Barclays 2011 Annual Report Download - page 38

Corporate governance report continued
Director Independence
We consider non-executive Director independence on an annual basis,
as part of each Director’s performance evaluation. I was considered to be
independent on appointment as Chairman, as recommended by the Code.
The Board Corporate Governance and Nominations Committee and the
Board has reviewed the independence of each non-executive Director and
concluded that each of them continues to demonstrate those behaviours
that the Board considers to be essential indicators of independence, which
are set out in our Charter of Expectations.
Director Re-election
The Code requires that all Directors submit themselves for re-election at
the Company’s Annual General Meeting (AGM), which this year will be
held on 27 April 2012. Following a rigorous performance evaluation of
each Director and the Board as a whole, I can confirm that all the Directors
submitting themselves for re-election are considered by the Board to be
fully effective. Biographical details of each of the Directors may be found
on pages 50-52 and you will find full details of the performance evaluation
process and results in my report on Board evaluation on page 37.
Succession Planning and Board Appointments
Having a good succession plan in place mitigates against risks associated
with the departure or absence of well-qualified and experienced
individuals. We recognise this and our aim is to ensure that the Board
and management are always well resourced, with the right people in
terms of skills and experience, to deliver our strategy. When making Board
appointments, we seek to ensure that we have a diverse range of skills,
background and experience, including industry and geographical
experience. We also recognise that, even though new faces bring fresh
ideas and perspective to how things are done, continued tenure brings
a depth of company-specific knowledge that is important to retain.
As a result, we consider length of tenure when making appointments
to the Board to ensure that we have the optimum balance and can
progressively refresh the Board. The length of tenure of the current
non-executive Directors and their geographical experience and
background is illustrated in the charts on page 35 and below.
The Board Corporate Governance and Nominations Committee is
responsible for both executive and non-executive Director succession
planning and recommends new appointments to the Board. More detail
on the role of the Board Corporate Governance and Nominations
Committee is given in my report below.
Non-executive Director Terms of Appointment
On appointment, our non-executive Directors are given a letter of
appointment that sets out the terms and conditions of their Directorship,
including the fees payable and the expected time commitment. Each
non-executive Director is expected to commit a minimum of 20 days per
annum to the role. Additional time commitment is required to fulfil their
roles as Board Committee members and/or Board Committee chairmen,
as applicable. On average, the time commitment of non-executive
Directors is in the range of 30–36 days per annum, although the Board
Committee Chairmen devote considerably more time.
Directors’ external activities and conflicts of interest
Our Directors have a statutory duty to avoid situations in which they
have or may have interests that conflict with those of Barclays, unless that
conflict is first authorised by the Directors. This includes potential conflicts
that may arise when a Director takes up a position with another company.
We recognise the importance of the experience, value and knowledge
that can be brought to the Board by Directors undertaking other roles or
activities. Our Directors are obliged to obtain authorisation prior to doing
so and it is their responsibility to ensure that they will be able to meet the
time commitment we expect of them and that the additional role will not
impact their effectiveness as a Barclays Director.
Our executive Directors may take up only one FTSE 100 non-executive
directorship and they are allowed to retain any fees they receive. No such
fees were received in 2011.
Our articles of association allow the Board to authorise potential conflicts,
and we have a comprehensive procedure in place to deal with any actual
or potential conflict of interest. The Board takes into consideration all the
circumstances and deals with each appointment on its individual merit.
All potential conflicts approved by the Board are recorded in an Interests
Register, which is reviewed on an annual basis by the Board Corporate
Governance and Nominations Committee to ensure that the procedure
and process are working effectively. Following a review of the Interests
Register, the Committee concluded that all the potential conflicts as
registered have been considered thoroughly and appropriately. During
2011, the Board authorised Sir Richard Broadbent’s appointment as a
non-executive Director of Tesco PLC, recognising that there would only be
a short overlap given his impending retirement from the Board. In view of
the potential conflict that might arise given Tesco’s retail banking activities,
following this appointment Sir Richard excused himself from any Board
discussions relating to our UK Retail Banking business.
Board Induction and Professional Development
Although newly appointed non-executive Directors have a wealth of
experience and knowledge, there is still the need to ensure they are
provided with a bespoke induction programme to deepen their
understanding of our business and their knowledge of Barclays, its
operations and staff. I work with the Company Secretary to ensure that a
comprehensive induction programme is in place, which includes sessions
with each of the executive Directors, members of the Executive
Committee and meetings with the senior executives responsible for each
of our businesses and central functions: these sessions focus on the
challenges, opportunities and risks that are faced by each business.
The Board Corporate Governance and Nominations Committee
undertakes an annual review of our Director induction and development
programmes to ensure that they are appropriate and fit for purpose.
More information on our Board induction process can be found in
Corporate Governance in Barclays.
1
2
3
No.
1 UK 6
2 Continental Europe 1
3 US 2
Geographical mix (main experience) of non-executive Directors
1
2
3
5
4
6
No.
1 Financial Services 5
2 Accountancy/financial background 4
3 Retail/marketing 1
4 Government experience 2
5 Business school 1
6 Corporate Finance 2
7 International (Europe) 1
8 International (US) 2
7
8
Industry/background experiencea
Notes
a Individual Directors may fall into one or more categories.
36 Barclays PLC Annual Report 2011 www.barclays.com/annualreport