ICSA Board Evaluation · Aveva Group plc 13 Aviva plc 14 AZ Electronic Materials S.A. 14 Babcock International plc 14 BAE Systems plc 15 Balfour Beatty plc 16 ... ICSA Board Evaluation

ICSA Board EvaluationReview of the UK top 200 companies 2012

April 2013

ICSA Board Evaluation16 Park Crescent London W1B 1AHPhone: 020 7612 7080 E-mail: [email protected]

www.icsaboardevaluation.co.uk


www.icsaboardevaluation.co.uk2

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Aberdeen Asset Management plc 6

Admiral Group plc 6

Aegis Group plc 7

Afren plc 7

African Barrick Gold 7

Aggreko plc 8

Alliance Trust plc 9

AMEC plc 9

Amlin plc 10

Anglo American plc 10

Antofagasta plc 10

ARM Holdings plc 11

Ashmore Group plc 11

Ashtead Group plc 11

Associated British Foods plc 12

Astra Zeneca plc 13

Aveva Group plc 13

Aviva plc 14

AZ Electronic Materials S.A. 14

Babcock International plc 14

BAE Systems plc 15

Balfour Beatty plc 16

Barclays plc 18

Barratt Developments plc 19

Bellway plc 20

Berkeley Group plc 20

BG Group plc 20

BHP Billiton plc 21

Booker plc 23

BP plc 23

British American Tobacco plc 24

British Land plc 26

BSkyB plc 26

BT plc 27

BTG plc 27

Bunzl plc 28

Burberry Group plc 28

Cairn Energy plc 29

Capital & Counties Properties plc 29

Capita Group plc 30

Capital Shopping Centres Group plc 30

Carillion plc 30

Carnival Corporation & plc 31

Catlin Group Limited 31

Centrica plc 31

Close Brothers Group plc 32

Cobham 32

Compass Group plc 33

Cookson Group plc 33

CRH plc 34

Croda plc 35

Debenhams plc 35

Derwent London plc 35

Diageo plc 35

Drax plc 36

Dunelm plc 36

easyJet plc 37

Elementis plc 37

Essar Energy plc 38

Eurasian Natural Resources Corporation plc 38

EVRAZ plc 39

Experian plc 39

Ferrexpo plc 39

Filtrona 40

Foreign & Colonial Investment Trust plc 40

Fresnillo plc 40

Foreword 5

Contents



Contents (continued)

G4S plc 41

GKN plc 41

GlaxoSmithKline plc 42

Glencore International plc 43

Greene King plc 44

Great Portland Estates plc 44

Halma plc 44

Hammerson plc 45

Hargreaves Lansdown plc 45

Hays plc 46

Henderson Group plc 46

HICL Infrastructure plc 46

Hikma Pharmaceuticals plc 47

Hiscox plc 47

Hochschild Mining plc 48

Howdens plc 49

HSBC Holdings plc 49

Hunting plc 50

ICAP plc 50

IG Group plc 51

Imagination Technologies plc 51

IMI plc 51

Imperial Tobacco plc 52

Inchcape plc 52

Informa plc 53

Inmarsat plc 53

InterContinental Hotels plc 54

Intermediate Capital plc 55

Intertek plc 55

International Airlines Group plc 56

Invensys plc 56

Investec plc 56

ITV plc 57

Jardine Lloyd Thompson plc 57

Johnson Matthey plc 57

Jupiter Fund Management plc 58

Kazakhmys plc 59

Kingfisher plc 59

Ladbrokes plc 60

Land Securities plc 61

Legal & General Group plc 62

Lloyds Banking Group plc 62

London Stock Exchange Group plc 62

Lonmin plc 63

Man plc 63

Marks and Spencer Group plc 64

Meggitt plc 66

Melrose plc 66

Michael Page plc 66

Millennium & Copthorne Hotels plc 66

Mitchells & Butler plc 67

Mondi plc 67

Morrison Supermarkets plc 67

Murray International plc 68

National Grid plc 68

Next plc 69

Old Mutual plc 69

Ophir Energy plc 70

Pearson plc 70

Pennon Group plc 71

Persimmon plc 71

Petrofac Limited 72

Playtech plc 72

Polymetal International plc 73

Premier Oil plc 73

Provident plc 73

Prudential plc 74

PZ Cussons plc 74

QinetiQ plc 75

Reckitt Benckiser plc 76



Reed Elsevier plc 76

Renishaw plc 76

Rentokil Initial plc 77

Resolution plc 77

Rexam plc 77

Rightmove plc 78

Rio Tinto plc 79

RIT Capital Partners plc 79

Rolls-Royce Holdings plc 80

Rotork plc 80

Royal Bank of Scotland Group plc 80

Royal Dutch Shell plc 81

RSA Insurance Group plc 82

SAB Miller plc 82

Sage plc 83

Sainsbury, J plc 83

Schroders plc 84

Scottish Mortgage Investment Trust plc 84

Segro plc 84

Serco Group plc 85

Severn Trent plc 86

Shaftesbury plc 86

Shire plc 87

Smith, DS plc 87

Smith & Nephew plc 87

Smiths plc 88

Soco International plc 89

Spectris plc 89

Spirax Sarco plc 89

Sports Direct International plc 90

SSE plc 90

Stagecoach plc 90

Standard Chartered plc 91

Standard Life plc 92

St James’s Place Capital plc 92

TalkTalk Telecom Group plc 94

Tate & Lyle plc 94

Taylor Wimpey plc 95

TelecityGroup plc 96

Templeton Emerging Markets Trust plc 97

Tesco plc 97

3i Group plc 98

Travis Perkins plc 98

Tui Travel plc 99

Tullow Oil plc 99

UBM plc 101

Ultra Electronics plc 101

Unilever plc 102

United Utilities plc 102

Vedanta Resources plc 103

Victrex plc 104

Vodafone Group plc 104

Weir Group plc 105

Whitbread plc 105

William Hill plc 106

Wolseley plc 106

Wood Group plc 107

WPP plc 107

Xstrata plc 107

Contents (continued)



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Foreword

We are pleased again to be publishing our compilation of how the top 200 publicly quoted companies in the UK have reported to their shareholders on the way in which they have conducted a board evaluation during their financial year ending on or after 31 December 2011. We realise that users of this review can obtain this information themselves from a company’s website. However, we know that there is demand among Members of ICSA to have this information available in a readily accessible form, which is why we have decided to repeat the report after an interval of two years.

We are conscious that some companies will have reported already on how they conducted a board evaluation in the financial year ended on or after 31 December 2012. To that extent, our review may seem to be out of date but, nonetheless, we do hope that it will be helpful to our readers.

The most encouraging aspect of the annual reports which we have looked at for the purposes of this review is that, by and large, companies are reporting much more fully and helpfully about the way in which the evaluation was conducted, the lessons which have been learned and the actions which are being taken. This is commendable.

There remain, however, some ongoing examples of boiler plate drafting, including resort to the tired assertion that ‘a formal and rigorous’ evaluation has been undertaken. In the past, that was often a poor attempt to hide the fact that the board had employed some tired old questionnaire or other device. Repetitious use of the ‘formal and rigorous’ introduction was tending to cause the editors of this review to lose the will to live!

There remain a few candidates for consideration for a wooden spoon award. These might include Aegis, IAG, Mitchells & Butler and Renishaw. Another has been Persimmon although it did announce that the board would be carrying out an externally assisted board evaluation during 2012.

One company which reports well each year is Barclays plc. It seems, however, that it has been using the same search consultants for many years despite the strictures of Barclays’ new chairman, Sir David Walker, in his 2009 report on banks and other financial institutions. Perhaps the arrival of the new chairman will see the Barclays board ringing the changes.

In conclusion, we hope that this review is helpful to our readers. Our thanks go to those who have expressed appreciation for the review in previous years and those who have asked us to resume production.

The page reference after the name of each company listed in this review is a reference to the relevant page of that company’s annual report and accounts.



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Aberdeen Asset Management plc Page 42

A formal process has been established, led by the chairman, for the annual evaluation of the performance of the Board, its appointed committees and each director, to ensure that they continue to act effectively and efficiently and to fulfill their respective duties, and to identify any training requirements.

In contrast to the previous two Board evaluation exercises, which were carried out by an external consultant, this years review was undertaken internally with the Chairman having received advice of an external consultant, MWM consulting, who did not provide the Group with any other services. The Chairman undertook interviews with each member of the Board and this was followed up with discussions at Board and committee meetings.

The non-executive directors also met without Chairman present to discuss the results of the evaluation of the Chairman’s performance, having taken into consideration the views of the executive directors, and the results of this meeting were subsequently discussed between the Senior Independent Director and the Chairman. Additionally, the Chairman and the non-executive directors held a meeting without the executive directors present at which the executive directors’ performance was discussed.

Admiral Group plc Page 38

The performance and effectiveness of the Board and its Committees is fundamental to the success of the Group and there is a rigorous evaluation each year to assess how well the Board, its Committees, the Directors and the Chairman are performing. It is the Group’s policy that every three years an external consultant, who has no connection with the Company, carries out a formal review of the Board’s performance and such an evaluation process took place in 2010. The evaluation process in 2011 was led by the Chairman with support from the Company Secretary. The process consisted of the completion, by all Directors, of a comprehensive questionnaire evaluating the performance of the Board and its Committees. The questionnaire considered Board processes and their effectiveness, Board composition, Board objectives, Board support, and content of discussion and focus at Board meetings, and invited Directors to indicate where specific improvements could be made. Completion of the questionnaire by each Director was followed by one-to-one discussions between each Director and the Chairman where the Board’s role and structure, process, relationships, and any emerging issues were discussed.

The overall results of the evaluation were considered by the Chairman and the principal recommendations presented by him for review and discussion by the Board in February 2012. The evaluation concluded that good progress had been achieved in most of the areas identified for action in the last Board evaluation and that the Board and its Committees has continued to work very effectively in relation to most dimensions. Improvements have been seen in many of the areas of focus identified in the evaluation undertaken in 2010. These included the recruitment of two new Non-Executive Directors in response to forthcoming Non-Executive Director rotation as Directors reach their maximum term; and increased Board focus on the importance of effective succession planning and identifying talented individuals across the Group who have senior management potential.

In addition, the Chairman has concluded that each Director contributes effectively and demonstrates full commitment to his/her duties. As a result of the evaluation undertaken in 2011, the following emerged as areas of particular focus:

�� Further increasing depth of management by recruiting talented individuals to assist existing management and develop as leaders of tomorrow�� Ensure that the balance of management time between the Group’s core UK business and its overseas operations remains appropriate and aligned with the Group’s agreed long term strategy objectives�� The effectiveness of Board visits to the Group’s overseas operations was reviewed. Rather than annual formal visits to the Group’s foreign businesses it was proposed that in future individual Non-Executive Directors should accompany the Chairman and Chief Executive on at least one of their overseas visits made throughout the year�� Whilst progress had been made in shifting the balance of Board consideration towards the strategic and away from the operational it was acknowledged that more time could be made available for in depth discussions on strategic issues and developments.



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The Chief Executive, to whom they report, appraises annually the performance of the individual Executive Directors. The Chairman, taking into account the views of the other Directors, reviews the performance of the Chief Executive. The performance of the Chairman is reviewed by the Non-Executive Directors, led by the Senior Independent Director (‘SID’), taking into account the views of the Executive Directors. Following the latest review, the SID considered and discussed with the Chairman the comments and feedback relating to the Chairman’s performance that had been received from the Directors as part of the Chairman’s evaluation questionnaire. Following these discussions with the Chairman, the SID was able to confirm that the performance of the Chairman continues to be effective, and that the Chairman continues to demonstrate appropriate commitment to his role.

Aegis Group plc Page 52

From time to time the non-executive directors, including the Chairman, meet without the executive directors present to consider matters relating to the running of the Board and the Company and the effectiveness of the Board itself and of the executive management.

Afren plc Page 67

The Board undertakes a formal and rigorous review of its performance and that of its Committees each financial year. In the year under review the evaluation was led by an independent external consultant, Tom Bonham Carter of Armstrong Bonham Carter LLP. The evaluation process involved comprehensive interviews with each Director and the Company Secretary. The evaluation covered the Board, the Committees and each Director.

Feedback from the evaluation process was provided to the Board in the form of a presentation and a written report to the Board. The review identified that the Board had a number of strengths which was exemplified in the record of the Company in acquiring and developing assets and its balance sheet management. The review also suggested areas for further development covering the development of strategy, Board composition and succession planning, monitoring operations, and stakeholder management.

The Board has addressed these issues since the review and will continue to do so going forward.

African Barrick Gold Page 86

During the reporting period, the Board conducted its first performance evaluation process under the guidance of the company Secretary.

The evaluation was carried out by way of anonymous questionnaires that were collated by the company Secretary and then reviewed and discussed. As the evaluation was the first conducted since ABG’s initial public offering, the questionnaire focused on a range of topics including the following:

�� Establishment and role�� Composition, appointments, skills, experience and training�� Attendance at meetings, contribution, internal relationships�� Leadership�� Strategic aims and objectives�� Risk management�� Procedures and internal controls�� Communication with shareholders.

A report on the outcome of the overall performance evaluation was provided to the Board for discussions and review purposes.

Each committee follows a similar process, under the leadership of the committee chairman.

In addition to the Board and committee evaluation, the Senior Independent Director led a review of the Chairman’s performance, in line with UK Corporate Governance requirements, which took into account the views of all independent Non-Executive Directors.



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Overall, the results of these evaluations found that the Board and its committees are operating effectively, that the individual Directors’ performance continue to be effective, that each individual has committed sufficient time of the discharge of their duties. Further details as regards the evaluation process, in particular the assessment conducted and key areas agreed for further action and improvement are set out in the diagram on page 87.

Aggreko plc Page 58

In previous years we have conducted our annual evaluation of Board and Committee performance using an assessment questionnaire prepared by the Company Secretary and the Chairman which all Directors completed. Directors graded areas such as the performance of the Board and its Committees, the effectiveness of the Chairman, Executive and Non-executive Directors, the monitoring of operational performance and Corporate Governance, as well as Leadership and Culture. In this way we were able to compare results from year to year. Following last year’s evaluation we agreed on a number of topics which would remain a priority for 2011, including: continuing to ensure that we had a robust succession planning process; meeting the challenge of developing environmental and



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emissions regulation; regular discussion of strategy throughout the year, and monitoring of the political and financial risks associated with the countries in which we operate. These items were included in the Board and Committee calendar for 2011, as explained in more detail in the paragraph headed ‘Board meetings’ above and in the reports of the individual Committees.

This year we engaged an independent external consultancy, Lintstock, who have extensive experience of conducting external Board evaluations, and asked them both to review our questionnaire and to administer the process online. Lintstock have no other relationship with the Company. As a result, we reduced the length of the questionnaire, removing many of the questions which had received high scores consistently in the past (and so did not need more attention), whilst retaining some of the more important ones to provide a continuing comparison but introducing some new, more penetrating questions, to focus on issues which we thought merited more attention. We also specifically asked Directors for their views on the diversity of the Board. As before, we then produced a report of the results, which was discussed by the Board and by each Committee, and separately between Non-executive Directors and which also provided a background to interviews between the Chairman and individual Directors as part of annual appraisals.

Overall, the results of this year’s evaluation were again very positive, but the responses suggested that the main areas of focus should continue to be strategy, succession planning and risks in International Power Projects.

We have reviewed the interests declared by Directors which could conflict with those of the Company, and we are satisfied that the Board’s powers to authorise potential conflicts is operating effectively.

Alliance Trust plc Page 30

Each year the Board reviews its own performance, and also the performance of its committees and individual Directors. This year the review was carried out internally but next year will be conducted with external assistance. The evaluation was undertaken by a series of structured interviews led by the Chairman with the Company Secretary in attendance during the period between December 2011 and January 2012.

