Holiday Inn 2012 Annual Report Download - page 56

Board performance evaluation
IHG has always recognised the importance of evaluating the
performance of the Board, its main Committees and its Directors.
Accordingly, an independent external facilitator assists in the
performance evaluation.
2012 Board performance evaluation process
The 2012 evaluation of the Board and its Committees was conducted
with external assistance in accordance with the guidance in the Code. The
Board performance evaluation was conducted with Lintstock Limited,
an independent facilitator, who has no other connection with IHG.
The Board performance evaluation questionnaires covered a variety
of topics including:
• Board composition, succession planning and dynamics;
Individual Director performance evaluations
The performance evaluations of members of the Board are carried
out by the following individuals:
Director being appraised Appraisee
Chairman All Directors complete the externally
produced questionnaire. The results are
then reviewed by the Senior Independent
Director and Non-Executive Directors
excluding the Chairman.
Chief Executive Chairman and all Non-Executive
Directors meet to discuss performance.
Executive Directors Chief Executive.
Non-Executive
Directors
Chairman.
Accountability
Internal controls and risk management
The Board has ultimate responsibility for ensuring that business
risks are effectively managed. The Board has considered and
approved the risk management policy and has delegated regular
review of the risk management procedures to the Audit Committee.
The review was carried out through a monitoring process, which
accords with the Code and the Turnbull Guidance.
• Board advisors, Board papers and effectiveness
of the Committees;
• Board expertise and how the Board spends its time;
• the Board’s strategic and operational oversight;
• input into risk management and internal controls; and
• investor and stakeholder relationships.
2012 Board performance evaluation results
The results of the questionnaires were collated and presented to the
Board for discussion at its meeting in February 2013. The feedback
confirmed that the Board and each of its Committees continue to
operate effectively and that each Director continues to make an
effective contribution and retains a strong commitment to the role.
Day-to-day management of business risks is the responsibility of
the Executive Committee. These are managed through established
processes which monitor:
• strategic plan achievement, through a comprehensive series of
Group and regional strategic reviews;
• financial performance, within a comprehensive financial planning
and accounting framework;
• capital investment performance, with detailed appraisal and
authorisation processes; and
• risk management processes relying upon a dynamic risk
assessment and assurance mapping process (through reports
from the Head of Global Risk Management, the Head of Global
Internal Audit, and, as appropriate, from management) providing
assurance that the significant risks faced by the Group are being
identified, assessed, prioritised, evaluated and appropriately
managed and mitigated, having regard to the balance of risk,
cost and opportunity.
In addition, the Audit Committee reviews:
• regular reports from management, Global Risk Management,
Global Internal Audit and the external auditors on the
effectiveness of systems for internal controls, financial reporting
and risk management;
• the timeliness and effectiveness of corrective action taken by
management; and
• material financial and non-financial risks.
2012 and 2011 Board performance evaluation outcomes and action plan
2012 2011
Observations Action taken/to be taken Observations Actions taken
Deepen the Board’s focus on
the Group’s strategy.
Retain focus on strategy with
particular attention on the
external environment.
Improve meeting processes to
enable more time for wider
Board discussion.
Board agendas are regularly
reviewed to ensure sufficient
time for Board discussion.
Ensure the smooth integration
of the new Chairman.
A tailored induction has
been completed with
ongoing support.
Allot adequate time on agendas
to review the effectiveness of
past decisions.
Board agendas are assessed
to ensure adequate time is
allocated to all matters.
Continue to improve the
meeting process including
senior management
presentations and papers
to the Board.
Senior management to review
the optimum level of detail in
presentations and papers.
Continue to encourage
discussion on key strategic
issues facing the Group.
Facilitation of discussions
on key strategic issues has
been addressed.
Consider growth opportunities
for the Group.
Continue to review growth
opportunities for the Group.
Build upon and improve
oversight of the main risks
affecting the Group.
Provision of additional
materials as necessary to the
Board and increased discussion
at Board meetings.
Governance: Corporate governance continued
54 IHG Annual Report and Financial Statements 2012