Aviva 2013 Annual Report Download - page 71

Strategic report Governance IFRS Financial statements Other information
Aviva plc
Annual report and accounts 2013
69
Directors’ and Corporate governance report continued
September and December 2013 respectively. Committee
membership is also regularly refreshed and a number of
changes have recently been implemented.
NEDs need to be able to present objective, rigorous and
constructive challenge to management, drawing on their wider
experiences to question assumptions and viewpoints and where
necessary defend a given position. The NEDs should also assist
management in the development of the Company’s strategy. To
be effective, a NED needs to acquire a sound understanding of
the industry and the Company so as to be able to evaluate
properly the information provided. All of the current directors
were subject to a formal performance evaluation. The Board,
having considered the matter carefully, is of the opinion that all
of the current NEDs are independent and free from any
relationship or circumstances that could affect, or appear to
affect, their independent judgement. Scott Wheway, who has
served on the Board for six years, was subject to a particularly
rigorous review of his independence. Accordingly, over half of
the Board members, excluding the Chairman, are independent
NEDs. Biographical details including a summary of the skills and
experience the directors bring to the Board are set out in the
Strategic report.
Each NED must be able to devote sufficient time to the role
in order to discharge his or her responsibilities effectively. On
average, the NEDs spend at least 41 days a year on Company
business, with the chairmen of the Audit, Risk, Governance and
Remuneration Committees spending substantially more. The
Chairman has recently been appointed as Chairman of
FirstGroup plc. The Nomination Committee reviewed the time
commitment required for the role and had no objection to the
Chairman taking up this appointment.
The Chairman and Group CEO
Role profiles are in place for the Chairman, John McFarlane and
the Group CEO, Mark Wilson, which clearly set out the duties of
each role. The Chairman’s priority is leadership of the Board and
ensuring its effectiveness; the Group CEO’s priority is the
management of the Group. The Board has delegated the day-
to-day running of the Group to the Group CEO within certain
limits, above which, matters must be escalated to the Board for
consideration and approval.
Senior Independent Director
Sir Adrian Montague became the Senior Independent Director
on 8 May 2013 when Richard Goeltz retired from the Board.
The role of a senior independent director is to provide a
sounding board for the Chairman, to serve as an intermediary
for the other directors where necessary and to be available to
shareholders should they have concerns that they have been
unable to resolve through normal channels, or when such
channels would be inappropriate. During the year, the NEDs,
led by Richard Goeltz and then Sir Adrian Montague, have met
several times without the Chairman present and Sir Adrian
Montague led the review of the Chairman’s performance during
the year.
Board activities during 2013
The work of the Board follows an agreed annual work plan and
principally falls under six main areas. The following chart shows
how the Board allocated its time during 2013.
Allocation of Board agenda time
6% Succession planning, Board composition
and effectiveness
25% Group strategy, business plans and performance
monitoring
19% Financial reporting and controls, capital structure
and dividend policy
12% Corporate governance
8% Group risk management policies, risk appetite
and framework
14% Transactions
16% Other
The Board monitored the performance of the Group and its
compliance with the governance framework described below
through regular:
 Group CEO reports, which included updates on the
implementation of the revised strategy and the new theses;
updates on ongoing corporate transactions and disposals;
reports on financial performance; changes in senior
management; regulatory developments; and the control
environment
 CFO reports, which included the financial results and
forecasts; reports on operational performance; competitor
results; the Group’s operational plan; treasury activities; and
progress against Solvency II
 Reports from the CRCO on the Group’s capital and liquidity
position; regulatory issues; risk appetite; and compliance
with business standards and controls
 Reports and recommendations from each Board committee
 Presentations from business units and functions
As part of its annual work plan, the Board reviewed and
approved all financial results announcements, the Annual report
and accounts, the operational plan and dividend payments, all
changes to the composition of the Board and its committees,
and received regular updates on progress against the strategy
and the transformation programme.
In addition, the Board undertook the following specific
activities during the year:
 Approved the disposal of the Group’s remaining holding in
Delta Lloyd N.V.
 Approved a proposal to reduce the complexity of the
Group’s corporate structure to give a greater degree of
direct control over subsidiaries
 Agreed a new strategy and the four strategic theses
 Agreed a new set of values and behaviours to support a
culture that will enable the Group to achieve the strategy
 Approved an early repayment of £300 million of the intra-
Group loan to reduce internal debt
 Approved the final terms of the disposal of the US Life
business
 Approved a new, sustainable dividend policy
 Approved the entering into of negotiations with Pt Astra
International Tbk to set up a joint venture life insurance
company in Indonesia
The Board held one meeting in Canada during the year to gain
a deeper understanding of the operations of the Canadian
business.
Board effectiveness
The effectiveness of the Board is vital to the success of the
Group and the Company undertakes a rigorous evaluation each
year in order to assess how well the Board, its committees, the
directors and the Chairman are performing. The aim is to
improve the effectiveness of the Board and its committees and
the Group’s overall performance. For the 2013 evaluation an