For the year ended 31 December 2012, the Board believes that the Company has complied with the principles and provisions of the UK Corporate Governance Code. A full version of the UK Corporate Governance Code can be found on the Financial Reporting Council’s website: www.frc.org.uk
A1 The Board’s role
The Board meets formally on a regular basis in order to review the Company’s performance and strategy against set objectives. There is a clear schedule of matters reserved for the Board as further described in the Corporate governance section.
A2 A clear division of responsibilities
The Company has both a Chairman, who is responsible for the leadership and effectiveness of the Board and a Group Chief Executive who is responsible for leading the day-to-day management of the Company within the strategy set by the Board.
A3 Role of the Chairman
The Chairman sets the agendas for meetings, manages the meeting timetable and facilitates open and constructive dialogue during the meetings.
A4 Role of the non-executive directors
The Chairman promotes an open and constructive environment in the boardroom and actively invites the non-executive directors’ views.
Regular meetings are held between the non-executive directors in the absence of the executive directors providing an opportunity for any concerns to be discussed.
B1 The Board’s composition
The composition of the Board is reviewed regularly by the Nominations Committee to ensure that the there is an appropriate mix of skills on the Board and a range of diverse experience.
B2 Board appointments
The appointment of new directors to the Board is led by the Nominations Committee. Further details of the appointments undertaken during the year and succession planning can be found in the Nominations committee report.
B3 Time commitments
The time commitments of non-executive directors are defined on appointment and regularly evaluated. In practice, the time commitments go beyond those set out in the letters of appointment. The Chairman gives consideration to new directorships which may impact existing time commitments.
B4 Training and development
An induction programme is in place. The Chairman reviews each of the non-executive director’s training needs and tailored programmes are in place to meet these needs.
B5 Provision of information and support
The Chairman, in conjunction with the Company Secretary, ensures that all Board members receive accurate and timely information.
B6 Board and Committee Performance Evaluation
An externally facilitated evaluation was undertaken during 2012 and is described in detail in the Corporate Governance section.
B7 Re-election of the directors
All directors were subject to shareholder re-election at the 2012 AGM as will be the case at the 2013 AGM.
C1 Financial and business Reporting
The Directors’ Report can be located in the Our progress, Our performance and Our approach sections, and this sets out the performance of the Company, the business model, strategy and the risks and uncertainties relating to the Company’s future prospects.
C2 Risk management and internal control systems
The Board sets the Company’s risk appetite and annually reviews the effectiveness of the Company’s risk management and internal control systems. The activities of the Audit and Group Risk Committees, which assist the Board with its responsibilities in relation to risk setting and management, are set out in the Risk management section.
C3 Role and responsibilities of the Audit Committee
The Board has delegated a number of responsibilities to the Audit and Group Risk Committees which undertake the day-to-day oversight of the risk management framework on behalf of the Board. The Chairmen of each of the Committees provide regular reports to the Board.
D1 Levels and elements of remuneration
The levels of remuneration of directors and how the Company promotes an alignment of interests between directors and shareholders by linking reward to performance are explained in the Directors’ Remuneration Report.
D2 Development of remuneration policy and packages
The activities of the Remuneration Committee and the way in which it sets executive remuneration policy are set out in the Directors’ Remuneration Report.
E. RELATIONS WITH SHAREHOLDERS
E1 Shareholder engagement and dialogue
The Board seeks to actively engage with both institutional and retail shareholders. Details of the shareholder engagement programme are set out in the Engagement with stakeholders section.
E2 Constructive use of the AGM
The Board values the AGM as an important opportunity to engage with investors. Attendees at the AGM have the opportunity to ask questions to the Board and to speak to individual directors following the formal business of the meeting.