Aer Lingus 2011 Annual Report Download - page 37

DIRECTORS’ REPORT Aer Lingus Group Plc
Annual Report 2011 35
Directors’ Report (continued)
Board following the AGM held on 6 May 2011. The Appointments
Committee of the Board undertook a process involving other members
of the Board and an external consultancy for the appointment of Ms
Mella Frewen in 2011. An external consultancy firm was not used in
respect of the appointment of Mr David Begg in January 2011.
Board Independence
During 2011, 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 were considered
to be independent by the Board. During the entirety of 2011, 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 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
UK Corporate Governance Code and to ensure the Directors bring the
right range skills, knowledge and experience to the Board to discharge
its obligations to the Company and its shareholders.
External Directorships
The Board believes it is beneficial for executive directors to hold non-
executive directorships with other companies or industry associations
provided that such roles do not impact their ongoing obligation and
responsibility to the Company. The Board permits executives to accept
such positions and to retain any related fees. During 2011, the Board
consented to Mr Mueller accepting an appointment to the Board of
Tourism Ireland as a non-executive Director. Further details are set out
on page 24.
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 2011, 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. During 2011, the Chairman ensured that the Board was
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, debate and challenge 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 Officer.
Terms of appointment
The Chief Executive Officer and the Chief Financial Officer have
service contracts with the Company which 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 UK Corporate Governance Code. Subject to the
requirement for annual election for all Directors as required by the UK
Corporate Governance 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. Recommendation to shareholders for the
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
benefits upon termination.
The Minister for Transport of Ireland (acting through the Minister for
Finance of Ireland in his capacity as shareholder) has specific rights
under the Company’s Articles of Association in relation to the
nomination and rotation of up to three Directors. These rights may not
comply with the requirements in the UK Corporate Governance Code
(June 2010) that the Appointments Committee lead the process for
Board appointments and make recommendations to the Board
regarding Board appointments and that all Directors be submitted for
re-election at regular intervals. The Minister for Transport of Ireland is
entitled to nominate up to three Directors for appointment. The
number of Directors eligible to be nominated by the Minister for
Transport of Ireland is dependent on the proportion of the total issued
ordinary share capital held by the Minister for Finance. Throughout