The evaluation identified a number of actions which could be taken to improve the effectiveness of the Board, including additional contact between non-executives and management between meetings, and changes to Board and committee meeting arrangements. It also provided an opportunity to consider Board composition in the light of forthcoming changes.

The Senior Independent Director led the evaluation of the Chairman’s performance, which was the subject of discussion at a meeting of the Non-Executive Directors. The evaluation confirmed that the Chairman was effective in her role.

AMEC plc Page 50

The Board has the benefit of an open and honest atmosphere on all matters and has cognisant of the value of continued self assessments as a key component in its performance. During this year the Chairman co-ordinated a discussion with each director, and thereafter with the Board as a whole, on continued collective and individual effectiveness. The Chairman is confident in the continued commitment to the role, and effective contribution of each director, and is focused on the regular review of their developmental priorities. As referred to by the Chairman in his introduction to the corporate governance statement, the last externally-led review of the effectiveness of the Board and its committees was in 2008. The Board has been keen to ensure the optimal timing of its next externally facilitated review. Because of the material number of changes in its membership, and so of its committees, over the past two years (including the appointment of the Chairman on 1 June 2011), the next such review has been deferred until 2012. The Board regards the postponement as essential to allow the complete integration of its new members, and the bedding-in of any consequent changes. This will enable the necessary rigour of evaluation, and consideration thereafter, as anticipated by the Code. The usual internal evaluation process was continued in 2011, the results of which will help to shape the focus of the external evaluation. The Board looks forward to focusing in 2012 on further improving its behaviours, processes and effectiveness as part of this process. In line with its support for the direction of the Davies Report, the Board is also fully accepting of the addition to the Code of new supporting principle B.6 and will ensure that the 2012 evaluation process considers the Board’s ‘diversity, including gender’ as one of the factors relevant to its effectiveness.



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As required by the Code during the year the Senior Independent Director, appraised of the views of the non-executive and the executive directors, reviewed the performance of the then Chairman, Jock Green- Armytage. The Senior Independent Director is scheduled to meet with the current Chairman in March 2012, to review his performance since joining the Board. The Chief Executive conducts annual performance development reviews with the executive directors and his direct reports.

Amlin plc Page 69

The Board has completed an annual evaluation of the performance of the Board, its Committees and each director. The annual evaluations were initiated by a questionnaire completed by each director giving his assessment of both collective and individual performances. The results of the latest internal Board evaluation were summarised by the Chairman at its meeting in early 2012 and the Board agreed its conclusions. Each Board Committee had its performance evaluated and the conclusions were also reported to the Board in early 2012.

The Chairman discussed issues arising from the evaluation of each individual director, including the performances of executive directors in respect of their Boardroom as opposed to executive roles (which was evaluated as part of the Group’s regular Performance Development Review process), with the director concerned as required. The Chief Executive’s total performance was reviewed by the Chairman.

The Chairman’s own evaluation is usually conducted by the non-executive directors led by the senior independent director, taking into account the views of the executive directors. The senior independent director normally discusses and agrees the conclusions with the Chairman.

Anglo American plc Page 93

As a direct result of the last external Board evaluation, changes were made in strategy planning and improving communication with major shareholders as well as in the areas of committee composition, talent management and succession planning.

The action plan and resulting achievements from the internally facilitated 2010 Board effectiveness review may be found on page 89. As previously noted, an external evaluation of the Board took place in 2011/2012 in accordance with the recommendations made in the Code and we will report on this next year. As in past years, the evaluation process also included a review, chaired by the senior independent Non-Executive director (without the chairman present), of the performance of the chairman. The chairman has held individual discussions with each director to ensure that the necessary Board and committee processes are functioning properly.

Since his appointment, Sir John has introduced a rolling agenda for the Board and instigated regular informal meetings of the NEDs prior to each Board meeting. In order to facilitate openness and constructive debate between our executives and NEDs, we hold Board dinners before Board meetings where directors are encouraged to raise issues in an informal setting. These meetings provide an opportunity, inter alia, to discuss the performance of management and to air subjects outside the confines of the Boardroom in an informal and constructive manner. At every Board meeting, time is set aside for a NEDs only discussion and the Board also receives a governance update from the company secretary highlighting developments in company law, corporate governance and best practice. Board papers are circulated one week before meetings. Messrs Beamish, Walker, Weston and Whitcutt attend all Board meetings.

Antofagasta plc Page 77

During the year an internal evaluation was conducted of the effectiveness of the Board. This principally comprised interviews conducted with the Directors, considering factors including the effectiveness of Board meetings, the level and nature of information provided to Directors, the composition of the Board and the contribution of individual Directors. As discussed above, the Senior Independent Director is responsible for the evaluation of the Chairman’s effectiveness as part of this process. Charles Bailey conducted the evaluation of the Chairman during 2011 in his role as Senior Independent Director prior to his retirement during the year.

The results of the evaluation process are used by the Chairman in further developing the effective operation of the Board, and given his additional role as chairman of the Nomination Committee will also be used by him in that role when considering future individual appointments to the Board and changes in the overall composition of the Board.



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In line with the new requirement of the UK Corporate Governance Code, in the future an externally facilitated evaluation will be conducted at least every three years.

ARM Holdings plc Page 68

The Board undertakes an annual Board evaluation. During 2011, this exercise was conducted internally, facilitated by the Company Secretary. An external evaluation last took place in 2010 and the Board plans to continue with a cycle of external evaluations every three years and internal evaluations in between.

The 2011 evaluation covered:

�� Strategic development, execution and monitoring; �� Risk management and control; �� Leadership development and succession planning; �� Shareholder and stakeholder communication; �� Performance management; �� Board structure, committees and their operation; �� Induction and development; and �� Assessment of the performance of individual committees and the Chairman.

The overall conclusion was that individual Board members are satisfied that the Board works well and operates effectively in an environment where there is constructive challenge from the non-executive directors. They are also satisfied with the contribution made by their colleagues and that Board committees operate properly and efficiently.

Ashmore Group plc Page 41

The 2010 Code recommends that the Board should undertake a formal annual evaluation of its own performance and that of its committees and individual Directors and that an externally facilitated evaluation should be undertaken at least once every three years. During the year, the Board undertook an externally facilitated evaluation of its own performance and that of its committees and individual Directors led by an independent consultant experienced in Board evaluation. The external facilitator had no other connection with the Company. Meetings were held between each Director and the independent external facilitator in which issues and developments over the year were discussed and performance was considered by reference to the objectives of the Board and its committees. The issues raised during this process were discussed by the Board together. During the year, the Non-executive Directors, led by the Senior Independent Non-executive Director, evaluated the performance of the Chairman and gave feedback on his performance as Chairman which was also reflected in the externally facilitated evaluation. The Board believes that, following the completion of the independently facilitated performance evaluation, the performance of the Directors continues to be effective and that they continue to demonstrate commitment to their roles.

Ashtead Group plc Page 37

The performance of the chairman, the chief executive, the Board and its committees is evaluated, amongst other things, against their respective role profiles and terms of reference. The executive directors are evaluated additionally against the agreed budget for the generation of revenue, profit and value to shareholders.

The evaluation of the chairman, the Board and its committees was conducted by way of a questionnaire completed by all of the directors, the results of which were collated by the company secretary and presented to the entire Board. Based on this evaluation, the Board concluded that performance in the past year had been satisfactory.It is the Board’s intention to have its and its committees’ performance evaluation conducted by an external third party during the forthcoming year.



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Associated British Foods plc Page 41/42

An evaluation to assess the performance of the Board as a whole, its committees and that of the individual directors is conducted on an annual basis with the aim of improving the effectiveness of the Board and its members and the performance of the group.

This year’s review was undertaken by an independent external facilitator, Stephen Williams, who provided feedback to the Chairman. Stephen Williams was previously company secretary and general counsel of Unilever plc, senior independent director of Bunzl plc and Arriva plc and is currently senior independent director of Whitbread plc and a non-executive director of Croda International PLC. He has extensive experience of facilitating Board evaluations. Independently of his services as a Board facilitator, he has a consultancy appointment with Spencer Stuart. The Chairman sat on an advisory Board of that company.

The review took place in the final quarter of the financial year. A discussion guide was prepared and circulated to each director and the Company Secretary. This included eight topics which formed the basic agenda around which each discussion was framed and these were as follows:

�� Board structure, organisation and dynamics, including the mix of skills and knowledge, diversity, how the Board works as a unit and the tone set by the Chairman and Chief Executive;�� Board efficiency and effectiveness, including individual performance, clarity of the purpose, direction and values of the Company, quality of leadership and key Board relationships;�� Risk management and governance; �� Strategic review and resource allocation; �� People issues and succession planning; �� Business performance, including level and quality of reporting measures; �� Board committees; and �� Key issues for 2013.

The external facilitator undertook a confidential, unattributable interview with each director and the Company Secretary based on the discussion guide. Following the meetings, the external facilitator produced a written report which was discussed with each of the Chairman, Senior Independent Director and the Chief Executive, before being sent to Board members and discussed at the following Board meeting. There was a strong sense of progress in implementing proposals arising out of the 2011 evaluation.

Actions implemented arising from 2011 evaluations include:

Objective

Value creation Investment returns reviewed

Strategy development A review of longer term growth opportunities

Risk management Amount of time devoted to risk issues on the Board agenda increased

Succession planning Continuing

Based on the results of the evaluation process in 2012, the Board considered that overall it was operating effectively and that each of the directors continues to make a valuable contribution with proper commitment to their respective roles. The Board’s principal committees were also judged to be functioning efficiently and effectively.

A list of recommended action points was drawn up and agreed, which is being implemented under the direction of the Chairman including actions set out in the table below.Areas identified for action from the 2012 evaluation include:

Objective

Synergy Extend the search for a reporting on synergy within the exiting group



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Strategy Continuing review or longer term growth opportunities

Risk management Additional understanding of non-financial risks in our business

Succession planning The need for diversity throughout the group, acknowledging its increasing geographical spread

Astra Zeneca plc Page 105

During the year, the Board conducted the annual evaluation of its own performance and that of its Committees and individual Directors. The review was facilitated by an external consultancy, Lintstock Ltd (Lintstock), a London-based corporate advisory firm that provides objective and independent counsel to leading European companies. For a number of years, Lintstock has supplied software and services to the Company Secretary’s team for the web-based questionnaires used for internal Board performance evaluations, and for the management of insider lists. Other than these limited instances, Lintstock is not a supplier to the Company and was able to act as a robust and independent external facilitator for the Board performance evaluation.

The 2011 evaluation involved a series of web-based questionnaires and individual meetings between Lintstock and each Board member. Lintstock then prepared and discussed with the Chairman and the Company Secretary a draft report of their findings. The final report was circulated to the full Board and discussed at the Board meeting held in December. The evaluation covered a range of topics, including: the composition of the Board; the effectiveness of its strategic oversight; Board members’ involvement in the affairs of the Company outside Board meetings; decision making and time management; the nature and quality of the information and general support provided to the Board; its approach to risk management and oversight of internal controls; and succession planning and how effectively it prioritises matters. Separate questionnaires covered the operation and effectiveness of the Board’s committees.

The review concluded that the Board operates effectively and in an open manner. Board members have a good level of involvement in matters between Board meetings. The points to be addressed arising from the review include further improvements in the use of the Board’s time in terms of Board meeting arrangements and how agenda items are scheduled and approached; further refinement of the composition of the Board over time; consideration of a short strategic update during the year between the annual strategy days in September; minor improvements to the information provided to Board members in terms of content and format; more involvement by the Science Committee in assurance work on behalf of the Board; and continuing the improvements made in 2011 to the review by the Board of SET-level succession plans.

As part of the assessment process, each Director responded to a questionnaire about their individual contribution to the work of the Board and personal development needs, following which they had individual discussions with the Chairman to follow up their responses. Each Director continues to perform effectively and to demonstrate commitment to the role.

The Board’s annual performance evaluation was previously externally facilitated in 2008. The Board intends to continue to comply with the UK Corporate Governance Code guidance that the evaluation should be externally facilitated at least every three years.

Aveva Group plc Page 32

The UK Corporate Governance Code requires that the Board undertakes a formal annual evaluation of its own performance and that of its Committees and individual Directors and that at least every three years this evaluation should be externally facilitated.

The evaluation is designed to determine whether, as a Board, the Directors are informed and up to date with the business and its goals and understand the context within which it operates. Following Nick Prest’s decision to step down as Chairman at the next AGM, the Board conducted a high level review of its effectiveness as part of it deliberations on the ideal candidate specification for the new Chairman. It was agreed that it would conduct a more formal and detailed review of Board effectiveness and the 2013 financial year once the new Chairman has been appointed. As part of the Board review process the performance of the Chairman was assessed by the Senior Independent Director following consultation with the other Non-Executive Directors.



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Aviva plc Page 100

The effectiveness of the Board is vital to the success of the Group and the Company undertakes a rigorous evaluation each year in order to assess how well the Board, its Committees, the directors and the chairman are performing. The aim is to improve the effectiveness of the Board and its Committees and the Group’s performance. The process for 2011 was led by the chairman designate and supported by the group company secretary. The review was carried out by Boardroom Review, an independent consultancy with no other connection with the Company and focused on the Board’s role and its approach to its work, the way in which the Board works together and the way in which the Board uses its time. Boardroom Review prepared a report based on interviews with the directors and the overall results of the evaluation will be incorporated into the Board’s processes and activities for 2012.

The performance of the chairman was reviewed by the executive and non-executive directors. The chairman’s evaluation was managed by the senior independent director who provided feedback to the chairman. As part of the chairman’s evaluation, the non-executive directors met separately under the chairmanship of the senior independent director.

The Board evaluation process assessed the executive directors in their capacities as directors of the Company. They were evaluated in respect of their executive duties through a separate process whereby the chairman and the non-executive directors assessed the group chief executive and the group chief executive assessed the other executive directors.

The directors have concluded that the Board and its Committees operate effectively and agreed that the actions identified for improvement in previous reviews had been implemented. Additionally, the chairman has concluded that each director contributes effectively and demonstrates full commitment to his/her duties.

AZ Electronic Materials S.A. Page 56

As explained in the 2010 Corporate Governance Report, it was the intention that no formal performance evaluation of the Board, its Committees and individual Directors would take place before 2012. This would allow sufficient time to further strengthen the Board and for individual Directors to develop and settle into their new roles. During the year, the Chairman has continued to review and monitor the procedures, effectiveness and development of the Board and its Committees which have settled in well. It is recognised that the effectiveness of the Board is fundamental to the success of AZ. Accordingly, a formal performance evaluation will take place in the second half of 2012. This will be led by the Chairman, supported by the Company Secretary. The results of this review will be reported in the next Corporate Governance Report. The Senior Independent Director will manage the assessment of the Chairman’s performance.

Babcock International plc Page 51

The Board commissions an external independent review of its effectiveness and that of its committees and members at least every other year, with an internally led review in the alternate years. The review for the financial year 2011/12 was facilitated externally by Professor Stuart Timperley, a former professor at the London Business School with considerable experience of working on and with Boards and as an advisor on growth, transition and capability issues. Professor Timperley has carried out such external reviews on two earlier occasions and has on occasion provided mentoring to a small number of senior executives, but otherwise provides no other services to the Group. He was able to focus his attention and base his questions from a position of having a good understanding of the Company, its challenges and needs and was able to see things in the context of the Company’s development and of his earlier reviews.

He conducted a series of one-on-one confidential interviews with Board members, the Company Secretary and selected members of the senior management team. He reported back on his findings to the Chairman and submitted a report to, and made a presentation at, a full Board meeting, at which his observations were discussed.

