STRATEGIC REPORT
FINANCIAL STATEMENTS
Governance
BOARD EVALUATION
REVIEW OF BOARD PAPER TEMPLATES
Board and Board Committee paper templates are reviewed at least annually.
AUTHORS SESSION
REFLECTIVE SESSIONS
• Key changes agreed in 2022 to facilitate more effective discussion and decision-making were to request authors to: – articulate key risks and assumptions clearly; – document alternative options that had been discounted; – outline any sustainability considerations; – restrict papers to up to six pages unless agreed otherwise; and – include any reference only material in supplementary packs.
Company Secretarial host sessions for authors.
Reflective sessions are held by the Board and Board Committees.
• The sessions provide an opportunity to: – report on any changes to the templates; – highlight key feedback from Directors; and – address any questions from authors.
• Standing agenda item to
consider meeting effectiveness and quality of papers.
• Bi-annual discussion on the survey findings at the Board and GRCC. • Key conclusions are collated by Company Secretarial to form an action plan.
PROGRESSION
Bi-annual surveys are conducted requesting Directors to comment on meeting effectiveness and quality of papers.
• The surveys aim to identify what works well and what enhancements are required to facilitate constructive discussions and meet Directors’ expectations.
Focus areas from the 2021 review
AUDIT, RISK AND INTERNAL CONTROL Preparation of the Annual Report and Accounts
Action taken during 2022
The Board takes care to present a fair, balanced and understandable assessment of the Group’s position and prospects. The Board believes that the Annual Report and Accounts are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group’s position, performance, business model and strategy. The going concern statement and a review of whether there are any material uncertainties to the Group’s ability to continue to adopt the going concern basis of accounting in respect of the Annual Report and Accounts is set out in the Group Audit Committee Report and Directors’ Report. The Viability Statement is on page 61. Assessing emerging and principal risks The Board determines the nature and extent of the risks that it is willing to take to achieve its strategic objectives when setting its risk appetite framework. The Directors assessed the emerging and principal risks facing the Group, including risks that would impact its business model, future performance, capital and liquidity constraints. A description of the principal and emerging risks including the procedures in place to identify emerging risks is covered in the section on principal risks and uncertainties. Risk management and internal control systems The Board, with the assistance of the Group Audit Committee and Group Risk and Compliance Committee, and support from the Risk and Group Internal Audit functions, as appropriate, monitored the Company’s risk management and internal control systems that have been in place during the year, and reviewed their effectiveness. The Group Internal Audit function provides an independent and objective assurance of the adequacy and effectiveness of the Group’s controls to the Group Audit Committee each year. Information regarding this review is set out in the Group Audit Committee report. Group Audit Committee The Board has delegated responsibility for overseeing the financial reporting (including climate-related assumptions and disclosures), internal audit, external audit and the effectiveness of the internal controls to the Group Audit Committee. The Group Audit Committee conducts a review of the financial and non-financial statements to satisfy itself of the integrity of the Annual Report and Accounts and reports its findings to the Board. For information on the composition of the Group Audit Committee, its responsibilities and its activities during the year, including those activities required by provision 26 of the Code, please see the Group Audit Committee report.
Continuing to improve the quality of the Board and Committee papers
Following recommendations from the 2021 effectiveness review, the chart above illustrates the steps being taken. Further enhancements are planned in 2023 and beyond.
Focus areas from the 2022 review
Proposed action for 2023
Board and Committee succession planning
For the Group Chair to review the composition of the Board and Committees including the number of Non-Executive Directors To focus on streamlining information and the level of information provided in Committee papers and to consider the value of obtaining independent views on specialist areas of focus. To provide training on emerging specialist areas of focus such as illiquid asset classes. For the Business Development team to provide quarterly competitor analysis and market share information to the Board to support the wider Board deep dive reviews.
Management information
Training
Business development
The Group Company Secretary has devised an action plan which will be owned by the Nomination and Governance Committee, with periodic progress reports provided to the Board. Nomination and Governance Committee The principles of section 3 of the Code on composition, succession and evaluation are applied in practice through the activities undertaken by the Nomination and Governance Committee, to which the Board has delegated responsibility. The Nomination and Governance Committee report sets out, as required by provision 23 of the Code: • the responsibilities delegated to the Nomination and Governance Committee; • the process used for appointments of Executive and Non-Executive Directors; • the approach to succession planning; • the Board’s policy on diversity and inclusion; and • diversity of senior management.
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