Nominations Committee report

The Nominations Committee ensures that the Board has an effective balance of skills and experience around the boardroom table and is responsible for identifying the skills required of future directors in light of the group’s strategy. The Committee ensures that there is a rigorous process in place for the appointment of new directors.”

John Stewart, Chairman

The Committee and its remit

On appointment, all independent non-executive directors join the Nominations Committee and the table below sets out the current membership. In addition to the Committee members, the group chief executive and HR director may be invited to attend meetings as appropriate. In order to avoid potentially conflicting situations, a director may be requested to absent themselves from any discussions relating to his/her own re-appointment or succession.

Members

Members

John Stewart

Julia Wilson

Rudy Markham

Lindsay Tomlinson

Stuart Popham

Lizabeth Zlatkus

Carolyn Bradley

Olaf Swantee

Richard Meddings

 

The Committee has overall responsibility for leading the process for new appointments to the Board and ensuring that these appointments bring the required skills and experience to the Board. Against this backdrop, the Committee is responsible for:

  • Reviewing the structure, size and composition of the Board as the company moves forward compared to its current position, and making recommendations to the Board with regard to any changes;
  • Reviewing the criteria for identifying and nominating candidates based on the description of the role and capabilities required for individual appointments;
  • Considering succession planning for directors and other senior executives in the course of its work, taking into account the challenges and opportunities facing the company, and what skills and expertise are therefore needed by the Board in the future;
  • Keeping under review the leadership needs of the organisation, both executive and non-executive, with a view to safeguarding the continued ability of the company to compete effectively in the market place; and
  • Reviewing the time commitment required from non-executive directors and assessing the non-executive directors’ other significant commitments to ensure that they continue to be able to fulfil their duties effectively.

Terms of reference which set out full details of the Committee’s authority can be viewed on our website.

The Committee’s activities in 2014

Board composition and appointments

The Committee met four times during 2014 and focused in particular on the composition of the Board and the appointments of three new non-executive directors.

Following the retirements of three of our non-executives in 2013 and the retirement of Mike Fairey in May 2014, the Committee commenced the process to identify further non-executive directors to join the Board. The Committee considered the importance of a diverse Board and assessed the skills and competencies required for these non-executive roles with a view to identifying any gaps which could be filled to enhance the Board’s future performance. The Committee identified that the Board’s skill set could be strengthened with the addition of increased digital knowledge, reflecting the feedback from the 2013 Board evaluation. The Committee proceeded to produce a detailed candidate brief and engaged external search consultants Korn/Ferry Whitehead Mann, who have no other connection to the company, to undertake the search.

The Committee sought a candidate who would bring a different perspective to the Board but one whose values and ethical approach to business were aligned with the group and an individual who could bring significant technological and digital experience in order to support the group’s digital strategy. On the basis of this brief, a long list of candidates was produced including candidates from a range of diverse backgrounds. Following rigorous interviews with a number of candidates, the Committee recommended the appointment of Olaf Swantee to the Board.

The Committee also continued its extensive search to find two further non-executives; one with the deep financial services and senior executive experience to succeed Mike Fairey and one with a strong consumer focused background given the customer is at the heart of our business. The Committee engaged external search consultants, JCA Group, who have no other connection to the company, to undertake this search and agreed two separate candidate briefs with them. JCA proceeded to identify long lists of candidates who met the briefs and candidates from each long list were interviewed by the Chairman, the group general counsel and the Committee, with interviews focused on testing whether the candidates had the required skills, experience and competencies for the roles as well as assessing whether the candidate would be a good cultural fit for the existing Board. Following these interviews, the Committee recommended the appointments of Richard Meddings and Carolyn Bradley to the Board, taking up their appointments on 1 and 8 December respectively. Richard was selected due to his extensive experience in the financial services industry and his recent executive experience whilst Carolyn was selected due to her customer focused background. There will also be some changes to the executive make-up of the Board following the announcement in September that John Pollock will be retiring from the company and stepping down from the Board at the 2015 AGM. After careful consideration, it was determined that there would be no direct replacement for John and in November we announced a new business and management structure for the LGAS business.

Independence

The Committee and the Board evaluate the independence of all non-executives and undertake an annual review of each non-executive director’s interests. The Board was satisfied that each non-executive remained independent and continued to have sufficient time to discharge their responsibilities to the company. Rudy Markham has served on the Board for eight years and as a result, his continued independence was subject to more rigorous review. The Committee considered Rudy’s external business interests and other relationships which could materially interfere with his ability to exercise independent judgement. The committee concluded that there were no circumstances which would affect Rudy’s ability to act in the best interests of the company and that his length of tenure had no detrimental impact on his level of independence.

Diversity policy and progress made in 2014

Our approach to diversity on the Board is set out in our Board Diversity Policy and we have continued to seek to ensure that diversity, in the widest sense, remains central to our thinking on the composition of the Board. Since publishing the policy, the Board has made encouraging progress, not only in increasing the diversity on our Board but also in supporting the delivery of the talent and leadership programmes within the organisation which seek to address gender imbalance by removing barriers that prevent women from realising their potential. The table below demonstrates the progress that has been made:

KEEP UNDER REVIEW THE COMPOSITION OF THE BOARD

 
  • The composition of the Board was reviewed during the year and three new non-executive directors were appointed
  • The Board now comprises: 23% females: 77% males
  • The length of tenure of the non-executives varies: 33% less than one year; 22% between one and three years; 33% between three and six years and 11% over six years
  • Board members come from a variety of backgrounds and have wide sector experience: 55% Financial services; 11% Digital and Technology; 11% Customer and Retail; 11% Legal; 11% Investment Management
ENCOURAGE THE EMERGENCE OF FEMALE CANDIDATES AND CANDIDATES OF DIVERSE BACKGROUNDS
  • The Committee only engages executive search firms that are signatories to the executive search firms’ Voluntary Code of Conduct – both JCA Group and Korn/Ferry Whitehead Mann are signatories to this Code
  • The Committee liaises with the search firm to ensure that candidate briefs include an appropriate emphasis on diversity of skills and background, independence of approach and thought
  • Executive search firms are encouraged to produce long lists which include female and other diverse candidates of appropriate merit
STRENGTHENING THE REPRESENTATION OF WOMEN AMONG THE NON-BOARD SENIOR MANAGEMENT CADRE
  • Board members actively participate in discussions relating to talent and leadership
  • Board members act as mentors to individual employees who have been identified as ‘future leaders’
  • Development of the Legal & General 50/50 by 2020 Network which aims to have a 50/50 balance of men and women right through the organisation by the year 2020