Noting that, since his last review, there had been a continuation of Babcock’s growth, significant acquisition activity, a rebalancing of the portfolio, substantial contract wins and a demonstrable track record in maintaining a stable base whilst undergoing considerable change, he looked at the way in which the Board had identified and addressed the range of issues in this period and how it needed to handle its strategic and governance responsibilities going forward.



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The review found no immediate or short-term issues relating to the effectiveness of the Board, its members or its committees that required addressing other than continuing to manage inevitable transitions. It did, however, identify medium and longer term challenges that will require consolidation and planning.

These would include:

�� The inevitable challenges of overseeing and running a much larger and changing organization and the ensuring pressures on governance, management resource and structural issues;�� Maintaining the momentum of a growth strategy, in particular the ramifications and demands of any international expansion;�� Ensuring the Board had credibility in relation to any new business areas it might be considering;�� Planning for and managing the impact of succession and changes at the Executive Director level and in the Senior Management team below that. It was noted that this was a matter that had been identified, had been receiving close attention over several years and its importance was reflected in its regular consideration.

BAE Systems plc Page 73

All of our committees are included in the Board’s annual effectiveness review. Such reviews are externally facilitated with all committee chairmen receiving feedback on the performance of their committee based on interviews conducted with all Board members. These reviews provide regular and constructive feedback to the committees to help them perform effectively. High performing individuals welcome constructive feedback from their peers as it is an essential part of achieving high performance. Over the last six years we have refined our externally facilitated evaluation process, and I believe that it is not only a useful performance management tool but also an important part of the checks and balances in our governance structure – allowing directors to raise concerns so that they can be dealt with in a timely manner.

Board Performance – 2011 Objectives and Achievements

2011 objectives 2011 summary of achievements

StrategyDevelop further the process by which the Board engages in the development of strategy.

For the Company to be able to respond to the changing market conditions and an ever-evolving business enviroment, its longer-term strategy must be a topic of recruitment examination, discussion and consultation. In 2011, the Board held detailed strategy discussions at five Board meetings and it agreed that all future sessions it will include strategy as a standing item for consideration.

Succession planning and implementation Prioritise support for new Board members and long-term succession planning for key executive roles.

The Board engaged with the Chief Executive in reviewing the development of senior executives and appointments to key Group leadership roles. The Board was closely involved in the process that led to the appointment during the year of the new Group Finance Director, Peter Lynas. The Board adopted a policy regarding diversity and it will continue to monitor progress against this.

Operational performance monitoringDevelop the programme of ‘Deep Dives’ to complement and validate KPIs and deepen directors’ understanding of the Group’s operations and performance.

During 2011, the Board continued to benefit from senior operational executives attending meetings on a regular basis, thereby providing directors with a deepen understanding of the Group’s operations and performance. In addition, directors made visits to various facilities and operations.



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Risk and risk managementMonitor the development of crisis management planning and the role of the Board in such plans. Establish future milestones after completion of the Woolf report three-year implementation review.

The Board was briefed regularly on the work led by the Chief Executive reviewing the Company’s crisis Management Procedures, which included the use of a simulation exercise to evaluate their effectiveness.

The Board, with the assistance of the Corporate Responsibility Committee, continues to provide oversight of responsible business conduct within the Company. This includes the implementation of the recommendations in the report issued by the Ethical Leadership Group on its review of the implementation of the Woolf Committee recommendations.

Stewardship and UK Corporate Governance codesEngage with shareholders as they implement the Stewardship Code and find ways to expose non-executive directors and directly to shareholders’ views.

The Chairman and certain non-executive directors participated in meetings with major shareholders during the year. In addition, the directors are provided with analysts’ reports and the results of an annual survey of shareholder sentiment.

BrandThink about ‘Brand’ in the context of the evolving nature of the business.

Work has started on the Company’s brand narrative and will continue in 2012. Given the changing dynamics of defence budgets worldwide and the evolving nature of the strategic planning work outlined above, the Board will continue its discussions on brand in 2012.

Board Performance – 2012 Objectives

Strategy Continue to keep strategy under review and support moves to adjust the portfolio of businesses where it is in the interests of shareholders to do so.

Succession planning Increase focus on matching succession and development to the strategic challenges of internationalization, and the next decade of change in the business environment.

Performance monitoring Extract insight from the new segmentation of business results.

Culture and behaviour Implement improvements and observations identified in the Ethical Leadership Group report and the US monitors’ reports, and oversee progress against these at Board meetings.

Risk management Continue to review the corporate risk register, including major programme risks and crisis management plans.

Board development Use deep dives to improve understanding of principle markets and other major business issues.

Balfour Beatty plc Page 71/72

Introduction

In keeping with the Code, the Board receives external evaluations normally every three years with internal evaluations in the intervening two years. The last external evaluation was carried out in 2010.

2011 evaluation

For 2011, the Board conducted its own internal evaluation using an online structured questionnaire covering the operation of the Board and its principal Committees. Questionnaires were also issued, in the case of each of the Board Committees, to those other participants who regularly attend these meetings. The questionnaires were supplemented by individual interviews with the Directors carried out by the Company Secretary, where appropriate, and the findings were summarized and presented to the Board in March 2011.



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The principal themes arising from the 2011 evaluation comprised:

�� Board size and compositionMarginally on the large size, but this was not thought to be an issue. From the mix of skills currently represented on the Board, a background in infrastructure and professional or support services could be useful adjuncts, as would more significant emerging markets experience. Introducing greater diversity on to the Board would be addressed when a vacancy occurred. Status: These points would be considered when the next non-executive director recruitment was under way. The Board’s diversity statement was published in September 2011 and incorporated into Board succession plans.

�� Board papersThe agenda and supporting papers were judged to be appropriate although in some instances these could be made more concise, focused on key issues and oriented towards action points. There were no deficiencies highlighted in the advisory support received by the Board.Status: In progress.

�� StrategyA focus on developing the Group strategy through 2011. Status: Completed

�� CommitteesCommittee chairmen should be provided with a regular opportunity to feed back to the other Directors on recent meetings. Status: Completed – standing Board agenda item.

Conclusions

Board strategy meetings allow Directors to receive in-depth reviews on topics crucial to the development of the business and organisation. The non-executive Director visit programme focused on the principal strategic issues, was considered to be a positive development.

The output from the evaluation also revealed that, in the opinion of the Directors, the acquisition of Parsons Brinckerhoff had been well handled by management, as had the introduction of the new divisional structure.

The following matters were identified where Directors believed a different approach could have been followed and possibly where more progress could have been made: the development of the Group strategy after the Parsons Brinckerhoff acquisition and Board diversity.

The top three priorities identified for 2011 were Group strategy development, succession planning and people development (in particular around diversity in its broadest sense), and embedding the divisional organisation structure.

During the course of 2011, each of the three priorities was addressed. The Board has received regular progress updates and is satisfied significant progress has been made.

For each of the Board Committees a list of emerging key themes was discussed at the Board meeting in March 2011 and although none of these were significant in themselves, each of the Committee chairmen has determined to address the matters during the year. For example, the Audit Committee identified the need to gain greater insight into the risk management and assurance policies and procedures within each of the new divisions. This process has already started with Rail and Support Services.



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Barclays plc Page 37

In order to improve the effectiveness of the Board and its Committees, as well as the effectiveness of each individual Director, we undertake on an annual basis a formal and rigorous Board effectiveness review. One of the advantages of undertaking an annual evaluation, which we have done since 2004, is that we can monitor trends in responses to questions and track progress made against action plans. We annually benchmark our approach against the practices of other companies in the FTSE 20 to ensure that we remain at the forefront of best practice. The Board Corporate Governance and Nominations Committee is responsible for overseeing the process and for monitoring any action plans on behalf of the Board.

Evaluation Statement

I provide below a summary of the Board’s progress against its 2011 action plan:

Key Themes Actions

Ensuring that Board dynamics remain effective following recent membership changes, including the appointment of the new Chief Executive

Effective working relationships have been developed and maintained between the non-executive Directors and the Executive Directors, facilitated by opportunities offered by offsite Board meetings and less formal discussions at Board dinners ahead of meetings.

Continuing the focus on strategic decision making in light of the evolving regulatory environment

The Board has continued to receive regular updates on the regulatory environment. Strategy presentations to the Board have included additional information on the external environment and its impact. External guest speakers have presented to the Board on significant issues, such as the valuation of banks.

Ensuring that a wide range of skills experience, background and diversity on the Board is maintained

Succession planning is a major focus of the Board and the Board Corporate Governance and Nominations Committee considers diversity on the Board when discussing succession plans and potential new appointments.

Revising the format of Board meetings to allow the Board to devote more time to discussion of key strategic issues, including discussions the evening before Board meetings

Board dinners are being held on evenings prior to Board meetings to enable Directors to discuss issues in more depth and build relationships. The Board dinners have included presentations and time for discussion of key issues. Routine Board items are being dealt with appropriately, including inverting the agenda, if appropriate, so that routine items are considered last.



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As in each year since 2004, the 2011 evaluation process was independently facilitated. We continue to monitor and review the facilitators available in the market and Egon Zehnder International was re-engaged following such review. Egon Zehnder is an executive search agent, but it did not undertake any Barclays Board searches during the year and the Board continues to believe that it provides an impartial and objective service.

The 2011 evaluation process again took the form of questionnaires completed by Directors and key executives, followed by structured interviews with representatives from Egon Zehnder. In addition to the Board evaluation questionnaire completed by all the participants, Board Committee members completed separate Board Committee questionnaires. The areas covered by the questionnaire were unchanged from previous years, although this year the questionnaire included some new questions designed to draw out behavioural issues and group dynamics.

In December 2011, Egon Zehnder presented a report on the evaluation process to the Board. We discussed the results of the evaluation and confirmed that we continue to operate at a very high level of effectiveness. The review identified that the Board is aligned in its understanding of the strategic challenges it faces in a highly regulated and uncertain economic environment; that it continues to work hard and effectively as a team; and that it has demonstrated a high degree of resilience over a significant period of uncertainty for the financial services industry. The review also concluded that the Board benchmarked well against other companies.

The key themes arising from the 2011 evaluation and which will form the basis of the action plan for 2012 are:

Ensuring that the Board continues to have an appropriate range and balance of skills, experience and diversity.

Continuing to develop an appropriate process for succession planning for key Board and senior executive management positions.

Enabling the Board to have greater interaction with Executive Committee members to gain an enhanced understanding of the challenges and opportunities they face in their businesses.

Ensuring that the Board has visibility of talent amongst senior executive management.

Continuing to ensure that timely and high-quality information flows to the Board and to Board Committees. As part of the annual evaluation process, we seek views on the performance of individual Directors. I have discussed this feedback with each of the non-executive Directors and agreed with them any areas for development. My own performance was reviewed by the Senior Independent Director, who sought the views of the other non-executive Directors.

Barratt Developments plc Page 45

The Board is responsible for undertaking a formal and rigorous annual evaluation of its own performance, that of its Committees and of individual Directors. Given that an external consultant undertook the performance evaluation of the Board and its Committees for the 2009/10 financial year, the Board agreed that it would, for the 2011/12 financial year, carry out the performance evaluation internally using the same performance evaluation process as it did for the 2010/11 financial year. Accordingly, each Director was asked to complete a separate confidential questionnaire on the effectiveness of the Board and each of the Committees of which he/she is a member. The Directors scored the performance of the Board and its Committees on various topics, including: contribution to strategy; risk management; financial and operating reporting; matters reserved for the Board; inter-relationships between the Board and its Committees; relations with advisers and regulators; and Board procedures. Responses were collated by the Group General Counsel and Company Secretary and a non-attributable report on the findings was formally presented to the Board in July 2012 for discussion. Thereafter the Chairman conducted one-to-one meetings with individual Directors in order to appraise the performance of each of them as Board members and explore the performance evaluation findings. Key outputs included a desire for more in-depth analysis of risk and crisis management plans, enhanced training and development and increased emphasis in all meetings on strategy development. An action plan to address these matters has been put in place. As a result of the performance evaluation the Board and each of its Committees reviewed and updated their terms of reference as appropriate.

During the year the Board and its Committees addressed all the issues raised as part of the 2010/11 performance evaluation process, including, development of succession plans for all levels of senior management (including the Executive Directors) and review of the annual Board strategy day agenda to encourage more focus on longer-term strategy as well as the short to medium-term strategies.



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In accordance with the requirements of the Code, the Chairman met with the Non-Executive Directors independently of the Executive Directors. The Non-Executive Directors, led by the Senior Independent Director, met without the Chairman being present, to assess the performance of the Chairman and provided feedback from the process.

Bellway plc Page 34

During the year the directors undertook an evaluation of the performance and effectiveness of the Board, its Committees and individual directors. The evaluation was performed using a system of self-assessment. This involved the Chairman, acting on behalf of the Board, evaluating the performance of the other individual directors, and the non-executive directors, led by the senior independent non-executive director, assessing the performance of the Chairman, taking into account the views of the executive directors. The Board, led by the Chairman, evaluated its own performance, and the standing Committees, led by the Chairman of each, evaluated their own performance.

As part of the process of ensuring Board effectiveness, the non-executive directors, led by the senior independent non-executive director, met without the Chairman present. Additionally, the Chairman held a meeting with the non-executive directors without the executives present. The Chairman also had meetings with each of the executive directors.

The Board and its Committees reviewed the results of these evaluations and are satisfied with the evidence they provided about the balance, effectiveness and performance of the Board and its Committees and the effectiveness and commitment of each director.

Following formal rigorous evaluation, the Chairman, acting on behalf of the Board, is satisfied as to the effectiveness and commitment of all of the directors.

Berkeley Group plc Page 105

The Board undertakes an annual formal evaluation of its own performance and that of its Committees and individual Directors. This year the process was led by the Chairman and covered:

�� Strategic matters�� Board structure, committees and their operation�� Succession planning�� Induction and development�� Assessment of the performance of individual committees and the Chairman�� Shareholder communication

The overall conclusion was that individual Board members are satisfied that the Board works well and operates efficiently. They are also satisfied with the contribution made by their colleagues and that the Board committees operate properly and efficiently.

In line with the best practice recommendations of the Code, which recommends that an externally facilitated evaluation should be conducted at least every three years, the Board has agreed that an external evaluation will be conducted for 2012/13.

BG Group plc Page 60

In 2011, the evaluation of the effectiveness of the Board and its Committees was facilitated internally by the Senior Independent Director, Baroness Hogg, and the Committee Chairmen, with the support of an external facilitator. The evaluation comprised a written questionnaire and, where appropriate, a series of one-to-one interviews with Board and Committee members.

The evaluation covered a number of key areas including: strategy; internal control and risk; performance management; shareholder communication; Board culture and dynamics; Board composition, including consideration of the balance of skills, experience, independence and knowledge of the Group on the Board, and its diversity (including gender); and the Board and Committee calendar, agendas and support.



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The results of the evaluation were discussed by the Board as a whole and at the relevant Committees. The Directors concluded that the Board operates effectively as a unit and that the diverse membership provides a broad range of skills and perspectives. Meetings are open and members of the Board are able to engage fully and constructively. A number of matters raised during the evaluation exercise will form part of the agenda of the Board and its Committees in 2012 and these include: a continued focus on Chief Executive succession planning; the integration of action items from the Board Planning Conference into subsequent Board agendas (including a deeper understanding of the competitive landscape); further use of external presenters to enhance debate from a different perspective; expanding the practice of allowing senior executives below Board and Group Executive Committee level exposure to the Board; regular discussions on risks in light of global economic and political issues; and additional feedback throughout the year from investor meetings.

