Annual Report & Accounts 2009 - Anglo Irish Bank

Corporate governance statement
On 15 January 2009 the Government announced that it would
take steps that would enable the Bank to be taken into State
ownership. The Anglo Irish Bank Corporation Act, 2009 ('the
Act') provided for the transfer of all the shares of the Bank to
the Minister for Finance ('the Minister' and 'the Shareholder')
and was enacted under Irish law on 21 January 2009. On the
same date, the Bank was re-registered as a private limited
company. During 2009 the Bank adopted the Code of Practice
for the Governance of State Bodies and is working with the
Department of Finance towards full compliance, where
applicable. The Bank has also adopted, and is in compliance
with, the corporate governance and other obligations imposed
by the Ethics in Public Office Act, 1995 and the Standards in
Public Office Act, 2001.
The Combined Code on Corporate Governance (the 'Combined
Code') issued by the Financial Reporting Council in June 2008
sets out the principles of good governance and a code of best
practice. Companies listed on the Irish Stock Exchange are
required to report on their compliance with the provisions of
the Combined Code. Although the Bank's shares are no longer
listed on the Irish and London Stock Exchanges, the Board
supports the principles and provisions of the Combined Code.
This corporate governance statement describes how the Bank
applied the principles of the Combined Code throughout the
financial period ended 31 December 2009.
Except where otherwise stated the Directors believe that the
Group has complied with the provisions of the Combined Code
throughout the financial period ended 31 December 2009.
Relationship with the Shareholder
In addition to the Act, a Relationship Framework between the
Minister and the Bank was formally approved by the Board in
June 2009. This provides a framework under which the
relationship between the Minister and the Bank shall be
governed. Under the Relationship Framework, certain key
matters are reserved to the Minister, and in which the Board
shall only engage on the instructions of, or with the prior
consent of, the Minister.
There has been regular two way communication between the
Shareholder and the Directors during the financial period on a
wide range of issues, with the Directors being kept informed of
the Shareholder’s views through regular reports to the Board
by the Chairman and the Group Chief Executive and through
meetings between the Board and the Minister.
Board of Directors and Membership
The Board of Directors recognises its responsibility for the
leadership, direction and control of the Bank and the Group
and its accountability to the Shareholder for financial
performance. As at 31 December 2009, the Board comprised
the Chairman, two Non-executive Directors and the Group
Chief Executive. It is a priority for the Board to increase the
number of Non-executive Directors.
The Non-executive Directors are independent of management
with varied backgrounds, skills and experience.
There have been a total of 59 board meetings during the
financial period, 10 of which were scheduled. The purpose of
the 49 unscheduled meetings was primarily to discuss the
difficult market conditions that existed during the financial
period, capital matters, legacy related matters and the Bank's
Restructuring Plan.
All Directors are expected to attend each meeting and the
attendance at scheduled board meetings during the financial
period is set out on page 33. Directors are provided with
relevant papers in advance of each meeting. In addition,
electronic copies of meeting papers and other relevant
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information are available to Directors via a dedicated Directors'
extranet.
If any Director is unable to attend a meeting, he will still
receive the supporting papers and will usually discuss any
matters he wishes to raise with the Chairman to ensure his
views are given due consideration. During the financial period
many of the unscheduled meetings were arranged at short
notice and it was not always possible for all Directors to
attend. The average attendance rate was 93%.
The Board keeps a formal schedule of matters specifically
reserved for its decision. These are matters which are
significant to the Bank because of their strategic, financial or
reputational implications and include agreement of strategic
objectives, annual plans and performance targets, monitoring
and control of operations, review of the performance of Board
Committees and approval of specific senior appointments. The
schedule of matters reserved for the Board was reviewed,
updated and approved by the Board in March 2010, having
also been previously reviewed in 2009.
Ned Sullivan was the Senior Independent Non-executive
Director until 19 January 2009. Given its current size and
composition, the Board has not considered it necessary to
appoint a new Senior Independent Director to replace Ned
Sullivan. On the appointment of additional Non-executive
Directors it is the Board's intention to reconsider the
appointment of a Senior Independent Director.
The Bank has insurance in place to cover the Directors and
Officers in respect of legal actions which may be brought
against them in the course of their duties.
Roles of Chairman and Group Chief Executive
Donal O'Connor was appointed Chairman of the Bank on
18 December 2008 and Executive Chairman, on an interim
basis, on 19 February 2009.
Following a comprehensive search and selection process,
A.M.R. (Mike) Aynsley was appointed Group Chief Executive on
7 September 2009, at which point Donal O'Connor resumed
his role as Non-executive Chairman and since that date the
roles of Chairman and Group Chief Executive have been
distinct and separate.
The Chairman's main responsibility is to lead and manage the
Board, and to promote corporate governance and effective
communication with the Shareholder. The Board has delegated
the day to day responsibility of the Bank's operations to the
Group Chief Executive who in turn delegates the
implementation of operational decisions to the senior
management team.
Independence of the Board
The Board has carried out its annual evaluation of the
independence of each of its Non-executive Directors, taking
into account the relevant provisions of the Combined Code,
namely whether the Directors are independent in character
and judgement and free from relationships or circumstances
which are likely to affect, or could appear to affect, the
Directors' judgement. The Board is satisfied that each of the
current Non-executive Directors fulfilled the independence
provisions of the Combined Code.
Appointments to the Board
The Board appoints new Directors on the recommendation of
the Nomination and Succession Committee. Directors are
appointed initially for three years and, subject to satisfactory
performance, may be re-appointed for additional terms.
Following nationalisation, the Minister has additional powers
to appoint Directors of the Bank under the Act.