The Board regularly reviews the requirements of the Combined Code, and some of the ways in which the Company applies and complies with the principles of the Code are explained below.
Composition of The Board
The Board consists of two executive Directors and five non-executive Directors, including a non-executive Chairman. The names and biographies of the Directors are set out in the section entitled “Board Members”. The Board considers that each of the non-executive directors is independent for the purposes of the Combined Code and that the size and composition of The Board is appropriate to the business. The Board structure and the independent status of each non-executive Director are monitored on an ongoing basis through the annual board performance evaluation process and during regular meetings of the Nomination committee. Each Director is required to retire and stand for re-election at every Annual General Meeting.
The roles of the Chairman and Chief Executive are clearly defined and the division of their duties and responsibilities is clearly set out in writing and approved annually by The Board.
All Directors have access to the services of the Company Secretary and may take independent professional advice at the expense of the Company if necessary. Hewitt New Bridge Street Consultants are independent advisors to the Remuneration committee since their appointment in 2002, and they provide no other services to the Company or its Directors.
Board meetings
The Board meets approximately seven times each year and holds private dinners the evening before most meetings to hold informal discussions about business topics and to meet with senior management before the following day’s meeting.
Directors are available to hold meetings via telephone conference if required in order to discuss matters which need to be addressed urgently. Non-executive Directors have access to senior management outside of scheduled board meetings.
Board packs including papers for decision, discussion and information are circulated sufficiently in advance of meetings to enable Directors to give due consideration to the papers prior to the meetings. Monthly board reports are also circulated by the executive Directors summarising financial and operational performance and providing updates on key aspects of the business.
Board performance evaluation
The Board conducts an annual performance evaluation process to review: the constitution of The Board; its strengths and weaknesses; the manner of conducting and preparing for meetings; and the performance of The Board as a whole, of each committee and of individual Directors. The evaluation process is well received by The Board and is effective in focusing The Board’s attention on good governance and best practice, as well as highlighting The Board’s strengths and discussing how to address any weaknesses.
The Chairman meets with non-executive Directors, without executive Directors present in order to discuss their performance, and the non-executive Directors, led by the senior independent non-executive Director, meet annually without the Chairman in order to review his performance.
Internal controls
The Company’s control structure is designed to identify and manage the Group’s key business risks and includes a number of important controls, including financial, operational and compliance controls as well as formal risk management assessments that are centred at Group level (and include the Group Finance and Group Legal functions) and flow to subsidiary board level. There is a clear organisational and reporting structure across the Group and the two executive Directors are appointed to The Boards of all operating subsidiaries.
Business review meetings are held monthly by the executive team with senior managers within each operating subsidiary in order to provide a proper opportunity for financial results and other business and operational issues to be fully explored and addressed.
The Group uses a system of control documents to roll out group policies. The Schedule of Matters Reserved for The Board, which is reviewed by The Board annually, is one of these control documents. A copy of the Schedule of Matters Reserved for The Board is available to view here.
The Group has a whistle blowing policy to encourage employees to report, in good faith, any genuine suspicions of fraud or malpractice in order to identify any problems within the Group at an early stage. The policy is also designed to ensure that any employee who raises a genuine concern is protected.
Further details of internal controls are set out in the Corporate Governance report contained in the Company’s Annual Report and Accounts.