BHP Billiton Limited Page 118/119

The Board is committed to transparency in determining Board membership and in assessing the performance of Directors. The Board evaluates its performance through a combination of both internal peer and externally facilitated assessments. Contemporary performance measures are considered an important part of this process. Directors’ performance is also measured against their individual development plans. The Board conducts regular evaluations of its performance, the performance of its committees, the Chairman, individual Directors and the governance processes that support the Board’s work. The Board evaluation process comprises both assessment and review, as summarised in the diagram below. This includes analysis of how the Board and its Directors are functioning, the time spent by the Board considering matters and whether the terms of reference of the Board committees have been met, as well as compliance with the Board Governance Document.

Evaluation Process

Year OneCommittee and individual Director Assessment*

Year TwoWhole Board assessment*

Each year, review of:• Directors for re-elections• Board and committees for compliance with the Board Governance Document and committee terms of reference.

*May be internally or externally facilitated assessment. An externally facilitated assessment of the Board of Directors and Committees takes place at least every two years.

The assessment of the Board’s performance is conducted by focusing on individual Directors and Board committees in one year and the Board as a whole in the following year. In addition, each year the Board, with the assistance of the Nomination Committee, conducts a review of the performance of each Director seeking re-election and uses the results of that review when considering whether to recommend the re-election of each Director. As the Board has adopted a policy of annual election, this effectively means that all Directors are subject to performance review annually should they wish to remain on the Board.

Directors provide anonymous feedback on their peers’ performance and individual contributions to the Board, which is passed on to the relevant Director via the Chairman. In respect of the Chairman’s performance, Directors provide feedback directly to John Schubert to be passed on anonymously to the Chairman. External independent advisers are engaged to assist these processes as necessary, and an externally facilitated assessment of the Board, Directors or committees takes place at least every two years. The involvement of an independent third party has assisted in ensuring that the evaluation processes are both rigorous and fair.

Director evaluation

The evaluation of individual Directors focuses on the contribution of the Director to the work of the Board and the expectations of Directors as specified in the Group’s governance framework. The performance of individual Directors is assessed against a range of criteria, including the ability of the Director to:

�� Consistently take the perspective of creating shareholder value; �� Contribute to the development of strategy; �� Understand the major risks affecting the business; �� Provide clear direction to management;



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�� Contribute to Board cohesion; �� Commit the time required to fulfil the role and perform their responsibilities effectively; �� Listen to and respect the ideas of fellow Directors and members of management.

Board effectiveness

The effectiveness of the Board as a whole and of its committees is assessed against the accountabilities set down in the Board Governance Document and each of the committees’ terms of reference. Matters considered in evaluations include:

�� The effectiveness of discussion and debate at Board and committee meetings; �� The effectiveness of the Board’s and committees’ processes and relationship with management; �� The quality and timeliness of meeting agendas, Board and committee papers and secretariat support; �� The composition of the Board and each committee, focusing on the blend of skills, experience, independence and knowledge of the Group and its diversity, including geographic location, nationality and gender.

The process is managed by the Chairman, but feedback on the Chairman’s performance is provided to him by Dr Schubert.

Information about the performance review process for executives is set out in section 5.15.

Evaluations conducted in FY2012

During the year, with the assistance of an external adviser, recommendations were implemented from the assessment of each Board committee that was finalized in FY2012. An assessment of each Director was also completed. Enhancements identified from previous years’ evaluations have continued to be implemented.

Committee assessment

At the end of FY2011, each committee retained the services of an external adviser (JCA Group, a UK-based provider of Board evaluation services that has no other connections with the BHP Billiton Group) to assist with an assessment of the committee’s effectiveness, and this assessment continued into FY2012. The assessments indicated that the Board’s committees continue to function effectively and in accordance with their terms of reference.

Director assessment

During FY2011, an external adviser (Heidrick and Struggles, Leadership Consulting Practice) was retained in relation to the assessment of each Director, and this assessment continued into FY2012. Although Heidrick and Struggles’ Executive Search Practice also provides services in respect of Board renewal, the Leadership Consulting Practice and the Executive Search Practice operate independently.

The process involves each Director, including the Chairman and CEO, being interviewed by the external facilitator. The interview considers each Director’s contribution and the value they bring to the work of the Board. It also provides the opportunity for each Director to provide comments and feedback on fellow Directors, as well as their views on the focus of the Board.

The overall findings are presented to the Board and discussed. Each Director is provided with feedback on their individual and collective contribution to the Board and its committees.

Board review

As the assessment completed in FY2012 focused on individual Directors and Board committees, a short form review of the Board as a whole was conducted to assess compliance with the Board Governance Document, time spent by the Board in considering matters and compliance with corporate governance requirements.

The review of the Board as a whole indicated that the Board is continuing to function effectively and in accordance with the Board Governance Document.



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Internal Board process enhancements

Over the past two years, a number of enhancements have been made to the internal processes surrounding Board meetings as a result of evaluations.

�� Chairman’s matters: In the past, the Board held a closed session at the end of Board meetings. An additional closed session has been incorporated so that all Board meetings start with a closed session of all Directors (there are no members of the GMC present other than the Executive Director). This allows the Chairman to outline matters to be considered by the Board and set the context for the meeting. It is also an opportunity for Directors to raise the items of business they believe should be particularly considered or any other relevant issues.�� Assurance items: The Board agenda provides more time for reports from the committee chairmen to the Board. This ensures that the Board is properly and formally informed of the work of its committees and relevant committee papers are also provided to the Board. Where it is considered appropriate, presentations made to committees are also presented to the Board during its meeting.�� Training and development sessions are scheduled during the Board meeting program.�� Closed session: Directors continue to have the opportunity to raise matters during the closed session at the end of each Board meeting, which is attended only by the Non-executive Directors.

Booker plc Page 13

During the year, the Board conducted an evaluation of its own performance and that of its three principal committees. The individual performance of the Non-Executive Directors was also evaluated through one to one interviews with the Chairman. In April 2012, each Director completed a questionnaire prepared by the Chairman and the Company secretary to rate the collective performance of the Board and its committees. The Company secretary collated the evaluation results and the Chairman then reviewed an unattributed executive summary, highlighting key outcomes. A report of the findings was then presented to and discussed by the Board. No actions were considered necessary as a result of these evaluations and the Chairman confirms that each Director continues to make a valuable contribution to the Board and, where relevant, its Committees and devotes sufficient time to the role.

During the year, the Chairman and the Non-Executive Directors met in the absence of the Executive Directors. There was also one meeting of the Non-Executive Directors chaired by the senior independent Non-Executive Director at which the Chairman was not present in order to appraise the Chairman’s performance.

The Board decided in 2010 to undertake an externally facilitated evaluation process every three years, which has since become a requirement within the Code. The first externally facilitated evaluation will be undertaken in 2013.

BP plc Page 122

We undertake an annual review of the Board, its committees and individual directors. The chairman undertakes the evaluation of individual directors, with the chairman’s own performance evaluated by the chairman’s committee (led by the senior independent director).

In 2009 and 2010, we undertook an external review of the Board’s performance. In 2011, we decided to continue external facilitation as a way of building on the past year’s results and providing a robust, third- party insight into the Board’s effectiveness. To enable continuity and comparability of results over the two year period, we used the same external facilitator as for the 2010 review.

Evaluation Process for 2011

�� Each director (with the exception of those appointed in 2012) was sent a questionnaire and a list of discussion topics.�� The facilitator held one-to-one reviews with each participating director, using the questionnaire and discussion topics as a starting point.�� Each committee held its own review using online questionnaires that were developed by us using an externally generated



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question bank. The results from these questionnaires were then discussed with the external facilitator by each committee (these are outlined in the reports of our committees).�� A paper on the key themes and views from the one-to-one reviews and the evaluation of the committees were sent to the Board to review.�� The Board held a discussion with the external facilitator to assess these views and the issues raised.�� The Board agreed on actions for the forthcoming year based on this discussion.

Key Conclusions of the 2011 Evaluation

The review concluded the Board had operated well in 2011. It had been an eventful year and the Board continues to deal with events from the Gulf of Mexico. There was a strong view that the Board had an open and transparent style of discussion, with good engagement and contribution from all members, particularly around strategic planning and risk management. The Board also considered that its focus, discipline and follow through had strengthened over the year, which was seen as important given the events of the previous 18 months and the volume of issues dealt with by the Board. It hoped to continue this trend in 2012.The review also found that there was potential for continuous improvement in areas such as Board materials (including the length of papers) and agendas, and that as the Board endeavours to move back into a ‘steady state’ of operation, it would need to revisit its collective expectation around governance processes and style.

Tracking Issues from our Previous Evaluation

Over 2011, the Board acted upon the recommendations from the 2010 Board evaluation. The Board determined to conduct additional site visits and participate in detailed briefings in order to gain further insight into the company’s operations and activities – which it achieved through an active programme over the year attended by individual or groups of directors. The Board set up a working group to review and revise the company’s Board governance principles to ensure that BP’s governance processes were effective. The Board also reviewed BP’s crisis and continuity plan, including specific focus on the process through which Board involvement is triggered as part of its action to clarify the Board’s role in the crisis planning process. Finally, the Board had extensive engagement with executive management in forward-looking strategy discussions and an overview of BP’s risk management systems.

British American Tobacco plc Page 58/59

Following the comprehensive report and findings which resulted from the 2010 Board Evaluation (see below), the Board once again appointed Simon Osborne and Geoffrey Shepheard from the Institute of Chartered Secretaries and Administrators (ICSA) to conduct a follow up Board and Committee evaluation for 2011. This also included a more detailed peer-based evaluation of the personal effectiveness of each Director.

The key areas for the review were based on the topics which had been discussed the previous year and included:

�� The role of the Board, its responsibilities and those of its Committees; �� How the Board oversees risk, business conduct and corporate governance; �� The arrangements for, and effectiveness of, Board meetings; �� The support and training provided to the Board; �� Board composition, range of skills required, succession planning and effectiveness of the Chairman, Senior Independent Director and Committee Chairmen; �� How the Board works together and its engagement with shareholders; and �� Outcomes and achievements, including how the Board is perceived externally.

John Daly, who had joined the Board after completion of the 2010 evaluation, was interviewed by Simon Osborne. All other Directors were sent a transcript of their 2010 discussion and asked to update their comments with their thoughts on the progress of the Board over the preceding year. Each Director was required to give an assessment ranging from Poor through to Excellent on each of the core issues.

In addition, each Director assessed themselves, and all the other Directors – both Executive and Non-Executive and the Chairman –



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against a number of personal effectiveness criteria, including awareness of the Group strategy, ability to think strategically and challenge constructively, level of commitment and preparedness, communication and listening skills, and contribution to decision-making. The Chairman was also assessed on his ability to create the conditions for overall Board effectiveness and for setting the tone at the top.

The facilitators collated and analysed the results from each element of the evaluation and prepared separate reports, summarising key points and including non-attributable comments given in individual responses. The Board and Director Reports were initially discussed with the Chairman. The Board report was then presented by ICSA at a Board meeting. Each Director received a copy of the report on his or her own effectiveness and those reports on individual performances were discussed by the Chairman with each Director as appropriate. The Chairman’s performance was discussed initially with the Senior Independent Director before he provided feedback to the Chairman.

The Board evaluation for 2012 will be facilitated by the Company Secretary and it is anticipated that in the future it will be facilitated externally at least once every three years.

Evaluation of Board performance

Update on 2010 objectives

Throughout 2011, the Board monitored progress towards achievement of the specific action points arising from its first externally facilitated evaluation. Details are set out below.

�� Carry out a review of the size and composition of the Remuneration Committee: At least one additional meeting has been scheduled in 2012 and a revised forward agenda has been established. For the time being, all independent Non-Executive Directors will continue to be members of the Committee. Further details of the review are provided in the remuneration report. �� The Remuneration Committee to receive a formal report following the annual appraisal of each member of the Management Board: In February 2011, the Chief Executive provided a full update to the Committee on the performance of each member of the Management Board. This process will be repeated annually. �� Each Committee to review the 2010 report’s specific comments relating to its activities as well as any generally applicable action points: These reviews have been carried out and, as a result, each Committee has updated its forward calendar of specific agenda items and considered its role and responsibilities, for example with regard to risk oversight. �� Review the process for the proposed re-election of Directors: A formal two-stage process was introduced in February 2011. This involves a discussion between the Chairman and each Non-Executive Director in October each year and formal consideration by the Nominations Committee in the following February, with each Director being absent from the meeting while his or her own position is discussed. �� Establish a direct reporting line for the Company Secretary to the Chairman in relation to Board matters: This was introduced with effect from October 2010. �� The Nominations Committee to have particular regard to a person’s ability to influence outcomes when considering non-executive appointments: An ability to influence and provide constructive challenge has always been a key requirement. This point was re-emphasised with the search firms engaged in 2011 to find further non-executive directors and in the role specification which was prepared. �� Review the calendar of standard Board and Committee agenda items: The Board and each of the Committees have reviewed and updated the standard calendar of agenda items and also regularly reflect on the balance between pre-read and presentation at their meetings. �� Review the induction arrangements for non-executive directors: These arrangements are reviewed with every new appointment and the time commitment expected for the induction is now specified in the appointment letter. �� Implement a Board software solution to facilitate secure electronic delivery of papers: A secure electronic delivery system was introduced in September 2011 as an interim measure. Following a formal tender process, it is expected that the Blueprint BoardPad 2 software will be implemented by April 2012.

Outcome of 2011 evaluation Board performance: The 2011 evaluation showed that the Board continues to be effective. The assessments showed that the Board is rated highly in each category, with only marginal variations from the previous year’s ratings. It was considered that the Board had discharged its role and responsibilities effectively and that, during the year, it had focused



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particularly on longer-term strategic issues, such as opportunities for speedier growth, the threats from increased illicit trade and the challenges posed by further regulation. The Board’s continuing focus on succession was highlighted by the smooth transition between the retiring Chief Executive, Paul Adams, and his successor, Nicandro Durante, and also by the appointment of Ann Godbehere in October 2011.

The Board’s working relationship with its four principal Committees was considered to have improved during the year. The CSR Committee has benefitted from a revised schedule of meetings and the Remuneration Committee has agreed that it will hold at least one additional meeting in 2012.

With regard to the spread of skills, background and experience on the Board, the evaluation confirmed that the current Directors’ backgrounds provide a good mix from both FMCG and financial companies. During 2011, the Board identified a number of additional skills which would also be beneficial to the Company, including science-based skills, experience in relation to the Far East and skills relating to the use of new media in a consumer-facing business.

Director Evaluations: The Chairman has discussed each report with the Director concerned and the Senior Independent Director has met with the Chairman to discuss his report with him. Development plans have been agreed and opportunities for Board training and development will be reviewed in 2012.

2011 Action Plan: The outstanding action points from 2010 will be fully implemented during 2012, including the introduction of new Board software and implementation of the revised calendar for meetings of the Remuneration Committee. In addition, the Board agreed to review the time allowed in the Board calendar for training and personal development purposes.

British Land plc Page 73

The Board undertakes a formal and rigorous annual evaluation of its performance. The British Land Board performance evaluation alternates internally facilitated appraisals with externally facilitated appraisals at least every three years.

An independent external review of the effectiveness of the British Land Board was conducted this year by Dr Tracy Long of Boardroom Review. Boardroom Review had no other connection with the Company. The review was designed to encourage Directors to question the Board’s approach, assess its impact and contribution and prepare for the challenges ahead. The review investigated the Board’s approach to strategy, risk and control, performance management and communication, its culture and dynamics, and the way in which it optimised its use of time, and included confidential interviews with all thirteen Directors and the Company Secretary, an observation of the strategic awayday and a review of selected papers.

The results of the review, which were compared with Boardroom Review’s 2009 evaluation, and which concluded that the Board had an open and constructive culture, strong composition and sound leadership, were presented as a written report and presentation, during which Directors discussed key themes and areas for further development.

