Annual Report and Accounts 2010-11 - Manchester Airport

Report on Corporate Governance 31During the year, a new post of Group Chief Operating Officer was created whose primary responsibilities are to optimisebest practice transfer in the Group, key account management and implement Group-wide strategies such assustainability. Penny Coates formerly MD of Regional Airports Group was appointed Group Chief Operating Officer inAugust 2010.Chairman and Chief ExecutiveThe roles of the Chairman and Group Chief Executive are separate and clearly defined. The Chairman is responsible forthe working of the Board and provides leadership, ensuring that it delivers effectively on its accountabilities. The dayto-daymanagement of the Group and the delivery of Group financial and operational objectives is the responsibility ofthe Group Chief Executive who is supported by the Group Chief Finance Officer and Group Chief Operating Officer.Board balance and independenceThe Board comprises the Chairman, up to four executive directors and eight non-executive directors. It is considered thatthe size of the Board is sufficient for the requirements of the business and that there is an appropriate balance of nonexecutiveand executive directors on the Board.All non-executive directors are appointed subject to objective capability criteria. The Board considers that all the nonexecutivedirectors are independent both in character and judgement. The Group meets the requirement of the Code thatat least half the Board comprises independent directors. The Chairman was deemed independent for the purposes ofthe Code at the time of his appointment.The Board has reviewed its decision not to appoint a senior independent director and has concluded that since the rolesof the Chairman and Group Chief Executive are not held by the same person and since there are only a small number ofshareholders thus facilitating communication between the Group and its owners, a senior independent director is notnecessary. The prior approval of the shareholders is required in respect of all Board appointments. Non-executivedirectors are appointed for periods of up to three years.Conflicts of interestSince 1 October 2008, directors have been under a statutory duty to avoid any situation in which they have or can have adirect or indirect interest that conflicts or possibly may conflict with the interests of the Company. The duty is not infringedwhere a conflict has been authorised in advance by the unconflicted directors or shareholders of the Company or wherethe situation cannot be reasonably regarded as likely to give rise to a conflict of interest. The Company’s articles ofassociation were amended to include provision which permit the unconflicted directors to authorise conflict situationsand procedures have been put in place for the disclosure of any conflicts by the directors to the board and for theconsideration and if appropriate authorisation of such conflicts. The procedures permit any authorisation to be subject toany limits and/or conditions that the directors think fit.Board processes and proceduresThe Company has a formal induction programme for all new directors joining the Board which comprises key writteninformation, meetings with members of the senior management team and site visits. The Company undertakes to providethe necessary resources for updating directors’ knowledge by providing them with relevant information concerning boththe Group and their responsibilities as directors. In addition, there is a procedure whereby the directors are able to takeindependent advice in relation to their duties at the Company’s expense, if appropriate.During the year an evaluation of the effectiveness of the Board’s performance and its committees was carried out. Thiswas an internal exercise. A questionnaire was prepared and circulated forming the basis of a one to one discussion withthe directors. The Board considered feedback from the review and considered that it and the committees are operatingin an effective manner.Board committeesThe principal committees are as follows:Audit CommitteeThe Audit Committee’s members are Mike Hancox (Chairman), James Wallace, Vanda Murray and Stuart Chambers. Allmembers of the Audit Committee are independent non-executive directors. The Board is satisfied that Mike Hancox andJames Wallace have recent and relevant financial experience.The Manchester Airport Group PLC Annual Report and Accounts 2010-11