Aviva 2013 Annual Report Download - page 72

Aviva plc
Annual report and accounts 2013
70
Directors’ and Corporate governance report continued
external review was facilitated by Independent Board Evaluation
and supported by internal questionnaires to the Board
committees. The results were discussed by the Board and each
of the committees and actions agreed. Overall the Board was
found to function well with a collaborative and professional
atmosphere around the board table. Areas for greater Board
focus in 2014 included making more time on the Board agendas
for the evolving business strategy; adding diversity to the Board;
and further developing the induction process for new directors.
The focus for the Board committees in 2014 are detailed in each
committee’s report.
Independent Board Evaluation have no other connection
with the Company.
The review of the performance of the Chairman, led by the
Senior Independent Director, concluded that the Chairman is an
inclusive leader, welcoming contributions from all Board
members and works well with the Group CEO. He has built a
cohesive Board and continues to make a valuable contribution
to Board discussions.
The Chairman and Independent Board Evaluation assessed
the performance of the NEDs and the executive directors in their
capacity as directors. The Chairman concluded that each
director contributes effectively and demonstrates full
commitment to his/her duties. To assess the Group CEO in
respect of his executive duties a separate process was carried
out by the Chairman and in respect of the CFO, by the Group
CEO. The process involved measuring performance against each
executive director’s role objectives.
Induction, training and development
The Board and the Chairman believe strongly in the
development of all of its employees and directors and it is a
requirement of each director’s appointment that they commit
to continuing their development.
During the year, directors attended a number of internal
training sessions, including sessions on economic capital, the
Own Risk Solvency Assessment and stress and scenario testing.
Training sessions have been built into the Board’s and
committees’ work plans for 2014.
The Chairman ensures that all new directors receive a
comprehensive induction programme tailored to their particular
needs and which consists of several separate training sessions
over a number of months. These include presentations from key
members of senior management, visits to the Group’s main
operating businesses and functions, and meetings with the
external auditor and one of the Company’s corporate brokers.
Further or follow-up meetings are arranged where a director
requires a deeper understanding on a particular issue. All new
directors also receive induction materials, which include the
current strategic and operational plan, recent Board and
committee minutes and meeting packs, organisation structure
charts, role profiles, a history of the Group, and relevant
policies, procedures and governance material.
Directors’ attendance
The Company requires directors to attend all meetings of the
Board and the committees on which they serve and to devote
sufficient time to the Company in order to perform their duties.
The attendance of the directors at the Board meetings held in
2013 is shown in the following table and the attendance at
committee meetings is shown in the committee reports.
Board attendance 2013
Director
Number of
meetin
g
s attended
Percentage
attendance1
Glyn Barker 11 100%
Patricia Cross3 1 100%
Richard Karl Goeltz4 5 100%
Michael Hawker 11 100%
Gay Huey Evans2 9 82%
John McFarlane2 10 91%
Trevor Matthews 4 80%
Michael Mire5 4 100%
Sir Adrian Montague6 11 100%
Patrick Regan 11 100%
Bob Stein7 11 100%
Russell Walls4 5 100%
Scott Wheway2 10 91%
Mark Wilson2 10 91%
1 This shows the percentage of meetings which the director attended during the year whilst a member of the
Board.
2 The director was unable to attend Board meeting(s) due to prior commitments, the meetings being called at
short notice or where a conflict of interest prevented the director from taking part in the meeting.
3 Patricia Cross was appointed on 1 December 2013.
4 Russell Walls and Richard Karl Goeltz retired on 8 May 2013.
5 Michael Mire was appointed on 12 September 2013.
6 Sir Adrian Montague was appointed on 14 January 2013.
7 Bob Stein was appointed on 28 January 2013.
During 2013, there were 11 Board meetings held, of which,
eight were scheduled Board meetings and three were additional
Board meetings called at short notice. In addition the Board
delegated responsibility for certain items, such as giving final
approval to proposals broadly agreed by the full Board, to
specially created committees of the Board which met seven
times during 2013.
The Chairman and the NEDs met several times in the
absence of the executive directors and the NEDs met in the
absence of the Chairman, including one meeting chaired by the
Senior Independent Director to appraise the Chairman’s
performance.
Conflicts of interest
In line with the Companies Act 2006, the Company’s articles of
association allow the Board to authorise potential conflicts of
interest that may arise and to impose such limits or conditions
as it thinks fit. The decision to authorise a conflict of interest can
only be made by non-conflicted directors (those who have no
interest in the matter being considered) and in making such a
decision the directors must act in a way they consider in good
faith will be most likely to promote the Company’s success.
The Board’s procedure to regularly review and approve actual
and potential conflicts of interest as they arise, and prior to
the appointment of new directors, operated effectively during
the year.
Governance structure
The Board is responsible for promoting the long-term success
of the Company for the benefit of shareholders. This includes
ensuring that an appropriate system of governance is in place
throughout the Group. To discharge this responsibility, the
Board has established frameworks for risk management and
internal control using a ‘three lines of defence’ model and
reserves to itself the setting of the Group’s risk appetite.
In-depth monitoring of the establishment and operation of
prudent and effective controls in order to assess and manage
risks associated with the Group’s operations is delegated to the
Audit Committee, the Risk Committee and the Governance
Committee which report regularly to the Board. However, the
Board retains ultimate responsibility for the Group’s systems of
internal control and risk management and their effectiveness.
These frameworks play a key role in the management of
risks that may impact the fulfillment of the Board’s objectives.
They are designed to identify and manage, rather than
eliminate, the risk of failure to achieve business objectives and
can only provide reasonable and not absolute assurance against
material misstatement or losses. These frameworks are regularly