There is an effective board to lead and control the group. The board has reserved to itself for decision a formal schedule of matters pertaining to the group and its future direction, such as the group’s commercial strategy, major acquisitions and disposals, board membership, appointment and removal of the Group Chief Executive and the Company Secretary, executive remuneration, trading and capital budgets and risk management policies. All strategic decisions are referred to the board. Documented rules on management authority levels and on matters to be notified to the board are in place, supported by an organisational structure with clearly defined authority levels and reporting responsibilities.
The board currently comprises nine non-executive and two executive directors. While there is no optimum number of non-executive and executive directors, and the membership of the board is kept continuously under review, the board is satisfied that its current size and structure is appropriate to meet the requirements of the business. Other than as part of its ongoing refreshment and renewal no changes are currently planned in the structure or membership of the board. Biographies of each of the directors are set out in the Board of Directors section. The wide range of qualifications, skills and experience that is encapsulated in the biographies is harnessed to the maximum possible effect in the deliberations of the board. Having directors with a mix of public service, financial, risk management, consumer related and general business experience has been of particular benefit over 2010 when the company has had to deal with a particularly challenging environment.
The roles of the Chairman and the Group Chief Executive are separated and are clearly defined, set out in writing and agreed by the board. The board considers all the non-executive directors to be independent of management and free of any business or other relationship which would interfere with the exercise of their independent judgement. The Chairman, on appointment, met the independence criteria set up in the Code. The board has nominated Roy Keenan as the Senior Independent Director.
The board had ten scheduled board meetings during 2010 and also met on other occasions as considered necessary. Full board papers are sent to each director in sufficient time before board meetings and any further papers or information are readily available to all directors on request. The board papers include the minutes of all committee meetings which have been held since the previous board meeting and the chairman of each committee is available to report on the committee’s proceedings at board meetings if appropriate. Attendance at scheduled board and committee meetings is outlined later on in this section. The board receives formal reports on group compliance matters at each of its meetings.
The board has a formal performance review process to assess how the board and its committees are performing. This process, facilitated every three years by external consultants, comprises a detailed and rigorous examination by directors of all aspects of board and committee performance. The review in 2010 was facilitated by the Chairman – external consultants were last used in 2008. A report produced following the review identifies any measures which can enhance this performance and these are considered by the full board. The performance of each individual director is also assessed on an annual basis by the Chairman and is discussed with the director concerned. The nonexecutive directors, led by the Senior Independent Director, evaluate the performance of the Chairman, taking into account the views of executive directors.
The Chairman meets at least once a year with the nonexecutive directors without the executives present.
Procedures are in place for directors, in furtherance of their duties, to take independent professional advice and training, if necessary, at the group’s expense. The group has arranged directors’ and officers’ liability insurance cover in respect of legal action against its directors. Appropriate training is arranged for directors on first appointment and the Chairman also ensures that the directors continually update their skills and knowledge through appropriate seminars and presentations. The Company Secretary is responsible for advising the board through the Chairman on all governance matters.
All directors have direct access to the Company Secretary.
Where directors have concerns which cannot be resolved about the running of the company or a proposed action, they will ensure that their concerns are recorded in the board minutes. On resignation, nonexecutive directors provide a written statement to the Chairman, for circulation to the board, if they have such concerns.
Please note this content represents the Company’s current Corporate Governance, to find out more about the Corporate Governance for the 2009-2010 financial year please access this PDF