The Board is committed to the highest standards of corporate governance and we comply with all elements of the UK Corporate Governance Code. The Board has responsibility for ensuring that the Group is managed effectively and in the best interests of its shareholders, customers, employees and other stakeholders (including regulators), and its principal banking subsidiary, Shawbrook Bank Limited. The Board operates within a formal schedule of matters reserved which is reviewed regularly, which can be found under ‘Constitutional and other Governance documents’ in the drop down list below.
An externally facilitated review of Board effectiveness was undertaken during the year. The review confirmed that the Board has provided effective oversight of the business, and has been highly engaged both in developing robust risk policies and frameworks and in guiding longer term plans and strategies. The review also identified areas where the Board can continue to improve its effectiveness, and its findings are covered more fully in the Corporate governance report.
Overview of leadership appointments
- John Callender was appointed to the Board in March 2018, he brings extensive financial services experience gained through his executive and non-executive careers.
- The Board was strengthened with the appointment of Cedric Dubourdieu. Cedric was appointed to the Board as a Non-Independent Non-Executive Director on 5 September 2017 and has a wealth of experience with close to 20 years of private equity experience.
- Andrew Didham was appointed as an Independent Non-Executive Director on 1 February 2017, bringing a wealth of experience to the Board of Directors, particularly in the financial services sector.
- Dylan Minto was appointed Chief Financial Officer (CFO) and Executive Director on 6 February 2017 after a successful period as Interim CFO following the departure of Tom Wood in H1 2016.
Composition of the Board
The Board currently consists of 12 members, namely the Chairman, six Independent Non-Executive Directors, three Executive Directors and two Non-Independent Non-Executive Director.
The Non-Executive Directors have strong and relevant experience across all aspects of banking and specifically have relevant skills in financial management, regulatory, credit assessment and pricing, liability management and conduct matters. To ensure the Board continues to have an appropriate balance of skills, these skill sets are reviewed annually through the completion of a skills matrix which is considered by the Nomination Committee and the Board.
Directors may be appointed by ordinary resolution or by the Board. A Director appointed by the Board holds office only until the next following annual general meeting and is then eligible for reappointment. The Board or any committee authorised by the Board may from time to time appoint one or more Directors to hold any employment or executive office for such period and on such terms as they may determine and may also revoke or terminate any such appointment.
All new Directors are subject to election at the first Annual General Meeting following their appointment by the Board. The Company’s Articles of Association also states that all directors are subject to election at every Annual General Meeting.
Any Director may be removed by special resolution before the expiration of his period of office.
The Board delegates specific powers for some matters to Committees: Audit, Risk, Nomination and Remuneration. The outputs from each Committee meeting are reported to the Board, thus ensuring the Board maintains the necessary oversight. More detail on the Committees and their work is described in the Committees section below.
The written terms of reference of the Committees, including their objectives and the authority delegated to them by the Board. All Committees have access to independent expert advice and the services of the Company Secretary. The Chairman of each Committee reports to the Board. The constitution and terms of reference of each Committee are reviewed annually to ensure that the Committees are operating effectively and any changes considered necessary are recommended to the Board for approval.
A larger version of the image above can be found here.
Further details on the composition of the Board may be found in the articles of association of Shawbrook Group plc.
Meetings and attendance
The Board holds meetings at regular intervals, at which standing items such as the Group’s financial and business performance, risk, compliance, IT, human resources and strategic matters are reviewed and discussed. There is a comprehensive Board pack and agenda which is circulated beforehand so that Directors have the opportunity to consider the issues to be discussed, and detailed minutes and any actions are documented.
The below list shows some of the other noteworthy matters considered by the Board in the year:
- Review of executive governance
- Membership of Board Committees
- Risk Management Framework and risk policies
- Enterprise Wide Risk Management Report
- Capital and liquidity adequacy, including ICAAP
- Target Operating Model
- Creation of Jersey subsidiary
- Regulatory developments, in particular the Senior Managers Regime and IFRS9
- Corporate development opportunities
- Information security
- HR and people strategy
- The historical controls breach in the Business Finance Division
In addition, the Board also held two strategy workshops where, amongst other matters, the competitive environment and the impact of Brexit were discussed.
Regular meetings are scheduled up to a year in advance, and if any Director is unable to attend then they may provide comments on the papers to the Chairman before the meeting. Meetings are structured so that appropriate time is devoted to all agenda items. In addition to these regular, scheduled meetings, ‘ad hoc’ Board meetings are held outside the published cycle where circumstances require – for example, to approve appointments to the Board, any material transactions or the approval of regulatory submissions.
Throughout the relevant period, the Chairman has held a number of meetings with Non-Executive Directors, without the Executive Directors being present. The Senior Independent Director has held meetings with Non-Executive Directors, without the Chairman being present.
The attendance of Directors at Board and Committee meetings during the year is set out below. The number of meetings held during the period that the Director held office is shown in brackets.
