BBA Group Annual Report 2004 - BBA Aviation

DIRECTORS’ CORPORATE
GOVERNANCE REPORT
Ross McMillan resigned from the Board with effect from 23 February
2005. John Roques, David Rough and Bruce Van Allen retire by rotation
and intend to seek re-appointment at the forthcoming AGM.
The Board believes that John Roques and David Rough should
be re-elected by shareholders as non-executive directors because
each continues to be effective and demonstrates commitment to his
role. The Board believes that each director will continue to do so.
The Board has determined that all its non-executive directors
are independent in character and judgment. As specified in the revised
Combined Code, such assessment is not required for a serving Chairman.
However, the Board believes that its Chairman, Roberto Quarta,
should be considered independent although he was Group Chief
Executive of the Company for a number of years until 2001. The Board
considers that there are substantial benefits to having a Chairman who
is familiar with the business and that the Chairman has, throughout his
period of office, demonstrated his independence.
During the year, the Chairman held a meeting at which only the
non-executive directors were present. In addition, the non-executive
directors met the Senior Independent Director without the Chairman
present. There are several other opportunities during the year when
discussions between various directors may be arranged or take
place informally.
Executive directors must obtain the prior consent of the Board
before accepting a non-executive directorship in any other company.
Executive directors may retain the fees from any such directorship.
As stated on page 38, Roy McGlone is a non-executive director of
Aggreko plc and during 2004 he was paid £30,350 in fees.
4. Chairman and Group Chief Executive
There is a clear division of responsibilities between the Chairman and
the Group Chief Executive and this is reinforced by a written statement
of the division of responsibilities approved by the Board. The Chairman,
a non-executive director, is primarily responsible for leading the Board
and ensuring its effectiveness. He is responsible for setting the Board
agenda and ensuring the directors receive information in an accurate,
clear and timely manner. He is responsible for promoting effective
decision-making, ensuring the performance of the Board, its
committees and individual directors are evaluated on an annual basis
and that appropriate Board training and development occurs. The
Group Chief Executive is responsible for the development and
implementation of Board strategy and policy, the running of the
Group’s business, ensuring that the business activities are effectively
communicated and promoted within and outside the business and for
building positive relationships with the Company's stakeholders.
BBA GROUP
ANNUAL REPORT
2004
44
5. Board Appointments
The Board acknowledges its responsibility for planned and progressive
refreshing of the Board. It believes that the necessary arrangements to
manage succession issues promptly and effectively are in place. There
is a formal and transparent procedure for the appointment of new
directors to the Board, the prime responsibility for which is delegated
to the Nomination Committee. The appointment process is initiated by
the Board and a selection procedure established to identify suitable
external search consultants for the vacancy. The process will differ in
its detail depending on whether the appointment is for an executive or
non-executive position, but the essentials will remain the same.
Following the appointment of a suitable external consultant, details
of the role and capabilities required for the appointment will be
prepared. The consultant then draws up a list of potential candidates
and a shortlist is created through consultation amongst Committee
members. The Board as a whole is also regularly updated as to the
status of the appointment process. Meetings as appropriate are
arranged with Committee members and the Committee aims to ensure
that each Board member is given the opportunity to meet the final
candidates. The Nomination Committee will then meet to finalise a
recommendation to the Board regarding the appointment. This process
was followed during 2004 for the appointment of Michael Harper as a
non-executive director which is referred to in paragraph 3 above.
The Board has a written framework for the induction of new
directors. This includes site visits, meetings with senior management
and advisers and the provision of corporate documentation. A personal
induction programme is prepared for each new director tailored to the
experience and needs of the individual. Major shareholders will be
offered the opportunity of meeting new directors.
Appointments of non-executive directors are made by the Board
for an initial term of three years. This term is subject to the usual
regulatory provisions and continued satisfactory performance of duties
following the Board's annual performance evaluation. Re-appointment
for a further term is not automatic but may be made by mutual
agreement. In addition, it is the Company’s practice that all directors
are subject to re-election at least every three years.
The fees of the non-executive directors, including the Chairman,
are determined by the Board as a whole on the recommendation of the
Group Chief Executive. No director is involved in deciding his own
remuneration or fees. Letters of appointment for the non-executive
directors are available to review on request.