Aviva 2014 Annual Report Download - page 67

Aviva plc Annual report and accounts 2014
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central mechanism to further improve the
monitoring and management of the
Group’s control environment.
The committee also continued to
monitor the integrity of the Group’s
financial reporting, focussing on their fair
presentation, the reasonableness of financial
assumptions and judgement factors and the
appropriate application of accounting
policies.
In the 2013 Annual report and
accounts we reported that we had
identified controls failings in Aviva
Investors that happened between August
2005 to June 2013. In February 2015,
Aviva Investors reached a settlement with
the FCA in relation to this and agreed to
pay a fine of £17.6 million. Aviva
Investors has committed significant
resources to enhancing its control
environment. Aviva Investors has fixed the
issues, improved the systems and
controls and made substantial changes to
the management team.
Risk Committee
During the year the Risk Committee closely
scrutinised the Group’s work towards
compliance with Solvency II (SII), reviewing
and approving interim measures on the
path to compliance, including an Internal
Model Validation Business Standard and,
later in the year, the methodology and
assumptions for the Individual Capital
Adequacy submission to be made in 2015.
With the Group’s designation as a
Global Systemically Important Insurer (GSII),
it was important for the committee to
scrutinise the GSII recovery and resolution
plans. The committee also reviewed
management plans to address potential
future capital requirements that might be
required as a result of either being classified
as a GSII or the transition to Solvency II.
Remuneration Committee
As advised in last year’s Annual report,
during 2014 the Remuneration Committee
undertook a strategic review of executive
remuneration to ensure the Directors’
remuneration policy remained fit for
purpose, aligned to the achievement of
strategy, competitive, consistent with good
governance and regulatory practice and
compliant with relevant regulation. It was
recognised at the time that such a strategic
review might require the Company to
propose changes to the policy at the 2015
Annual General Meeting (2015 AGM).
Details of the review process, consultation
and conclusions reached by the committee
can be found in the Directors’ remuneration
report, as can detail of the proposed revised
policy. We are confident that we now have
a fair and balanced set of policy changes,
which align the interests of executives with
the long term success of the Company, and
hope you support these at this year’s AGM.
Nomination Committee
The principal role of the Nomination
Committee is to keep under review the
composition of the Board to ensure that it
has the right balance of skills, knowledge,
experience and diversity. Increasing female
representation on the Board to at least 25%
remains our firm aim; however
appointments will not be made on the basis
of gender alone and will be made on merit
and have regard to other criteria identified
by the committee.
During the year, Scott Wheway chaired
committee meetings to consider candidates
to be appointed as Chairman upon my
retirement following the 2015 AGM. Details
regarding the process by which Sir Adrian
Montague was recommended to the Board
are set out in the Nomination Committee’s
report.
The proposed acquisition of Friends Life
gave the committee an opportunity to
consider the composition of the Board of
the enlarged Group. As a result, the
committee recommended to the Board that
Andy Briggs and Sir Malcolm Williamson be
appointed as directors of the Board
following successful completion of the
transaction.
Having considered each Non-Executive
Director’s independence, each director’s
contribution to the Board, and their
suitability for re-election, the committee
supports the re-election of all Board
members standing for re-election at the
2015 AGM.
UK Corporate Governance Code
During the year the Company has been
compliant with all relevant provisions of the
2012 UK Corporate Governance Code (the
Code). A new version of the Code was
published in September 2014 and the
Company intends to be compliant with all
new relevant provisions in the timeframes
dictated by the Code. We disclose details of
how we comply with the Code throughout
the Directors’ and corporate governance
report and the Directors’ remuneration
report in the Annual report and accounts.
John McFarlane
Chairman
4 March 2015
0-3 years 5
3-6 years 2
6-9 years 1
+9 years 0
Length of tenure of
Non-Executive Directors
UK 6
US 2
Australasian 3
Geographical mix
Governance
Aviva plc Annual report and accounts 2014 |63