Board and Committee structure
Below is the Company’s governance framework which provides an overview of the roles, responsibilities and reporting lines of the Board and its Committees.
The owners of the Company and the persons to whom the Board is ultimately responsible.
Responsible for the overall leadership and governance of the Board and ensuring that it operates effectively through productive challenge and debate.
Collectively responsible to the Company’s shareholders for the long-term success of the Group. It provides effective leadership and direction and sets strategic objectives and oversees their delivery, taking into account the interests of a diverse range of stakeholders, within effective systems of risk management and internal control. It also sets the culture, values and standards for the whole organisation and ensures that the necessary governance, structure, financial management and resources (including succession planning) are in place.
These Committees operate under the delegated authority of the Board and within formal terms of reference. Their key responsibilities include:
- Nominations Committee: Monitors the structure, size and composition of the Board and its Committees. It oversees succession planning for Directors and senior management, and leads the search and nomination process for the appointment of new Directors.
- Audit Committee: Oversees, monitors and makes recommendations in relation to the Group’s financial accounting and reporting processes and the integrity of the financial statements. It reviews the work and effectiveness of the Group’s external audit process, the internal audit function, and the systems of risk management and internal control.
- Safety & Environment Committee: Reviews and monitors the strategies, policies and standards, initiatives, risk exposures, targets and performance of the Group in relation to safety and environment matters.
- Remuneration Committee: Reviews and recommends to the Board the framework and policy for remuneration of the Chairman, the Executive Directors and other members of the Group Executive Committee, and for implementing the policy.
Group Chief Executive
Responsible for the development and implementation of strategy, leadership of the Group and, supported by the executive team, the overall performance of the business.
Group Executive Committee
An advisory and reporting body to the Group Chief Executive. It acts to review and oversee the safety, operational and financial performance of the Group, assess the ongoing impact of material risks, approve expenditure and other financial commitments within delegated authority levels and discuss, formulate and approve proposals for onward consideration by the Board. It also addresses other key business and corporate-related matters.
Setting the agenda
The Chairman and the Company Secretary are responsible, in consultation with the Group Chief Executive and the relevant Chair, for maintaining a rolling 12-month programme of agendas for the Board and its Committees. This is to ensure that all necessary matters are covered and prioritised time and attention given for discussion, recommendation and approval. At each meeting, the Board rigorously reviews updates on Group and divisional operating and financial performance versus plan and budget. Other regular Board agenda items include capital expenditure requests, tax and treasury updates, key project reviews, risk management, human capital and talent, legal and governance and investor relations. The Committee Chairs also provide to the next Board meeting a summary of the main discussion points, decisions and recommendations arising from the last Committee meeting so that non-members are kept up-to-date with the work undertaken by each Committee. Reports for each of the Committees, including details of their responsibilities and activities during the year, appear later in this report.
Since the Board is the decision-making body for all significant matters affecting the Group, a formal schedule of matters reserved for its approval is in place. These matters include: strategy, risk appetite and significant risk management; major acquisitions, disposals and bids; capital and liquidity matters; medium-term planning and the annual budget; financial results; key policies; Board and Committee membership; and governance. Other matters, responsibilities and authorities have been delegated by the Board to its four standing Committees, namely: Nominations, Audit, Safety & Environment and Remuneration.
The schedule of matters reserved to the Board and the terms of reference of each Committee, which are reviewed and approved annually, can be found on the Company’s website at www.nationalexpressgroup.com. Any matters outside of these fall within the responsibility and authority of the Group Chief Executive. He leads the GEC, which operates in an advisory and reporting capacity to him, and both he and the Group Finance Director provide regular reports to the Board.
Section 172 of the Companies Act
With reference to the duties placed on Directors by Section 172 of the Companies Act 2006 (as supplemented by the new Code), the Board believes that it does take into account the stakeholder consideration factors set out therein, where appropriate, when making decisions. However, as part of the Board’s current broader review of stakeholder engagement and bringing the voice of the workforce into the boardroom, we will look further at opportunities to improve and formalise the process. This will likely include reminding and training senior management throughout the business of the importance of also bearing these factors in mind when making material local decisions and including details of their preliminary considerations in upward recommendations to the GEC, the Board and its Committees.