Aviva 2005 Annual Report Download - page 57

Governance
Aviva plc 2005
In accordance with the Company’s Articles of Association, directors
appointed during the year by the Board are required to retire at the
first Annual General Meeting following their appointment and
stand for election by shareholders. On 14 January 2005 Lord
Sharman was appointed as an independent non-executive director
of the Company. He retired at the 2005 Annual General Meeting
and was subsequently elected by the shareholders. On 1 October
2005, Mary Francis was appointed by the Board as an independent
non-executive director. Mrs Francis will retire at the forthcoming
Annual General Meeting and, being eligible, will offer herself for
election by shareholders. Mrs Francis does not have a service
contract with a Group company.
The Company’s Articles of Association require one-third of the
directors to retire by rotation each year. At the forthcoming Annual
General Meeting Richard Harvey, Carole Piwnica, Philip Scott and
Patrick Snowball will retire and, being eligible, will offer themselves
for re-election. Richard Harvey, Philip Scott and Patrick Snowball
are executive directors and each has a service contract with a
Group company, details of which can be found on page 69.
Independent non-executive directors Derek Stevens and André
Villeneuve were re-elected by shareholders at last year’s Annual
General Meeting. Both these directors have now served on the
Board for more than nine years and therefore will retire and seek
re-election again at this year’s meeting. However, subject to being
re-elected, it is intended that these directors will retire on or before
31 December 2006 in line with the Board’s plans to renew and
refresh its composition.
Pehr Gyllenhammar, the chairman of the Board since 1998, retired
on 31 December 2005 and was succeeded as chairman by Lord
Sharman on 1 January 2006. George Paul and Elizabeth Vallance,
both independent non-executive directors, also retired from
the Board on 31 December 2005 in line with the Company’s
succession plans.
Directors’ interests and indemnity arrangements
At no time during the year did any director hold a material interest
in any contract of significance with the Company or any of its
subsidiary undertakings other than a third party indemnity provision
between each director and the Company and service contracts
between each executive director and a Group company.
The Company has purchased and maintained throughout the year
directors’ and officers’ liability insurance in respect of itself and its
directors. The directors also have the benefit of the indemnity
provision contained in the Company’s articles of association.
The Company has executed deeds of indemnity for the benefit
of each director of the Company, and each person who was a
director of the Company during the year, in respect of liabilities
which may attach to them in their capacity as directors of the
Company or of associated companies. These provisions, which are
qualifying third party indemnity provisions as defined by s.309B of
the Companies Act 1985, were in force throughout the year and
are currently in force.
Details of directors’ remuneration, service contracts and interests
in the shares of the Company are set out in the Directors’
Remuneration Report on pages 65 to 74.
Substantial shareholdings
The Company’s register of substantial shareholdings is maintained in
accordance with the provisions of s. 211 of the Companies Act
1985. At 1 March 2006, the register showed that the holdings
exceeding the 3% disclosure threshold were those of Barclays Plc
which held 109,751,163 ordinary shares (4.57%) and Legal &
General Group Plc which held 81,072,340 ordinary shares (3.38%)
of the issued ordinary share capital of the Company.
Financial instruments
Group companies use financial instruments to manage certain types
of risks including those relating to credit, foreign currency exchange,
cash flow, liquidity, interest rates, equity and property prices. Details
of the objectives and management of these instruments are
contained in the Business Review on pages 16 to 49 and an
indication of the exposure of the Group companies to such risks is
contained in note 51 to the accounts on page 188.
Health and safety
The health and safety of staff is a priority and is reviewed at regular
intervals. Each business within the Group has an appointed health
and safety representative, whose role is to bring to the attention of
senior management any areas of concern that should be addressed
within the health and safety programme.
Information on health and safety matters is communicated to staff
through the normal communication channels. Under the Group’s
Health and Safety Policy the Group Chief Executive is accountable
for health and safety.
Charitable donations
Aviva has continued to support community initiatives and charitable
causes worldwide and the total Group commitment during the
year, as measured in accordance with Business in the Community’s
PerCent Standard, was over £5.7 million (2004: £4.6 million).
In 2005, the Group’s community investment in the United Kingdom
totalled £3.9 million (2004: £3.4 million) of which £1.7 million
(2004: £1.3 million) was given in the form of donations to
charitable organisations. The Company allocates a part of its budget
to matching contributions raised by staff and to providing financial
support to charities and communities where members of staff give
a personal commitment in terms of their time. In addition, the
Company provides a significant level of support to a small number
of national charities. During 2005, the Company continued its
commitment to Breakthrough Breast Cancer, Wheelpower
(the British wheelchair sports association) and The Princess Royal
Trust for Carers. In addition, the Group supported the Make A Wish
Foundation UK, which was chosen by staff in the United Kingdom
as their “charity of the year”, and NCH (the children’s charity).
The Group and its staff worldwide made substantial donations
to the Asian Tsunami appeal in 2005.
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