BSkyB plc Page 47

An evaluation of the Board is undertaken on an annual basis to ensure that governance best practice standards are achieved and upheld. This year’s internal Board evaluation has focused on Board composition and succession planning and was led by the Corporate Governance & Nominations Committee with regular reporting to and input from the Board.

The evaluation framework sought views on:

�� The effectiveness of the Board; �� The mix of skills and experience on the Board; �� The performance of the Board’s committees.

The evaluation is ongoing whilst the Board goes through a period of replacing Board members as they retire. The Board has decided



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that an externally facilitated Board Evaluation will be undertaken during the 2012/13 financial year. The development themes arising from the external evaluation process will be discussed in future reports.

BT Group plc Page 68

Boardroom Review, an independent external organisation, was appointed, after a tender exercise, to conduct a Board evaluation. The methodology included one-to-one interviews and observation of a Board meeting to provide an independent external view of the Board’s effectiveness. A report was produced and discussed at the Board meeting in May 2011. The report described a number of areas where the Board was effective and functioning well. In addition there were some areas where enhancements could be considered and a number of actions were agreed by the Board. Progress against the main actions is highlighted in the table below:

Key Areas Actions

Strategy

Additional time to focus on strategy In addition to the annual Board strategy session, regular strategy updates have been received by the Board and are also planned for 2013

Opportunities to improve understanding of the business A programme has been established to give the non-executive directors a better appreciation of the different elements of BT in the UK and overseas

Access to wider external perspective Both our corporate brokers have attended separate Board meetings during the year

Focus of work

Whether the Audit & Risk Committee members are receiving sufficient information to support the extended remit and focus on risk

Separate annual presentations are given by the Chief Executive and each of the lines of business and internal service unit CEOs, to the Audit & Risk Committee. Responses to the Committee evaluation questionnaire did not highlight any concerns

Board members to have further opportunities to see senior executives

Continuation of Talent breakfasts with the Chairman and non-executive directors and one-to-one meetings are being arranged

Meetings

Extend the time to discuss priority agenda items Considered on a meeting-by-meeting basis and continued use of working lunch sessions to discuss additional topics

Consideration of offsite and/or overseas Board meetings During the year a Board meeting was held at Adastral Park, where BT’s research, technology and IP operations are based. An overseas Board meeting is planned for 2013

The internal questionnaire for the next annual Board evaluation has been distributed and covers the following areas: composition and effectiveness of the Board; the processes supporting the Board, and performance. The results of the questionnaire will be discussed by the Board early in 2013. In addition, the Audit & Risk Committee, Nominating & Governance Committee and the Operating Committee have undertaken an evaluation of their effectiveness.

BTG plc Page 47

The CEO is responsible for appraising the performance of the CFO. The Chairman and non-executive directors review the performance of the CEO. The non-executive directors, led by the Senior Independent Director and following input from the executive directors, normally evaluate the performance of the Chairman each year. However, as Garry Watts only joined the Company in January 2012 it was considered too early to perform a formal evaluation. This will take place during the current year. The Committees also reviewed their performance and reported the results to the Chairman and the Board as a whole. The non-executive directors meet at least once a year without the executive directors in order to discuss the performance of the executive directors and any concerns over their management of the Company’s affairs.



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In previous years, the Board has carried out an annual evaluation of its own effectiveness and that of its Committees, both through measuring performance against annual objectives and through an individual appraisal process. With the requirement introduced by the Code for an external evaluation at least every three years, it was decided to appoint external consultants, SCT Consultants Ltd, to assist with the review. This was considered a valuable exercise particularly in light of the continued growth of the business.The process confirmed that the Board provided effective leadership of the Group and proposed a number of recommendations for the coming year, including:

�� To increase the strategic focus and content of Board discussions to contribute to the ongoing transformation of the Group. �� To re-evaluate the membership and operation of the Board Committees to streamline activities and allow additional focus where needed. �� To enhance the risk management process to ensure sound management controls are in place. �� To ensure the information flows from the Board down through the organisation, to give clarity, accountability and oversight of the effective implementation of key decisions. �� To focus on the development needs of the organisation as a whole, having regard to the capacity and capabilities needed in order for the organisation to deliver on its existing objectives and future strategic objectives. �� To develop a stakeholder management plan which would define the basis of communication and increase Board interaction with all stakeholders.

Bunzl plc Page 36

The Company has a formal performance evaluation process for the Board, its Committees and individual directors overseen by the Chairman. This includes completion of self-assessment forms by, and individual discussions with, each director when their individual training and development needs are reviewed. Led by the senior independent director, the non-executive directors also meet without the Chairman present at least annually to appraise the Chairman’s performance including a review of his other commitments to ensure that he is able to allocate sufficient time to the Company to discharge his responsibilities effectively. The Chairman periodically holds meetings with the non-executive directors without the executive directors present. All of these processes were carried out satisfactorily during the year as a result of which the Board concluded that both it and its Committees are operating effectively. Following the evaluation process this year, it was agreed that the Board should increase its visibility of the Group’s senior executives, by asking them to make more presentations about the businesses for which they are responsible, and that the Nomination Committee should have greater insight into the Group’s executive development programmes as part of the Committee’s annual review of the management succession plan. The Board has considered the new requirements of the Code in respect of an external evaluation of the Board at least every three years. The Board has agreed that such an evaluation will be carried out within the next year.

Burberry plc Page 77

The Board undertakes a formal review of its performance and that of its committees each financial year, with an external evaluation once every three years. During the year an internally facilitated review by way of an online questionnaire was undertaken. Feedback from the evaluation was provided in the form of a written report to the Board followed by a discussion of the outcomes, led by the Chairman. In 2010/11 an externally facilitated review of the Board’s effectiveness was facilitated by Dr Tracy Long of Boardroom Review.

Consistent with Dr Long’s findings last year, the review concluded that the Board was highly effective, the size and continuity of the Board was felt to encourage open and, where necessary, robust debate. The review identified that the Board had a number of key strengths, including:

�� The small size and open culture of the Board encouraged discussion and debate, fostered by the Chairman who is viewed as a strong and positive influence and a great ambassador for the Group; �� The Board operated effectively as currently composed with a diversity of skills and very good knowledge of the business and management; �� The Board’s role in overseeing the strategic plan was rated highly and had improved significantly over the last few years;�� The increased use of informal meetings, presentations from senior management and the visit to the businesses in Asia, were all positive developments;



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�� The annual cycle of Board and Committee work and information provided was appropriate and well planned; and�� Board and Committee performance in managing principal risks was rated highly.

Following its discussion the Board agreed the following recommendations:

�� Whilst the current composition of the Board was considered appropriate, the Board should plan for the next few years to build on its relevant skills and competencies. It was identified that the future addition of a director with experience of operating in Asia and/or Emerging Markets would be beneficial;�� The Board should continue to strengthen its contribution and impact on overseeing strategy including by affording more opportunities throughout the year to engage with senior management responsible for key elements of the business and strategy; and�� The Board should continue to consider its approach to assessing Board and Committee effectiveness to ensure that the Group’s approach to this remained meaningful and reflective of the unique and collaborative nature of the Board.

The non-executive directors, led by the Senior Independent Director, also considered the performance of the Chairman without the Chairman present. They confirmed that the Chairman’s leadership, performance and overall contribution were of a high standard.

Cairn Energy plc Page 60

The Board has in place a formal rigorous process for annual performance evaluation for the Board, Audit, Nomination and Remuneration Committees and individual directors. In 2011 the performance evaluation process was carried out internally. In accordance with the UK Corporate Governance Code, the Board will implement the new requirement that the performance evaluation of the Board will be externally facilitated every three years. It is proposed that this external review will be carried out in 2012.

The process during 2011, which was led by the current Chairman, focused on conducting a thorough review of the commitment, skills and experience of each member of the Board and of the strengths and weaknesses of the Board as a whole. The performance evaluation was primarily based upon answers to a questionnaire which focused on the performance of the Board. The questionnaire was prepared internally by the Deputy Company Secretary and the Chairman and was distributed to all Board members. The areas covered by the questionnaire included the effectiveness of the Board and Board committees, strategy setting, performance against key objectives set for the Board and each of the directors and the level and quality of information available to the Board. Once a questionnaire had been completed by each member of the Board, the Chairman held a meeting with each director, as appropriate, to discuss their responses.

The Executive Directors also have their performance individually reviewed by the Remuneration Committee against objectives which are set annually. The bonuses payable to the Executive Directors under the Company’s cash bonus scheme (described further in the Directors’ Remuneration Report on pages 69 to 87) are linked directly to the results of these reviews.

Following the performance evaluation process conducted in 2011, the Board and its committees are satisfied that they are operating effectively and that each director has performed well in respect of their individual roles on the Board. Following the results of the individual performance evaluations, the Board believes that all of the directors’ performance (all of whom are proposed for re-election at the AGM) continues to be effective and that they each demonstrate commitment to the role.

Capital & Counties Properties plc Page 55

The Board conducts an annual evaluation of its own performance and that of its Committees and Directors. Following the externally facilitated review undertaken by Independent Audit Limited in 2010, it was felt that an internal review led by the Chairman and Company Secretary was appropriate for 2011. It is anticipated that an internal review will also be undertaken during 2012. Directors were asked to answer questions on a wide range of topics, and to highlight any areas they felt needed additional focus. The outcome of the review was positive, with the Board judged to be effective and open, however, several areas have been identified for attention during 2012.



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In addition to the Board evaluation, during the year the Senior Independent Director and Non-executive Directors conducted their first annual appraisal of the Chairman’s performance, and the Chairman undertook an appraisal of the Chief Executive’s performance.

Evaluation Process

Consideration of approach

Recommendation of Independent Audit Limited’s online Thinking Board to Nomination Committee and Board

Questionnaires prepared and issued to all Directors

Results collated

Interim Report presented to the Board for discussion

Action plan and process for reviewing progress agreedKey Actions included:

• Appointment of Henry Staunton to Nomination Committee• Increased Board diversity• Improve planning of Committees’ annual agendas• Develop Board succession plan• Expand Non-executive Director development opportunities

Capita plc Page 63

During October 2011, the Board evaluation process was carried out by means of a questionnaire requiring written responses from the Directors. To ensure independence and objectivity, the questionnaire was conceived, administered and reviewed on a confidential basis by the Deputy Company Secretary. The resultant report, analysing responses and drawing anonymous conclusions, was sent to each Director for consideration at the October Board meeting. The Chairman also met with each Board member individually to discuss the performance of the Board and also discussed and agreed the format of the Board evaluation with the Senior Independent Director.

The report recognised the robustness of the governance process within the Board, and the strength of the dynamics that exists between strategic challenge and strategic focus amongst Executive and Non-Executive Directors.

The results of the evaluation were very positive and the final report was presented without amendment to the Board.Consideration of the Board balance is kept under regular review by the Chairman and Chief Executive.

The use of an external evaluator for the Board evaluation is reviewed annually.

Capital Shopping Centres Group plc Page 66

Every year, the Board conducts an evaluation of its own performance and of the performance of the Chairman and each of the Board Committees. In 2010, the performance evaluation was carried out by an external consultant, Independent Audit Limited, and the Board intends to use an external facilitator at least every three years in accordance with provision B.6.2 of the Code. The 2011 performance evaluation was carried out internally by way of detailed questionnaires and analysis of responses and comments. Further details relating to the 2011 performance evaluation are set out under ‘Nomination and Review Committee’ below.

Carillion plc Page 44

In 2011, a detailed internal evaluation of the Board’s corporate governance procedures and compliance was conducted by the Chairman in conjunction with the Company Secretary. The internal evaluation took into account the views of each of the Directors on (i) the role of Directors, (ii) the collective and individual performance of the Board and all its members, (iii) Board Committees, (iv) leadership and culture, (v) Corporate Governance, (vi) Directors’ remuneration, (vii) relations with shareholders and (viii) Board accountability and audit. The Board, at its meeting in November 2011, reviewed the results of the internal evaluation and, where required, issues were acted upon in order to further enhance the effectiveness of the Board’s procedures and working practices. Such an evaluation has been



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conducted in each of the last ten years and will be repeated annually. In addition, the performance of each individual Director has been reviewed.

Carnival Corporation & plcNo information given.

Caitlin Group Limited Page 96

The Board continually seeks to improve its procedures and performance. During 2011, the Board undertook a detailed self-appraisal and worked with management to refine and improve the quality of the information provided to it by the Company. As a result of that process, the Board and management have worked during 2011 to enhance the Board’s contribution to Group strategy, improve communication with shareholders, rationalise Board and Committee membership, ensure an appropriate level of externally provided professional development, improve the quality of information provided to the Board (both at and between meetings) and provide more exposure to a broader range of the Group’s management. In addition, throughout the year the Board heard regular presentations from various areas of the business and held regular meetings of all Non-Executive Directors in the absence of the Executive Directors.

Other performance reviews undertaken during 2011 include:

�� An internal review of the effectiveness of the Audit, Compensation, Investment and Nomination Committees;�� Performance appraisals of individual Directors; and �� Review by the Non-Executive Directors of the Chairman’s effectiveness.

The internal reviews were conducted through a combination of meetings and appraisal forms, and recommendations arising from these reviews were implemented during the year.

During 2012, the Board and its committees will undertake externally facilitated effectiveness appraisals.

Centrica plc Page 46

The Board considers the annual review of the Board, its Committees and Directors as an essential part of good corporate housekeeping, with the use of an external facilitator at least once every three years. During Sir Roger’s time as Chairman, the Company has employed JCA Group and Egon Zehnder on two occasions and this year, Independent Board Evaluations (IBE) to bring a fresh pair of eyes to the appraisal. IBE have no other connections with the Company. On each occasion, the Board has received positive reports and has adopted recommendations to improve Board, Committee and individual director performance. This year, IBE observed a Board meeting as well as meetings of the Audit and Nominations Committees and conducted face-to-face interviews with each of the Directors to get a detailed understanding of how well the Board operates. The scope of the evaluation was to assess how well the Board and its Committees operated as a unit and individually. The evaluation covered key governance areas such as shareholder accountability, strategy, risk management, Board composition and succession planning and Board culture and decision-making. A comprehensive analysis was then presented to the Board. For 2011, the findings continued to be positive and recommendations were aimed at ‘making a good Board great’. These suggestions included making more time in regular Board meetings for strategic debate and encouraging Executive Directors to speak more often outside their areas of specific expertise. The Board and each of its Committees have already started to make progress against the findings and the Board will conduct a review against these objectives at the mid-year.

During 2011, the Board progressed the issues identified in the 2010 internal evaluation, summarised in last year’s Annual Report, through both the regular Board and Committee meetings and as part of the annual Board strategy conference.



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Close Brothers Group plc Page 36

In 2012 the Nomination and Governance Committee recommended that the Board evaluation should be carried out internally. In accordance with the requirements of the Code the Board intends to appoint an external consultant to facilitate the Board evaluation in 2013. The 2012 internal evaluation was led by the company secretary and took the form of confidential questionnaires which assessed the performance of the Board and its committees with the option for a confidential interview. In order to assess the progress of the Board over the year, the 2012 evaluation focused on the same areas as the 2011 evaluation:

�� Board and committee competencies and experience;�� Effectiveness of the Board and director commitment;�� Succession planning and talent review;�� Strategic direction;�� Board training; and�� Use of time at Board meetings.

The feedback from the evaluations was collated by the company secretary, reviewed with the chief executive and chairman and presented to the Nomination and Governance Committee in July 2012.

The majority of responses were positive and the feedback confirmed that there had been notable improvement in a number of areas identified in the 2011 evaluation and forming the basis of the 2012 action plan including succession planning, Board training and culture and the performance of the Risk Committee.

The 2012 evaluation also assessed the effectiveness of each of the Board’s committees. The committee members were asked questions regarding governance arrangements, the quality of advice and input from external advisers, the quality of contribution of relevant internal functions, the quality of presentations and disclosure by the executive and the overall effectiveness of the committees. The majority of responses were positive.

