Barclays 2005 Annual Report Download - page 28

Barclays PLC
Annual Report 2005
26
Corporate governance
Corporate governance report
A report on the performance of the Board as a whole and of Board
Committees was presented to the Board at its meeting in December
2005. The Board concluded from the results of the review that it
continues to operate effectively. Some areas for further improvement in
2006 were identified. Feedback on individual Directors was discussed
with the Chairman. The Chairman then held private meetings with
each Director to discuss the results and agree any developmental
areas. Sir Richard Broadbent, the Senior Independent Director, led the
performance review of the Chairman.
Re-election of Directors
Dr Danie Cronjé, Robert E Diamond Jr, Robert Steel and John
Sunderland were each appointed to the Board during the year and will
be seeking re-election at the 2006 Annual General Meeting (AGM).
Fulvio Conti, who joins the Board on 1st April 2006, will also seek
re-election at the 2006 AGM. Professor Dame Sandra Dawson,
Sir Richard Broadbent, Gary Hoffman and Naguib Kheraj will each be
retiring by rotation and seeking re-election at the AGM. Sir Nigel Rudd,
having served as a Director for over nine years, retires annually in
accordance with the Code and is seeking re-election.
Sir David Arculus, having served on the Board for nine years, will retire
at the AGM and is not offering himself for re-election.
Independence of non-executive Directors
The Board evaluates annually whether each of the non-executive
Directors is independent. The Code sets out circumstances which
may appear relevant to the Board’s determination of whether a non-
executive Director is independent. The Board has carefully considered
the issue of independence and has determined that the following
behaviours, which are set out in the Board’s ‘Charter of Expectations’,
are essential for the Board to consider a Director to be independent:
•Provides objective challenge to management.
•Is prepared to challenge others’ assumptions, beliefs or viewpoints
as necessary for the good of the organisation.
•Questions intelligently, debates constructively, challenges rigorously
and decides dispassionately.
•Is willing to stand up to defend their own beliefs and viewpoints in
order to support the ultimate good of the organisation.
•Has a good understanding of the organisation’s businesses and
affairs to enable them to properly evaluate the information and
responses provided by management.
Having considered the matter carefully, the Board has determined that
each of the non-executive Directors is independent.
Sir Nigel Rudd has now served on the Board since February 1996.
The Board has therefore given particular consideration to his
independence. Having reviewed Sir Nigel’s performance and
contribution as part of the annual Board Effectiveness Review, the
Board considers that Sir Nigel remains independent and makes an
effective contribution in his role as Deputy Chairman. Sir Nigel
continues to meet the time commitment expected of him as
Deputy Chairman.
Senior Independent Director
The Code states that the Board should appoint one of the independent
non-executive Directors as Senior Independent Director. Sir Richard
Broadbent was appointed to that position in September 2004 and he
reports below on how he has fulfilled that role in 2005.
Board Meetings
The Board meets regularly, usually between eight to ten times a year,
including a full day each year, offsite, devoted to review and approval of
Group strategy. Regular items for Board meetings include the Finance
Director’s Report, the Group Chief Executive’s Report on the key issues
affecting the Group and its businesses, strategy updates from our main
businesses and reports from the Chairmen of each of the principal
Board Committees.
The Board has a formal schedule of matters reserved to it, including
the approval of interim and final financial statements, significant
changes in accounting policy and practice, the appointment or removal
of Directors or the Company Secretary, changes to our capital structure
and major acquisitions, mergers, disposals and capital expenditure.
The Chairman meets privately with all the non-executive Directors
prior to each Board meeting to brief them on the business to be
considered and to address any concerns they may have. Ten such
meetings were held in 2005.
Open discussion and frank debate is encouraged and expected at
meetings. The findings of our Board Effectiveness Review have
confirmed that Board meetings provide a forum for challenging and
constructive debate.
All Directors have access to the services of the Company Secretary and
his team. Independent professional advice is also available, on request,
to all Directors at the Company’s expense.
Senior Independent Director’s Report
I am pleased to have the opportunity to report on my activities
during the year as Senior Independent Director. The role of Senior
Independent Director is a developing one and I have sought to
reflect this by interpreting it broadly. I have set out to provide a
point of contact, in case of need, for shareholders and, through
meeting with shareholders and intermediaries, to ensure that I am
aware of their views. I have led the Chairman’s performance
evaluation. I have also met, separately, from time to time with the
Group Chief Executive to ensure that I am aware of any relevant
issues that the executive team wish to raise.
During 2005, I met with several major shareholders and shareholder
bodies to listen to their views on the Group and to discuss any
issues they may have. I met privately with our investor relations
advisers to discuss the detailed results of their audit of shareholder
opinion. I was also available to answer questions from shareholders
at the AGM in April 2005.
An important task for me during the year was to lead the
non-executive Directors in evaluating the Chairman’s performance.
This included half-year and full-year reviews of the Chairman’s
performance against the objectives we set for him at the start of
the year. Following the annual Board Effectiveness Review, which
took place in the last quarter of 2005, I received feedback on the
Chairman’s performance and discussed this with the other
non-executive Directors and the Group Chief Executive.
There are no issues arising from these discussions that I feel it is
necessary to draw to the attention of shareholders.
Sir Richard Broadbent
Senior Independent Director
9th March 2006