Aer Lingus 2008 Annual Report Download - page 29

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AER LINGUS GROUP PLC - ANNUAL REPORT 2008
As at the date of this report, of the non-executive Directors,
Mr Ivor Fitzpatrick, Ms Danuta Gray, Ms Anne Mills, Mr Thomas
Moran, Mr Thomas Corcoran and Mr Laurence Crowley are
considered to be independent by the Board. Therefore, as at
the date of this report, at least half the Board excluding the
Chairman, is comprised of non-executive Directors determined
by the Board to be independent. It is the Company’s intention to
review the composition of the Board to endeavour to continue
comply with this Combined Code requirement.
The Board considers that between them the Directors bring the
range of skills, knowledge and experience necessary to lead the
Group.
Chairman
Mr John Sharman was Chairman of the Group from July
2004 until his resignation on 3 October 2008, when Mr Colm
Barrington was appointed as Chairman. The Chairman is
responsible for the effective working of the Board and the Chief
Executive is responsible for running the business of Aer Lingus
Group plc. The division of responsibilities between the Chairman
and the Chief Executive is clearly established and has been set
out in writing and approved by the Board. Throughout 2008,
the roles of Chairman and Chief Executive were independent
of each other. Mr Dermot Mannion resigned from the role of
Chief Executive and from the Board on 6 April 2009. Mr Colm
Barrington has assumed executive responsibility for an interim
period until the appointment of a new Chief Executive.
The Chairman and the Company Secretary work closely
together in planning a forward programme of Board meetings
and establishing their agendas. As part of this process the
Chairman ensures that the Board is supplied in a timely
manner with information in a form and of a quality to enable
it to discharge its duties. Mr Sharman held a number of other
directorships and the Board considered that these did not
interfere with the discharge of his duties to Aer Lingus. Mr
Barrington holds a number of other directorships and the Board
considers that these do not interfere with the discharge of his
duties to Aer Lingus.
Senior Independent Director
Mr Sean FitzPatrick was the Senior Independent Director (SID)
until his resignation on 19 December 2008. As at the date of this
report, Mr Laurence Crowley is the SID. The role of the SID is
clearly established and has been set out in writing and approved
by the Board. The SID is available to all shareholders who have
concerns that cannot be addressed through the normal channels
of Chairman, Chief Executive or Chief Financial Officer.
Terms of Appointment
All Board members have a service contract or letter of
appointment with the Company. All service contracts with
executive Directors have notice periods of 12 months or less.
The terms upon which each of the non-executive Directors
has been appointed are set out in letters of appointment which
reflect the form recommended by the 2006 FRC Combined
Code. It is the Company’s policy that each non-executive
Director will be appointed for a fixed period not exceeding
three years (with the potential for a second three year term),
subject to satisfactory performance and re-election at any
annual general meeting where this is required. None of the
non-executive Directors is a party to any service contract
with the Company that provides for benefits upon termination.
The Minister for Transport of Ireland (acting through the
Minister for Finance of Ireland in his capacity as shareholder)
and the ESOT each have specific rights under the Company’s
Articles of Association in relation to the nomination and
rotation of Directors. These rights may not comply with the
requirement under the Combined Code that the Appointments
Committee lead the process for Board appointments and make
recommendations to the Board regarding Board appointments
and the requirement under the Combined Code that all
Directors be submitted for re-election at regular intervals. The
Minister for Transport of Ireland is entitled to nominate for
appointment up to three Directors. The ESOT is entitled to
nominate for appointment up to two Directors. The number of
Directors eligible to be nominated by the Minister for Transport
of Ireland and the ESOT is dependent on the proportion of
the total issued ordinary share capital held by each of them
respectively. During 2008, the Minister for Transport of Ireland
nominated his full entitlement of three Directors (Mr Francis
Hackett, Mr Chris Wall and Dr Colin Hunt). Mr Chris Wall ceased
to be a Director on 5 March 2009 following the expiry of his
appointment as a “Minister’s Nominee”.
During 2008, the ESOT nominated its full entitlement of two
Directors (Mr Michael Johns and Mr David Begg).
Retirement and Re-election
In accordance with the Articles of Association, one-third of
the Directors who are subject to retirement by rotation retire
from office at each AGM. All Directors, with the exception
of those nominated by the Minister for Transport of Ireland
(acting through the Minister for Finance of Ireland) or by the
ESOT, are required to retire by rotation every three years. All
retiring Directors may offer themselves for re-election. Directors
nominated by the Minister for Transport of Ireland or ESOT are
not subject to these provisions in relation to retirement.
It is the Board’s policy to regularly review the chairmanship
of its committees. Appointments to committees are for a
period of up to three years, which may be extended for up to
two further three-year periods provided the Director remains
independent, or in the case of some committees, a majority of
the Directors on the committee remain independent. As such,
the Board does not consider that a Director should not be a