Holiday Inn 2015 Annual Report Download - page 62

Corporate Governance continued
Board eectiveness evaluation
IHG has always recognised the importance of evaluating the
performance of the Board as a whole, its main Committees and
its Directors, in line with the Code recommendations. The objective
of these evaluations is to create a truly effective Board that is not
only fit for purpose but that adds real value to the Group.
Progress against our 2014 evaluation
In 2014, we conducted an internal evaluation as detailed in our
2014 Annual Report. Our progress in 2015 against the actions
identified is set out below.
Our 2015 evaluation process
Our 2015 evaluation was also conducted internally, with support
from an independent external facilitator with no connection to IHG.
Each member of the Board was invited to complete an effectiveness
questionnaire, which centred both on the progress against actions
identified in our 2014 Board effectiveness evaluation, and questions
on other topics to draw out additional suggestions and comments.
Key areas included Board working processes, the Board’s areas of
focus and engagement, and Board dynamics. It also invited Directors
to make other general or specific observations. The results were
analysed and the report was presented for discussion at the Board’s
February 2016 meeting.
Internal performance evaluations of Directors were also undertaken,
as follows.
Director
being appraised Appraiser
Chairman Non-Executive Directors excluding the Chairman and
facilitated by the Senior Independent Non-Executive Director
Chief Executive Officer Chairman and all Non-Executive Directors
Executive Directors Chief Executive Officer
Non-Executive Directors Chairman
Outcome
The evaluation confirmed that the Board and its Committees were
operating effectively and that each Director continues to bring relevant
knowledge, diversity of perspective, an ability and willingness to
challenge, and a strong commitment to the role.
2014 and 2015 Board effectiveness evaluations
2014 observations Action taken during 2015 2015 observations Recommendations for 2016
Increase the Board’s focus on brands. Deep dives into the strategy for the Holiday Inn,
Holiday Inn Express, InterContinental and
Crowne Plaza brands provided.
Much improved. The Board would
still benefit from a regular review
of the progress of each brand against
its strategy.
Provide regular updates on each brand,
setting out plans and key initiatives for
the year across the globe and by region,
and the progress made.
Enhance the Board’s understanding
of competitors’ strategy and
performance.
Presentations on competitors’ strategies
and offerings provided. Competitive analysis
included in both financial results and
strategic reviews.
Very clear mapping and assessment.
Enhanced analysis in 2015 has achieved
greater understanding of relative financial
and operational performance.
As a result of the progress made in 2015,
no further enhancements to our current
practice are suggested.
Increase the Board’s exposure
to the Group’s US business.
Meetings with the Chief Executive Officer for
The Americas, with a focus on our franchise
operations and our strategy for the progress
of the EVEN Hotels brand.
Although the presentations provided
have been helpful, more frequent focus on
our US business and strategy is requested.
There is a concern that there has been
a lack of progress in relation to the
Kimpton integration.
Provide regular updates on The Americas
in relation to operational delivery,
performance by brand, and the Kimpton
integration, as well as a full review at the
June Board meeting.
n/a n/a Increase the Board’s understanding
of consumer trends and behaviour.
Provide the Board with industry reports
and consumer trends on a global and a
regional basis.
Board meetings
members and other senior management present deep dives on each
region and function throughout the year.
In addition to the routine financial and operating reports and updates
that the Board considers, substantial time is also spent considering
Group strategy, performance and oversight, including a dedicated
annual strategy meeting, which is a minimum two-day event each year.
The Board held eight scheduled meetings during the year, and individual
attendance is set out on page 54. Sufficient time is provided at the start
and end of each meeting for the Chairman to meet privately with the
Senior Independent Non-Executive Director and Non-Executive
Directors to discuss any matters arising.
So that the Board makes the best possible use of its time at meetings,
all Directors are provided with detailed briefing papers (available
electronically) generally at least one week in advance of every meeting
to ensure that discussions are focused and relevant.
The role of the Board
The Board leads the Group’s strategic direction and long-term
objectives and monitors Group performance, and risk and internal
management controls, through effective oversight and review.
There are a number of key decisions and matters that are reserved
for the Board’s approval and these include matters relating to Group
business and commercial strategy; significant investment proposals;
maintenance of oversight and control of the Group’s operating and
financial performance; monitoring the Group’s overall systems of
internal controls; risk management and appetite; and governance
and compliance.
As part of general monitoring and oversight of Group performance
and compliance within the governance framework, certain matters
are routinely considered and addressed at Board meetings. Meetings
begin with an update from the Chairman and Chief Executive Officer
and include finance updates from the Chief Financial Officer (which
include a financial review of the Group). Executive Committee
60 IHG Annual Report and Form 20-F 2015