Barclays 2007 Annual Report Download - page 138

Corporate governance
Corporate governance report
136 Barclays PLC Annual Report 2007
There is a strong independent element on the Board and, in line with the
recommendations of the Code, at least half the Board are independent
non-executive Directors. At the date of this report, the Board is comprised
of the Group Chairman, five executive Directors and 12 non-executive
Directors. The balance of the Board is illustrated by the chart below left.
The Board Corporate Governance and Nominations Committee is
responsible for reviewing the composition and balance of the Board
and its principal Committees and for recommending to the Board the
appointment of new Directors. These regular reviews aim to ensure that
there is an appropriate mix of skills and experience on the Board, taking
into account the need to progressively refresh the Board. Details of the
experience and skills of each of the current Directors are set out in their
biographies on pages 128 to 129. The length of tenure of the current non-
executive Directors is illustrated by the chart below right.
All Directors are required to seek re-election every three years and any
Directors appointed during the year seek re-election at the next annual
general meeting (AGM). Sir Nigel Rudd, who has served on the Board
since 1996, seeks re-election annually. These periods are in line with
the recommendations of the Code. Details of Directors proposed for
re-election are given in the Notice of Shareholder Meetings, which is
enclosed separately with this Report.
Executive Directors are allowed to serve on one other listed company
board, in addition to their role at Barclays.
Independence of non-executive Directors
The Code sets out circumstances which the Board may find relevant
when determining the independence of a non-executive Director.
The Board considers that the following behaviours, as set out in our
Charter of Expectations, are essential for the Board to conclude an
individual is 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 and defend their own beliefs and viewpoints
in order to support the ultimate good of the organisation; and
– has a good understanding of the organisation’s business and affairs
to enable them properly to evaluate the information and responses
provided by management.
The Board considers non-executive Director independence on an annual
basis, as part of each Director’s performance review.
The Corporate Governance and Nominations Committee and
subsequently the Board reviewed the independence of non-executive
Directors in early 2008 and concluded that each of them continues to
demonstrate these essential behaviours. In determining that each of the
non-executive Directors remains independent, the Board considered in
particular the following:
– Sir Nigel Rudd has served as a non-executive Director since 1996.
The Code suggests that length of tenure is a factor to consider when
determining independence. As recommended by the Code, it is our
policy that any Director who serves for more than nine years should
seek annual re-election by shareholders and that all Directors subject
to re-election should undergo a rigorous performance evaluation.
– At the time of his appointment to the Board, Dr Danie Cronjé
was Chairman of Absa. The Code suggests that such a
business relationship is a factor to be considered by the Board when
determining independence. The Code further suggests that cross-
directorships may affect independence. Sir Nigel Rudd and Dr Cronjé
are both non-executive Directors of Sappi Limited. Dr Cronjé retired as
Chairman of Absa and left the Absa Board in 2007 and will not submit
himself for re-election as a Director of Barclays when he retires at the
2008 AGM.
As a result of the annual performance review, the Board concluded that
Sir Nigel Rudd and Dr Cronjé both continue to demonstrate the essential
characteristics of independence expected by the Board. Sir Nigel’s length
of service, and his resulting experience and knowledge of Barclays, is
viewed by the Board as being especially valuable, particularly as only one
other non-executive Director has served for more than six years and the
Board continues to be regularly refreshed.
All Directors must report any changes in their circumstances to the Board
and the Board reserves the right to terminate the appointment of a non-
executive Director if there are any material changes in their circumstances
that may conflict with their commitments as a Barclays Director or that
may impact on their independence.
Balance of non-executive and executive Directors
1
2
3
1 Chairman 1
2 Executive Directors 5
3 Independent non-executive
Directors 12
Length of tenure of non-executive Directors
1
2
34
1 0-3 years 6
2 3-6 years 4
3 6-9 years 1
4 Over 9 years 1