Barclays 2008 Annual Report Download - page 162

Corporate governance
Corporate governance report
The Board allocated its time at scheduled Board meetings during
2008 as follows:
– received reports from the Group Chief Executive on strategic progress,
matters considered by the Executive Committee and competitor
activity;
– received reports from the Group Finance Director on the financial
position of the Group, which included capital management and liquidity
updates throughout 2008;
– received reports from each of the Board Committees;
– received reports from the Group Risk Director on risk management
and from the Group General Counsel on legal risk;
– received reports from businesses or functions on progress against
strategy, including Barclays Wealth, Barclays Capital, Barclaycard,
Brand & Marketing, UK Retail Banking, Investment Banking and
Investment Management in Asia Pacific and GRCB – Emerging Markets;
– approved the full year and half-year results for the Group;
– received a report on the effectiveness of the Board following the
performance review;
– received reports on peer group comparisons of results following the
release of preliminary and half-year results;
– received reports on governance issues and updates on the changes
in company law;
– approved the revised fees recommended for non-executive Directors
following a benchmarking comparison against our peer group;
– received external presentations on shareholder sentiment, including
institutional perceptions, Group Strategy, Global Retail and Commercial
Banking, Investment Banking and Investment Management,
performance, capital management and communications;
– approved the strategy and Risk Appetite for the Group;
– received reports on franchise health and the Employee Opinion
Survey; and
– received reports on the economic environment.
Adverse market conditions during 2008 led to the Board holding an additional
23 meetings during the year. These additional meetings discussed the
impact of market conditions on performance, liquidity, the three capital
raisings that were undertaken during the year and the acquisition of Lehman
Brothers North American businesses. Ongoing and regular communication
with the Board was vital during this period, a principle that had been
established during the potential ABN AMRO acquisition in 2007. If the
additional meetings relating to the capital raisings are taken into account,
the Board spent 33% of its time on capital management.
The capital raising that was announced on 31st October 2008 in
response to the new higher capital targets which the FSA set for all UK
Banks was the subject of considerable discussion. Seven Board meetings
and three Board Finance Committee meetings were held during October
to discuss the new requirements and Barclays response. The Board had
to take some key decisions during this period, in particular:
– whether or not to accept government money over the weekend
of 11th/12th October 2008;
– the decision to accelerate the timetable for raising required capital
in the light of deteriorating market conditions;
– the decision not to pursue a rights issue in the light of practical and
market constraints; and
– the decision to proceed with the Capital Raising as announced.
These decisions were only taken by the Board after rigorous discussion
and having sought external advice. They were taken in the long-term
interests of all shareholders.
Board structure and composition
The roles of the Group Chairman and Group Chief Executive are separate.
In line with the recommendations of the Code, there is a strong independent
element on the Board and at least half the Board are independent non-
executive Directors. At the date of this report, the Board is comprised of the
Group Chairman, four executive Directors and 11 non-executive Directors.
The balance of the Board is illustrated by Figure 2.
The Group Chairman’s main responsibility is to lead and manage the
Board, ensuring that it discharges its legal and regulatory responsibilities
effectively and fully. The Board has delegated the responsibility for the day-
to-day running of the Group to the Group Chief Executive. The Group Chief
Executive in turn leads the executive Directors in making and implementing
operational decisions and is responsible for recommending strategy to
the Board.
Although the Board of Directors has collective responsibility for the
success of the Group, executive Directors are directly responsible for business
operations, whereas non-executive Directors are responsible for bringing
independent judgement and scrutiny to decisions taken by the Board. The
non-executive Directors must satisfy themselves on the integrity of financial
information and that financial controls and systems of risk management are
robust. The Board has the benefit of a broad range of skills, knowledge and
experience that the non-executive Directors have built up as Directors of other
companies or business leaders, in government or in academia. Given the
events of 2008 and the continuing uncertainty in the global financial services
industry, the Board and, in particular, the Board Corporate Governance and
160 Barclays PLC Annual Report 2008 |Find out more at www.barclays.com/annualreport08
Fig 2: Balance of non-executive and executive Directors
12
3
2008
1Chairman 1
2Executive Directors 4
3Independent non-executive
Directors 11