The directors.

The Board is led by the Chairman, John Stewart, and the day-to-day management of the organisation is led by the Group Chief Executive, Nigel Wilson, previously Chief Financial Officer, who succeeded Tim Breedon on 30 June 2012. The composition of the Board is reviewed regularly to ensure the right combination of skills and experience is in place to lead the Company. The latest review recognised the desirability of greater representation on the Board from the Group’s investment management business, LGIM, and in September 2012, the Board was pleased to announce the appointment of Mark Zinkula, Chief Executive Officer of LGIM, as an executive director.

In accordance with the recommendations of the Code, Mark Zinkula will stand for election by shareholders at the 2013 AGM and all other Board directors, with the exception of Henry Staunton who intends to retire as a director, will stand for re-election as was the case at the 2012 AGM.

Following Nigel’s appointment as Chief Executive and whilst we have been undertaking the process to identify a new Chief Financial Officer, Wadham Downing has acted as Interim Chief Financial Officer and attended all meetings of the Board.

Training and development

On appointment to the Board, directors participate in a comprehensive induction programme which continues to improve and evolve as new directors join the Board. As part of the induction programme each director is provided with a detailed induction pack containing key business information, the Group’s governance policies and investor reports. Each director also attends an extensive series of structured meetings with other directors and senior management to gain an in-depth understanding of all business areas, the challenges they face and strategies for growth. The induction programmes are tailored to meet the needs of the appointee.

On Mark Zinkula’s appointment to the Board, an induction programme was developed for him focusing in particular on business areas other than LGIM to ensure that Mark has an in-depth understanding of the Group as a whole. As part of this programme, Mark has also participated in training sessions detailing advanced directors’ duties with a particular emphasis on the specific obligations of a director of a UK listed company.

The Chairman meets regularly with each director to agree training and development goals and personal development plans are in place for each of the non-executive directors, which include business-related training sessions and UK and overseas site visits.

The executive and non-executive directors are invited to attend regular Executive Business Awareness sessions following the scheduled Board meetings with the key focus during 2012 having been Solvency II and Conduct Risk.

OFFICE LOCATION SITE VISITS

During the course of 2012, Board meetings were held in several different Company locations; central London, Kingswood and Hove. The Board meetings held in Kingswood and Hove included site visits to the business areas operating at these locations and gave the Board members a great opportunity to meet with employees to discuss new business ideas and initiatives and experience customer service first-hand. Employees greatly valued the opportunity to ask questions and gain insights from Board members in small group sessions.

“I really valued the opportunity to discuss new customer service initiatives with several Board members. The insights they gave from their experience of how other companies operate was extremely useful and informative.”

QUOTE FROM EMPLOYEE

The Board

The Board meets formally on a regular basis and the meeting agenda, which was refreshed following the Board Effectiveness Review in 2012, prioritises strategic issues, the Company’s financial and operational performance, key stakeholder matters and the performance of the individual business areas.

The specific duties of the Board and those decisions which can only be made by the Board are clearly defined in the schedule of matters reserved. The matters requiring Board approval include, amongst others:

  • Group annual strategic plans and any changes to such plans.
  • Mergers, acquisitions and disposals of a material size.
  • Changes to Group structure and capital.
  • Financial reporting and dividends.
  • Group risk appetite and internal controls.
  • Executive director remuneration.
  • The approach to corporate governance.

The Group Chief Executive, who is responsible for the day-to-day management of the organisation, is supported by the executive management team and an Executive Committee, which comprises all of the Executive Directors, the Group Chief Risk Officer, the Group Regulatory Risk and Compliance Director, the Group HR Director, the Head of Group Treasury and Investments, the Director of Shared Services and the Group General Counsel and Company Secretary. The Committee acts as an advisory group to the Group Chief Executive and exists to inform executive decision-making within the authority delegated by the Board. The Executive Committee aims to meet in advance of each Group Board meeting and reviews matters to be proposed to the Group Board for approval in order to ensure that the Executive Committee is supportive of such matters, that they have been fully stress tested and that information provided to the Board is comprehensive, transparent and sufficiently focused.

STRATEGY AWAY DAYS

The Board dedicates time to considering the Company’s future strategy, in light of the previous year’s performance against set targets, the continuing challenges that face the UK and global economies and financial services companies, and the opportunities for growth. A two day strategy event was held in 2012 at which the Board considered the growth and future development of the Group as a whole and how greater synergies could be driven across the Group. This year there were focused discussions on expansion of the LGIM business, the growing need for retirement solutions, connecting better with customers and improving digital presence. The directors found this to be a particularly interactive, thought provoking and helpful event.

“This was my first strategy day since joining the Board last November and I was very impressed with the openness of all the participants to robust and constructive debate, and the breadth of opportunities we have as a business. It was also good to be able to interact with many in the wider management team in a less formal setting than the Boardroom.”

JULIA WILSON
NON-EXECUTIVE DIRECTOR