Board and Committee performance and evaluations

Each year, the Board undertakes a review of its own performance and that of its committees. This review provides the Board with the opportunity to reflect on its activities, the quality of its decisions and allows each Board member to consider their own performance and contribution. The Board then agrees an ‘action plan’ based on the findings of the review and throughout the year, the Board has continued to progress the recommendations from the 2013 review. A summary of the progress made against the 2013 recommendations is shown in the table below.

This year, given the changes to the composition of the Board and the relatively short tenure of a number of non-executive directors, the Chairman determined that an internally facilitated review would be most effective and appropriate. This provided the opportunity to create tailored questionnaires, focusing in particular on those areas that had prompted the most feedback and discussion during the previous review.

In line with previous years and to ensure continuity and comparability, the directors were asked their views on a number of topics including:

  • Board composition, expertise and dynamics
  • Board support and processes
  • Strategic oversight
  • Risk management and internal control
  • Succession planning and human resource management
  • Priorities for change

The review concluded that the Board was effective overall while recognising the need for improvement in some areas which is set out in the table below.

PROGRESS MADE AGAINST RECOMMENDATIONS FROM 2013 REVIEW

Board composition and expertise – The composition of the Board has been considered and reviewed in 2014 resulting in the appointment of three new non-executive directors who enhance the Board’s expertise through: strong technological and digital experience; extensive financial services experience and a customer-focused background.

Board packs and management information – Good progress has been made on improvements to the management information pack and this is generally a focus for continuous improvement.

Overseas and off-site Board meetings – The Board has undertaken a visit to the Chicago office and visited the Cardiff office.

Strategic planning – The Board held a productive two-day off-site strategy session which built on the discussions that had taken place over the course of the year both inside and outside of the boardroom.

Stakeholder views – The Board places great importance on understanding the views of stakeholders and during the year, Board members invited representatives from the FCA and PRA to meet with them for an open discussion. The company’s brokers have also briefed the Board on institutional shareholder feedback following the year-end results. The Chairman and SID also undertook a series of meetings with the company’s significant institutional shareholders.

RECOMMENDATIONS FROM 2014 REVIEW
 

Board composition and expertise – In considering future appointments, the Nominations Committee should seek candidates with greater international experience, asset management expertise and those from insurance backgrounds.

Strategic oversight – The Board should continue to further develop strategic options and re-visit the progress on the discussions that took place at the Strategy Day half way through the year.

Succession planning – The Board should further consider succession plans for executive directors as part of the talent management sessions and should be further exposed to the succession plans for senior management and potential successors for key roles.

Board dynamics – The non-executives should meet more regularly with the chief executive officer in the absence of the rest of the executive in order to further facilitate open debate and challenge.

Time management – A review of the number of Board meetings should be undertaken and consideration should be given to extending the time of Board meetings to allow more time for discussion on strategic matters and to address the increasing regulatory agenda.