The Board is responsible for the overall strategy of the Group and together with the Company is committed to becoming best in class
The Company has continued progress towards this ambition delivering many improvements and efficiencies across customer service, underwriting effectiveness and in respect of costs. The Board’s role in the delivery of this ambition is the oversight and challenge of the operations.
The primary responsibility of the Board is to provide effective leadership to ensure that it promotes the success of the Company for the benefit of its members as a whole. The Board, supported by its committees, provides entrepreneurial leadership within a framework of prudent and effective controls. The Board is accountable to stakeholders for the creation and delivery of strong sustainable performance and the creation of long-term shareholder value.
The Board has adopted a schedule of matters reserved for the Board which is reviewed on an annual basis and updated as necessary.
Matters reserved to the Board include:
- Approval of the Group’s long-term objectives and commercial strategy;
- Approval of changes to the Group’s senior management structure;
- Approval of the Group’s overall risk appetite;
- Annual review of the effectiveness of the Group’s systems of risk management and internal control;
- Approval of the annual operating and capital budgets changes to the Group’s capital structure;
- Approval of the Group's financial results and any significant changes to accounting practices or policies;
- Corporate governance arrangements; and
- Approval of any significant expenditure, material transactions and contracts.
The Board sets annual objectives for the business in line with the current Group strategy and monitors achievement against these objectives through regular reports. These include updates from the Group CEO, the Group CFO and other relevant members of senior management or executives on all material business matters.
The directors may exercise all the powers of the Company subject to the Articles of Association, relevant law and any directions that may be given by the Company at general meetings by shareholder resolution.
Role of chairman
- Leadership of the Board, promoting a culture of openness and debate;
- Effectiveness of the Board;
- Ensuring provision of timely, accurate and clear information;
- Ensuring the Board determines the nature, and extent, of the significant risks the company is willing to embrace;
- Ensuring membership of the Board has the right balance of skill and experience to support the needs of the business;
- Effectiveness and structure of the Board’s committees;
- Maintain effective communication with shareholders and Board understanding of major investor views;
- Leading the annual evaluation of the Board and its committees’ performance;
- Performance of Board committees and individual directors;
- Agreeing training and development plans for each director;
- Ensuring a tailored induction for new directors;
- Monitor the succession planning and Board composition based on the recommendations by the Group nomination and governance committee;
- Leadership of the Board in agreeing the Group’s strategic operating plans and budgets;
- Ensuring relevant objectives are established for the group chief executive and his management team;
- Reviewing with the group chief executive the overall performance of the company and its senior management;
- Undertaking the role of ambassador for the company, participating in the engagement and effective communication with the company’s stakeholders; and
- Chairing effective general meetings.
Role of group chief executive
- Developing targets and goals for the senior management of the company;
- Developing, recommending and presenting to the Board, taking into account any threats or opportunities: strategic plans, risk appetite for the business, risk exposure;
- Preparing detailed business plans for the company and its major subsidiaries, monitoring the performance of the Group, ensuring that objectives are achieved and business plans are implemented within budget;
- Overseeing, directing and controlling financial management, control standards and reporting processes of the company and its main subsidiaries;
- Reviewing the organisational framework to ensure that policies relating to management selection, performance review, development and change are appropriate;
- Ensuring that management succession plans are in place Identifying and executing acquisitions and disposals up to prescribed limits;
- Compliance with legal and regulatory requirements of the relevant regulatory bodies;
- Developing the company’s communications strategy to meet the needs of, and engage with, all internal and external stakeholders;
- Representing the company in the industry and business community; and
- Liaising with the chairman and Board on matters which are material to the performance of the company.
Role of senior independent director
- Providing support to the chairman in the delivery of his responsibilities when required;
- Assisting in matters relating to Board evaluation;
- Chairing the group nomination and governance committee when considering matters relating to the chairman of the Board;
- Ensuring that the views of each of the non-executive directors are given due consideration and facilitating communication between the non-executive directors and the chairman;
- Holding meetings with the non-executive directors without the chairman being present to review the chairman’s performance; and
- Lead the annual appraisal of the chairman's performance.
