Management

Board matters

Board matters

For the purposes of these terms of reference, the term ‘Major’ shall have the meaning given to it in the Society’s risk reporting framework.

1.1 The principal functions of the Board are to:

1.1.1 determine the strategy and policies of the Group to ensure the long-term success of the Society;

1.1.2 set out the guidelines within which the business is managed; 

1.1.3 review business performance in the Society and significant Group subsidiaries;

1.1.4 determine the nature and extent of significant risks; and

1.1.5 ensure judgements and decisions are taken with due regard to the creation or increase in conduct risks, taking proactive steps to avoid or prevent these where possible.

1.2 The Board also has a general duty to ensure that the Group operates within:

1.2.1 the Society's Rules (as amended from time to time);

1.2.2 rules and guidance issued by competent regulatory authorities; and

1.2.3 all applicable laws.

2.1 Strategy and management

2.1.1 Responsibility for the overall management of the Group and setting the Group’s values and standards.

2.1.2 Approval of the Group's long term objectives and commercial strategy, which should be designed to achieve long-term success, including the Group's Corporate Plan.

2.1.3 Approval of the Group’s annual operating and expenditure budgets.

2.1.4 Oversight of the Group's operations ensuring:

  • competent and prudent management
  • sound planning and risk management
  • an adequate system of internal control
  • adequate accounting and other records
  • compliance with statutory and regulatory obligations
  • adequate financial resources
  • fair outcomes for our members and customers

2.1.5 Review of performance in the light of the Group's strategy, objectives, business plans and budgets and ensuring that any necessary corrective action is taken, including review of the Board Performance Pack.

2.1.6 Any extension of the Group's activities into new business or new geographic areas.

2.1.7 Any decision to cease to operate all or any part of the Group's business which would have a Major impact on the Group.

2.2 Structure, capital and funding

2.2.1 All issues or redemptions of Core Capital Deferred Shares

2.2.2 Subject to paragraph 2.2.1, changes relating to the Group's capital structure including capital raising activity, except individual capital raising transactions which are below £100 million and not part of a wider capital raising programme, which transactions can be approved by the Chief Executive and Group Finance Director jointly.

2.2.3 Subject to paragraph 2.2.1, any capital redemptions, except those below £200 million which are included in the Corporate Plan and where the redemption does not breach any Board risk appetite trigger, such transactions can be approved by the Board Risk Committee.

2.2.4 Changes to the Group's corporate structure including any merger or creation, acquisition or disposal of any subsidiary or associated company, or of any significant business operation, or any other initiative which has significant strategic implications for the Group, except that in the event that the Society is invited to rescue another society or other financial institution by way of merger or acquisition and it is not practical to convene a Board meeting, the Emergency Powers Committee shall have power to agree such merger or acquisition on behalf of the Board.

2.2.5 Any acquisition, disposal or securitisation of trading assets or liabilities with a gross book value in excess of £1billion or where there is an unbudgeted loss arising in excess of £50 million.

2.2.6 The acquisition or disposal of any individual non-trading asset, including freehold or leasehold property, with a gross book value in excess of £50 million or where there is an unbudgeted loss arising in excess of £25 million.

2.2.7 The above paragraphs exclude all dealings in any trading assets as duly authorised by Board delegated authorities or under other committees’ terms of reference.

2.2.8 Changes to the Group's management and control structure unless separately approved by the Audit Committee or Board Risk Committee under their terms of reference.

2.2.9 Any change to the Society's mutual status.

2.2.10 The principles of any new forms of wholesale funding and capital instruments with characteristics different from those previously approved by the Board.

2.3 Financial reporting and controls

2.3.1 Approval of preliminary announcement of annual results, half yearly results and interim management statements.

2.3.2 Approval of the distribution policy for periodic investment returns on Core Capital Deferred Shares.

2.3.3 Declaration of periodic investment returns on Core Capital Deferred Shares.

2.3.4 Approval of the annual report and accounts including the corporate governance statement and remuneration report.

2.4 Internal controls and risk management

2.4.1 Ensuring maintenance of a sound system of internal control and risk management including:

  • receiving reports on, and reviewing the effectiveness of, the Group's risk and control processes to support its strategy and objectives
  • undertaking at least an annual assessment of these processes
  • approving an appropriate statement for inclusion in the annual report.

