Compliance with the September 2012 UK Corporate Governance Code
For the year ended 31 December 2014, we are pleased to report that we have complied with the principles and provisions of the UK Corporate Governance Code. A full version of the Code can be found on the Financial Reporting Council’s website: frc.org.uk
A1 The role of the Board
The Board met formally eight times during the year. The Board’s agenda follows an annual work plan and the Board is responsible for setting the group’s strategy and monitoring the performance of the group as a whole. There is a clear schedule of matters reserved for the Board and schedules of delegation, as further described in the Delegated authority framework section.
A2 Division of responsibilities
John Stewart, the Chairman, is responsible for leading the Board while Nigel Wilson, group chief executive, is responsible for the day-to-day management of the company within the strategy set by the Board. The role profiles for both the Chairman and group chief executive are reviewed on an annual basis.
A3 The Chairman
The Chairman sets the agendas for meetings, manages the meeting timetable and facilitates open and constructive dialogue during the meetings.
A4 Non-executive directors
The Chairman encourages an open and constructive dialogue in the boardroom and the contributions made by the non-executives are highly valued. The Chairman is available to the non-executives and there are regular meetings in the absence of the executive directors. See also the Nominations Committee report.
B1 The composition of the Board
The composition of the Board is reviewed regularly by the Nominations Committee. In considering the composition, the Committee is mindful of the need to maintain a well-balanced Board in terms of skills, knowledge, experience, background and perspectives.
B2 Appointments to the Board
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.
Non-executive directors are advised of the time commitment expected from them on appointment. At times, this time commitment may go beyond that set out in the letter of appointment and is therefore reviewed regularly. External commitments, which may impact existing time commitments, must be agreed with the Chairman.
All new directors are invited to participate in a tailored and comprehensive induction programme. The Board runs a programme of ongoing development sessions, further detail of which is set out in the Induction and ongoing development section.
B5 Information and support
The Chairman, in conjunction with the company secretary, ensures that all Board members receive accurate and timely information.
The Board and its committees undertook an internal evaluation during 2014. The last externally facilitated evaluation was in 2012. Details of the 2014 evaluation can be found in the Board and Committee performance and evaluations section.
All directors were subject to shareholder election or re-election at the 2014 AGM, as will be the case at the 2015 AGM.
C1 Financial and business reporting
The strategic report 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
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 Audit Committee report and in the Group Risk Committee report.
C3 Audit Committee and auditors
The Board has delegated a number of responsibilities to the Audit Committee which comprises four independent non-executives. The Committee is responsible for overseeing the group’s financial reporting processes, internal control and risk management framework and the work undertaken by the external auditor. Regular updates are provided to the Group Board by the committee chair.
D1 The level and components of remuneration
The Remuneration Committee is responsible for setting the group’s remuneration policy. The company aims to reward employees fairly and our remuneration philosophy seeks to link reward to performance, thereby aligning the interests of the directors and shareholders. The work of the Committee is set out in the Letter from the Remuneration Committee Chairman.
The Remuneration Committee is responsible for setting the remuneration for all executive directors. Details of the composition and the work of the Remuneration Committee is set out in the Directors’ Remuneration Report.
E. RELATIONS WITH SHAREHOLDERS
E1 Dialogue with shareholders
The Board seeks to actively engage with both institutional and retail shareholders and a number of meetings were held in 2014. The chairman seeks to ensure that the Board are kept appraised of shareholder views.
E2 Constructive use of the AGM
The AGM provides the Board with an important opportunity to meet with shareholders, in particular retail shareholders, who are invited to meet with the Board following the formal business of the meeting.