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Corporate governance practices
Corporate governance framework
The Company is subject to the UK Corporate Governance Code (the Code), which it aims to comply with fully. Details of the Company's compliance with the Code, during the preceding year, are set out in the Annual Report and Accounts and on the section of the website on Compliance with the UK Corporate Governance Code .
The directors of the Company are responsible to shareholders for ensuring that the Company is appropriately managed and that it achieves its objectives. This includes ensuring that an appropriate system of governance is in place throughout the Company.
Matters not specifically reserved for the board and its committees under its terms of reference, or for shareholders in general meeting, are delegated to the group chief executive officer who in turn delegates responsibility for specific operations to the members of the group executive.
Composition of the board
The board is made up of the chairman, nine independent non-executive directors and three executive directors.
The biographical details of the directors can be viewed in the section on directors' profiles .
Aviva complies with the Code requirement that at least half of the board, excluding the chairman should be independent non-executive directors. At present, all the non-executive directors are independent.
Appointment and re-election of directors
Appointment to the board is on the recommendation of the nomination committee, following a search undertaken by an executive selection agency and a series of interviews. If an appointment is made to the board between AGMs, the director will be put forward for election by the shareholders at the next AGM following the appointment.
All directors are subject to annual re-election at the Company's AGM, in compliance with the UK Corporate Governance Code.
The Remuneration Committee considers alignment between Group strategy and the remuneration of its senior executives, including executive directors, to be critical. It believes that senior executives should be appropriately rewarded (on a market competitive basis) for the delivery of stretching goals but should receive reduced rewards when the business performs poorly.
Board induction and training
Directors participate in a comprehensive, tailored induction programme when joining the board. They are also required to commit to continue their personal development through attendance and participation on relevant courses, seminars, workshops and lectures.
The comprehensive induction programme consists of several separate sessions with senior management throughout the business over a number of months. This includes presentations and discussions with key members of senior management, visits to the Group's main operating businesses and meetings with the external auditor and the Company's corporate brokers. All new directors receive induction materials which includes the current strategic and operational plan, recent Board and Committee minutes and meeting packs and relevant policies, procedures and governance material.
A rigorous evaluation of the board, its committees, the directors and the chairman is undertaken each year, to assess performance. The process is usually led by the chairman and supported by the group company secretary. At least once every three years, the evaluation process is undertaken by an independent consultancy and interviews are conducted with each board member. The effectiveness of the board committees is also evaluated annually.
Details of the latest effectiveness review is contained in the Annual Report and Accounts .
The board has established five standing committees, with clear terms of reference, to ensure oversight of important issues of policy outside the main board meetings. The committees are audit, governance, nomination, risk and remuneration. Further details of the duties and activities of the committees, their composition and their terms of reference can be viewed on the board committees section of the website .