The evaluations confirmed the directors’ opinion that the Board and its committees continue to be highly effective.In addition to the Board evaluation process, the senior independent director led a separate performance review in respect of the chairman which involved a review with the non-executive directors (excluding the chairman) and separate consultation with the chief executive. The senior independent director subsequently provided feedback to the chairman on his appraisal.

Cobham plc Page 37

The Board conducts an evaluation of its activities on an annual basis. During 2011, the Board and its committees undertook an internal evaluation.The evaluation included the circulation of a questionnaire, a review of actions taken in response to the 2009 external evaluation and 2010 internal evaluation. The Board considered the output and has approved an action plan to address issues arising. A Board evaluation undertaken by external facilitators is planned for 2012.A table of action instigated by previous performance evaluations is included below.



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Compass Group plc Page 46

A performance evaluation of the Board and of its Committees is carried out annually to ensure that they continue to be effective and that each of the Directors demonstrates commitment to his or her respective role and has sufficient time to meet his or her commitment to the Company.

Having conducted its evaluation, it is the view of the Board that each of the Non-Executive Directors brings considerable management experience and an independent perspective to the Board’s discussions and they are considered to be independent of management and free from any relationship or circumstance that could affect, or appear to affect, the exercise of their independent judgment.

In view of Board changes and the refinement of the Group’s operating and reporting regions during the year and in order to allow such changes to bed in, an independent formal external evaluation will be carried out during the year ending 30 September 2013 in accordance with the provisions of the Code.

Cookson Group plc Page 23

In accordance with the provisions of the Code, the Board undertakes a formal and rigorous evaluation of its own performance and effectiveness and assesses the performance of its committees and individual Board members on an annual basis.

The Chairman is responsible for, and leads the evaluation process and is assisted by the Group Secretary. In line with best practice, and as it has done in previous years, the Company engaged an external facilitator for the Board evaluation exercise in 2011. Equity Communications Ltd, an independent organisation which has aided the Company on corporate governance matters, once again performed this role.

As part of the evaluation process, the Chairman undertook a series of one-to-one meetings with each member of the Board and the



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Group Secretary to discuss their individual participation at and contribution to Board meetings. The Senior Independent Director, having taken soundings from all members of the Board and the Group Secretary, conducted the Chairman’s individual evaluation and provided feedback to the Chairman.

The external element of the Board review was completed using a questionnaire specifically designed for Cookson. This focused on the Board structure and functionality, and also covered the strategy review, succession planning and executive development. All the Directors and the Group Secretary completed the document, with the exception of Dr FitzGerald who had only been appointed the month before the external evaluation was undertaken.

The results from the questionnaire were collated and summarised by the external facilitator. Each Director received a copy of the report, which was discussed at the December meeting of the Board. The report summarised and analysed all responses to the questionnaire on a non-attributable basis. The Chairman used early feedback from the questionnaire process to assist in his interviews.

The report concluded that the initial positive reaction from the 2010 evaluation to the appointment of the Chairman had been more than maintained in 2011. Similarly, the strong and united Board dynamic that previously existed, had been preserved and strengthened with the addition of the new appointee. The report also found that the refinement to the Board’s approach to risk evaluation and mitigation identified in the 2010 evaluation had been implemented and was regarded as a valuable supplement to the Group’s operations, not least given the heightened risk of recession in some world markets. The report found that the Board was pleased that management had taken swift and early action to ensure that the Group took appropriate steps to counter any potential downturn in its businesses. The greater attention to succession planning, also identified as a priority, had been undertaken — although the new evaluation exercise identified that there was more to address with senior management succession.

Each Chairman of the Audit, Nominations and Remuneration Committees also discussed the performance of their committees. These review discussions concluded that each committee continued to operate effectively and no changes to current procedures were necessary.

The Board agreed a number of specific action items resulting from the evaluation exercise. These included: continuing the emphasis on succession planning, particularly for Non-executive Directors and senior management; increasing the focus on investor relations; continuing the focus on strategy development and providing more updates for the Board on the regulatory environment from external advisers.

CRH plc Page 41/42

The Senior Independent Director conducts an annual review of corporate governance, the independence of Board members, the operation and performance of the Board, and its Committees, the effectiveness of Board communications and the performance of the Chairman. This is achieved through discussion in one-to-one sessions with each Director. The meetings, which cover specific topics and allow for free-ranging discussion, provide a forum for an open and frank discourse. The Senior Independent Director circulates a written report to the Board each year, which summarises the outcome of the review and sets out any recommendations from Board members in relation to areas where improvements can be made. Consideration of the Senior Independent Director’s report is a formal agenda item at a scheduled Board meeting each year. This evaluation process will be facilitated in 2012 by a third party expert in this area. This is dealt with further in the Nomination & Corporate Governance Committee section on pages 44 and 45.

A review of individual Directors’ performance is conducted by the Chairman and each Director is provided with feedback gathered from other members of the Board. Performance is assessed against a number of measures, including the ability of the Director to contribute to the development of strategy, to understand the major risks affecting the Group, to contribute to the cohesion of the Board, to commit the time required to fulfill the role and to listen to and respect the views of other Directors and the management team. As part of that review process the Chairman discusses with each individual their training and development needs and, where appropriate, agrees for suitable arrangements to be put in place to address those needs.



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Croda plc Page 27

The Board usually carries out an annual self-evaluation exercise towards the end of the financial year. In view of the changes to the composition of the Board as a result of the appointment of a new non-executive director in July and the impending change of Group Chief Executive at the year end, the Board took the decision to defer such an exercise until 2012. It was felt that greater value would be obtained from carrying out a more formal review during 2012 once the new Board had been in place for several months. Accordingly, an externally facilitated evaluation will take place later in the year.

Debenhams plc Page 59

In 2011 the performance evaluation was facilitated by Lintstock Ltd. This year an evaluation of the performance of the Board, its committees, the individual directors and the Chairman was conducted internally. This was led by the Chairman who interviewed all Board members individually and discussed the results collectively with the Board. The conclusion was that the Board is operating effectively with plenty of energy around the table. The overviews presented to the Board by the various parts of the business are proving extremely valuable. The Board agreed to focus on further rationalization of materials it receives. In addition, the non-executive directors evaluated the Chairman’s performance at a meeting chaired by the Senior Independent Director.

Derwent London plc Page 78

Having regard to the requirement of provision B.6.2 of the Code, the Board, for the first time, appointed an independent third party to facilitate the annual review of the effectiveness of the Board, its Committees and individual Directors.

The review was initiated by all Directors completing an online questionnaire prepared by the third party which covered the processes and performance of the Board and its Committees together with a self-assessment questionnaire addressing the Director’s own performance and contribution.

The responses were externally summarised and reviewed by the Chairman, the Senior Independent Director or the Committee chairmen as appropriate. Any significant matters were discussed with the individual Directors by the Chairman.

As a result of the evaluation, the Board is satisfied that the structure, mix of skills and operation of the Board continues to be satisfactory and appropriate for the Company. In addition, the Chairman is satisfied that the non-executive Directors standing for re-election at the AGM continue to be effective and show commitment to their roles.

The performance of the Chairman was separately assessed by the non-executive Directors under the leadership of the Senior Independent Director.

Diageo plc Page 108

During the year, an evaluation of the Board’s effectiveness, including the effectiveness of the audit committee, the nomination committee and the remuneration committee was undertaken internally by way of a written questionnaire followed by the chairman of the Board meeting individually with all directors.

The Board questionnaire focused on the performance of the Board throughout the past year in the areas of: strategy, and how effective the Board had been in supporting the development of strategy; performance management; management succession, and talent; risk management; ensuring appropriate knowledge of the business and its people; the Board’s collective judgement; Boardroom dynamics; areas in which the Board felt it could improve its performance; and external factors that the Board should remain particularly alert to.The questionnaires for the committees focused on the performance of the respective committees throughout the past year; whether the agendas appropriately covered the remits of the committees; how the performance of the respective committees could be enhanced and areas of focus for the forthcoming year.



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A report was prepared for the Board on its effectiveness and that of its committees. The report concluded that the Board and its committees continued to operate effectively, meeting the requirements and spirit of the Code. Processes were seen to have improved to allow a focus and time spent on the most important matters for the company, including the development of strategy, and the climate in the Boardroom continued to create the optimum conditions for good decision making and sound guidance. The importance of ensuring appropriate succession to the Board to maintain Boardroom dynamics and the appropriate balance of skills, knowledge, diversity and experience was recognised in the search for non-executive directors and the appointment, with effect from 1 October 2012, of Ho KwonPing.

Areas identified for the Board and committees to maintain the appropriate governance for and development of the business have been integrated into the evolving annual agendas of the Board and its committees.

The performance of each director was evaluated by the chairman based on self-analysis and input from the other directors. A report on the individual performance evaluation process was given to the nomination committee. Following the performance evaluation of individual directors, the chairman has confirmed that the non-executive directors standing for re-election at this year’s annual general meeting continue to perform effectively and demonstrate commitment to their roles. The chairman’s performance was evaluated by the directors, using an internally produced questionnaire which was completed and returned to the senior non-executive director, who discussed the feedback in a meeting with the executive and non-executive directors and then privately with the chairman.

It is the Board’s intention to continue to review annually its performance and that of its committees and individual directors. In respect of the evaluation process in 2013, it is likely that the same method of internal facilitation will be used.

Drax plc Page 55

The effectiveness of the Board is vital to the success of the Group. During 2010, the Company undertook a review to evaluate the performance of the Board, its committees and individual directors. This was performed by Independent Audit Limited (‘Independent Audit’), an independent strategic governance consultancy that has no other connection with the Company.

The 2010 review involved individual interviews with each director, the Company Secretary and members of the senior management group, and concluded that the Board was strong and appeared well equipped to meet the challenges ahead. In particular, the composition and mix of the Board were considered to be appropriate with a strong cadre of non-executive directors with a broad range of relevant experience. The report made a number of recommendations to enhance Board effectiveness, all of which the Board acted upon as part of the process of continuing improvement. During 2011, the Board commissioned Independent Audit to conduct a follow up review, which was carried out through a questionnaire based process. The findings of the review were presented to the Board. The review did not disclose any areas of concern and found that good progress had been made on the areas for improvement identified by the 2010 review. The review suggested that there would be benefit in the Board reviewing certain of its past decisions. The Board will act on this suggestion and, as an example, will consider whether its decision taken in 2010 to change the manner in which it scrutinises and receives assurance in respect of health and safety management has resulted in a more effective process.During the year, the Chairman held a meeting with the non-executive directors in the absence of the executive directors, and the Senior Independent Director held meetings with the non-executive directors without the Chairman being present, as required by provision A.4.2 of the UK Corporate Governance Code.

The Board is committed to the development of all employees and directors and has reviewed and will periodically continue to review each individual director’s development requirements and make appropriate arrangements to address them. All new directors receive an induction, including being provided with information about the Group and their responsibilities, meetings with key managers and visits to the Group’s sites. In addition, each non-executive director visits operational sites and meets with senior management to be briefed on the Group’s business at least annually, and specific Board training days are arranged involving presentations on relevant topics.

Dunelm plc Page 29

The Chairman appraises the performance of the Chief Executive with regard to personal objectives agreed at the start of each financial year. The Chief Executive similarly appraises the performance of other Executive Directors. Separately the Senior Independent Director meets with the other Non-Executive Directors to evaluate the Chairman’s performance.



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There is a formal, rigorous and well established process for evaluating the performance of the other Non-Executive Directors, the Board Committees and the Board as a whole. A questionnaire is circulated to all Directors, to seek their views on matters such as the effectiveness of meetings, the approach to strategy and risk, succession planning and the AGM. The completed questionnaire forms the basis of a discussion between the Chairman and each Director. The Chairman presents the overall result back to the Board at a Board meeting convened solely for this purpose. During the course of this meeting there is the opportunity for the Chairman or other Directors to be asked to leave the discussion whilst their performance is assessed.

Following the Board review a list of actions is formulated and progress against these is monitored periodically by the Board. In the review which took place during the period these actions included a restructuring of Board agendas to provide additional focus on strategic issues, a review of how the Board communicates with all of its stakeholders and an extension of the Board’s review of succession planning activity below senior management level.

The Board considers that this process is effective for a small and very open Board; it will be assessing tenders for an external review of the Board during the next financial year.

easyJet plc Page 45

During the year, a performance review of the Board was undertaken using an external facilitator, Lintstock, in accordance with provision B6.2 of the Code. Lintstock has no connection with the Company, beyond evaluating the Board, other than providing software to the Company with which to monitor insider lists and Directors’ shareholdings. The Board considers that the performance review shows that each Director continues to contribute effectively and to demonstrate commitment to the role (including commitment of time for Board and committee meetings and other duties) and that there is an appropriate balance of skills, experience, independence, diversity (including gender) and knowledge of the Company to enable the Directors to discharge their respective duties and responsibilities effectively.

Elementis plc Page 39

The annual evaluation of the Board’s performance includes a review of its committees and individual directors, as well as the company secretary. The process involves the use of a questionnaire, which has been designed internally, and the results are discussed by all the directors at one of the Committee’s meetings held towards the end of the year. Prior to the process being agreed, the Committee discussed two proposals in June for an external evaluation to be conducted, but decided that the priority was to progress the Board’s succession plans. It was agreed that some of the work involved, such as identifying certain skills and competencies, could overlap with an external evaluation review and, therefore, it would be more appropriate for the latter to be carried out mid-way through, or towards the end of, the Board’s refreshment programme. Some shareholders have asked for additional information about directors to help them understand the extent to which a director’s background or experience helps shape or influence the contribution he makes to the operation and effectiveness of the Board. Although the Committee does not consider commenting on individual performance to be appropriate, the biographical information provided and the information in the table on Board diversity should assist shareholders to assess the skills and experience of the Board as a whole, when determining how to vote on certain resolutions at the AGM.

The general outcome of the process in 2011 was that the performance of the Board as a whole, the operation of its committees and the performance and contributions of individual directors (executive and non-executive), including the company secretary, were all considered to be effective. In terms of Board structures and operation, including information and resources, leadership, strategic direction and key priorities, these were considered to be appropriate and no particular concerns were raised. Key priorities that were discussed included: Board succession planning; proactive investor relations programme; general awareness around macroeconomic risks; maintaining balance sheet strength/optimising capital structure; and growing the Specialty Products business by a combination of organic growth, through new products and new markets/geographies, and making selective bolt on acquisitions in complementary technologies or markets.

Towards the end of the year, the Senior Independent Director chaired a meeting of the directors to review the performance of the Chairman without him being present. The conclusion was that the Chairman remains effective in his role in terms of his leadership and commitment, the operation and priorities of the Board, and his support to management.



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The Committee also met without the executive directors being present and complimented them for the openness and transparency in their dealings with the Board, which were appreciated.

Essar Energy plc Page 59/60

The Board has undertaken an evaluation of its performance and the performance of its committees. The evaluation process included each Director completing an evaluation questionnaire and the subsequent outcome was considered and reviewed by the Nomination and Governance Committee in detail, the results of which were reported to the Board. The evaluation of the Board did not identify any material issues. Certain areas for improvement were identified and these were addressed during the period.

The Company intends to engage an external facilitator to undertake an evaluation of the Board at least every three years, in compliance with the Governance Code. The first such externally facilitated evaluation will likely be undertaken during the financial year ending 31 March 2013.

The Board remains satisfied that following formal performance evaluation, each individual Board member’s performance continues to be effective and demonstrates commitment to their respective roles, and therefore following the recommendation of the Nomination and Governance Committee, that each Director proposed for election continues to be fully competent to carry out his responsibilities as a member of the Board.