In 2016, a total of 13 Board meetings were held, 11 of which were scheduled and two of which were ad hoc meetings. Attendance at meetings is shown below:
Name of Director Date appointed
or resigned in the year
eligible to attend as a Director
Iain Cornish - 13/13 Graham Alcock Resigned 9 June 2016 3/4 Robin Ashton - 13/13 David Gagie Appointed 1 January 2016 13/13 Sally-Ann Hibberd - 12/13 Stephen Johnson - 13/13 Paul Lawrence - 12/13 Roger Lovering - 13/13 Lindsey McMurray - 11/13 Steve Pateman Appointed 1 January 13/13 Tom Wood Resigned 30 June 2016 4/6
Since the year-end Andrew Didham was appointed as an Independent Non-Executive Director on 1 February 2017 and Dylan Minto as Chief Financial Officer and Executive Director on 6 February 2017.
Board Accountability: Executive Committee and Sub-Committees
The Board delegates daily management responsibility for the Group to the Executive Committee, which meets three times a month. The Executive Committee is responsible for developing the business and delivering against a strategy approved by the Board and ensuring effective monitoring and control mechanisms. There are also a number of executive sub-committees, as below, which assist the Executive Committee in discharging its responsibilities.
During 2016 the Group made a number of changes to enhance its risk governance. These included the launch of its Enterprise Risk Management Committee (ERMC), which takes an enterprise-wide view of the risk profile of the Group and is the senior risk committee within the Group. The ERMC replaced the Group Credit Committee (GCC) and the Conduct and Operational Risk Committee (CORC). To support the ERMC in embedding the Risk Management Framework and to reflect the Group’s development of credit grading, the ERMC implemented two new groups. The Model Management Group (MMG) oversees the development, approval and monitoring of the Group’s models and the Policy Review Group (PRG) oversees the consistent development, approval and monitoring of the Group’s policies.
Executive Committee terms of reference (PDF download)
Board Accountability: Audit Committee
The Audit Committee has responsibility for, among other things, the monitoring of the integrity of the financial statements of the Group and the involvement of the Group’s auditors in that process. It focuses in particular on compliance with accounting policies and ensuring that an effective system of internal financial control is maintained. The ultimate responsibility for reviewing and approving the annual report and accounts and the half-yearly reports remains with the Board.
The terms of reference of the Audit Committee cover such issues as membership and the frequency of meetings, as mentioned above, together with the requirements of any quorum for, and the right to attend, meetings. The categories of responsibility of the Audit Committee covered in the terms of reference are: external audit, internal audit, financial reporting, narrative reporting and internal controls.
The Audit Committee comprises four members. In accordance with provision C.3.1 of the Code, all members of the Committee are Independent Non-Executive Directors of the Group.
The Committee meets as required, but holds at least six meetings a year. The Committee met formally seven times last year, and met on another five occasions to discuss other matters. The number of meetings held during the period that the Director was a member and therefore eligible to attend is shown below.
Member Date joined
or stepped down
eligible to attend as a member
Andrew Didham Joined 1 February 2017 Roger Lovering - 7/7 Graham Alcock Stepped down 3 March 2016 2/2 Robin Ashton - 7/7 David Gagie Joined 3 March 2016 4/5 Paul Lawrence - 7/7
The Company Secretary acts as secretary to the Committee. Other individuals attend at the request of the Committee Chairman. During the year, the external auditors, Chairman of the Board, Chief Executive Officer, Chief Financial Officer, Chief Risk Officer, Internal Audit and other senior managers as appropriate would usually attend meetings to report to the Committee and provide clarification and explanations where appropriate. The Committee also met with the external and internal auditors without executive management on regular occasions in 2016.
The Board is satisfied that Andrew Didham and his predecessor, Roger Lovering, have recent and relevant financial experience, as referred to in the Code.
Audit Committee terms of reference (PDF download)
Board Accountability: Risk Committee
The Risk Committee comprises six members, all of whom are Independent Non-Executive Directors of the Group.
The purpose of the Committee is to assist the Board in its oversight of risk within the Group, with particular focus on the Group’s risk appetite, risk culture, risk profile and the effectiveness of the Group’s Risk Management Framework. As well as reviewing the Group’s risk assessment processes and methodology it identifies and manages new risks, alongside advising on proposed transactions and reviewing reports on any material breaches of risk limits. The Committee is also responsible for monitoring and reviewing the effectiveness of the risk function and the capital adequacy requirements of the Group’s relevant subsidiaries on an on-going basis.
Over the course of 2016, the Committee considered a wide range of risks facing the Group, both standing and emerging, across all areas of risk management in addition to the risk appetite and culture. Below is an outline of these risks, with a summary of the material factors considered by the Committee, including the conclusions that were ultimately reached.
Meetings are held at least bi-monthly. Individual meeting attendance during 2016 is set out below. The number of meetings held during the period and those that each Director was eligible to attend as a member of the Committee are shown below.
