Aer Lingus 2010 Annual Report Download - page 30

28 Directors’ Report Aer Lingus Group Plc – Annual Report 2010
Other matters reserved to the Board include treasury policy; internal
control, audit and risk management; remuneration of the non-executive
Directors; 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 is committed to a policy of refreshment and renewal in
relation to the Board of Directors. During 2010, three new Directors
were appointed to the Board (Mr Montie Brewer, Ms Nicola Shaw and Mr
Andrew Macfarlane) and two Directors retired (Ms Anne Mills and Mr Ivor
Fitzpatrick). Since 31 December 2010, one new Director has been
appointed to the Board (Ms Mella Frewen). In addition Mr David Begg
was appointed to the Board on 28 January 2011 following the expiry of
his term of appointment as a director nominated by Aer Lingus ESOP
Trustees Limited (“ESOT”). Mr Michael Johns also retired from the Board
as an ESOT nominated Director on 28 February 2011. The Appointments
Committee of the Board undertook a process involving other members of
the Board and an external consultancy for the Board appointments made
in 2010 and the appointment of Ms Mella Frewen in 2011.
The Board currently comprises fi fteen Directors – two executive
(Christoph Mueller, Chief Executive Offi cer and Andrew Macfarlane, Chief
Financial Offi cer) and thirteen non-executive (including the Chairman).
Detailed biographies of current Directors are set out on page 16.
During 2010, of the non-executive Directors, Mr Montie Brewer,
Mr Thomas Corcoran, Mr Laurence Crowley, Mr Ivor Fitzpatrick, Ms
Danuta Gray, Ms Anne Mills, Mr Thomas Moran and Ms Nicola Shaw
were considered to be independent by the Board. During the entirety
of 2010, at least half the Board, excluding the Chairman comprised
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, Ms Mella Frewen,
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 requirement
in the 2010 UK Corporate Governance Code.
The Board considers that a Board comprising fourteen Directors is not
so large as to be unwieldy and that between them the Directors bring
the breadth and depth of skills, knowledge and experience that are
required to lead the Group. The Board also considers that the Directors
have suffi cient time to discharge their responsibilities.
Chairman
Mr Colm Barrington was appointed as Chairman on 3 October 2008.
The Chairman was determined by the Board to be independent on his
appointment to the Board. 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 2010, the
roles of Chairman and Chief Executive were independent of each other.
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. The Chairman encourages openness
and debate at Board meetings. The Chairman 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)
since 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 Offi cer.
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 refl ect the form
recommended by both the 2008 FRC Combined Code on Corporate
Governance and the 2010 UK Corporate Governance Code. Subject to the
requirement for annual election for all Directors as required by the 2010
UK Corporate Governance Code, which will apply at the annual general
meeting to be held in 2012, it is the Company’s policy that each
non-executive Director will be appointed for a fi xed 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. Recommendation to shareholders
Directors’ Report (continued)