Annual report: Period Ended 31 December 2012 - Invesco Perpetual

28 City Merchants High Yield Trust Limited
Report of the Directors
continued
Board meetings follow a formal agenda, which includes a review of the investment portfolio with
a report from the portfolio managers on the current investment position and outlook, performance
against stock market indices and the Company’s peer group, asset allocation, gearing, cash
management, revenue forecasts for the financial year, marketing and shareholder relations,
corporate governance, regulatory changes and industry and other issues.
Appointment, Re-election and Tenure of Directors
No Director has a contract of employment with the Company. Directors’ terms and conditions
of appointment are set out in letters of appointment which are available for inspection at
the registered office of the Company and on the Manager’s website at
www.invescoperpetual.co.uk/investmenttrusts.
The Articles of Association require that a Director shall retire and be subject to re-election at the first
AGM after appointment and at least every three years thereafter. Thus, no Director serves a term of
more than three years before re-election. This being the first year of the Company, all of the Directors
will be subject to election at the forthcoming AGM. A Director’s tenure of office will normally be a
maximum of three terms of three years, except that the Board may determine otherwise if it is
considered that the continued service on the Board of an individual Director is in the best interests
of the Company and its shareholders. In this case, a Director serving longer than nine years will seek
re-election annually.
The Articles of Association provide that the Directors may, by notice in writing, remove any Director
from the Board.
Attendance at Board and Committee meetings
The following table sets out the number of scheduled meetings of the Board and Audit Committee
held during the period and the number attended by each Director:
Scheduled Audit
Board Committee
Meetings Meetings
Number of Meetings 5 1
Clive Nicholson (Chairman) 4 1
Philip Austin 5 1
John Boothman 5 1
Winifred Robbins 4 1
Philip Taylor 4 1
Board members also attended a number of additional non-scheduled meetings to deal with the
declaration of dividends and other ad hoc items.
Board, Committee and Directors’ Performance Appraisal
The Directors recognise the importance of the AIC Code’s recommendations in respect of evaluating
the performance of the Board as a whole, its Committees and individual Directors. The performance
of the Board, Committees and Directors is assessed in terms of:
– attendance at Board and Committee meetings;
– independence of Directors;
– the ability of Directors to make an effective contribution to the Board and Committees through
the diversity of skills and experience each Director brings to their role; and
– the Board’s ability to challenge the Manager’s recommendations, suggest areas of debate and fix
timetables for debates on the future strategy of the Company.
An external search consultancy, Stephenson & Co, was engaged to assist in the selection of the
Board. When appointing a new director, care is taken to ensure that there is a balance of skills and
experience appropriate for the requirements of the Company and that new directors have enough
time available to devote to the affairs of the Company. The composition of the Board is reviewed