 2013

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