Eurasian Natural Resources Corporation PLC Page 51

Towards the end of 2010 the Company invited ICSA Board Evaluation to carry out an independent evaluation of the Board. This process was comprehensive and exacting and the results were discussed by the Board and Nomination Committee during the spring and summer of 2011. The evaluation addressed Board balance, how members of the Board interacted and the perceived challenges of operating an international, emerging markets Company with a London listing. The key conclusion of the evaluation was that the Board needed to review its composition to ensure that it continued to be effective.

The Board then initiated a full corporate governance review (the ‘Review’) to help address the issues raised through the evaluation process. The Chairman asked ICSA Board Evaluation, who had had no other relationship with the Group when it was appointed to assist with the Board evaluation, to help with the initial stages of the Review.The Review was led by the Chairman and the results discussed by the Nomination Committee which then made recommendations to the Board. The Chairman held discussions with each Director, with major shareholders and with the Founder Shareholders to gather their views on Board representation.The Nomination Committee reviewed the output of the Chairman’s various discussions and recommended to the Board that its optimum size was 11 Directors, six of whom should be independent non-executive Directors. It also identified the need to enhance the mining experience on the Board, particularly in the context of the Group’s move into Africa. An external consultant was therefore instructed to search for appropriate candidates to join the Board to address the need for operational and African mining expertise.

Board changes during 2011/12

Date Director Event

8 June 2011 Mr Abdraman Yedibayev Resigned

8 June 2011 Mr Edward Utepov Resigned

8 June 2011 Sir Richard Sykes Not re-elected at AGM

8 June 2011 Mr Kenneth Olisa Not re-elected at AGM

28 September 2011 Mr Terence Wilkinson Appointed as non-executive Director

28 September 2011 Mr Mehmet Dalman Appointed Senior Independent Director

3 February 2012 Dr Johannes Sittard Resigned

3 February 2012 Mr Mehmet Dalman Appointed Chairman



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Following the search by an external consultant, the Nomination Committee recommended the appointment of Mr Wilkinson to the Board. He has operational mining experience and prior involvement in listed companies. The Nomination Committee also recommended the appointment of Mr Dalman as SID. When Mr Vulis offered to withdraw his earlier resignation as CEO, the Nomination Committee recommended to the Board that the withdrawal of the resignation be approved.The Nomination Committee was strengthened with the addition of the SID and it was renamed the ‘Nomination and Corporate Governance Committee’ to reflect the extension of its remit to include oversight of corporate governance arrangements and compliance with the Code.

EVRAZ plc Page 64

Since EVRAZ plc was incorporated in October 2011 and only four Board meetings took place between that date and 31 December 2011, no formal performance evaluation was undertaken during 2011.

The Company intends to conduct regular performance evaluation of the Board going forward in line with the UK Corporate Governance Code.

Experian plc Page 57/58

A comprehensive evaluation of the performance of the Board, its committees and each of the directors is carried out every year. For 2011, the internal evaluation process was led by the Chairman and supported by the Company Secretary. Using online evaluation software, the views of all directors were canvassed in respect of the performance of the Board and, separately, its committees. Among other things, the Board evaluation considered the following areas:

�� Providing direction to management and demonstrating ethical leadership;�� Assessing the line of sight to the business for decision-making;�� Contribution to the development and testing of the Group’s strategy;�� Top operational issues facing the Group over the next three to five years;�� Performance assessment of the Board in its operation and decision-making; and�� Oversight of risk and opportunities to improve Board performance in this area.

This process was complemented with separate meetings between each director and the Chairman. The evaluation of the Chairman himself was undertaken by the Deputy Chairman, through consultation with the other directors and the CEO.

The results of the Board evaluation were considered at the Board meeting held in January 2012. The directors have concluded that, following this review, the Board and its committees operate effectively and also consider that each director is contributing to the overall effectiveness and success of the Group. The Board also identified the following among its ‘top priorities’ for the coming year:

�� Talent/succession management, to ensure continuity in Board style/culture and executive talent; �� Continued familiarization with the business and executive talent, and continued close involvement with business issues, including corporate development, investment strategy and growth drivers; and �� Information technology and data security.

Ferrexpo plc Page 52

A process of evaluation of the Board and its Audit and Remuneration Committees has been conducted in 2011 by the Chairmen of these bodies. This is done by the Chairman of the relevant body interviewing his colleagues whilst referring to a questionnaire covering matters including the balance and diversity of the body’s membership, the body’s and its individual members’ effectiveness and performance (in terms of contribution to good governance), and the administration and conduct of the body’s business, and then discussing his findings with the body as a whole. The conclusion of the evaluation process was that the Board as a whole and its committees had functioned effectively during the year, and no particular areas were identified as needing improvement. The mixture of skills and experience on the Board and the committees was felt to be appropriate.



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The Board’s intention is to hold an external assessment once every three years, in line with the 2010 Code.

The Senior Independent Director and the other Non-executive Directors have evaluated, and will continue to monitor, the performance of the Chairman.

Filtrona Page 46

Given the Chief Executive transition during the first half of the year, it was decided to proceed with an internal Board review during 2011 as opposed to the external exercise originally intended. The review consisted of the Directors responding to questionnaires relating to the performance of the Board as a whole and its various Committees. The positive feedback from the questionnaires was the subject of detailed discussion both within the formality of the Boardroom and in separate informal meetings. An external review will be conducted during 2012 as we seek to further enhance the effectiveness of the Filtrona Board performance.

Foreign & Colonial Investment Trust plc Page 28

The 2011 annual appraisal of the Board, the Committees and the individual Directors was completed by the Chairman in January 2012. This built on the objectives and the critical success factors established and identified from the previous year’s appraisal for which the Chairman was supported by independent consultants, Manchester Square Partners. The process included confidential, un-attributable, one-to-one interviews between the Chairman and each Director. The appraisal of the Chairman was covered as part of the process and led separately by the Senior Independent Director. The Chairman’s report on progress against the objectives, which remain relevant for the current year, was submitted to the Board in January 2012.

Fresnillo plc Page 102

‘Our overall view is that, while the Fresnillo Board may work differently in some areas from more conventional UK plc Boards, it is showing strongly the characteristics which make it capable of being an effective Board... The progress made over only three years is commendable: the focus of agendas is now on the business; discussion is more open – for some to a surprising extent; an effective chemistry based on trust has been established; and the Company has strived to meet the spirit of the UK Corporate Governance Code.’ – Independent Audit Limited (Fresnillo plc Review of Board Effectiveness 2011).

Our Aim

The Board attaches considerable weight to making sure that its governance approach is effective. It fully recognises that sound governance has a role to play in securing strategic success and strong performance as well as in protecting the interests of its shareholders. It is especially conscious of the need for its governance to result in practical and effective independent oversight given its particular ownership structure and relatively short history as a UK listed company. The Board is determined to make sure that it is working effectively to the long-term benefit of all shareholders and recognises the role the Directors collectively have to play in maintaining this focus.

In 2011 the Board appointed Independent Audit Limited (IAL) to undertake an independent review of Board effectiveness. This appointment formed part of a three-pronged engagement of IAL to review how far the most critical components of the corporate governance approach at this time are meeting the needs of the business:

1. The work of the Board;2. The oversight provided by the Audit Committee; and3. The governance of risk (in conjunction with PricewaterhouseCoopers).

The main focus of the Board Performance Evaluation exercise was to provide an objective assessment of the Board’s development since the IPO to ensure that it is fulfilling its role in the interests of all of its shareholders.



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Our Approach

The Board performance evaluation exercise included individual discussions with each of the Directors, the Chief Financial Officer, Chief Operating Officer, the Vice President for Exploration and the Company Secretary. Board and committee papers covering a twelve month period were also reviewed. Two extensive meetings with the Chairman covered his views on the Board’s work and his governance goals and a detailed review of IAL’s findings. The report was presented to the Board by IAL in October 2011. An action plan has been developed since that meeting.

G4S plc Page 59

The performance of the Board and its committees (other than the CSR Committee) has been evaluated using a process conducted by an external consultancy. This involved the use of questionnaires completed by directors and other regular committee attendees which were then used to inform interviews conducted by the consultants with each director. Written reports were produced by the consultants setting out their findings in relation to the Board and its committees’ performance. These reports concluded that the Board and its committees had a strong culture and function effectively. Following consideration of the reports by the Board and the relevant committees, however, steps have been taken to modify the way the Board and its committees work to address the issues which were identified in these reports.

Examples of steps taken or to be taken include:

�� Changes to content of reporting to the Board and the review of the materiality thresholds of the matters which are presented to it;�� Allowing more time to address matters which do not appear on the regular committee agenda;�� Providing more opportunity for review of health and safety matters;�� Measuring the implementation of strategy; and �� Increasing contact between non-executive directors and investors.

GKN PLC Page 50

An external performance evaluation was undertaken in late 2010 and the results were presented to the Board in January 2011. The facilitator (Sheena Crane) did not provide any other services to the Group. A number of recommendations were agreed and implemented, including the following:

�� A written Chief Executive’s report on Group performance, progress on significant strategic activity and other issues of note to be circulated in advance of and considered at each Board meeting; �� An annual ‘deep dive’ review by the Board of succession planning to, and development for, senior levels below Board; �� Detailed reviews of strategic capabilities including continuous improvement and technology; and �� The rescheduling of Committee meetings to the day prior to Board meetings and more time allocated to the Board strategic review meeting in order to allow for increased debate.

The evaluation process for 2011 involved in-depth one-to-one interviews conducted by the Company Secretary with each Director to gather feedback on the following areas believed to be critical to informing and assisting the effectiveness of the Board and its Committees:

�� Strategy and process; �� Risk and risk management systems; �� Monitoring financial and non-financial performance; �� Succession planning; �� Deep dive topics and capability reviews; �� Overall Board and Committee working/efficiency; and �� Key themes for discussion focus in 2012.



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The results of the evaluation exercise were presented at a Board meeting in January 2012. The output is under consideration by the Board; any agreed changes will be implemented as soon as practicable. The individual performance of the Directors was also evaluated, against a number of assessment areas, through one-to-one interviews with the Chairman. No actions were considered necessary as a result of these evaluations and the Chairman confirms that each Director continues to make a valuable contribution to the Board and, where relevant, its Committees and devotes sufficient time to the role.

GlaxoSmithKline plc Page 89/90

The Board carries out an evaluation of its performance and the performance of its Committees every year. The evaluation is normally carried out by the Senior Independent Director, but every third year, the evaluation is conducted by an external facilitator. In 2008, Dr Tracy Long of Boardroom Review carried out the evaluation and she also conducted the 2011 evaluation. Dr Long has no other connection with the company.

The action points from previous Board evaluations are set out in the table below:

2011 Board Evaluation

The Board evaluation process included a one-to-one interview with each Director and the Company Secretary. The topics discussed, which had been circulated to the Directors in advance, included a variety of aspects associated with Board effectiveness, including Board and Committee information flows, handling of strategic issues, collective effectiveness and exploration of ways to further improve the way in which the Board operates.

The key conclusions of the 2011 evaluation were presented to, and discussed by, the Board.

Consistent with Dr Long’s findings in 2008, the review concluded that the Board was highly effective in the way it approached its work,



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developed its relationships and used its time. The CEO and Executive management were welcoming of the Non-Executive Directors, the quality of debate was high and there was strong leadership by the Chairman and Committee Chairmen. The use of Board dinners and the Board calendar and agendas were more effective than when previously reviewed in 2008. The quality of papers and presentations had further improved.

The challenge, given the environment within which the company operated, was to build on the Board’s contribution and impact.The Board agreed the following recommendations with a view to further increasing its ability to add value:

(i) The external landscape�� The Board agenda should dedicate time throughout the year for the consideration of major external influences, including competitive business models, market developments, and GSK’s relative strengths and weaknesses to help expand the Board’s knowledge. �� The Board would look to increase its understanding and knowledge through individual Non-Executive Director and Board site visits. �� Given the size of the Board, it was important that Non-Executive Directors, assisted by the Company Secretary, continued to engage both formally and informally with the company, drawing on relevant personal experience inside and outside of Board meetings, and attending relevant internal executive meetings and industry events to keep abreast of current developments. �� Management should demonstrate to the Board how they are embedding the culture of risk awareness within Emerging Markets and how emerging risks are captured within the Assurance process.

(ii) Board contribution and composition �� The Board had an opportunity to build on relevant skills and competencies for the future as its composition was due to change over the next two years. It would be helpful for the Board to plan its composition over the next five to six years, to optimise its effectiveness. �� The Directors had identified two significant gaps in the Board’s current composition: global CEO experience and knowledge of, and experience in, Emerging Markets. These aspects will be addressed in the recruitment of new Board members by the Nominations Committee.

A summary of the conclusions of the Committee evaluations is included in each Committee’s report.

The Non-Executive Directors, led by the Senior Independent Director, met separately, without the Chairman being present, to discuss the Chairman’s performance. They considered that his leadership, performance and overall contribution were of a high standard.In addition, the Chairman met with all the Non-Executive Directors independently of the Executive Directors.

Glencore International plc Page 86

Since Glencore has a new Board, it was thought appropriate that the first evaluation process should be an internal one. By using assessment questionnaires prepared by the Company Secretary and the Chairman, all Directors graded areas such as performance of the Board and its Committees, the effectiveness of the Chairman, Executive and Non-Executive Directors, the monitoring of operational performance and Corporate Governance, as well as leadership and culture. The Company Secretary and the Chairman provided a report of the results, which were discussed by the Board and by each Committee. The Board and the Committees concluded that overall they functioned effectively. However, matters for improvement concerning planning, logistics, content of meetings, Board papers and the need for additional directors were discussed and agreed.

We have reviewed the interests declared by the Directors which could conflict with those of the Company, and we are satisfied that the Board’s powers to authorize potential conflicts is operating effectively.



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Greene King plc Page 37/38

The Board believes it is appropriate to undertake a regular performance evaluation of itself, its committees and individual directors. An evaluation exercise was completed during the summer of 2011, facilitated by Boardroom Review, an independent external firm with no links to the company. The review took the form of confidential interviews with the directors at the time and a review of selected papers, with a view to considering the effectiveness of the Board within the context of three key criteria, namely the ability of the Board to achieve its objectives, its ability to work together effectively and the extent to which it maximises its use of time. The principal of Boardroom Review, Dr Tracy Long, then attended one of the company’s Board meetings to present her findings and facilitate a discussion on areas to be addressed.

Particular strengths were perceived to be the consideration of shareholder and stakeholder views, a thoughtful approach to control and risk and the management of time and information. Whilst the Board was satisfied that it and its committees are operating effectively, key actions agreed as a result of the review included a greater emphasis on long-term strategy, more challenging input during meetings, greater use of Board dinners and a clearer policy on diversity.

In conjunction with the Board evaluation, the senior independent director and non-executive directors conducted an appraisal of the chairman’s performance. The performance of the executive directors is reviewed annually by the remuneration committee in conjunction with their annual pay review and the payment of bonuses.

Great Portland Estates plc Page 95

Following an external Board evaluation last year, this year, in accordance with our policy, the evaluation process was undertaken by Charles Irby as Senior Independent Director supported by our Company Secretary. The process covered Board, Committee and personal performance and the output was reviewed at the January 2012 Board meeting to ensure any pertinent points could be incorporated within the Group’s strategic review and wider corporate governance review in March 2012. Overall the process confirmed that the Board and its Committees continued to work effectively and emphasised that the thresholds for decisions were at the right level, with focus being properly directed at material issues. Cognisant of the impact of ever changing legislation and regulations, it was agreed that an annual presentation on both potential and impending legal and regulatory changes across all areas of the Group’s operations including reporting, environmental, health and safety and numerous European industry and financing directives, would benefit the Board to ensure the potential impacts on the Group were appropriately addressed on a timely basis to help ‘future proof’ the business.