Member Date joined
or stepped down in the year
eligible to attend as a member
Paul Lawrence - 7/7 Robin Ashton - 6/7 Graham Alcock Stepped down 9 June 2016 3/3 David Gagie Joined 3 March 2016 4/6 Sally-Ann Hibberd Joined 3 March 2016 6/6 Roger Lovering - 7/7 Andrew Didham Joined 1 February 2017 -
During the year, the members of the Committee were Paul Lawrence, Robin Ashton, Graham Alcock, David Gagie and Roger Lovering, who each also served on the Audit Committee throughout the reporting period. Sally-Ann Hibberd does not sit on the Audit Committee. Andrew Didham was appointed to the Committee on 1 February 2017.
The Company Secretary acts as secretary to the Committee. Other individuals attend at the request of the Risk Committee Chairman and during the year the external auditors, Chairman of the Board, Chief Executive Officer, Chief Financial Officer, Chief Risk Officer, staff from the Internal Audit function and other senior managers as appropriate would usually attend meetings to report to the Committee and provide clarification and explanations where appropriate. During the year, the Committee met on seven occasions.
Risk Committee terms of reference (PDF download)
Board Accountability: Remuneration Committee
The Remuneration Committee has responsibility for determination of specific remuneration packages for each of the Chairman, the Executive Directors and certain senior executives of the Group, including pension rights and any compensation payments, and recommending and monitoring the level and structure of remuneration for senior management, and the implementation of share option, or other performance-related schemes. It meets at least four times a year.
The terms of reference of the Remuneration Committee cover such issues as membership and frequency of meetings, together with the requirements for quorum and the right to attend meetings.
The responsibilities of the Remuneration Committee covered in its terms of reference relate to the following: determining and monitoring the remuneration policy and determining, within the parameters of that policy, levels of remuneration, early termination, performance-related pay, pension arrangements, authorising claims for expenses from the Chief Executive Officer and Chairman, reporting and disclosure, share schemes, clawback, shareholder and employee consultation and remuneration consultants. The terms of reference also set out the reporting responsibilities and the authority of the committee to carry out its responsibilities. The Remuneration Committee will be required to produce complaint statements relating to the remuneration policy and the implementation of that policy for the Group’s annual report.
The Board Remuneration Committee comprises three members including the Board Chairman. Meetings are held at least four times per year. Individual meeting attendance during 2016 is set out below. The number of scheduled meetings held during the period that the Director was a member and therefore eligible to attend is shown below.
Member Date joined
or stepped down
eligible to attend as a member
Robin Ashton* Appointed Committee Chairman 9 June 2016 8/8 Iain Cornish - 8/8 Sally-Ann Hibberd Joined 23 May 2016 5/5 Graham Alcock** Stepped down 9 June 2016 4/4
* Robin Ashton assumed the role of Chairman of the Committee in June 2016 following Graham Alcock’s retirement from the Board.
** Graham Alcock was Chairman of the Remuneration Committee until the AGM on 9 June 2016 when he stepped down from the Board.
During the year the Chief Executive Officer, Chief Financial Officer, Chief Risk Officer, Group HR Director, Head of Reward and Non-Executive Director, Lindsey McMurray, all attended Committee meetings by invitation. In addition, the General Counsel and Company Secretary and Head of Secretariat provided secretariat support to the Committee during the year. No individual was present for discussions relating to their own remuneration.
Deloitte LLP provided independent advice to the Committee on executive remuneration matters, including a review of the Group’s remuneration policy, advice on incentive design and performance measurement, provision of current market trends data and regulatory updates, and support in relation to the Directors’ Remuneration Report.
Remuneration Committee terms of reference (PDF download)
Board Accountability: Nomination Committee
The Nomination Committee is chaired by Iain Cornish (the Chairman of the Group) and its membership comprises three Non-Executive Directors, a majority of whom are Independent Non-Executive Directors in line with provision B.2.1 of the Code.
The Nomination Committee is responsible for considering and making recommendations to the Board in respect of appointments to the Board, the Board committees and the chairmanship of the Board committees. It is also responsible for keeping the structure, size and composition of the Board under regular review, and for making recommendations to the Board with regard to any changes necessary.
Meetings are held at least four times per year. The Nomination Committee met on seven occasions during 2016 to discuss proposed appointments, succession and development and to evaluate the balance of skills, experience, independence and knowledge on the Board. Individual meeting attendance during 2016 is set out below. The number of meetings held during the period, and the number of meetings that each Director was eligible to attend as a member is shown below:
Member Date joined
or stepped down
eligible to attend as a member
Iain Cornish - 7/7 Robin Ashton - 7/7 Graham Alcock Stepped down 3 March 2016 1/1 Paul Lawrence Joined 3 March 2016 6/6
At the invitation of the Chairman of the Nomination Committee, on occasion, other attendees included the Chief Executive Officer, Human Resources Director and Lindsey McMurray (Non-Executive Director).
When searching for candidates for Board appointments, the Nomination Committee takes into account a number of factors, including the benefits of diversity, including gender diversity, and the balance of the composition of the Board. The overriding requirement is to ensure that recommendations for appointments are made on merit against objective criteria, and that the best candidates are put forward for Board appointments.
Nomination Committee terms of reference (PDF download)
Constitutional and other governance documents