The Directors acknowledge the need to segregate the responsibility for operating the Board from the management of the underlying business. Consequently, the roles of Non-Executive Chairman (Eric Walters) and Chief Executive (Paul Pindar) are separated.
The Board consists of the Non-Executive Chairman, Eric Walters; three further independent Non-Executive Directors, Peter Cawdron (Senior Non-Executive Director), Martina King and Bill Grimsey; and four Executive Directors; Paul Pindar, Chief Executive, Gordon Hurst, Group Finance Director and Company Secretary and Paddy Doyle and Simon Pilling, Joint Chief Operating Officers.
Peter Cawdron will retire as Non-Executive Director on 30 September 2008 and as part of the Board’s orderly succession planning, Martin Bolland was appointed as Non-Executive Director on 1st March 2008. Martin Bolland was appointed following a formal and rigorous recruitment process. When considering Mr Bolland’s appointment, the Nomination Committee met, with Eric Walters chairing the proceedings, and Peter Cawdron took no part in the process. One-on-one meetings were also undertaken with the Group Finance Director and Chief Executive.
The Senior Non-Executive Director is available, as necessary, to lead meetings of the Non-Executive Directors without the Executive Directors and/or the Chairman being present and meets with shareholders to understand any concerns. Biographies of the Directors can be found elsewhere on this site.
Director induction and professional development
On joining the Board, all Directors receive an appropriate induction programme involving appropriate documentation, meetings and visits to Capita businesses with other Directors, attendance at Divisional Board meetings and discussions with advisers and senior management from across the Group.
All Board members have access to independent advice on any matters relating to their responsibilities as Directors and as members of the various committees of the Board, at the Group’s expense. The Company Secretary, Gordon Hurst , who is also Group Finance Director, is available to all Directors and he is responsible for ensuring that all Group Board procedures are complied with.
The decision to combine the roles of Group Finance Director and Company Secretary was taken when Capita was a smaller entity and as the Group has evolved this approach has been regularly reviewed and has proven to work well. Capita owns a company secretarial business that provides services to numerous private and quoted companies and a team from this business directly supports Gordon Hurst in his role as Company Secretary.
During the year, the Directors received appropriate ongoing briefings and information, including updates on governance and regulatory issues, to enable them to perform their roles. They also attended external courses where appropriate.
Board performance evaluation
A full Board performance evaluation was conducted in 2006 and during the year to 31 December 2007, the Board continued to review outcomes of that evaluation, which were positive. A full Board appraisal will be conducted in the year to 31 December 2008.
The performance of individual Executive Directors is appraised annually by the Chief Executive, to whom they report. The performance of the Chairman is reviewed by the Non-Executive Directors, led by Peter Cawdron, taking into account the views of the Executive Directors.
The performance review of the Chief Executive is conducted by the Non-Executive Chairman, taking into account the views of other Directors. Non-Executive Directors’ performance is reviewed by the Non-Executive Chairman, taking into account the views of other Directors.
Appointment, re-appointment and removal of Directors
Directors are appointed and may be removed in accordance with the Articles of Association of the Company and the provisions of the Companies Acts.
All Directors are subject to election at the first Annual General Meeting after their appointment and to re-election at intervals of no more than three years in accordance with the Combined Code and the Company’s Articles of Association.
No person other than a Director retiring at the meeting shall be appointed or re-appointed a Director of the Company at any general meeting unless he/she is recommended by the Directors.
No person other than a Director retiring at a general meeting as set out above shall be appointed or re-appointed unless between seven and 35 days’ notice, executed by a member qualified to vote on the appointment or re-appointment, has been given to the Company of the intention to propose that person for appointment or re-appointment, together with notice executed by that person of his/her willingness to be appointed or re-appointed.
The Non-Executive Chairman and, where appropriate, the Non-Executive Directors have, following the evaluation process described above, considered the performance of Paddy Doyle and Martina King, who are subject to re-election at the 2008 Annual General Meeting and is satisfied that they continue to be effective and demonstrate a clear commitment to the role.
Nomination Committee
The Nomination Committee comprised Eric Walters (Chairman), Peter Cawdron, Martina King and Bill Grimsey throughout the year. The Committee reports to the Board and its duty is to seek suitably skilled and experienced candidates to be Non-Executive Directors and ensures plans are in place for orderly succession for appointments to the Board.
When considering the constitution of the Board, the Nomination Committee carries out a rigorous review, taking into account the need for progressive refreshing of the Board. Core competencies and attributes required to fill the roles are set out and independent external search consultants engaged, where appropriate, to identify potential candidates. The Chairman of the Company will not take part in any discussions regarding the consideration of the appointment of a new Chairman.
Audit Committee
The Audit Committee comprised the Non-Executive Directors throughout the year and was chaired by Peter Cawdron ,who has significant and recent relevant financial experience. Audit Committee meetings are attended, by invitation, by the Non-Executive Chairman, Chief Executive, Group Finance Director, Group Compliance Director, Group Risk and Business Assurance Director and by representatives of the external auditors.
At their meetings, the Committee reviewed a wide range of financial reporting and related matters including the half year and annual accounts prior to their submission to the Board . The Committee focused in particular on critical accounting policies and practices adopted by the Group and any significant areas of judgement that materially impact reported results. It also monitored the internal controls that are operated by management to ensure the integrity of information reported to shareholders.
The Committee provides a forum for reporting by the Group’s external auditors, and it advised the Board on the appointment, independence and objectivity of the external auditors and on their remuneration both for statutory audit and non-audit work. It also discussed the nature, scope and timing of the statutory audit with the external auditors. The Audit Committee annually performs an independent assessment of the suitability and performance of the external auditors in making its recommendation to the Board for their re-appointment.
The Committee has responsibility for reviewing the annual internal audit programme and for ensuring that the business risk management and internal audit functions are adequately sponsored and resourced. It also monitored the resourcing levels and performance of the Group’s compliance function.
At the meeting to review the 2007 Annual Report and Accounts, the Committee considered the level of non-audit services being provided by the Group’s external auditors in order to satisfy itself that the objectivity and independence of the external auditors was safe guarded. There is a policy in place to monitor and approve the use of the auditors for non-audit services. Details of audit and non-audit fees are in [note 7]. The lead audit partner is rotated on a five yearly basis.
Remuneration Committee
Details of the Remuneration Committee and its activities are given in the [Directors’ remuneration report].
The terms of reference of the Nomination, Remuneration and Audit Committees were updated during the year to reflect changes in best practice. The terms of reference are displayed in the [investor centre of the Group website].
Board and committee members, frequency of meetings and attendance
During 2007 the Board met nine times, excluding ad hoc meetings solely to deal with procedural matters. The Nomination Committee and the Remuneration Committee each met two and three times during the year, respectively. The Audit Committee met four times during the year. Attendance is recorded in the table below.
or the Chairman of the relevant committee.