Barclays 2015 Annual Report Download - page 42

40 I Barclays PLC Annual Report 2015 home.barclays/annualreport
Governance: Directors’ report
What we did in 2015
Chairman’s introduction
I am also delighted to report that we have met the Board diversity target
we set back in 2012, which was that 25% of the Board by the end of
2015 should be women. We have now agreed a new diversity target,
which is that 33% of the Board by the end of 2020 should be women,
although our overriding principle is that all appointments to the Board
are made on merit, taking into account the skills and experience that the
Board needs now and may need in the future to support delivery of our
strategy.
I am on record as saying that Barclays needs to reduce its internal
bureaucracy by becoming leaner and more agile and consequently more
effective and the Board and its processes are no exception to this. One of
the steps I took on becoming Chairman was to review the Board’s
governance structure, with assistance from the Company Secretary, in
order to simplify and streamline the principal Board Committees, in
particular those Board Committees with responsibility for oversight of
risk. As a result, the Board decided to disband the Board Enterprise Wide
Risk Committee, with its responsibilities for oversight of enterprise-wide
risk being assumed by the Board as a whole. We also concluded that the
Board Financial Risk Committee should assume responsibility for
oversight of the capital and financial aspects of operational risk, in
addition to financial risk, leaving the Board Conduct, Operational and
Reputational Risk Committee to focus on conduct and culture,
reputational risk and citizenship. The Board Audit Committee continued
to focus on the control aspects of operational risk. The Board
Committees have subsequently been renamed to more accurately reflect
their responsibilities.
As part of our discussions on Board and Board Committee succession
planning, membership of each Committee was also reviewed to ensure
that it had the right balance of skills, experience and perspectives and
also to ensure that individual Directors were not being over-burdened by
Committee responsibilities. Board Committees play a vital role in
supporting the Board in its oversight of internal control and financial
reporting, risk and risk management and reward and remuneration. Each
of the Board Committee Chairmen report below on how their
committees discharged their responsibilities during 2015 and the
material matters each considered. The Board Nominations Committee
has continued to play a role in succession planning for Group Executive
Committee and senior leadership roles and, having had the opportunity
during 2015, as Executive Chairman, to work even more closely with
Group Executive Committee members, I was able to bring some fresh
perspectives on the talent pipeline and talent management processes.
More detail on the Board Nominations Committee’s work on succession
planning can be found on page 61.
It is important to periodically obtain an independent perspective on the
effectiveness of the Board and particularly so in a year when our
conventional Board governance processes were temporarily revised. We
have conducted an externally facilitated review of the effectiveness of
the Board each year since 2004 and for 2015 we asked Independent
Board Evaluation to facilitate that review. I am pleased to advise that the
overall outcome of the review was that the Board is operating effectively,
although there are some areas that could be enhanced. A report on the
evaluation process and the outcomes may be found on pages 64, 66
and 67.
Culture and values
People matter more than anything else in any business: it is a company’s
people that make it great, help it stand out from its competitors, and
make it an attractive proposition for customers and investors. As a
Board, we are responsible for ensuring that Barclays’ people do things –
the right things – in the right way by setting the tone from the top, by
living Barclays’ culture and values in everything that we do and in the
decisions we make, by holding the Group Executive Committee to
account for the integrity of our Purpose and Values and by creating a
culture in which doing the right thing is integral to the way we operate,
globally. In an organisation as large and as complex as Barclays, that can
be, and is, a challenge, but we are only too alive to the consequence of
getting this wrong. I have personally endorsed our Code of Conduct,
The Barclays Way, and the Board Reputation Committee has been
monitoring, on behalf of the Board, the progress we are making to
embed cultural change.
Shareholder and regulatory engagement
Meaningful engagement with our shareholders and regulators is a key
pillar of our approach to corporate governance. We welcome open and
constructive discussion with our stakeholders, particularly with regard to
governance and succession planning, strategy and remuneration. You
can read more about how we have engaged with key stakeholders
during 2015 in this report. I also hope to meet with many of our private
shareholders at our AGM, which will be held on 28 April 2016. A
significant activity during 2015 was our external audit tender, on which
we engaged with a number of our major shareholders, and you can read
a report from Tim Breedon, who chaired our Audit Tender Oversight
Sub-Committee, on page 51.
Looking ahead
2015 has not been without its challenges, but I believe that we now have
the leadership in place to take forward execution of our strategy at pace,
to deliver on our priorities and generate the long-term sustainable value
that will benefit not only Barclays’ shareholders, but society at large.
John McFarlane
Chairman
29 February 2016