Barclays 2007 Annual Report Download - page 137

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Governance
Barclays PLC Annual Report 2007 135
The Board
Role of the Board
Under UK company law, Directors must act in a way they consider, in
good faith, would be most likely to promote the success of Barclays for the
benefit of the shareholders as a whole. In doing so, the Directors must
have regard (amongst other matters) to:
– the likely consequences of any decision in the long-term;
– the interests of Barclays employees;
– the need to foster Barclays business relationships with suppliers,
customers and others;
– the impact of Barclays operations on the community and the
environment;
– the desirability of Barclays maintaining a reputation for high standards
of business conduct; and
– the need to act fairly as between shareholders of Barclays.
The role and responsibilities of the Barclays Board, which encompass the
duties of Directors described above, are set out in Corporate Governance
in Barclays. The Board is responsible to shareholders for creating and
delivering sustainable shareholder value through the management of the
Group’s businesses. It therefore determines the goals and policies of the
Group to deliver such long-term value, providing overall strategic direction
within a framework of rewards, incentives and controls. The Board aims to
ensure that management strikes an appropriate balance between
promoting long-term growth and delivering short-term objectives.
The Board is also responsible for ensuring that management maintains a
system of internal control that provides assurance of effective and efficient
operations, internal financial controls and compliance with law and
regulation. In carrying out this responsibility, the Board has regard to what
is appropriate for the Group’s business and reputation, the materiality of
the financial and other risks inherent in the business and the relative costs
and benefits of implementing specific controls.
The Board is also the decision-making body for all other matters of such
importance as to be of significance to the Group as a whole because of
their strategic, financial or reputational implications or consequences.
There is a formal schedule of matters reserved for the Board’s decision,
which is summarised in the panel above right.
The chart below left illustrates how the Board allocated its time at its eight
scheduled meetings during 2007. If the additional meetings relating to
the proposed merger with ABN AMRO are taken into account, 49% of the
Board’s time in 2007 was spent on M&A. A typical Board meeting receives
reports from the Group Chief Executive and Group Finance Director and
will also be presented with an update on the execution of strategy in one
or two of the main businesses and functions. It will also receive reports
from each of the principal Board Committees and may also receive a report
from the Company Secretary on any relevant corporate governance matters.
Board structure and composition
The roles of the Group Chairman and Group Chief Executive are separate.
The Group Chairman’s main responsibility is to lead and manage the
work of the Board to ensure that it operates effectively and fully discharges
its legal and regulatory responsibilities. The Board has delegated the
responsibility for the day-to-day management of the Group to the Group
Chief Executive, who is responsible for recommending strategy to the
Board, leading the executive Directors and for making and implementing
operational decisions.
The Board of Directors has collective responsibility for the success of the
Group. However, executive Directors have direct responsibility for business
operations, whereas non-executive Directors are responsible for bringing
independent judgement and scrutiny to decisions taken by the Board,
providing objective challenge to management. The Board can draw on
the wide range of skills, knowledge and experience they have built up
as Directors of other companies, as business leaders, in government or
in academia. It is the intention to have a broad spread of geographical
experience represented on the Board. The chart below right illustrates
the geographical experience of the current non-executive Directors.
Barclays has adopted a Charter of Expectations, which sets out, in detail,
the roles of each of the main positions on the Board including that of the
Group Chairman, Deputy Chairman, Senior Independent Director and
both non-executive and executive Directors. Sir Richard Broadbent
continued in the role of Senior Independent Director in 2007. The Senior
Independent Director is an additional contact point for shareholders and
also monitors the performance of the Group Chairman on behalf of the
Board. Sir Nigel Rudd continued in the role of Deputy Chairman during 2007.
The Charter of Expectations, including role profiles for key Board
positions, is available from: http://www.aboutbarclays.com
Summary of matters reserved for the Board
– Approval of interim and final financial statements, dividends and
any significant change in accounting policies or practices.
– Approval of strategy.
– Major acquisitions, mergers or disposals.
– Major capital investments and projects.
– Board appointments and removals.
– Role profiles of key positions on the Board.
– Terms of reference and membership of Board Committees.
– Remuneration of auditors and recommendations for appointment
or removal of auditors.
– Changes relating to capital structure or status as a PLC.
– Approval of all circulars, prospectuses and significant press releases.
– Principal regulatory filings with stock exchanges.
– Rules and procedures for dealing in Barclays securities.
– Any share dividend alternative.
– Major changes in employee share schemes.
– Appointment (or removal) of company secretary.
Board allocation of time
1
2
3
5
4
1 Strategy Formulation and
Implementation Monitoring 39%
2 Operational and Financial
Performance 27%
3 Governance and Risk 9%
4 M&A 16%
5 Other 9%
Geographical mix (main experience) of non-executive Directors
1
2
4
3
1 UK 8
2 Continental Europe 1
3 US 1
4 Other 2