Operation of the Board
The Board generally meets six times each year. Additional meetings of the Board are held to consider matters arising between scheduled Board meetings, where a decision of the Board is required prior to the next scheduled meeting.
In addition to the formal meetings of the Board and its Committees, the Directors are in more frequent but less formal contact with each other and with the Group’s management on a range of matters. The Chairman and the Non-Executive Directors periodically meet without the Executive Directors being present. In addition, the Non-Executive Directors, led by the Deputy Chairman, meet without the Chairman at least annually.
All the Directors meet regularly with other senior management and staff of the Group, have access to confidential advice from the Company Secretary and may take independent legal or other professional advice at the Group’s expense where it is considered necessary for the proper discharge of their duties as directors. The Company Secretary, whose appointment and removal is a matter for the Board as a whole, is responsible to the Board for ensuring the Board procedures are complied with.
Each director receives induction training on appointment and subsequently such training, briefings and site visits as are considered necessary to keep abreast of matters affecting their roles as directors. The Chairman reviews the Directors’ training and development needs in conjunction with the Company Secretary. Training can encompass health, safety, environmental, social and governance matters.
The number of full Board meetings during the year was six. The full Board typically meets once a year at an operational location. Regular communication is maintained by the Chairman with other directors between meetings to ensure all directors are well informed on strategic and operational issues. The Board met in Washington DC in October 2015, giving the Board the opportunity to inspect the facilities at the Group’s operations in the city and to meet the local management team. The February 2016 Board meeting was held at York railway station and the Board received briefings on the Virgin Trains East Coast operations and received presentations from members of the Group’s talent programme. In November 2015, the Health, Safety and Environmental Committee visited the Group’s South West Trains rail operations and was briefed on operational challenges, particularly from overcrowding and station layouts, and the management team’s responses to those challenges.
The Board has a number of matters reserved for its consideration, with principal responsibilities being to agree the overall strategy and investment policy, to approve major capital expenditure, to monitor performance and risk management procedures of senior management, to ensure that there are proper internal controls in place and to consider major acquisitions or disposals.
The Directors have full and timely access to information with Board papers distributed in advance of meetings. Notable matters that the Board considered during the year ended 30 April 2016 included:
- Refinancing of the Group’s £400m bonds
- Discussion of rail franchise bids, including the Transpennine Express franchise, a proposed joint bid with Abellio for the Greater Anglia franchise and the decision not to proceed with an equity participation in the Greater Anglia bid
- Development of megabus.com services in mainland Europe, including the expansion of the business in France and Italy, and the subsequent sale of the European retail business to FlixBus
- Group strategy and development opportunities
- Political and regulatory developments and potential developments, including the Quality Contract proposals in North East England and proposed devolution of transport regulatory powers to regional authorities
- Challenges to rail franchise operators from open access bids
- Negotiation of a direct award of the South West Trains franchise and the decision not to proceed with the award on the terms proposed
- Agreement of terms of a new East Midlands Trains franchise
- The management response to slowing rates of revenue growth in the UK Bus (regional operations) Division and the UK Rail Division
- Progress on digital and technology matters, including the management of information security
- Divisional management and board succession planning
The Board keeps the roles and contribution made by each director under review and changes in responsibilities are made where necessary to improve the Board’s effectiveness. To provide a more manageable process and better control, certain of the Board’s powers have been delegated to committees. Minutes are taken of each meeting of the Board and its Committees. Where any director has significant concerns that cannot be resolved about the running of the Group or a proposed action, these concerns are recorded in the minutes. It is also the Group’s policy that where a director resigns, the director is asked to provide a written statement to the Chairman of any concerns leading to his or her resignation.