Roles

Role of the board

It is the responsibility of the board to ensure that the Company is appropriately managed and that it achieves its objectives.

The specific duties of the board are clearly set out in its terms of reference, which address a wide range of corporate governance issues. They also list those items that are specifically reserved for decision by the board and the matters that must be reported to the board.

Further details of the role of the board are provided below.

Board

The duties of the board are set out clearly in formal terms of reference, which are reviewed annually, stating the items specifically reserved for decision by the board. These include the approval of the Group's strategic objectives and business plans; monitoring of the performance of the Company and its management against these strategic objectives; acquisitions and disposals outside delegated limits; significant financial decisions and approval of key business policies.

The board is also responsible for setting and upholding the values and standards necessary to ensure that the Company's obligations to shareholders and other stakeholders are met. The terms of reference contain a procedure whereby directors may, in the furtherance of their duties, seek independent professional advice at the Company's expense if considered appropriate.

Directors are fully briefed in advance of board meetings on all matters to be discussed and at the board meetings directors receive regular reports on the Group's financial position, key areas of the Group's business operations and other material issues.

The directors bring to the board a wide range of experience and skills and participate fully in decisions on the key issues facing the Group. To ensure that the non-executive directors are able to exercise an independence of judgement, the nomination committee undertakes an annual review of directors' interests in which all potential or perceived conflicts and issues relevant to their independence are considered.

Based on the review presented in January 2011, the board considers that all of the current non-executive directors are independent of management and free of any relationship that could materially interfere with the exercise of their independent judgement.

The board has a formal performance review process to assess how well the board, its committees and processes are performing and how they might be improved. The review also assesses the performance of each director and the contribution he/she makes. The last review was presented to the board in January 2011.

The group company secretary is responsible for ensuring that board procedures are followed and all directors have access to her advice and services.

The board has established a number of committees, including remuneration, audit, nomination, risk and corporate responsibility. Each operates within clear terms of reference and the minutes of their meetings are circulated to all directors.

Role of the chairman, senior independent director and group chief executive

The respective roles of the chairman, senior independent director and group chief executive are set out in the board's terms of reference. The chairman's priority is the leadership of the board and the group chief executive's priority is the management of the Company. The primary role of the senior independent director is to provide a sounding board for the chairman and serve as an intermediary for the other directors.

Further details of the roles are provided below.

Chairman

• The chairman is responsible for the leadership of the board and the management of board meetings.
• Through the nomination committee, the chairman ensures a balance is maintained on the board as regards the numbers of executive and non-executive directors and their skills and expertise.
• It is the chairman's duty to ensure that all relevant issues are on the board agenda and that directors receive all appropriate documentation in a timely manner.
• The chairman is responsible for effective communication with the Company's shareholders.
• The chairman, through the board committees, ensures that the executive team is adequately resourced and that there are succession plans in place for the executive directors.
• The chairman shall ensure that all directors receive appropriate induction and training.

Senior independent director

The board shall appoint one of the independent non-executive directors to be the Company's senior independent director. The principal duties of the senior independent director are to:

• Be available to shareholders should they have any concerns that the normal channel of approaching the chairman, group chief executive, or chief financial officer has failed to resolve. The availability of the senior independent director is also important where contact by the shareholders with the chairman, group chief executive, or chief financial officer would not be appropriate.
• Chair meetings of the directors in the absence of the chairman.
• Lead discussions on the performance evaluation of the chairman.
• Attend meetings with major shareholders to listen to their views so as to develop a balanced understanding of any issues and concerns which they may have.

Group chief executive

The group chief executive has overall accountability for the:

• Development and execution of the Group's overall strategy in line with the policies and objectives agreed by the board.
• The operational effectiveness and profitability of the Group.
• The leadership of the Group through the executive directors and senior management team.