Aer Lingus 2009 Annual Report Download - page 33

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Directors’ Report Aer Lingus Group Plc – Annual Report 2009
The Minister for Transport of Ireland (acting through the Minister
for Finance of Ireland in his capacity as shareholder) and the ESOT
each have specific rights under the Company’s Articles of Association
in relation to the nomination and rotation of Directors. These rights
may not comply with the requirement under the Combined Code
that the Appointments Committee lead the process for Board
appointments and make recommendations to the Board regarding
Board appointments and the requirement under the Combined
Code that all Directors be submitted for re-election at regular
intervals. The Minister for Transport of Ireland is entitled to
nominate for appointment up to three Directors. The ESOT is
entitled to nominate for appointment up to two Directors. The
number of Directors eligible to be nominated by the Minister for
Transport of Ireland and the ESOT is dependent on the proportion
of the total issued ordinary share capital held by each of them
respectively. Up to 5 March 2009, the Minister for Transport of
Ireland nominated his full entitlement of three Directors (Mr Francis
Hackett, Dr Colin Hunt and Mr Chris Wall). Mr Chris Wall ceased
to be a Director on 5 March 2009 following the expiry of his
appointment as a “Minister’s Nominee”. Mr Leslie Buckley was
appointed as a “Minister’s Nominee” on 18 May 2009 and
throughout the remainder of the year there were three such
“Minister’s Nominees” (Mr Leslie Buckley, Mr Francis Hackett
and Dr Colin Hunt).
During 2009 the ESOT nominated its full entitlement of two
Directors (Mr David Begg and Mr Michael Johns) (the “ESOT
Nominees”). Further information is given in the biographies of
current Directors on pages 10 and 11 of the skills and experience
of the Minister’s Nominees and the ESOT Nominees.
Retirement and re-election
In accordance with the Articles of Association, one-third of the
Directors who are subject to retirement by rotation retire from office
at each AGM. All Directors, with the exception of those nominated by
the Minister for Transport of Ireland (acting through the Minister for
Finance of Ireland) or by the ESOT, are required to retire by rotation
every three years. All retiring Directors may offer themselves for re-
election. Directors nominated by the Minister for Transport of Ireland
or ESOT are not subject to these provisions in relation to retirement.
It is the Board’s policy to regularly review the chairmanship of its
committees. Appointments to committees are for a period of up to
three years, which may be extended for a further three-year period
provided the Director remains independent, or in the case of some
committees, a majority of the Directors on the committee remain
independent. A Director being a member of the same Board committee
for more than six years may be permitted only after review by the
Board. Recommendations to shareholders for the re-election of
non-executive Directors for terms beyond six years will be made
only after review by the Board.
Induction and development
New Directors are provided with extensive briefing materials on
the Company and its operations. An induction process is clearly
established and has been set out in writing and approved by Board.
There is in place a procedure under which Directors, in furtherance
of their duties, are able to take professional advice, if necessary, at
the Company’s expense.
The Company Secretary is responsible for ensuring that Board
procedures are followed and all Directors have access to his advice
and services. The Company Secretary ensures that the Board members
receive appropriate training as necessary. The Company Secretary is
responsible for advising the Board on all corporate governance matters.
The Company has an insurance policy in place which indemnifies the
Directors in respect of legal action taken against them in respect of
their reasonable actions as officers of the Company.
Meetings
The Board has a fixed schedule of meetings each year and may
meet more frequently as required. There were nine scheduled
Board meetings in the year. In addition there were four unscheduled
meetings and six conference call meetings. Therefore, there were a
total of nineteen Board Meetings held in 2009. Details of Directors’
attendance at these meetings is outlined in the table on page 35.
For regular Board meetings, the agenda will usually comprise reports
from the Chief Executive, Chief Financial Officer and executive
management. The practice is to have the agenda and supporting
papers circulated to the Directors seven days ahead of each meeting.
It is inevitable that there will be occasions when circumstances arise
to prevent Directors from attending meetings. In such circumstances,
it is practice for the absent Director to review the Board papers with
the Chairman and convey any views on specific issues. It should also
be noted that the time commitment expected of non-executive
Directors is not restricted to Board meetings. All of the Directors
are to be available for consultation on specific issues falling within
their particular fields of expertise. The Chairman and non-executive
Directors meet at least annually as a group without the executive
Directors present. In addition a further meeting each year consists
of the Senior Independent Director and the other non-executive
Directors, without the Chairman being present.