Aviva 2013 Annual Report Download - page 87

Strategic report Governance IFRS Financial statements Other information
Aviva plc
Annual report and accounts 2013
85
Directors’ and Corporate governance report continued
New York Stock Exchange listing requirements
The Company’s ordinary shares are admitted to the NYSE and are traded as American Depositary Shares. As a foreign company
listed on the NYSE, the Company is required to comply with the NYSE corporate governance rules to the extent that these rules
apply to foreign private issuers. As a foreign private issuer, the Company is therefore required to comply with NYSE Rule 303A.11
by making a disclosure of the differences between the Company’s corporate governance practices and NYSE corporate governance
rules applicable to US companies listed on NYSE. The Company complies with the UK Corporate Governance Code (Code) and
other relevant best practice principles and guidelines. The main differences between UK and US requirements are summarised
below together with Aviva’s approach to compliance:
NYSE Listin
g
Rules UK Corporate Governance Code Aviva approach
Independence criteria for directors
Independent directors must form the
majority of the board of directors. A director
cannot qualify as independent unless the
Board affirmatively determines that the
director has no material relationship with the
company. NYSE rules prescribe a list of
specific factors and tests that US – listed
companies must use for determining
independence.
At least half the Board, excluding the chairman,
should comprise independent non-executive
directors, as determined by the Board. The Code
sets out its own criteria that may be relevant to
the independence determination, but the Board is
permitted to conclude affirmative independence
notwithstanding the existence of relationships or
circumstances which may appear relevant to its
determination, so long as it states its reasons.
The majority of the Board comprises
independent non-executive directors who are
deemed independent under the Code and meet
the independence criteria in the NYSE rules.
Non-executive director meetings
Non-management directors of each listed
company must meet at regularly scheduled
executive sessions without management
and, if that group includes directors who are
not independent, listed companies should at
least once a year schedule an executive
session including only independent directors.
The chairman should hold meetings with the
non-executive directors without the executive
directors present.
The independent non-executive directors meet
without executive directors present at least
once annually.
Committees
US companies are required to have a
nominating/corporate governance
committee. In addition to identifying
individuals qualified to become Board
members, this committee must develop and
recommend to the Board a set of corporate
governance principles.
US companies are required to have a
compensation committee.
US companies are required to have an audit
committee and that one member must meet
the requirements to be an audit committee
financial expert. The audit committee should
also cover risk matters.
The Company is required to have a nomination
committee but not a corporate governance
committee.
The Company is required to have a remuneration
committee and under the Companies Act 2006 is
required to obtain shareholder approval of the
remuneration policy for executive directors.
The Company must have an audit committee and
at least one member must have recent and
relevant financial experience.
The Company has a Nomination Committee
and a Governance Committee. The Board as
a whole is ultimately responsible for the
corporate governance of the Group and
oversees this through reports to the Board
and its committees.
The Company has a Remuneration Committee
which covers all NYSE and Code requirements
and recommends the remuneration policy for
executive directors to the Board and
shareholders for approval.
The Company has an Audit Committee and at
least one member meets both the NYSE and
Code requirements on financial experience.
The Audit Committee does not review risk
management as this is covered by the Risk and
Governance Committees.
Code of business conduct and ethics
Companies are required to adopt and
disclose a code of business conduct and
ethics for directors, officers and employees,
and promptly disclose any waivers of the
code for directors or executive officers.
Not required under the Code. The Company has adopted a Business Ethics
Code to which all employees are bound and
a Code of Ethics for senior management, which
complies with the Sarbanes-Oxley Act of 2002.
Shareholder approval of equity-compensation plans
Shareholders must be given the opportunity
to vote on all equity-compensation plans and
‘material revisions’ to those plans, with
limited exceptions. Detailed definitions of
‘material revisions’ are provided by NYSE.
Shareholder approval is necessary for certain
equity-compensation plans and ‘significant
changes’ thereto, subject to certain exceptions.
The Code does not provide a detailed definition
or explanation of what are considered to be
‘significant changes’.
All new equity-compensation plans or
amendments to existing plans that are required
to be approved by shareholders under the Code
are put to shareholders for approval.
By order of the Board
John McFarlane
Chairman
5 March 2014