“The Group brings together the activities of our three main operating businesses. It is the custodian of our shared central assets: our capital, risk management and brand.”
Tim Breedon Group Chief Executive
Group Performance
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IFRS1 Basis |
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2008 |
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2007 | ||||||||||||||
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Operating (loss)/profit before tax2 |
£(189)m |
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£658m | ||||||||||||||
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Ordinary shareholders’ equity |
£3,588m |
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£5,446m | ||||||||||||||
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Dividend cover3 |
(0.5) |
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1.3 | ||||||||||||||
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Worldwide new business [APE]4 |
£1,486m |
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£1,437m | ||||||||||||||
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New institutional funds |
£33.1bn |
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£54.4bn | ||||||||||||||
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Worldwide FUM5 |
£280bn |
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£312bn | ||||||||||||||
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EEV6 Basis |
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2008 |
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2007 | ||||||||||||||
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Operating profit before tax |
£870m |
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£848m | ||||||||||||||
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Contribution from new business7 |
£297m |
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£359m | ||||||||||||||
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Ordinary shareholders’ equity |
£6,521m |
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£8,128m | ||||||||||||||
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Dividend cover3 |
2.7 |
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1.6 | ||||||||||||||
Capital Management
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Key Capital Measures (£bn) |
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2008 |
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2007 | ||||
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[IGD]* surplus capital |
1.8 |
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4.1 | ||||
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[Society] surplus capital |
1.6 |
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4.4 | ||||
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Economic capital |
Strong AA |
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Very strong AA | ||||
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Return on [EV]** |
7.8% |
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7.6% | ||||
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IGD* Surplus Capital (£bn) |
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As at 31 December 2008 |
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IGD* | ||||
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Available capital resources |
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4.4 | ||||
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Capital resources requirement |
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2.6 | ||||
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Surplus capital* |
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1.8 | ||||
Governance at a Glance
Core Principles
Are as set out by the Combined Code on Corporate Governance 2006. The Company believes it has complied with the principles and provisions of the Code to the extent that they apply to Legal & General Group Plc.
The Board met nine (2007: nine) times during 2008 and consists of:
- Non-executive Chairman
- Six non-executive directors
- Four executive directors.
Committees
The Board has five standing committees:
- Audit – four meetings (2007: four)
- Corporate Social Responsibility – four meetings (2007: four)
- Group Risk and Compliance – four meetings (2007: six)
- Nominations – two meetings (2007: two)
- Remuneration – five meetings (2007: three).
Changes
There were no changes in Board or Committee structure, or responsibilities undertaken by the Board. Board member changes are set out at Corporate Governance.
Risk Management at a Glance
Full year dividend
(2007: 5.97p)Risk Governance Structure
The Group’s risk governance is based on ‘three lines of defence’:
- embedded management of risk within each of our operating businesses
- risk oversight by Group functions and formal Group level risk assessment committees
- independent assurance by Internal Audit, overseen by the Audit Committee.
Risk Appetite
Taking measured risk is at the heart of our business. The Group defines its appetite for risk with reference to maintaining target capital requirements and returns on capital employed.
Risk Measures
Economic and regulatory capital are important measures to the Group in assessing aggregate risk exposures and evaluating business decisions. This assessment is supported by extensive capital planning, which includes scenario evaluation and stress testing.
Market Conditions
The events over the last year have highlighted the importance of selecting and managing the risks to which the Group is exposed. Our risk framework supports informed decision making in the management of our business.
For more information see Corporate Governance.