A summary of the Group’s Corporate Governance
Achieving long term success by being the best bank for customers and generating sustainable returns for shareholders.
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 aims to comply with all main principles of the UK Corporate Governance Code, which is available at www.frc.org.uk.
The Board of Directors
The Group is led by a Board comprising a Non-Executive Chairman, independent Non-Executive Directors and Executive Directors. The Board is collectively responsible for the long term success of the Company. It achieves this by setting the strategy and overseeing delivery against it, establishing the culture, values and standards of the Group, setting risk appetite and ensuring that the Group manages risk effectively, monitoring financial performance and reporting and ensuring that appropriate and effective succession planning arrangements and remuneration policies are in place.
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.
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.
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.
Appointment and Induction of 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 of the Company, be terminated without notice or payment of compensation.
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.
Further information is set out in the Annual Report and Accounts.
The Board is supported by its Committees which make recommendations to the Board on matters delegated to them, in particular in relation to internal control, risk, financial reporting, governance and remuneration matters. This enables the Board to spend a greater proportion of its time on strategic, forward looking agenda items. Each Committee comprises Non-Executive Directors only and is chaired by an experienced Chairman. The Committee Chairs report to the Board on the activities of the Committee at each Board meeting.
The Terms of Reference for each of the Board’s main Committees can be found here.
The Chairman of the Board leads the rolling review of the Board’s effectiveness and that of its Committees and individual Directors with the support of the Nomination & Governance Committee, which he also chairs. The annual evaluation, which is facilitated externally at least once every three years, provides an opportunity to consider ways of identifying greater efficiencies, maximising strengths and highlighting areas for further development. 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.
Details of the most recent Board Evaluation can be found within the Annual Report and Accounts.
In order to develop an understanding of the views of major shareholders, the Board receives regular reports from the Chief Financial Officer and the Director of Investor Relations.
The Chairman, the Group Chief Executive and the Chief Financial Officer have regular meetings with representatives of major shareholders. The Chairman of the Remuneration Committee also regularly meets the larger shareholders to listen to their views and discuss executive remuneration.
In addition, we held a governance lunch in 2016 at which investors could meet various members of the Board, and 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.