Role of non-executive directors
- Remain independent in character and judgement, ensure no relationships, conflicts of interest or circumstances which are likely to affect the exercise of judgement;
- Form and maintain balanced understanding of the views and issues of concern to major shareholders and to attend meetings with those major shareholders or financial analysts if requested;
- Challenging and agreeing the Group’s strategy with senior management;
- Be satisfied the integrity of financial information and the Group’s financial controls and systems of risk management are robust and defensible;
- Assessing the performance against Group strategy;
- Participating in the activities of the Board committees. Committee selection is regularly reviewed by the group nomination and governance committee based on skills and experience;
- Meet with the chairman without executive directors being present to appraise performance of the executive team;
- Meeting with the senior independent director without the chairman being present to review the chairman’s performance and other matters; and
- Ensure concerns which cannot be resolved about the running of the company or proposed actions are recorded in the relevant board or committee minutes.
The Group is committed to diversity and the promotion of equal opportunities. We recognise the importance of diversity to the effectiveness of the Board and remain committed to maintaining the Davies Report recommendation of a minimum of 25 percent representation of females on the Board. The Board composition is currently 73 percent male and 27 percent female. The Group continues to invest in strengthening its pipeline of female employees for senior leadership positions to ensure progress towards this target and has developed a framework of initiatives designed to help retain, develop and promote our female employees and improve diversity and inclusion more broadly. These include mentoring schemes (including the 30% club cross-company scheme), recruitment initiatives, development courses and a variety of other initiatives designed both to support our people and help ensure objectivity within our processes.
When appointing new directors, regard is given to the size of the Board, the balance of executive and non-executive directors and the benefits of diversity, including gender.
Effectiveness of the Board
The Board considers that the information provided to the Board and its committees is supplied in a timely manner and is of an appropriate quality to enable it to discharge its duties.
The Board continually challenges management to ensure that the flow and quality of information to the Board is of a high standard. A review and refresh of Board and committee papers was undertaken during the year and a framework implemented to enhance the information provided to the Board. The Chairman sets the agenda for Board meetings and is responsible for the running of meetings ensuring sufficient time for discussion and constructive challenge. When a director is not available to attend a meeting, his/her views are canvassed by the Chairman prior to the relevant meeting where possible, and the Board informed of their opinions and observations. When considering matters such as the approval of financial statements and large operational contracts, the Board may delegate authority to a Board sub-committee to finalise and approve as required.
Formal minutes recording the decisions of all Board and committee meetings are prepared and circulated to each director. If a director objects to a particular decision, this is recorded in the minutes of the relevant meeting.
For more information on the activities undertaken by the Board during 2016 refer to the Annual Report and Accounts.
The Group Nomination and Governance Committee undertakes a review of Directors’ time commitment annually. The letters of appointment for the Chairman and each of the non-executive directors set out their anticipated time commitment, being an average of two days per week for the Chairman and 28-32 days per year for non-executive directors. In addition directors are required to allocate sufficient time to meet the expectations of the role, including attending Board and committee meetings, ad hoc meetings, training and briefings with senior management as part of their induction and ongoing development programme and attendance at the Annual General Meeting.
Service agreements and letters of appointment, for all the Executive and Non-Executive Directors, are available for inspection at the Company’s registered office and at the AGM.
Induction, Training and Development
The Board receives briefings on matters of importance to the Group and attend training sessions and seminars to enhance their knowledge and keep their experience relevant. Each director has an individual training plan which is reviewed by the Chairman.
To ensure the Board remains effective, and compliant with the UK Corporate Governance Code, a performance evaluation is carried out annually. This is undertaken by an external independent party at least once every three years, with the intervening years run internally. The Chairman leads the internal process with support from both the Senior Independent Director and the Company Secretary, comprising online questionnaires and subsequent meetings. The views of directors and regular attendees to Board meetings are canvassed focusing on key areas identified in the previous year’s evaluation and the business during the relevant year. The results from the evaluation are presented to the Board and an action plan developed for the following year. Each year, progress against actions is monitored for progress.
For more information relating to the Group Board Evaluation undertaken and the actions identified refer to the Annual Report and Accounts.