The Board’s primary responsibility is to promote the long term success of the company by determining the company’s strategic objectives and monitoring management’s performance against those objectives. In the context of this framework, the Board is cognisant of the impact of each of its decisions on the Group’s stakeholders, including employees, shareholders and society as a whole.
The Board is led by the Chairman, John Stewart, and the day-to-day management of the organisation is led by Nigel Wilson, the group chief executive. The Board has seen a number of changes during the year; the appointment of Mark Gregory as group chief financial officer, the appointments of both Lindsay Tomlinson and Lizabeth Zlatkus as non-executive directors and the retirements of Nick Prettejohn, Dame Clara Furse and Henry Staunton. Due to the businesses evolving strategy, the Board is mindful of the need to keep its composition under review in order to ensure that we continue to maintain the right balance of skills, experience and diversity to lead the company through the next phase of its growth.
The chart below demonstrates the composition of the Board including the balance between executive and non-executive directors, tenure of non-executive directors and gender diversity.
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The Board meets formally on a regular basis. There were nine scheduled meetings in 2013 as well as a two day strategy event at which the Board considered the company’s future strategy in light of the Group’s five key drivers of growth. A table showing director attendance at Board meetings is set out in the Board and committee meetings attendance section. The work of the Board follows an annual work plan and the Board monitors the performance of the Group through regular:
- Reports from the group chief executive providing a groupwide business review
- Reports from the group chief financial officer on the Group’s current financial position
- Reviews of detailed management information packs showing performance against key metrics, project updates, and customer claims data
- Updates from each of the following business areas: Legal & General Retirement; Legal & General Investment Management; and Legal & General Assurance Society
- Legal and Governance reports from the group general counsel and company secretary
Our governance framework
The Board operates within a clearly defined schedule of matters reserved for the Board. During the year, the Board undertook a review of the matters reserved and the delegated authority framework in order to assist the Board in delivering its responsibilities, to improve decision making processes through the organisation and to enhance independent oversight of internal control and risk management. As part of this review, revised terms of reference were adopted for each of the committees within the governance framework; the schedule of matters reserved for the Board was refined and work is under way to implement schedules of delegation for the group chief executive, group chief financial officer and divisional chief executive officers. The matters requiring Board approval include, amongst others:
- Group annual strategic plan and review of performance against those goals
- Material transactions, acquisitions, mergers, disposals, joint ventures, take-over bid approaches
- Changes to the capital structure
- Financial reporting and dividends
- Risk appetite and systems of internal control and risk management processes
- Corporate governance policies
- Appointment or removal of key personnel and remuneration policies
- Material projects or contracts
- Material new product distribution and pricing arrangements
The Board also has in place a programme of site visits to ensure that members of the Board have a full understanding of the business operations in each location, have an opportunity to meet staff in different locations and to experience first hand the local culture and ethos.
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In 2013, the Board visited the Legal & General America (‘LGA’) office. Over the course of the visit, the Board met with members of the senior management team who provided the Board with in-depth briefings on the workings of both the LGA business and Legal & General Investment Management America business. The Board also participated in an operational tour of the business giving them the opportunity to observe the various teams in action and to meet with employees.
The overseas office visit comprised the following:
- Board meeting focused on the US businesses
- A tour of the LGA operations providing a valuable opportunity for employees to meet and speak in person with the Group Board
- ‘Deep dive’ session in to the LGIM America business
- Dinner with the LGA Board and LGIM America representatives. The Board used this session to discuss the businesses strategy and future growth plans