Aer Lingus 2011 Annual Report Download - page 39

DIRECTORS’ REPORT Aer Lingus Group Plc
Annual Report 2011 37
Directors’ Report (continued)
Directors. The evaluation covered Board processes and procedures,
and evaluations of individual Board members, the full Board and Board
Committees. The consultants prepared detailed evaluation reports and
presented them to the Chairman and subsequently the Board. The
Reports outlined the findings and made recommendations for
consideration and implementation by the Board.
Remuneration
Details of Directors’ remuneration is set out in the Report of the
Remuneration Committee on Directors’ Remuneration on pages 45 to
52.
Share ownership and dealing
Details of the shares held by Directors are set out in Table 2.2 on page
51. 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 five 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 specific 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 October 2011 the Audit Committee consisted of
Mr Laurence Crowley (Chairman), Ms Danuta Gray and Ms Nicola
Shaw. In October 2011, Mr Tom Moran was appointed as a member
of the Committee. Mr Crowley is a Chartered Accountant and is the
Committee’s financial expert. In addition, all other members of the
Audit Committee have recent and relevant financial experience. The
Audit Committee met eight times during the year. Attendance at
meetings held is set out in the table on page 42.
The main role and responsibilities of the Audit Committee are set out
in written terms of reference, which encompass those set out in the UK
Corporate Governance Code, and Statutory Instrument 220/2010
European Communities (Statutory Audits) (Directive 2006/43/EC)
Regulations 2010, including:
• to monitor the statutory audit of the annual and consolidated
accounts and the financial reporting process;
•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;
• 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 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);
• to monitor and review the results of the Company’s internal audit
function and the annual internal audit plan;
• 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;
•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;
• 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;
•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
• to review the Company’s goodfaith reporting/whistleblowing
policy.
The Audit Committee discharged its obligations throughout the year.
The following is a summary of the principal work undertaken by the
Audit Committee during 2011:
• the Committee reviewed and approved the internal audit plan for
2011 and considered reports from the internal auditors on the
implementation of that plan;
•following the review and approval of the 2011 external audit plan
in late 2010, the Committee considered reports from the external
auditors on the implementation of that plan in the context of the
Preliminary Results and audit of the 2010 Accounts and the 2010
Annual Report;