Tullett Prebon plc Annual Report 2010
Corporate Governance Report
The directors are responsible for the corporate governance of the Group. They support the principles of good corporate governance and code of best practice laid down by the Combined Code on Corporate Governance issued by the Financial Reporting Council in June 2008 (the ‘Combined Code’). Throughout the year ended 31 December 2010 the Board believes it has complied with the principles and provisions recommended by the Combined Code. The manner in which the Company has applied the principles of good governance set out in the Combined Code during 2010 is outlined below. For the ﬁnancial year commencing on 1 January 2011 the Company is subject to the UK Corporate Governance Code issued by the Financial Reporting Council in June 2010. The Combined Code and the UK Corporate Governance Code are publicly available at www.frc.co.uk.
received fees of £97,744 for the year ended 31 December 2010 from Collins Stewart plc, which he is entitled to retain. The terms of the directors’ service agreements and letters of appointment are summarised in the Report on Directors’ Remuneration set out on pages 32 to 38. The terms and conditions of appointment of the non-executive directors will be available for inspection during normal business hours on any weekday (other than public holidays) at the Company’s ofﬁces from the date the notice of AGM is posted until the conclusion of the AGM. Independence of directors The Board has determined that all four of the non-executive directors are independent. The Senior Independent Non-executive Director, David Clark, has responsibility for dealing with any shareholders who have concerns, which contact through the normal channels of Chairman, Chief Executive or Finance Director has failed to resolve, or for which such contact is inappropriate. Induction and professional development All directors receive induction on joining the Board and relevant training is available to directors to assist them in the performance of their duties. The Audit Committee and the Remuneration Committee receive brieﬁngs on current developments. The non-executive directors take advantage of sector and general conferences and seminars and training events organised by professional ﬁrms and receive circulars and training materials from the Company and other professional advisers. Regular presentations are made to the Board by members of the Company’s Executive Committee, and arrangements are made for non-executive directors to meet members of the management teams and they attend the Company’s management conferences. Non-executive directors regularly visit the Company’s international ofﬁces, usually in connection with other activities. Conﬂicts of interest The Company’s Articles of Association permit the Board to consider and, if it sees ﬁt, to authorise situations where a director has an interest that conﬂicts, or may possibly conﬂict, with the interests of the Company (a ‘Relevant Situation’). The Board has a formal system in place for directors to declare Relevant Situations to be considered for authorisation by those directors who have no interest in the matter being considered. In deciding whether to authorise a Relevant Situation, the non-conﬂicted directors must act in the way they consider, in good faith, would be most likely to promote the success of the Company, and they may impose limits or conditions when giving the authorisation or subsequently if they think this is appropriate. The Board has followed the prescribed procedures in deciding whether, and on what terms, to authorise Relevant Situations and believes that the systems it has in place for reporting and considering Relevant Situations, including an annual review of authorisations, continue to operate effectively. During the year the independent non-executive directors, led by the Senior Independent Non-executive Director, reviewed the external business commitments of members of the Board and concluded that none of these gave rise to conﬂicts of interest or other factors which might affect the effective operation of the Company or the Board.
Composition of the Board The Board currently comprises two executive directors, four independent non-executive directors and a non-executive Chairman. There were no changes to the membership of the Board during 2010, except that Michael Fallon resigned as a non-executive director with effect from 1 June 2010 and was re-appointed as a nonexecutive director on 28 September 2010. The directors’ biographies are shown on page 25 and demonstrate the Board’s depth of experience and skill. The non-executive directors also have the range of experience and the calibre to exercise independent judgement and contribute to Board discussions. Four of the directors (and three of the non-executive directors) have extensive previous experience at a senior level in the ﬁnancial services sector and three of the directors are chartered accountants (two of whom were audit partners in a major ﬁrm of accountants), one of the non-executive directors was a Senior Adviser to the Financial Services Authority, and both the Chairman and the Finance Director were previously Finance Directors of a number of other companies. The average age of the members of the Board is 56 (non-executive directors, including the Chairman – 58) and the average length of service of the non-executive directors excluding the Chairman (including membership of the Board of Collins Stewart Tullett plc) is six years. The Chairman, Keith Hamill was, at appointment, independent of the Company and the management, but, as Chairman, is not classiﬁed as independent. His other signiﬁcant commitments are noted in his biography on page 25. There is a clear division of responsibilities between the Chairman and the Chief Executive. The primary responsibility of the Chairman is the leadership of the Board. The primary responsibility of the Chief Executive, Terry Smith, is the running of the Company’s operations and the development and implementation of strategy in order to maximise shareholder value. In the event that any of the executive directors wished to take up a non-executive appointment with another company, the Board would be amenable to such a proposal, provided that the time commitment involved would not be too onerous. Following the demerger of Collins Stewart plc on 19 December 2006, Terry Smith became Chairman of Collins Stewart plc. On 1 April 2010 Terry Smith handed over the Chairmanship and served as Deputy Chairman until 6 December 2010 when he retired as a director. Terry Smith