The fundamental purpose of any company is the creation and delivery of long-term sustainable shareholder value in a manner consistent with its obligations as a responsible corporate citizen, and corporate governance must be seen in this context.
We aim to create and sustain value over the long term by understanding the external factors that present risks and opportunities for our business, thereby ensuring our strategy is appropriate; building strong and stable relationships with our customers, employees and suppliers; and ensuring that we manage our risks and resources, including capital, appropriately. Our strategy is focused on four key priorities: Capital; Returns; Income Growth; and Citizenship and we ensure our Board discussions are focused on these issues.
We have complied with the UK Corporate Governance Code and applied its principles throughout 2011 and we continue to review our corporate governance processes and practices to ensure they remain fit for purpose.
Actions taken in this respect during the year included:
- once again conducting a rigorous, externally facilitated Board Effectiveness Review;
- in addition to our scheduled Board meetings, we held eight additional meetings to discuss key issues that our business has faced;
- creating, in late 2011, a Board Citizenship Committee to have oversight of our conduct with regard to our wider value and obligations to society and our reputation as a responsible corporate citizen; and
- while ensuring that all Directors are appointed on merit, and ensuring that there is an appropriate range and balance of skills, experience and background on the Board, we have set ourselves the aspirational target of ensuring that at least 20% of our Board is made up of women by the end of 2013 and for this position to exceed 25% by the end of 2015.
6 March 2012
- Board Corporate
(Group Chairman and
- Board Audit Committee
- Board Risk Committee
- Board Remuneration Committee
and the Group Chairman)
- Board Citizenship
(Group Chairman and
Board Corporate Governance and Nominations Committee
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In order to deliver our strategy, we need the right people. The Board Corporate Governance and Nominations Committee has a key role in reviewing new appointments and succession plans to ensure that we have a Board and an executive management team with the appropriate skills, knowledge and experience to operate effectively in an ever challenging environment.
Board Audit Committee
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It is important that we generate income in a sustainable way and manage our risks and costs properly, without eroding the controls we have in place. The Board Audit Committee has a key oversight role in ensuring that our financial statements are a true and fair representation of our financial position and strength and that our control environment is robust and maintained.
Board Risk Committee
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Understanding, monitoring and mitigating risk is a fundamental task for any board. The Board Risk Committee plays a critical role in setting the tone and culture that promotes the achievement of effective risk management across the Group and has provided oversight of, and advice on, both our risk appetite and risk management and our capital and liquidity strategies.
Board Remuneration Committee
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The debate on executive remuneration has continued, with particular focus on the relationship between bonus payments and company performance. It is essential that we reward our people appropriately, that their pay reflects performance and that we do not incentivise them to take inappropriate levels of risk. The Board Remuneration Committee provides direction and oversight of remuneration policy.
Board Citizenship Committee
In 2011, we strengthened our governance framework by creating a Board Citizenship Committee as a formal sub-committee of our Board of Directors. The committee is chaired by Group Chairman Marcus Agius and includes two non-executive Directors.
Progress against our priorities is reviewed regularly and formally assessed at least twice yearly by the Board Citizenship Committee and the Executive Committee. A range of management committees are responsible for specific aspects of Citizenship performance.
- Chief Executive
- Executive Committee
(Business Unit Heads and the Heads of Key Group Control Functions)
- Management Committees
(including Disclosure Committee, Group Governance and Control Committee, Financial Risk Committee, Operational Risk Committee, Treasury Committee)