Aer Lingus 2010 Annual Report Download - page 32

30 Directors’ Report Aer Lingus Group Plc – Annual Report 2010
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.
Performance evaluation
The Board and its committees undertake an annual evaluation of their
performance of how well they are functioning as an effective board
applying best principles of governance, whether each director continues
to contribute effectively and demonstrate commitment to the role and to
identify areas for development. The Chairman’s performance is evaluated
by the Senior Independent Director and the non-executive Directors at
least once a year. In addition to being evaluated by the Chairman, the
Directors are also obliged to assess their own performance.
Remuneration
Details of Directors’ remuneration is set out in the Report of the
Remuneration Committee on Directors’ Remuneration on pages 37 to 41.
Share ownership and dealing
Details of the shares held by Directors are set out in Table 2.2 on page
41. The Company has a policy on dealing in shares that applies to all
Directors and senior management. Under the policy, Directors are required
to obtain clearance from the Chairman before dealing in company shares.
Directors and senior management are prohibited from dealing in company
shares during designated prohibited periods and at any time which the
individual is in possession of price-sensitive information.
Board committees
The Board has established fi ve permanent committees to assist in the
execution of its responsibilities. These are the Audit Committee, the
Remuneration Committee, the Appointments Committee, the Safety
Committee and the Risk Committee. Ad hoc committees are established
from time to time to deal with specifi c matters. Terms of reference for
each of the permanent committees have been documented and approved
by the Board. Copies are available on request from the Company Secretary.
All Chairmen of the committees attend the Company’s AGM and are
available to answer questions from the shareholders.
Audit Committee
The Board has established an Audit Committee consisting of at
least three non-executive Directors considered by the Board to be
independent. Until June 2010 the Audit Committee consisted of Mr Ivor
Fitzpatrick (Chairman), Mr Laurence Crowley and Ms Danuta Gray.
In June 2010, Ms Nicola Shaw was appointed as a member of the
Committee. Upon Mr Fitzpatrick’s retirement on 31 December 2010,
Mr Crowley assumed the chairmanship of the Committee. Mr Crowley
is a Chartered Accountant and is the Committee’s fi nancial expert. In
addition the other members of the Committee have recent and relevant
fi nancial experience. The Audit Committee met nine times during the
year. Attendance at meetings held is set out in the table on page 34.
The main role and responsibilities of the Audit Committee are set out
in written terms of reference, which encompass those set out in the
Combined Code on Corporate Governance Code (June 2008), and
Statutory Instrument 220/2010 European Communities (Statutory
Audits) (Directive 2006/43/EC) Regulations 2010, including:
a. to monitor the statutory audit of the annual and consolidated
accounts and the financial reporting process
b. to monitor the integrity of the financial statements of the Company
and any formal announcements relating to the Company’s financial
performance and reviewing significant financial judgments
contained therein;
c. to review and monitor the effectiveness of the Company’s internal
financial controls and its systems of internal controls, internal audit
and risk management systems (the review of internal financial
control and risk management systems has been delegated to the
Risk Committee to complete. The Risk Committee reports to the
Audit Committee and the Board in this regard);
d. to monitor and review the results of the Company’s internal audit
function and the annual internal audit plan;
e. to make recommendations to the Board in relation to the
appointment, re-appointment and removal of the external auditors
and to approve the terms of engagement of the external auditors;
f. to monitor and review the external auditors’ independence and
objectivity (in particular the provision of additional services to the
audited entity) and the effectiveness of the audit process taking
into consideration relevant professional and regulatory requirements;
g. to develop and implement policy on the engagement of the external
auditors to supply non-audit services, taking into account relevant
ethical guidance regarding the provision of non-audit services by
the external audit firm and to report to the Board;
h. to report to the Board, identifying any matters in respect of which
it considers action or improvement is needed and making
recommendations as to the steps to be taken; and
i. to review the Company’s whistleblowing policy.
The Audit Committee discharged its obligations throughout the year as
follows:
• Reviewed internal and external audit plans and approved internal
audit plans in advance of audit;
• Met with and received reports from internal and external auditors,
including the report of the external auditor on any key matters
arising from the statutory audit and on any material weaknesses
in internal control in relation to the financial reporting process;
Directors’ Report (continued)