The Board is committed to achieving long term success for the Company by being the best bank for customers and generating stable and sustainable returns for shareholders. Fundamental to the Board’s strategy are high standards of corporate governance, in particular, those laid down in the Financial Reporting Council’s UK Corporate Governance Code.
The Group is led by a Board comprising executive and independent Non-Executive Directors. Directors are appointed by the Board and stand for election by the shareholders at the first annual general meeting following their appointment. At each annual general meeting thereafter, Directors must retire, and may stand for re-election by the shareholders. Independent Non-Executive Directors are appointed on a rolling 12 month basis, which may, in accordance with the articles of association, be terminated without notice or payment of compensation.
Eight board meetings are scheduled per year, with ten being held in 2012. The schedule enables the Directors to regularly review corporate strategy, the operations and the results of the businesses and to discharge their duties within a framework of prudent and effective controls.
To assist the Board in carrying out its functions and to provide independent oversight of the internal control and risk management framework, a substantial part of the Board’s responsibilities are delegated to the Board’s Committees. Each of the Committees is chaired by an experienced Chairman and comprises independent Non-Executive Members only. All Non-Executive Directors serve on at least two Committees. The Board is kept up to date on the activities of the Committees through reports from the Committee Chairmen at each Board meeting.
The roles of the Chairman, the Group Chief Executive and the Board and its governance arrangements, including the schedule of matters specifically reserved to the Board for decision, are reviewed annually.
The Board has delegated to management the power to make decisions on operational matters, including those relating to credit, liquidity and market risk, within an agreed framework.
All Directors have access to the services of the Company Secretary, and independent professional advice is available to the Directors at the Group's expense.
The Board evaluates its performance and that of its Committees and individual Directors on an annual basis. In 2012, the Board’s effectiveness review was conducted externally by Independent Audit. The evaluation consisted of: one to one interviews with the Directors, the Company Secretary, members of the Group Executive Committee and other senior management; observations of Board and Committee meetings; and a review of minutes and a selection of papers. The findings were discussed by the Board and where areas for further efficiencies and effectiveness were identified, action has been agreed.
The Chairman's performance is evaluated by the Non-Executive Directors, led by the Senior Independent Director, taking account of the views of Executive Directors.
The Nomination & Governance Committee is responsible for assisting the Chairman in reviewing the overall composition of the Board, including its size, structure independence and diversity.
The Chairman has a private discussion at least once a year with every Director on a wide range of issues affecting the Group, including any matters which the Directors, individually, wish to raise.
There is an extensive induction programme for all new Directors, which is tailored by the Chairman to the individual needs of the Director having regard to their specific role on the Board and their skills and experience to date. Regular refresher training and information sessions to address current business or emerging issues are arranged as appropriate.
In order to develop an understanding of the views of major shareholders, the Board receives regular reports from the Group Finance Director and the Director of Investor Relations.
The Chairman, the Group Chief Executive and the Group Finance Director also have regular meetings with representatives of major shareholders. Anthony Watson, the Chairman of the Remuneration Committee and the Senior Independent Director, regularly meets the larger shareholders to listen to their views and discuss executive remuneration issues. In addition, all Directors are invited to attend investment analysts' and stockbrokers' briefings on the financial results.
All shareholders are encouraged to attend and participate in the Group's annual general meeting.
Further details of the Group’s corporate governance arrangements are contained within the Annual Report and Accounts.