2.4.2 Approval of the Group's risk appetite.

2.4.3 The Board may delegate certain responsibilities for approval of other aspects of risk management to the Board Risk Committee. Delegations of authority will be set out in the Board Risk Committee terms of reference which is approved annually by the Board.

2.4.4 The Board Risk Committee will advise the Board on risk matters and highlight significant risks identified through the Society’s risk reporting framework for discussion and if appropriate, approval.

2.5 Projects and Contracts 

2.5.1 Individual projects or projects that are related which in aggregate involve project spend in excess of £50million over the life of the project. Project spend shall include, but not be limited to, third party supplier contract expenditure as well as internal spend and internal resource costs.

2.5.2 Contracts with third parties which involve annual spend in excess of £25million or total life of contract spend in excess of £150million.

2.5.3 Entering into individual or inter-related leases or tenancies where the annual rent exceeds £5million , or disposal of surplus leasehold premises with an annual rental value in excess of £5million. 

2.6 Lending

2.6.1 Approval of recommendations from the Executive Risk Committee for

(i) lending proposals in excess of the Executive Risk Committee's lending mandate 

(ii) borrowing propositions which, in the opinion of the Executive Risk Committee, fall outside the Society's normal business 

(iii) acquisition of external loan portfolios in excess of the Executive Risk Committee's mandate.

2.6.2 Approval of Treasury Counterparty exposures in excess of the Executive Risk Committee's mandate

2.7 Communication

2.7.1 Approval of resolutions and corresponding documentation to be put forward to members at a general meeting, including proposals for amendments to the Society's Memorandum and Rules.

2.7.2 Approval of all circulars, prospectuses and listing particulars which require approval by the Board.

2.8 Board membership and other senior management issues 

2.8.1 Changes to the structure, size and composition of the Board, following recommendations from the Nomination and Governance Committee.

2.8.2 Ensuring adequate succession planning for the Board and senior management following recommendations from the Nomination and Governance Committee, including any changes to the Board Composition and Succession Plan.

2.8.3 Appointments to the Board, following recommendations by the Nomination and Governance Committee, including the appointment of the Chairman, the Chief Executive, the Senior Independent Director and the Secretary, and the selection of members and chairmen of Board committees.

2.8.4 Continuation in office of directors, including:

  • at the end of their term of office when they are due to be re-elected by members at the annual general meeting
  • the suspension or termination of service of an executive director as an employee of the Society, subject to the law and their service contract.
  • the termination of service of the Chief Risk Officer and/or the Chief Compliance Officer and/or the Secretary.

2.8.5 Appointment, reappointment or removal of the external auditor to be put to members for approval, following the recommendation of the Audit Committee.

2.9 Remuneration

2.9.1 Determining the remuneration policy for the directors and other senior executives subject to the Memorandum and Rules and any member approval as appropriate.

2.9.2 The introduction of new incentive plans for executive, group or divisional directors or significant changes to existing plans subject to any member approval as appropriate.

2.9.3 Determining whether the circumstances are such that the Society's members should be invited at the annual general meeting to approve the remuneration policy. 

2.10 Delegation of Authority

2.10.1 The division of responsibilities between the chairman and the chief executive, which should be in writing.

2.10.2 Approval of terms of reference of Board committees including any delegation of authority to those committees

2.10.3 Approval of Additional Job Information statement for each of the Chief Executive Officer, Chairman, Senior Independent Director, Board Committee Chairmen and for Non-Executive Directors.

2.10.4 Receiving minutes and/or reports from the Board committees and the CEO on their activities.

2.10.5 Approval of the Nationwide Governance Manual annually and any replacement of it.

2.11 Corporate governance matters

2.11.1 Undertaking a formal and rigorous review annually of its own performance, that of its committees and individual directors and the division of responsibilities.

2.11.2 Determining the independence of directors.

2.11.3 Considering the balance of interests between members, other customers, employees and the community.

2.11.4 Review of the Group's overall corporate governance arrangements.

2.11.5 Receiving reports on the views of the Society members.

2.11.6 Agree the Directors’ Conflict of Interest Policy and all other relevant policies.

2.12 Miscellaneous 

2.12.1 The making of political donations.

2.12.2 Prosecution, defence or settlement of litigation or alternative dispute resolution mechanism involving sums above £25 million or which would have a Major impact on the Group.

