Governance framework

The Board leads and controls the Group within a sound governance framework. The Board is responsible for setting the Group's strategic aims, its values and standards and ensuring the necessary financial and human resources are in place to achieve its goals.

Statement of Compliance with the UK Corporate Governance Code

In the opinion of the Directors, the Company has complied during the year with the provision of the UK Corporate Governance Code issued by the Financial Reporting Council in 2010 ("the Code") save in respect of the following provisions:

• The Composition of the Nomination Committee (B.2.1). Jorge Cosmen, who is a member of the Nomination Committee, is not considered to be independent.  However, as Deputy Chairman and the representative of one of the Company's largest shareholders, the Board considers Mr Cosmen should be a member of the Nomination Committee in order to be involved in the recruitment process for Board appointments.
• The Composition of the Audit Committee (C.3.1) and the Composition of the Remuneration Committee (D.2.1).  Following the resignation of Roger Devlin the Audit Committee and the Remuneration Committee consisted of two Non-Executive Directors for a short period until the appointment of Chris Muntwyler to the Audit Committee and Lee Sander to the Remuneration Committee in November 2011.

Applying the principles of good governance

The Board of Directors, Chairman and Group Chief Executive

The Board consists of a balance of Executive and Non-Executive Directors who collectively bring a strong and in-depth mix of business skills and expereince and considerable knowledge to assist with Board decisions.  A summary of the members of the board including the mix of skills and experience is set out here. Full biographical details are set out here.  The offices of Chairman and Group Chief Executive are held separately. The division of responsibilities between the roles of Chairman and Group Chief Executive is shown below.

Tim Score is the Senior Independent Director. The Board considers all of the Non-Executive Directors to be independent other than Jorge Cosmen and considered John Devaney to be independent prior to his appointment as Chairman. Mr Cosmen is not considered to be independent by the Board due to his close links with the ALSA business and significant interests in the shares of the Company which are held through European Express Enterprises Limited. The Non-Executives bring a variety of different experiences and considerable knowledge to assist with Board decisions. Non-Executive Directors do not participate in any of the Company's share option or bonus schemes and their service is non-pensionable.

Main responsibilities of the Chairman:

• chairing and managing the business of the Board;
• together with the Group Chief Executive, leading the Board in developing the strategy of the business and ensuring this is effectively implemented by the executive management team;
• ensuring that there is effective dialogue with investors concerning mutual understanding of objectives;
• in conjunction with the Nomination Committee, taking responsibility for the composition and replenishment of the Board;
• periodically reviewing with the Board its working practices and performance; and
• ensuring there is effective contribution from the Non- Executive Directors and a constructive relationship between the Executive and Non-Executive Directors.

Main responsibilities of the Group Chief Executive:

• communicating a shared purpose and the culture, vision and values of the Group;
• the development and implementation of management strategy;
• the day-to-day management of the Group;
• managing the executive management team;
• fostering relationships with key stakeholders;
• leading the Group Executive Committee;
• in conjunction with the Group Finance Director, communicating the Group's financial performance to investors and analysts;
• liaising with the Chairman to ensure effective dialogue with investors and stakeholders.

Management structure

The main committees of the Board are the Audit, Safety and Environment, Remuneration and Nomination Committees.

The Executive Committees meet on a monthly basis and matters dealt with at these committees are reported to the Group Executive Committee.