Corporate governance practices.
Compliance with the UK Corporate Governance Code
As a company with a premium listing on the London Stock Exchange, we are required by the UK Listing Authority to disclose our compliance with the UK Corporate Governance Code (the Code). We must also explain any non-compliance.
The Board believes that the Company was compliant with the Code throughout the financial year under review, except for a period of non-compliance with Provision 9 of the Code from 9 October 2018 to 4 March 2019 when Sir Adrian Montague assumed the role of Executive Chairman. Following the appointment of Maurice Tulloch as Group Chief Executive Officer (Group CEO) on 4 March 2019, Sir Adrian reverted to his former position as Non-Executive Chairman. Details of our compliance with the Code, during the preceding year, are set out in the Directors and Corporate Governance section (PDF 162KB) of our Annual Report and Accounts.
Our directors are responsible to shareholders for:
- Making sure our company is appropriately managed and we achieve our objectives.
- Making sure we have an appropriate system of governance throughout our company.
Some matters fall outside our Board of Directors’ scope. Unless they are reserved for shareholder approval in a general meeting, the Board delegates them to our Group Chief Executive Officer, who then delegates responsibility for specific operations to members of the Group Executive Committee.
Composition of our Board
Our Board is made up of:
- The Chairman
- Four Independent Non-executive Directors
- The Chief Executive Officer
- The Chief Financial Officer.
We comply with the Code requirement that at least half of our Board, excluding the Chairman, should be Independent Non-executive Directors. At present, all four of our Non-Executive Directors are independent.
You can read our Board of Directors' profiles here.
Appointment and re-election of directors
We make appointments to our Board on the recommendation of the Nomination and Governance Committee, following a search undertaken by an executive selection agency and a series of interviews.
If we make an appointment to our Board between Annual General Meetings (AGMs), we will put the new director forward for election by the shareholders at our next AGM.
We put all our directors forward for re-election at our AGM, in compliance with the Code.
Board diversity and inclusion
Our Board is committed to having a diverse and inclusive leadership team. We understand the richness that diversity brings in providing the range of perspectives, insights and challenge needed to support good decision making.
Our Board’s Diversity and Inclusion statement (PDF 71.8KB) supports our diverse and inclusive culture. It also supports the Nomination and Governance Committee in its approach to succession planning. The statement is in line with our overall values and Group Diversity and Inclusion strategy.
Our Remuneration Committee considers alignment between the Group’s strategy and the remuneration of its Senior Executives, including Executive Directors, to be critical.
We believe that Senior Executives should be appropriately rewarded on a market competitive basis for the delivery of stretching goals and should receive reduced rewards when the business performs poorly.
For more details please read our Remuneration report (PDF 450KB).
Board induction and training
We give our directors a comprehensive, tailored induction programme when they join the Board, which includes:
- Sessions with senior management throughout the business over a number of months.
- Presentations and discussions with our key members of senior management.
- Visits to our Group's main operating businesses.
- Meetings with the external auditor and our corporate brokers.
Directors also commit to continue their personal development through attending relevant courses, seminars, workshops and lectures.
We give all our new directors induction materials, including:
- Our current strategic and operational plan
- Recent Board and committee minutes and meeting packs
- Relevant policies, procedures and governance materials.
We undertake a rigorous evaluation of our Board, its committees, the directors and the Chairman every year, to assess their performance. The Chairman usually leads this process, supported by the Group Company Secretary.
At least once every three years, we ask an independent consultancy to carry out our evaluation. They interview each Board member.
We also review the effectiveness of our Board committees every year. You can read about our latest effectiveness review in the Directors' and Corporate Governance Report (PDF 162KB) (Board Evaluation) in our 2019 Annual Report and Accounts.
Our Board has five standing committees. Each has clear terms of reference, to ensure oversight of important policy issues outside the main Board meetings.
You can find out about our committees’ duties and activities, their composition and terms of reference on the Board committees section of the website.
Communicating with our shareholders on a wide range of issues is important to us.
Our Executive Directors meet with our major institutional shareholders regularly. They discuss a wide range of issues including strategy, performance, management and governance - within the constraints of the information already known to the market.
When it’s appropriate, we seek the views of our major investors, particularly on remuneration issues. We do this directly and through consultation with the Association of British Insurers.
At our AGMs, we comply with the Code in these areas:
- the disclosure of proxy voting
- the separation of resolutions
- the attendance of committee chairmen.
We send out notice of our AGM at least 20 business days before the meeting, to ensure that our shareholders have enough time to consider the items of business.
Our annual report presents a clear and balanced view of our Group's activities and prospects. The Chairman's statement, Group Chief Executive's review and business operating and financial reviews give an assessment of our affairs and position, supported by presentations at the AGM.