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
On joining the Board, each Director undertakes a structured and comprehensive induction programme comprised of certain basic modules and additional bespoke modules tailored to the requirements of their role.
Throughout their tenure on the Board, Directors keep their knowledge and skills up to date, partly through experience acquired on the job (in the case of Executive Directors) or acquired in other roles (in the case of Non-Executive Directors), and partly by attending external seminars and briefings as required, for example those provided by the Deloitte Academy and other professional advisers.
Directors also receive a range of briefings directly from the divisional businesses and Group functional leads which serve to ensure a deep understanding of the Group’s businesses, strategy, risks and management of the same, as outlined in the box to the right.
During 2020, in addition to regular briefings from the Group CEO and Group CFO on the Group’s safety, operational and financial performance, the Board received:
- detailed briefings from management of the Group’s business divisions on how each business was performing generally and in response to the Covid-19 pandemic, including financial performance (including detailed cost saving plans), operational performance (including service reductions and ramp-ups), people impact (including additional health and safety measures being taken to protect colleagues), impact on wider stakeholder relations (including levels of financial and other support from customers and government authorities and levels of service being provided) and impact on near and long-term strategy and risk management (including new strategic options and new risk management processes);
- briefings given by heads of the Group’s major functions, including legal, governance, tax, treasury, insurance and internal audit, on their general work and specific actions taken to manage the additional risks or compliance required as a result of the Covid-19 pandemic;
- various presentations from and detailed discussions with the Company’s brokers, banks and strategic advisers on strategic options for managing liquidity and strengthening the balance sheet, managing equity and debt stakeholder relations and otherwise managing the challenges created by Covid-19; and
- continued quarterly reports on human capital, focusing on resourcing and retention, employee engagement, diversity and inclusion, talent management and employee relations, together with regular briefings on the direct impact of Covid-19 on colleagues and on the output of colleague wellbeing surveys.
Conflicts of interest and other appointments
The Board operates a policy to identify and manage situations declared by Directors (in accordance with their legal duty to do so) as a result of 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 exercise independent judgement to promote the success of the Company.
Following review by the Nominations Committee of the application of this policy during the year under review, the Board is satisfied that no Director conflict situation currently exists, save in respect of Mr Cosmen due to his family’s shareholding, which conflict has been authorised by the Board on the basis that, as noted above, he brings significant value into the Boardroom. A register of Directors’ actual and potential conflicts, together with conflict authorisations previously given by the Board, is maintained by the Company Secretary.
Mr Sander’s position at Alstom – which acquired Bombardier Transportation – was also kept under review by the Board as a situation that could give rise to a potential conflict of interest due to NX Rail GmbH’s lease of Bombardier manufactured trains to service its RME concession. However, as Mr Sander was not involved in any decisions in connection with the RME concession and it accounted for less than 0.66% of the Group’s 2020 revenue, no actual conflict of interest arose.
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.
Director Commitments and external appointments
Directors’ commitments are reviewed as part of the annual Board and Director evaluation process and the Nominations Committee also keeps them under regular review. All Directors are expected, and required by their employment or appointment terms, to commit sufficient time to the Board and the Company as is necessary to carry out their duties.
Non-Executive Directors are also required, by their appointment terms, to seek the Board’s approval to taking on significant new commitments. Non-Executive Directors may hold a number of external appointments provided that, in aggregate, they do not detract from the time and attention such Directors need to provide to the Company. Details of Non-Executive Directors’ other current appointments are included in their biographies in the Corporate Governance Report.
Executive Directors must also obtain the Board’s approval prior to taking on any new commitments and, subject thereto, are permitted to either: hold one external listed or traded company non-executive directorship or other significant appointment with a non-competing company; or hold one or more nonsignificant roles with non-competing organisations on a case-by-case basis. Ignacio Garat does not currently hold any external appointments. On 1 June 2020, Chris Davies was appointed as a Non- Executive Director of Motability Operations Group PLC, a non-traded public company providing mobility to disabled customers under contract to Motability, the national charity. This is not considered a significant role for Mr Davies and was duly approved by the Board.
A register of Directors’ external appointments is maintained by the Company Secretary.
On the advice of the Nominations Committee, the Board considers, taking into account their high level of attendance at Board and Committee formal and informal meetings throughout the year under review, their participation in workforce engagement and wider Company events and their current external appointments, that all the Directors are able to, and do in fact, devote sufficient time to the Company.
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.
