The financial year 2009/10 saw widespread questioning and analysis of the factors which had led to the financial crisis of 2008/09, global debate on regulatory reform and a sharp focus on the proper role, functioning and behaviours of company boards.
Against this background, we have continued to strengthen and broaden the skill set and experience of our Board and to review and develop the way we govern the Company and communicate with investors.
Board development
Following closely on the retirement of Glen Moreno and the succession of Alison Carnwath as Senior Independent Director in July, the Board was joined by two new non-executive directors, Ruud Hendriks and Fred Jolly. Both individuals were recruited to enrich the Board with broader investment management and client development experience and were appointed following an extensive search and thorough interview process. Together they bring a valuable diversity of view to Board debate and decision making. Ruud has life long experience of working within large organisations developing products for the institutional investor. Fred is a seasoned builder of businesses with entrepreneurial vision and approach. Both received an extensive and in-depth induction from our fund management, product structuring and corporate teams to help leverage their knowledge and contribution to the business.
Board governance and investor communications
The Board also benefited during the year from the added value offered by strengthened corporate functions. The Secretariat has been instrumental in streamlining Board Committee focus and membership, improving governance and delivering effective process. Investor Relations have facilitated a series of meetings at which I was able to hear at first hand the feedback and concerns of our major investors and give them a sense of the dynamic of the Board and its thinking. Our HR function has supported the Remuneration Committee's major and detailed review of the structure of our executive director remuneration and the development of proposals tailored to Man's business model.
Executive reward
Executive reward continues to be a subject of widespread legitimate concern and earlier this year the Remuneration Committee conducted an extensive consultation with major shareholders on the new structures they had developed. We believe that the new performance measures adopted for our incentive schemes are vital value drivers for the business and that the substantial increase in the deferred element of our Executive Directors' compensation structure serves to strengthen their focus on long-term success and alignment with shareholders.
Strategy development
Strategy development was a recurrent and important theme in my meetings with investors. Our Board strategy reviews have progressed from being budget centred and informed by detailed management presentation to being driven by an agenda set by Board members themselves which looks to the longer-term direction and time horizon of the business.
In 2009, the Board oversaw the integration of the fund of funds business to protect our customer franchise. In May 2010, I was delighted to announce Man's proposed acquisition of GLG. The combination of our two businesses willl create a powerful new group with enormous potential, marrying GLG's highly regarded expertise in discretionary investing with Man's quantitative skills and world class distribution and product structuring. Importantly, it will result in a significantly enhanced product offering for investors and a more diversified source of income for shareholders. My Board colleagues and I unanimously believe that this is a very exciting transaction and have strongly recommended it to shareholders. In addition, through 2010 we will be overseeing important initiatives to ensure we realise the full potential of AHL, develop other quantitative styles and optimise our fund operating model.
