Aer Lingus 2009 Annual Report Download - page 32

0 Directors’ Report Aer Lingus Group Plc – Annual Report 2009
Board of Directors
Role
The duties of the Board and its committees are set out clearly in
formal terms of reference which are reviewed regularly and state
the items specifically reserved for decision by the Board.
The Board is responsible for the leadership and control of the
Company. There are matters formally reserved to the Board for
consideration and decision. The Board is responsible for establishing
overall group strategy. It approves the Group’s commercial strategy
and the operating budget and monitors performance through the
receipt of monthly operating information and financial statements.
The approval of acquisitions is also a matter reserved for the Board.
Similarly, there are authority levels covering capital expenditure
which can be exercised by the Chief Executive or by the Chairman
and Chief Executive jointly. Beyond these levels of authority, projects
are referred to the Board for approval.
Other matters reserved to the Board include treasury policy;
internal control, audit and risk management; pension schemes;
corporate social responsibility and the appointment or removal
of the Company Secretary.
The Board has delegated responsibility for the management of the
Company, through the Chief Executive, to executive management.
The Board also delegates some of its responsibilities to Board
Committees, details of which are set out below.
Membership
The Board currently comprises fourteen Directors – one
executive (Christoph Mueller, Chief Executive Officer) and thirteen
non-executive (including the Chairman). Biographies of current
Directors are set out on pages 10 and 11.
During 2009, of the non-executive Directors, Mr Thomas Corcoran,
Mr Laurence Crowley, Mr Ivor Fitzpatrick, Ms Danuta Gray, Ms Anne
Mills and Mr Thomas Moran were considered to be independent by
the Board. Following changes in the composition of the Board, at
times during 2009, at least half the Board, excluding the Chairman
did not comprise non-executive Directors determined by the Board
to be independent.
As at the date of this report, of the non-executive Directors, Mr
Montie Brewer, Mr Thomas Corcoran, Mr Laurence Crowley, Mr Ivor
Fitzpatrick, Ms Danuta Gray, Mr Thomas Moran and Ms Nicola Shaw
are considered to be independent by the Board. Therefore, as at the
date of this report, at least half the Board excluding the Chairman, is
comprised of non-executive Directors determined by the Board to be
independent. It is the Company’s intention to continue to review the
composition of the Board to endeavour to continue to comply with
this Combined Code requirement.
The Board considers that between them the Directors bring the range
of skills, knowledge and experience necessary to lead the Group.
Chairman
Mr Colm Barrington was appointed as Chairman on 3 October 2008.
The Chairman is responsible for the effective working of the Board
and the Chief Executive is responsible for running the business of
Aer Lingus Group plc. The division of responsibilities between the
Chairman and the Chief Executive is clearly established and has been
set out in writing and approved by the Board. Throughout 2009,
the roles of Chairman and Chief Executive were independent of
each other. Mr Barrington assumed executive responsibility for
an interim period in 2009 following the resignation of the previous
Chief Executive and until the appointment of Mr Christoph Mueller
as Chief Executive.
The Chairman and the Company Secretary work closely together in
planning a forward programme of Board meetings and establishing
their agendas. As part of this process the Chairman ensures that the
Board is supplied in a timely manner with information in a form and
of a quality to enable it to discharge its duties. Mr Barrington holds
a number of other directorships and the Board considers that these
do not interfere with the discharge of his duties to Aer Lingus.
Senior Independent Director
Mr Laurence Crowley has been the Senior Independent Director
(SID) from his appointment on 9 January 2009. The role of the SID is
clearly established and has been set out in writing and approved by
the Board. The SID is available to all shareholders who have concerns
that cannot be addressed through the normal channels of Chairman,
Chief Executive or Chief Financial Officer.
Terms of appointment
All Board members have a service contract or letter of appointment
with the Company. All service contracts with executive Directors
have notice periods of 12 months or less.
The terms upon which each of the non-executive Directors has been
appointed are set out in letters of appointment which reflect the form
recommended by the 2008 FRC Combined Code. It is the Company’s
policy that each non-executive Director will be appointed for a fixed
period not exceeding three years (with the potential for a second
three year term), subject to satisfactory performance and re-election
at any annual general meeting where this is required. Recommendations
to shareholders for the re-election of non-executive Directors beyond
six years will be made only after review by the Board. None of the
non-executive Directors is a party to any service contract with the
Company that provides for compensation upon termination.
Directors’ Report [continued]