Managing the Business

Board independence and balance

The Directors’ biographies appear in section 2 of the Annual Report and illustrate the Directors’ range of experience, which ensures an effective Board to lead and control the Group. The Board delegates the operational management of the Group to the Chief Executive and Finance Director (“Executive Directors”). The Non-Executive Directors bring an independent viewpoint and create an overall balance. The Executive and Non-Executive Directors have a complementary range of experience that ensures no one director or viewpoint is dominant in the decision-making process.

The Code suggests that independent non-executive directors should make up at least half of the Board (excluding the Chairman). Throughout the period from 1 May 2015 to 30 April 2016, the Board considers that it complied with this Code requirement. The current position is that two thirds of the Board members (excluding the Chairman) are independent.

In determining the independence of non-executive directors, the Board considers a number of factors. In particular the Board satisfies itself on the following questions:

  • Does the director provide a robust and effective challenge to executive management?
  • Is the director prepared to challenge others’ beliefs, assumptions and viewpoints for the overall good of the Group and its shareholders?
  • Does the director effectively contribute to constructive debate by the Board and its Committees?
  • Is the director willing to defend his or her own beliefs and viewpoints for the overall good of the Group and its shareholders?
  • Does the director have a sufficiently sound and detailed knowledge of the Group’s business that enables him or her to effectively question strategy and executive management’s running of the business?

Sir Ewan Brown, one of the six independent Non-Executive Directors, has served on the Board since 1988 and is a non-executive director of Noble Grossart, which has from time to time provided advice to the Company. The Company recognises and understands investor concerns over longer-serving non-executive directors but continues to regard Sir Ewan Brown as independent. Sir Ewan Brown’s long association with the Group and the sound and detailed knowledge of the Group’s business that he has developed enables him to provide a robust and effective challenge to management. The Board believes that Sir Ewan Brown’s length of service enhances his effectiveness as a non-executive director and that he remains independent in character and judgement. Six of the nine members of the Board, excluding the Chairman, are considered by the Board to be independent. Even if Sir Ewan Brown is not treated as independent, the balance of the Executive and Non-Executive Directors complies with the recommendations of the Code.

In recognition of the factors suggested by the Code for determining independence, Sir Ewan Brown does not serve on the Remuneration Committee or the Audit Committee.

All Directors stand for election or re-election at each annual general meeting of the Company.