The Role of the Board
The Board provides leadership of the Group and direction for management. It is collectively responsible and accountable to the Company’s shareholders for the long-term success of the Group and for ensuring the appropriate management and operation of the Group in pursuit of its objectives. The Board is responsible for setting the Group’s strategy, values and standards and ensuring that the necessary controls and resources are in place to deliver these.
To help discharge its responsibilities, the Board has a formal schedule of matters specifically reserved for its decision, which form the core of the Board's agenda. The Board has also delegated certain aspects of its responsibilities to the following Committees: the Audit Committee, the Remuneration Committee, the Nominations Committee, the Safety & Environment Committee and the Disclosure Committee.
The Board and its Committees have regular scheduled meetings and hold additional meetings as and when required. Directors are expected, where possible, to attend all Board meetings, relevant Committee meetings, the AGM and any General meetings. The core activities of the Board and its Committees are documented and planned on an annual basis and a list of matters arising from each meeting is maintained and followed up at subsequent meetings. The Non-Executive Directors also meet during the year without the Executive Directors being present.
Induction and ongoing training and development
All new Directors receive a structured and comprehensive induction programme. It is prepared and arranged by the Chairman and Company Secretary, with Executive input as necessary, tailored to the experience and background of the individual and the requirements of the role. With no new Director appointments made in the year, no induction programmes were undertaken.
Existing Directors engage in various forms of ongoing training and development and in 2018 this included:
- the regular receipt of written and oral reports from internal experts and external advisers, including on safety, finance, legal, human resources, risk management and governance matters;
- attendance at external training sessions and briefing forums, including those provided by the Deloitte Academy and other professional advisers;
- an in-depth review of the future direction of, and risks facing, the mass land transport industry from the Company’s Commercial Director, supported by the Company’s joint broker, BAML, at the Board’s annual strategy review meeting;
- a presentation to the Audit Committee by IBM on the fast-changing cyber security risk landscape and best practice response measures that can be taken; and
- guidance from BAML on takeover activities in the market place and associated training on unwelcome bid responses.
Additionally, to provide Directors with opportunities to meet with management, engage with employees and increase their visibility and working knowledge of the Group’s operations and market dynamics, the Board aims to visit two Group locations each year. However, only one such visit took place in 2018, to Boston, which also facilitated a scheduled Board meeting and its annual strategy review. A ‘Board in Action’ review of the Boston trip can be found on the opposite page.
The Chairman also undertakes a busy programme of local site and management visits, which this year focused on the UK. Similar visits, both at home and overseas, are undertaken by other Non-Executive Directors in fulfilment of their roles.
Conflicts of interest and other appointments
The Board operates a policy to identify and manage situations declared by Directors (in accordance with their statutory duty to do so) in which they or their connected persons have, or may have, an actual or potential conflict of interest with the Company.
The Board considers such situations as they arise and decides whether to authorise any conflict based on the overriding principle that a Director must at all times be able to consider and exercise judgement to promote the success of the Company. The policy has been in place and operated effectively throughout the year.
No Director conflict situation currently exists save in respect of Jorge Cosmen (a non-independent Non-Executive Director) as he is a member of the Cosmen family which is a substantial shareholder in the Company and has close links with the Group’s ALSA business (see page 103). This conflict has been authorised by the Board on the basis that Mr Cosmen’s knowledge of the Spanish transport market and political environment brings significant value into the boardroom. During the year, the Nominations Committee considered whether Lee Sander’s new appointment as President Americas of Bombardier Transportation gave rise to a potential conflict situation and concluded that it did not. This is because decisions regarding our RME trains in Germany are normally taken at local and/or divisional level, not at Board level.
A register of Directors’ conflicts and other appointments is maintained by the Nominations Committee, together with conflict authorisations previously given, and regularly reviewed.
The Nominations Committee also monitors a Director’s ability to fully discharge their duties and make a valued contribution to the Board, and that includes monitoring the number of other appointments held by Directors outside of the Company. For Non-Executive Directors, this situation is known and considered when they first join the Company and permission from the Chairman is required before any additional third party appointment can be accepted so that an opportunity exists for any overboarding or conflict risk assessment to be made.
Executive Directors are permitted to hold one external non-executive directorship with a non-competing company provided they first obtain Board approval to do so. No such external appointments are currently held by any of the Executive Directors
Re-election of Directors
In accordance with the Company’s Articles of Association, and the Code, all Directors of the Company will offer themselves for either election or re-election at each AGM. Non-Executive Directors are appointed for specific terms, subject to re-election. Non-Executive Directors will only be put forward for re-election if, following performance evaluation, the Board believes the Director’s performance continues to be effective and demonstrates commitment to the role.
Remuneration
The Directors’ Remuneration Report, including details of remuneration policy and service contracts, is set out within the Annual Report here.
Directors' conflicts of interest
The Board operates a policy to identify and manage declared actual and potential conflicts of interest which Directors (or their connected persons) may have and are obliged to avoid under their statutory duties and the Company’s Articles of Association. The Board considers each Director’s situation and decides whether to approve any conflicts based on the overriding principle that a Director must at all times only be able to consider and exercise judgement to promote the success of the Company. The policy has been in place and operated effectively throughout the year. Authorisations given by the Board are reviewed on a regular basis.
There are no material conflicts currently in place save in respect of Jorge Cosmen’s position as a non-Independent Non-Executive Director and his association with the Cosmen family as a substantial shareholder
Accountability and audit
Statements of the respective responsibilities of the Directors and auditor are set out in the Annual Report within the Governance Section of the Annual Report and the Independent Auditor's Report.