2.12.3 Approval of the overall levels of insurance for the Group including Directors’ & Officers' liability insurance.

2.12.4 Significant changes to the rules of the Group's pension scheme.

2.12.5 This schedule of matters reserved for Board decisions.

3.1 Matters which the Board considers suitable for delegation are contained in the terms of reference of those Board Committees.

3.2 In addition, the Board will receive reports and recommendations from time to time on any matters which it considers significant to the Group.

4. Senior Manager Regime Prescribed Responsibilities & Key Functions

4.2. Assist the Senior Manager Function (SMF) role holder in fulfilling the following Prescribed Responsibilities:



Prescribed Responsibilities to the Committee
Prescribed Responsibility Description SMF SMF Committee Status
h Responsibility for overseeing the adoption of the firm’s culture in the day-to-day management of the firm Chief Executive 

Member

i Responsibility for leading the development of the firm’s culture by the governing body as a whole Chairman  Member (Chair)
t Responsibility for the development and maintenance of the firm’s business model by the governing body Chief Executive

Member



4.3. Where matters are being discussed in relation to a prescribed responsibility, the relevant SMF role holder should attend and participate in the discussion, or if they are unable to attend to ensure that they are suitably represented.

Board Membership

Board membership
Executive Directors Non-Executive Directors
Chief Executive David Roberts (Chairman)
Group Finance Rita Clifton CBE
Chief Operating Officer Mitchel Lenson
  Lynne Peacock (Senior Independent Director)
  Tim Tookey
  Mai Fyfield
  Kevin Parry

Secretary: Group Secretary

1. Membership

1.1 Members of the Board shall be appointed by the Board, on the recommendation of the Nomination and Governance Committee (other than the positions of Chairman and Chief Executive, the recommendation for which shall be considered at a meeting of the full Board), and shall be subject to annual election and re-election by the Society’s members. The Society’s members also have the right to nominate candidates for election to the Board. The majority of Board members shall be independent non-executive directors.

1.2 Only members of the Board have the right to attend Board meetings. However, other individuals such as the Secretary, Divisional Directors and external advisers may be invited to attend all or part of any meeting as and when appropriate.

1.3 Subject to annual election and re-election by the members of the Society non-executive appointments to the Board shall be for a period of up to three years, which may be extended for further three year periods.

1.4 The Board shall appoint the Chairman and the Chief Executive. At the time of appointment as Chairman, the director concerned shall be an independent non-executive director. In the absence of the Chairman and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting. 

Board Quorum and Meetings

1. Secretary

1.1 The Secretary of the Society shall be appointed by the Board and shall act as the secretary of the Board.

2 Quorum

2.1 The quorum necessary for the transaction of business shall be 5 members, of whom the majority should be non-executive directors. A duly convened meeting of the Board at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Board.

3 Frequency of Meetings

3.1 The Board shall meet at least ten times a year and otherwise as required.

4 Notice of Meetings

4.1 Meetings of the Board shall be summoned by the Secretary at the request of any of its members or at the request of external or internal auditors if they consider it necessary.

4.2 Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the Board and any other person required to attend no later than 5 working days before the date of the meeting. Supporting papers shall be sent to Board members and to other attendees as appropriate, at the same time.

5 Minutes of Meetings

5.1 The Secretary shall minute the proceedings and resolutions of all meetings of the Board, including recording the names of those present and in attendance. 

5.2 The Secretary shall record any conflicts of interest divulged at the meeting.

5.3 Minutes of Board meetings shall be circulated to all members of the Board before the next meeting of the Board.

6 Annual General Meeting

6.1 Members of the Board shall attend the Annual General Meeting, prepared to respond to any questions on the Board's activities.

You may also be interested in...

The AGM

The 2016 AGM will be held in Gateshead. Find out details on the voting results from the 2015 AGM, further details on how you can vote and your rights as a member.

Member TalkBacks

We've held over 150 regular Member TalkBack events around the Country since 1997. Here's a chance to have your say and put your questions to a Nationwide Director.

Board committees

Board composition and succession plan