Following the full external evaluation carried out in 2009, an internal review based on a written questionnaire developed by the Company Secretary with input from the Board was carried out in 2010. This covered the operation of the Board and the Remuneration and Nomination Committees. A separate evaluation was carried out for the Audit and Risk Committee as reported here. The review of the Board's collective performance focussed on the main issues identified for improvement in 2009 and topical governance concerns emerging from the Walker and Combined Code reviews. It also gave ample scope for free comment on any aspects of Board operation with input from the new non-executive directors being of particular interest and value. Individual director evaluation was built on a range of self appraisal questions for private discussion and feedback between the Chairman and individual Board members. These sessions allowed the Chairman to take soundings on Board dynamics, to mentor individual roles as necessary and ensure that the most is made of non-executive talent and time commitment. The Senior Independent Director sought written comments from all Board members on the performance of the Chairman which were discussed with him in a private meeting. The main issues identified in the collective Board evaluation were the need for:
All these issues were presented to and considered by the Board in March and a progress review will be carried out mid way through the financial year.
The process for the appointment of directors to the Board is led by the Chairman and the Nomination Committee as detailed in the Nomination Committee report. Details of executive directors' service contracts are given in the Remuneration Committee report. The terms of non-executive directors' appointments are set out in their letter of appointment. The Company's Articles of Association provide that all directors are subject to appointment by shareholders at the first annual general meeting after their appointment by the Board and to reappointment by shareholders thereafter at intervals of not less than three years.
Non-executive directors are appointed for an initial term of three years which may be followed by a second three year term by mutual agreement. Any extension beyond this period will be subject to rigorous review, taking into account the strengths and profile of the individual and balancing the need for continuity of knowledge and experience and the refreshing of skills and outlook. With the restructuring of Committee memberships and non-executive responsibilities in the course of 2009, the opportunity was taken to update the approximate time commitments identified for individual non-executive director roles and to amend directors' letters of appointment accordingly.
Directors are required to declare all their external business positions prior to their appointment to the Board and to keep the Board updated on any subsequent changes. In addition, the Board carries out a formal annual review of directors' external business appointments and interests, giving special consideration to any which might be regarded as creating a potential conflict with the interests of the Company. Alison Carnwath's current directorship of MF Global, which she will relinquish in August 2010, has previously been recognised as representing a potential conflict of interest. For this reason, the Board's policy is that Mrs Carnwath should absent herself from any Board discussion of the Company's relationship or dealings with MF Global and that she does not receive related Board papers and minutes. This protocol has been rigorously observed during the year.
There is provision for directors to take independent professional advice relating to the discharge of their responsibilities should they feel they need it. Under the Company's Articles of Association and to the extent permitted by law, directors have been granted an indemnity by the Company in respect of any third party liabilities which they incur as a result of holding office. This also permits the Company to advance payment of legal costs to directors for their defence in investigations or against legal actions. The Company has arranged directors' and officers' liability insurance against certain liabilities and defence costs which its indemnity does not cover. However, neither the Company's indemnity nor directors' insurance provides protection in the event of a director being found to have acted fraudulently or dishonestly.
Institutional investors
We undertake a comprehensive programme of meetings and events for institutional investors and research analysts. In the year under review, this programme included over 250 investor meetings; preliminary and interim results presentations; and conference calls relating to quarterly Interim Management Statements and pre-close trading statements. Investors and analysts also met with key operational managers, notably to gain more insight into AHL. Investor feedback is regularly circulated to and discussed by the Board, and in the course of the year the Investor Relations team presented to the Board and participated in the induction programme for new non-executive directors.
The Chairman attends results presentations and earlier this year undertook a programme of meetings with institutional opinion formers to supplement contact between investors and the executive management team. This gave him the opportunity to listen to investors' views at first hand, and to discuss strategy and governance with them. The Chairman of the Remuneration Committee has engaged with investors and shareholder representative bodies to discuss planned changes to executive remuneration arrangements. The Senior Independent Director is always available to meet with major shareholders, but has not had cause to do so during the year.
Private shareholders
We welcome and respond to enquiries from private shareholders throughout the year, either via our shareholder mailbox (shareholder@Man Groupplc.com), by letter or telephone. We have recently updated the Shareholder Information pages of our corporate website which can be found under Investor Relations. These cover a range of issues which may be of interest to shareholders, including dividend information, frequently asked questions and a direct link to Shareview which enables shareholders to manage many aspects of their holdings on-line. Recognising that not all shareholders will be able to come to our Annual General Meeting, we have provided a special email address (agm@Man Groupplc.com) for questions from those unable to attend.
