30 LV= Annual Report 2012
Our approach to Corporate Governance
We choose to observe the requirements of
the annotated version of the UK Corporate
Governance Code, even though we are not
formally bound by it1.
Compliance with the Annotated Code for
the year ended 31 December 2012
The board considers that we fully comply with
the applicable principles and provisions of the
Annotated Code with the exception of a decision
taken by the board that only the chairman will offer
himself for annual re-election by members at the
Annual General Meeting.
Developments in corporate governance
In September 2012 the Financial Reporting Council
published an updated version of the UK Corporate
Governance Code; an annotated version adapted
to the circumstances of mutual organisations was
then produced by the Association of Financial
Mutuals in November 2012. In early 2013 we
completed a review of the amended Annotated Code
and following this review we have taken appropriate
action to ensure we are compliant including setting
out our policy on boardroom diversity.
Following the ‘comply or explain’ principle of the
Annotated Code, the board decided that from the
2012 AGM the chairman would stand for annual
re-election. Dennis Holt, our current chairman is
retiring immediately following the 2013 AGM and
the chairman designate, Mark Austen, is standing
for re-election as a non-executive director. In this
respect we will not be fully compliant with the
Annotated Code, which recommends the annual
re-election of all directors, but the board has, in any
event, determined that the annual election of the
chairman provides an adequate means for members
to register concern with the performance of the
board directors who continue to stand for re-election
at least every three years.
Appraising the board’s performance
Every year the performance of board members is
reviewed both individually and as a team. The senior
independent director reviews the performance
of the chairman, and the chairman reviews the
performance of all other directors.
The board
The UK Corporate Governance Code recommends Our board currently comprises six non-executive
that FTSE 350 companies, or equivalents, and four executive directors. All the non-executive
(which would include LV=) commit to an externally directors (apart from the chairman, for whom the
facilitated review of board effectiveness at least test of independence is not applicable) are regarded
1 The annotated version of the as independent. We therefore satisfy the Annotated
UK Corporate Governance
every three years. A review of the board and its
Code and the best practice committees therefore commenced in late 2012. Code’s recommendation that, excluding the chairman,
guidance was published by at least half the board should consist of independent
the Association of Financial
The outcome of this review will be considered by
Mutuals (the ‘Annotated Code’) the board at its April 2013 meeting. non-executive directors.