Aer Lingus 2011 Annual Report Download - page 38

Annual Report 2011
36
DIRECTORS’ REPORT Aer Lingus Group Plc
Directors’ Report (continued)
2011, the Minister for Transport of Ireland nominated his full
entitlement of three Directors (Mr Francis Hackett, Dr Colin Hunt and
Mr Leslie Buckley).
Retirement and re-election
Under the Articles of Association, one-third of the Directors who are
subject to retirement by rotation retire from office at each AGM.
However in compliance with the UK Corporate Governance Code, all
Directors, with the exception of those nominated by the Minister for
Transport of Ireland (acting through the Minister for Finance of
Ireland), will retire by rotation at the forthcoming AGM and following
review are being recommended for re-election. Directors nominated
by the Minister for Transport of Ireland 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 a further three-year period
provided the Director is re-elected by shareholders and remains
independent, or in the case of some committees, a majority of the
Directors on the committee remain independent. A Director being a
member of the same Board committee for more than six years may be
permitted only after review by the Board. Recommendations to
shareholders for the re-election of non-executive Directors for terms
beyond six years will be made only after review by the Board.
Induction and development
New Directors are comprehensively briefed on the Company and its
operations, including the provision of extensive induction materials on
appointment. An induction process is clearly established and has been
set out in writing and approved by Board. In addition, to aid their
ongoing development and understanding of the business, Directors
engage with the executive and senior management teams on a
continuing basis.
Aprocedure is in place under which Directors, in furtherance of their
duties, are able to take professional advice, if necessary, at the
Company’s expense.
The Company Secretary is responsible for ensuring that Board
procedures are followed and all Directors have access to his advice
and services. The Company Secretary ensures that the Board members
receive appropriate training as necessary. The Company Secretary is
responsible for advising the Board on all corporate governance matters.
The Company has an insurance policy in place which insures the
Directors in respect of legal action taken against them in respect of
their reasonable actions as officers of the Company.
Meetings
The Board has a fixed schedule of meetings each year and may meet
more frequently as required. There were 9 scheduled Board meetings
in 2011. In addition there were 2 conference call meetings which were
not pre-scheduled and were convened at short notice. Therefore, there
were a total of 11 Board Meetings held in 2011. Details of Directors’
attendance at these meetings is outlined in the table on page 42. In
line with best practice guidelines, all directors attended in excess of
75% of the pre-scheduled Board meetings in 2011.
For regular Board meetings, the agenda will usually comprise of reports
from the Chief Executive Officer, Chief Financial Officer and executive
management. The practice is to have the agenda and supporting
papers circulated to the Directors seven days ahead of each meeting. It
is inevitable that there will be occasions when circumstances arise to
prevent Directors from attending meetings. In such circumstances, it is
practice for the absent Director to review the Board papers with the
Chairman and convey any views on specific issues. It should also be
noted that the time commitment expected of non-executive Directors
is not restricted to Board meetings. All of the Directors are to be
available for consultation on specific issues falling within their
particular fields of expertise. The Chairman and non-executive
Directors meet at least annually as a group without the executive
Directors present. In addition a further meeting each year consists of
the Senior Independent Director and the other non-executive
Directors, without the Chairman being present.
Performance evaluation
The Board and its committees undertake an annual evaluation of their
performance of how well they are functioning as an effective board
applying best principles of governance, whether each director
continues to contribute effectively and demonstrate commitment to
the role and to identify areas for development. The Chairman’s
performance is evaluated by the Senior Independent Director and the
non-executive Directors at least once a year. In addition to being
evaluated by the Chairman, the Directors are also obliged to assess
their own performance.
In 2011 the performance evaluation was externally facilitated. The
external consultants appointed to undertake the external evaluation are
independent and have no connection with the Company or any of the
Directors. It ran over approximately a three month period and involved
external consultants firstly meeting each of the Directors in person for
an hour long interview with a view to identifying any required areas of
focus for the evaluation. Members of executive management also met
with the consultants as part of this process. Thereafter questionnaires
were sent to each Director for completion. Following the completion
of the questionnaires, further meetings (some of which were
conducted by telephone) took place between the consultants and the