Barclays 2013 Annual Report Download - page 55

I described to you in my report last year how we had enhanced our
internal control and risk management framework by creating a new
Board-level committee, the Board Conduct, Reputation and Operational
Risk Committee, charged with specific oversight of operational and
conduct risks, reputational matters and our citizenship strategy. As a
result, 2013 saw a significant change in the nature and extent of the
Board’s scrutiny of these increasingly important areas. Financial risks
– credit, market and funding – continued to be examined by the Board
Financial Risk Committee and the Board Audit Committee continued to
discharge its responsibilities for oversight of financial reporting, internal
control and internal and external audit matters. It is inevitable that
there is the potential for overlap across these Board Committees and
we have sought to ensure that their respective responsibilities and
accountabilities are very clear.
We need also to ensure that rewards for our people are consistent with
our values and do not incentivise inappropriate risk-taking or reward
focus on short-term returns: the Board Remuneration Committee
developed and implemented changes to our remuneration structure in
2013 to ensure that remuneration is closely linked to the achievement
of sustainable performance and long-term value creation. This is
reflected in high levels of deferral for senior management, tougher
performance conditions attached to awards and adjustments for
current and historic risk, including the operation of malus. To bring the
entire risk profile of Barclays together at Board level, we also created a
Board Enterprise Wide Risk Committee, whose role is to focus on a
holistic view of Barclays’ risk appetite and risk profile and to seek to
identify potential future risk, or the ‘unknown unknowns’ that may
emerge.
Each of these Board Committees reports below on the material issues
they examined during 2013.
The right people
It is vital to Barclays’ long-term success that we have the right people,
leadership skills and values in place. Talent development and
succession planning are critical components of sustainable success
and this starts at the very top, in the Boardroom.
It is an essential part of my role, as Chairman, to ensure that the Board
has the right balance and diversity of expertise, skills, experience,
perspectives and, most crucially, independence of thought and action.
There were a number of changes to the Board in 2013: Diane de Saint
Victor, Frits van Paasschen, Mike Ashley and Wendy Lucas-Bull joined
the Board as non-executive Directors and Tushar Morzaria joined us as
Group Finance Director. In early 2014, Steve Thieke joined the Board as
a non-executive Director. We said farewell to Sir Andrew Likierman,
who retired at the 2013 Annual General Meeting after nine years’
service; to Chris Lucas, who retired as Group Finance Director in
August; and to David Booth, who retired at the end of 2013. Fulvio
Conti and Simon Fraser will retire from the Board at the 2014 Annual
General Meeting, having served for eight and four years respectively
and I would like to thank them on behalf of the Board for their
commitment and contribution. We have also seen changes in the
chairmanship of two of the principal Board Committees with effect
from 1 January 2014, with Mike Ashley succeeding Sir Michael Rake as
Chairman of the Board Audit Committee and Tim Breedon succeeding
David Booth as Chairman of the Board Financial Risk Committee. I can
also report that, as at the end of 2013, there were three women on the
Barclays Board (20%), compared to one woman at the end of 2012
(8%) and this progress is in line with the commitments we made in our
Board Diversity Policy. You can find our Board Diversity Policy in the
corporate governance section of Barclays’ website, Barclays.com.
I should take the opportunity here to advise that the Board has asked
Sir John Sunderland, who will have served on the Board for nine years in
June 2014, to remain on the Board until the 2015 Annual General
Meeting. This is for two very important reasons. First, we would like to
ensure continuity for the Board Remuneration Committee, which Sir
John so ably chairs, although we hope to be able to appoint a successor
to Sir John in the near future. Secondly, the Board Corporate
Governance and Nominations Committee has started to plan for
succession to me as Chairman in due course and has asked Sir John,
with his substantial experience of business leadership more widely as
well as that on the Board of Barclays, to lead that process. The Board
considers that Sir John continues to demonstrate the essential
characteristics of independence and that his independence will not be
impaired by his serving for over nine years.
My report below on the activities of the Board Corporate Governance
and Nominations Committee during 2013 describes in more detail our
work on talent management and succession planning, both at Board
level and more widely in Barclays.
The right priorities
As Chairman, I am primarily concerned with ensuring that the Board is
operating effectively and focusing its time, energy and attention on the
right areas. Each year, the Board undertakes a formal evaluation of its
own effectiveness and, since 2004, these evaluations have been
externally facilitated. From the 2013 Board Effectiveness Review, the
Board will agree a set of priorities, against which we will report
progress in future years. Our aim will be to ensure that we, as a Board,
are doing the right things, in the right way and, in doing so, are setting
the right example for Barclays and our industry as a whole.
Sir David Walker
Chairman
3 March 2014
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