NATS-Annual-Report-2015

Annual Report and Accounts 2015 | NATS Holdings Limited
Governance 55
Governance report
(continued)
The terms of reference for the Board and its committees
are available to all staff and shareholders and can be made
available externally with the agreement of the Company
Secretary. Reports from each of the standing committees
are set out on pages 58 to 74. However, in addition to the
standing committees, from time to time the Board may
form committees on an ad hoc basis to deal with specific
business issues. During the year, the Board formed the
following ad hoc committee:
Specific Contract Review Committee
The Board recognises that having representatives of some
of its key customers as members of the Board could prima
facie result in a conflict of interest, for example when the
group is negotiating commercial contracts with those
customers.
The Board has put in place a range of controls to mitigate
this risk, for example limiting the distribution of commercially
sensitive papers to those Board members who are
independent of the party with whom NATS is contracting. In
addition, the Board may also delegate scrutiny of a contract
to a specific sub-committee of non-conflicted Board
members.
Meetings with shareholders
Shareholders meetings are held twice a year, linked to the
planning and reporting cycles, and provide the group with
an opportunity to update the shareholders on the progress
of the annual business plan and long term strategy. The
two meetings during the year were the Annual General
Meeting held on 31 July 2014 and a further meeting on 29
January 2015. Shareholders may also meet informally with
the Chairman, Chief Executive Officer, Finance Director and
other members of executive management upon request.
Due to the manner in which non-executive directors are
appointed by the shareholders under the SPA, there is no
senior independent director.
Compliance with the UK
Corporate Governance Code
NATS is committed to maintaining the highest standards of
corporate governance. The SPA requires the group and the
directors to adhere to the UK Corporate Governance Code
so far as reasonably practicable and save to the extent
inconsistent with the other provisions of the SPA. For the
financial year ended 31 March 2015, the applicable standard
is the 2012 UK Corporate Governance Code (the Code).
NATS has applied the principles of the Code to the extent
considered appropriate by the Board throughout the year
ended 31 March 2015. However, a number of principles and
provisions in the Code are not relevant to the partnership
nature of the NATS group ownership and the principal areas
where NATS did not comply are summarised below.
Corporate Governance Code A.3.1: Independence
of the Chairman
The Chairman is nominated by AG, his appointment
being subsequently approved by the Secretary of State
for Transport. He therefore does not fully meet the
independence criteria as set out in the Code and this affects
NATS’ compliance with a number of Code provisions.
Corporate Governance Code A.4.1, B.1: Independence
of Directors and appointment of Senior Independent
Director
The arrangements for appointing non-executive directors,
as set out in the SPA, are such that none of the directors
meet the Code’s criteria for independence. This affects
NATS’ ability to comply with a number of the Code’s
provisions, including the requirement to appoint a senior
independent director.
Corporate Governance Code B.2.1, D.2.1: Composition
of the Nomination and Remuneration Committees
Details of the work of the Nomination and Remuneration
Committees are set out below. However, the manner in
which directors are appointed, as noted above, means that
these committees’ processes do not fully comply with the
Code as regards independence.
Governance