Investor room/Corporate governance/Board of directors
The Board
The Company is committed to high standards of corporate governance, for which the Board is responsible to the Company’s shareholders. The Board has fully implemented the provisions of the revised Combined Code issued in June 2006.
What are the responsibilities of the Board of Directors?
The Board sets the Company’s strategic aims and ensures that necessary resources are in place in order for the Company to meet its objectives. All members of the Board take collective responsibility for the performance of the Company and all decisions are taken objectively and in the interest of the Company.
The Board is responsible for satisfying itself as to the integrity of financial information and the effectiveness of the Company’s system of internal control and risk management processes and is responsible for ensuring that the Company’s obligations to its shareholders are met.
Whilst the Board has delegated the normal operational management of the Company to the Executive Directors and other senior management it has established guidelines requiring specific matters to be subject to decision by the full Board of Directors, including material acquisitions and disposals, investments and capital projects. The Non-executive Directors have a particular responsibility to challenge constructively the strategy proposed by the Chief Executive and Executive Directors; to scrutinise and challenge performance; to satisfy themselves on the integrity of financial information and that financial controls are robust and defensible; to ensure appropriate remuneration and that succession planning arrangements are in place in relation to Executive Directors and other senior members of the management team.
How frequently are Board meetings held?
At least ten Board meetings are scheduled during the year and additional meetings are convened to consider matters that are time-critical. The Chairman ensures that, at least annually, the non-executives meet without the executive directors present.
What are the responsibilities of the Chairman and Chief Executive?
There is a clear division of responsibility between the Chairman and Chief Executive which has been formally documented and approved by the Board.
The Chairman is responsible for:
- Leadership of the Board, ensuring its effectiveness and setting its agenda
- Ensuring, through the Company Secretary that the members of the Board receive clear, accurate and timely information
- Arranging the regular evaluation of the performance of the Board, its Committees and individual Directors
- Facilitating the effective contribution of non-executive directors and ensuring constructive relations between executive and non-executive directors
The Chief Executive is responsible for:
- Developing strategic operating plans
- Preparing annual budgets and medium term projections for the Company and closely monitoring performance against plans and budgets
- Ensuring effective communication with shareholders
- Overseeing the day to day management of the Company
How is the board structured to ensure that no individual or small group of individuals can dominate the Board’s decision making?
The Board is considered to be of sufficient size such that the balance of skills and experience is appropriate to the size of the business. The Board is balanced by a strong non-executive element and at least half of the Board, excluding the chairman, are considered by the Board to be independent in character and judgement and have no relationships or circumstances that are likely to affect, or could appear to affect, their judgement as Directors of the Company. The Board has reviewed the provisions in the revised Combined Code and has concluded that, under the definitions used, all six of the current Non-executive Directors are independent.
The Board has appointed Tony Rice as its Senior Independent Non-executive Director and, on appointment, the Chairman was considered by the Board to meet all of the independence criteria set out in the Combined Code.
How are directors appointed to the Board?
The Company has a formal, rigorous and transparent procedure for the appointment of new directors. The Nominations Committee leads the process for board appointments and for succession planning and makes recommendations to the Board. New directors stand for election at the AGM following their appointment. Every director is required to retire by rotation, and may stand for re-election if nominated by the Nomination Committee, at least every third year.
None of the full time executive directors has more than one Non-executive directorship in a FTSE 100 company nor the chairmanship of such a company.
The terms and conditions of appointment of Non-executive directors are available for inspection at the Company’s registered office during normal business hours.
What information is provided to the Board?
To enable the Board to discharge its duties, all Directors are given appropriate documentation in advance of each Board meeting. This normally includes a detailed report on current trading and full papers on matters where the Board will be required to make a decision or give its approval.
What is the role of the Company Secretary?
The Company Secretary acts as secretary to the Board and its Committees.
The Directors, each of whom has received appropriate training, have access to the advice and services of the Company Secretary who is responsible for advising the Board, through the Chairman, on all governance matters.
The Company Secretary is also responsible for ensuring that board procedures are followed, that applicable rules and regulations are complied with and that there are good information flows within the Board, its Committees and between the Non-executive Directors and senior management.
The Company Secretary facilitates the induction and professional development of Board members who are available to meet major shareholders if requested.
How is the performance of the Board evaluated?
During the year the Board undertook a formal evaluation of its own performance and that of its committees and individual Directors. The Board considered that the best means of effectively undertaking this process was a combination of self and peer assessment. This process was led by the Chairman except in relation to his own performance as Chairman which was led by the Senior Independent Director. The results of the review were discussed by the Board and an appropriate action plan was agreed.