GOVERNANCE REPORT
67
The Senior Independent Director, Keith Nicholson, provides a sounding board for the Chair, and serves as an intermediary for the other Directors when necessary. The Senior Independent Director also meets annually with the Non-Executive Directors without the Chair being present to appraise the Chair’s performance, and address any other matters which the Directors might wish to raise. The Senior Independent Director conveys the outcome of their discussions to the Chair. The Non-Executive Directors of the Board will meet at least twice per year without the Executive Directors being present. Non-Executive Directors’ time commitments Non-Executive Directors’ appointments are subject to review every three years. Their letters of appointment set out the expected time commitment. The need for availability in exceptional circumstances is recognised. We request that the Board is informed of any subsequent changes in the other significant commitments of the Directors. The Board and Nomination Committee do not consider that any of the Non-Executive Directors have too many other commitments which would render them unable to devote sufficient time to the Company’s activities. The other directorships of the Non-Executive Directors, are set out in their biographies on pages 56 to 59. None of the Directors hold directorships in FTSE 100 companies. Information and support Directors may seek independent professional advice at the Company’s expense where they consider it appropriate in relation to their duties. All Directors have access to the advice and services of the Group Company Secretary and the Group General Counsel. The role of the Group Company Secretary is to support the Chair and the Board, which includes bringing all governance matters to the attention of the Board and delivering a programme of Board and Committee meetings, training and senior management presentations to ensure that each Director has the information required in a timely manner to discharge their statutory duties. COMPOSITION, SUCCESSION AND EVALUATION The principles of section 3 of the Code are applied in practice through the activities undertaken by the Nomination Committee, to which the Board has delegated responsibility. The Nomination Committee Report on page 69 sets out, as required by provision 23 of the Code: • the responsibilities delegated to the Nomination Committee; • the process used for appointments of Executive and Non-Executive Directors; • the approach to succession planning; The Board is satisfied that there is the right balance of skills and experience on the Board and its Committees to support the Group’s challenges ahead. The Board acknowledges the lack of diversity on the Board and is committed to improving this. More information can be found in the Nomination Committee Report on page 71. In accordance with the Code, the Board believes that it has the appropriate balance of capabilities, skills, expertise, independence and knowledge to enable it and its Committees to discharge their duties and responsibilities effectively. • the Group’s policy on diversity and inclusion; and • the gender balance of those in senior management. Composition and succession planning
The Nomination Committee regularly reviews Board composition when considering succession planning. In particular it reviews the length of tenure of those Directors who have served on the Board for over two three-year periods. This includes that of the Chair who served as Chair of Partnership Assurance Group plc prior to the merger. During the year, the Nomination Committee also considered the long tenure of Keith Nicholson who entered his third three-year term as Senior Independent Director. Further information regarding succession planning is included in the Nomination Committee report on page 70. All Directors’ appointments are subject to annual re-election by shareholders and the reasons why their contribution is and continues to be important to the Company’s long-term sustainable success is set out in the explanatory notes accompanying the resolutions. Appointment of CEO and CFO During the year the Nomination Committee led a process to appoint a new Chief Financial Officer, Andy Parsons, who joined the Company and the Board on 1 January 2020. The Nomination Committee also led a process to appoint a new Chief Executive Officer, with David Richardson, the previous Deputy Chief Executive Officer and Managing Director of UK Corporate Business, being appointed to this role on a permanent basis. Mr Richardson was already appointed as an Executive Director to the Group Board. More information about the appointment is included in the Nomination Committee Report. Development All new Directors receive a formal induction on joining the Board and a tailored training plan. Their induction includes discussions with the Chair and Executive Directors as well as one-to-one briefings and presentations from senior management on matters relating to the Group’s business, its procedures and regulatory developments. As part of the annual Board effectiveness review, the Chair discusses with each of the Directors their training and development needs. Board evaluation Following the external Board evaluation during 2018, in 2019 the Board conducted an internal evaluation. Lintstock, an advisory firm that specialises in board performance reviews, was engaged to assist with the process. Lintstock has no other connection with the Group. The four principal Committees which were “in scope” for the review were the Audit, Nomination, Remuneration and Group Risk and Compliance Committees. The Group Company Secretary and the Chair engaged with Lintstock to set the context for the evaluation and to tailor content of the review. All Board members were invited to complete the online survey addressing the performance of the Board, its Committees, the Chair as well as their own contribution to the Board. Lintstock subsequently produced a report of the results of the survey. The Board considered the report and concluded that it was effective. Furthermore the Senior Independent Director considered the performance of the Chair and confirmed that he was effective. The Nomination Committee considered the report on each of the Directors and following an assessment of their other duties was satisfied that they continued to be effective. Following the discussion at the Board meeting, the Company Secretary considered the themes in the report and prepared a number of actions, the completion of which will be monitored by the Nomination Committee. Pleasingly the actions identified built on matters identified in the external PwC board evaluation in 2018. The areas of work were: Board composition – the survey noted that the Board was highly rated and whilst the gender balance on the Board had improved it was agreed that the Board should continue to focus on diversity over the next three to five years when considering Board succession.
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