Halma plc Page 74 The Board considers the evaluation of its performance and that of the Audit, Nomination and Remuneration Committees annually, with each Committee also evaluating its own performance. This year, the Board engaged an external facilitator for full Board and Committee evaluations.

Dr Tracy Long of Boardroom Review carried out the evaluation. Dr Long has no other connection with the Company. The Board effectiveness review covered three key areas namely the Board’s:

�� Definition of its role and approach to its work; �� Ability to work together effectively; and �� Ability to optimise its use of time and contribution to the Company.

The evaluation process included a one- to-one interview with each Director and the Company Secretary and Dr Long observed the workings of the Board and its Committees during the February 2012 Board and Committees meetings. The key conclusions of the 2011/12 evaluation were first discussed with the Chairman and subsequently presented to the full Board. The evaluation results were discussed by the Board at the April 2012 Board meeting. The review concluded that the Board was effective, methodical and thorough in the way it approaches its work. There was open and transparent debate and an even contribution from all members of the Board. There was an active and collaborative approach to performance management reflected in the constructive debates in the Remuneration



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Committee. The Board spent a significant amount of time considering risks and controls and was assisted by strong financial information, effective internal and external audit processes and a strong Audit Committee. Overall, the process confirmed the right blend of behaviours and skills around the Halma Board table. The Board freely and openly expresses any concerns which results in more considered outcomes emphasising collective responsibility, transparency, clarity and integrity.

The Board agreed the following recommendations from the review which would enable the Board to add further value to the business:i) Greater level of non-executive’s knowledge regarding competitive and customer landscapes;

ii) Greater individual contributions encouraged with enhancements from changes in Board composition; and

iii) Provide more opportunities in the Board schedule to improve communication between executives and non-executives.

As in prior years, the Board also met in February 2012 before the scheduled Board meeting. There was a meeting of the Chairman and non-executive Directors with the Chief Executive. This was followed by a meeting of the Chairman and non-executive Directors only. The Senior Independent Director also led a meeting with the non-executive Directors without the Chairman present. The Executives were also given the opportunity to meet with the Chairman and/or the Senior Independent Director separately. The outcome of these meetings was then fed back to individuals by the Chairman, Senior Independent Director or Chief Executive, as appropriate.

Hammerson plc Page 50

In accordance with the UK Code, an external evaluation of the Board’s performance, and those of its Committees and individual Directors, was undertaken in December 2010 by ICSA Board Evaluation. A number of recommendations for adjustments to practices arising from this review have already been implemented and further adjustments are also being made. It is intended that the next external Board evaluation will be undertaken in 2013 and that, in the intervening years, evaluations be undertaken internally by the Company Secretary. Such an internal evaluation of Board and Committee performance was conducted for 2011. A UK Code questionnaire-based approach was adopted for this evaluation. This has concluded that the Board and its Committees are operating effectively and that improvements and an increasingly positive view of performance are being seen. However, some further potential improvements have been highlighted and will be addressed under the guidance of the Chairman and the Company Secretary. The Chairman meets with the Non-Executive Directors as necessary, but at least twice each year, without Executive Directors present. The Senior Independent Director chairs an annual meeting of Executive and Non-Executive Directors without the Chairman in order to appraise his performance and to provide an opportunity to address any other matters which the Directors might wish to raise. The outcome of these discussions is conveyed to the Chairman by the Senior Independent Director.

Hargreaves Lansdown plc Page 38

This year, the Board carried out an internally facilitated Board effectiveness review in the year. The Review was led by the Chairman and covered the effectiveness of the Board as a whole, its individual Directors and its Committees. All directors contributed to the review through either face to face discussions or telephone conversations. The conclusions of the review were discussed by the Board at its meeting in April. The outcome of the review was positive, with participants noting the better balance of skills following the appointment of the two new independent non-executives. The majority of the Board meetings now occur over a two day cycle, including an informal dinner facilitating wider discussions. As a result, the Board is getting greater access to the wider executive team and participating in discussions on a wider set of subjects. It was agreed in the following year to focus on achieving a better balance between the necessary regulatory, risk and compliance aspects and the more forward looking strategic agenda. It was also recognised that increased focus on succession planning is required and that various aspects of management information provided to the Board could be enhanced.

Individual appraisal of each director’s performance is undertaken by either the Chief Executive or Chairman each year and involves meetings with each director on a one-to-one basis. The non-executive directors, led by the senior independent director, carry out an appraisal of the performance of the Chairman. The Chief Executive’s performance was evaluated by the Chairman and the non-executive director team with input from the executive Directors.



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Hays plc Page 45

This year the Board undertook an internal review of the effectiveness of the Board, its committees and individual members, having carried out an external review with Egon Zehnder in 2010. The next external review will take place in 2013 in line with the Code. As part of this year’s effectiveness review, each director (other than the Chairman) completed a questionnaire comprising questions relating to:

�� Information flows, Board papers and agenda composition;�� Controls, risk management and risk appetite;�� Board dynamics and relationships between Board members;�� The composition of the Board and its skills;�� Discussion topics and decision making including the balance between operational and strategic matters;�� Value creation, strategy and performance; and�� The effectiveness of the Audit, Nomination and Remuneration Committees.

The completed questionnaires were sent to the Company Secretary who compiled a report on the results of the evaluation for the Chairman’s consideration. The Chairman met with each of the directors individually to discuss the results of the review and their responses, and to provide constructive feedback. The findings of the 2012 performance evaluation together with recommendations from the Chairman were then considered by the Board and certain actions will be implemented as a result.

Henderson Group plc Page 31/32

We decided to have an external evaluation for 2011. Three candidates were selected from a number of companies. They were then invited to make presentations to the Chairman and the Senior Independent Director, following which Independent Board Evaluation (IBE) were engaged to conduct the process described below. IBE has no other connections with the Company.

IBE held interviews with each of the Directors and attended one of the scheduled Board and Committee meetings. IBE subsequently held discussions with the Board and Committee Chairmen to discuss the results and presented its recommendations to the Board.

The results of the evaluation will be considered further by the Board and the implementation of any actions will be monitored.

The performance of Andrew Formica, Chief Executive, was evaluated by the Chairman and the Remuneration Committee. The evaluation of the members of the Executive Committee (ExCo) was undertaken by the Chief Executive and the Remuneration Committee.

The performance evaluations were conducted in accordance with the processes disclosed on our website.

HICL Infrastructure plc Page 54

The Board evaluates its performance and considers the tenure and independence of each Director on an annual basis, and believes that the mix of skills, experience and length of service are appropriate to the requirements of the Company. The annual evaluation for the year ended 31 March 2012 has been completed by the Chairman and took the form of one to one interview with each Director. In addition, the Board engaged Trust Associates to conduct an external evaluation of the Board in relation to its skills and workings in accordance with Principle 7 of the AIC Code. The results of this evaluation process were presented to and discussed by the Board and it was agreed that the current composition of the Board and its Committees reflected a suitable mix of skills and experience, and that the Board, as a whole, and its Committees were functioning effectively.

For the evaluation of the Chairman, the Senior Independent Director discussed the results of the questionnaire with the Chairman prior to further distribution to the remaining Directors.



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Hikma Pharmaceuticals plc Page 62/63

As required by the Code, a formal evaluation of the performance of the Board was undertaken during the period under review. As in previous years, at the request of the Chairman, the process was co-ordinated by the Senior Independent Director.

In 2010, the Board appointed Lintstock to conduct an independently moderated evaluation of the Board and its committees. Lintstock were re-appointed for 2011 and reviewed the overall processes and areas of focus in light of comments from the 2010 evaluation, particularly in respect of group strategy, approach to risk, Board composition and succession.Lintstock prepared online questionnaires designed to build on these areas and other key governance and management themes. Lintstock managed the process and reported independently to the Chairman and the Senior Independent Director, following which the results and findings were presented to the full Board. The report for each committee was reviewed by the relevant committee Chairman and the full committee. As well as issues specific to Hikma, the evaluation covered general topics including Board support, access to senior management, diversity issues and mergers and acquisition processes. The report to the Board focused on the key trends emerging from the evaluation. Lintstock presented these results in the context of Hikma’s business, and that of its peers in the FTSE and international markets and provided their independent feedback on the results. As a result, the Board resolved certain action points to enhance performance. The results of the evaluation process formed part of the Chairman’s appraisal of the overall effectiveness of the Board and its members. The review concluded that the Board had functioned well in 2011, had built on matters raised in 2010, was well supported and had balanced and inclusive processes which promoted effective decision-making.

In 2012, the Board will consider whether to enhance the externally moderated evaluation with face to face director interviews and a Board meeting review, based on the continued added value this could bring to the Board’s operations.

In addition to the matters set out above, in respect of all directors, the Senior Independent Director met with the Non-Executive Directors to undertake a formal appraisal of the performance of the Chairman. This review addressed the effectiveness of his leadership, the setting of the Board agenda, communication with shareholders, internal communication and Board efficiency. The non-executives concluded that the Chairman gave clear leadership and direction to the Board, and that the Board is run in an appropriate and effective manner.

Hiscox plc Page 38

An externally facilitated Board evaluation process was conducted during the year. This included a review of the culture and dynamics of the Board, the interaction of the Board with its Committees, the information provided to the Board, and the performance of the Chairman. Each Director was interviewed and asked to complete a questionnaire. The findings of the evaluation were then discussed by the Board as a whole.

In addition the Non-Executives periodically meet without the Chairman and Executive Directors to discuss a wide range of issues concerning the Company including as appropriate the performance of the Chairman and the Executive Directors. Such a meeting was held after the external evaluation exercise. While no major issues concerning Board performance were raised during the year a number of improvements were suggested around Board information and minute taking, and Board visits to Hiscox operations.

The Chief Executive held one-to-one meetings with each of the Executive Directors to discuss their performance over the year and to set targets for the year ahead.



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Hochschild Mining plc Page 68/69

The Board is committed to the process of self evaluation as a means of continually improving its efficiency.

Implementation of 2010 Board evaluation

During the year, a number of steps were taken by the Board or the management team, as appropriate, to implement the recommendations arising from the 2010 Board Evaluation process.

In summary these actions included:

�� The search for a Non-Executive Director with a mining or geological background, which resulted in the appointment, during the year, of Dr Graham Birch;�� The design and roll-out of the Talent Inventory Review which identifies and documents the training and development needs of key senior management position holders;�� Presentations to the Board on the Group’s IT organisation and infrastructure, and tax strategy;�� Revisions to the format of the monthly management accounts to accommodate specific information requests from the Board;�� The inclusion of standing reports to the Board on Cash and Debt Management; and�� A Board visit to the Group’s joint venture operations in southern Argentina.

2011 Board evaluation

In keeping with past practice, the 2011 Board Evaluation process was undertaken through one-to-one interviews conducted by the Senior Independent Director assisted by the Company Secretary. Given the timing of his appointment to the Board, Rupert Pennant-Rea did not participate in the exercise.

The interviews were structured to elicit Directors’ views on a number of subject areas (see box below).

2011 Board Evaluation – Area of focus

The Board• Composition, focusing in particular on: - Whether the profile of the Board is aligned with the medium-term strategic plan - The role and contribution of the Non-Executive Directors• Board process• Succession Planning• Risk Management and Governance

The Committees• Composition and overall workings• Discussion on specific aspects of the principal Board Committees

The ChairmanWith particular focus on:• his ability to lead the Board• facilitating open discussion• interaction with shareholders

In addition to the above, Directors were requested to provide feedback on the performance of their fellow Board members.

The findings relating to the evaluation of the Board and the Committees were considered collectively by the Chairman and the Senior Independent Director, and the resulting recommendations were discussed and, where appropriate, approved by the Board.

The outcome of the Chairman’s performance evaluation was collated by the Senior Independent Director and considered by the Non-Executive Directors collectively before being relayed to the Chairman.



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The principal recommendations arising from the year’s Board Evaluation process are:

�� Enhancements to the annual strategic review; �� The opportunity to speak with experts in the field of Community Relations in Latin America given its strategic importance; �� A more active role to be taken on by the Nominations Committee with particular focus on succession planning; �� Improvements in the linkages between the Board committees and the Board; and �� The need for additional update meetings during the year to take place between the four scheduled Board meetings.

External Board evaluation

The Board notes the recommendation of the Code to undertake an externally facilitated evaluation at least once every three years.

The Board acknowledges the benefits of an external evaluation which will be commissioned by 2013.

Howdens plc Page 54/55

A formal review of the Board’s effectiveness was conducted following the September Board meeting in accordance with the Board’s formal process for reviewing its own effectiveness. Following the 2010 evaluation which was conducted by an independent, external facilitator, the 2011 review was undertaken by the Company Secretary. The review was conducted within a methodology previously agreed by the Board and comprised a series of interviews and a questionnaire.

The formal evaluation addressed key topics which included:

�� The composition of the Board;�� The extent and quality of information provided to the Board and Committees;�� The conduct of Board meetings and processes;�� The extent to which the Board engages in strategic planning;�� Talent management and continuity planning;�� The performance of the Chairman, of Board committees and of individual members;�� The quality of debate within the Board; and�� The extent to which actions arising from the 2010 evaluation exercise had been implemented effectively.

The report of the evaluation was presented to the Board in February 2011 and the Board accepted its findings and recommendations.The Senior Independent Director met with the non-executive directors in the absence of the Chairman to assess the Chairman’s performance.

There is a procedure for all directors to take independent external advice, at the Company’s expense, in the course of their duties via the Company Secretary. Working with the Chairman, the Company Secretary is responsible for ensuring that Board procedures are followed and all directors have access to her advice and services.

HSBC Holdings plc Page 228

In November 2011, Oliver Wyman was commissioned to facilitate and report on the review of effectiveness of the Board, with particular focus on it meeting investor expectations and priorities, and to review progress made in the year since the previous review, which had focused on the Board’s risk management and governance responsibilities. Oliver Wyman’s report was prepared following interviews with Directors and senior members of management and a review of relevant documents. Factors assessed during Oliver Wyman’s review included the Board’s performance in key priority areas for investors including strategy, financial performance, risk, regulation, compensation, sustainability and corporate governance.

The Oliver Wyman report concluded that the Board operates effectively with a number of important strengths and that significant progress had been made during 2011 to address recommendations made by Oliver Wyman in last year’s report. The report identified



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some areas where effectiveness could be enhanced. Oliver Wyman has provided and continues to provide consultancy services to the Group.

The report is used by the Board in its annual evaluation of its own performance and that of its committees, and by the Group Chairman in his review of the individual performance of Directors. The Board will monitor implementation of actions arising from its 2011 performance evaluation. All actions arising from the Board’s 2010 performance evaluation have been implemented.

It is the intention of the Board to continue to undertake an evaluation of its performance and that of its committees and individual Directors annually, with external input to the process at least every third year.

Formal evaluation of the individual performance of each Director is undertaken annually by the Group Chairman using the findings of the performance evaluation process undertaken by the Board. During this evaluation, the Group Chairman discusses the contribution of the Director and the time spent by them in performing their responsibilities. The Group Chairman has confirmed that all of the non-executive Directors continue to perform effectively and to demonstrate commitment to their roles.

The non-executive Directors, led by the Deputy Chairman and senior independent non-executive Director, are responsible for the evaluation of the performance of the Group Chairman.

Hunting plc Page 48

The Board, its committees and each individual Director participate in an annual performance evaluation appraisal, the purpose of which is to confirm the continued effective contribution and performance of the individual or committee in line with the Code’s recommendations. Evaluation of the Board was undertaken by the non-executive Directors and took account of the Directors’ attendance and their contribution at meetings, financial performance of the Group against budget, compliance with corporate governance and best practice guidelines and market perception of the Group. The Nomination, Remuneration and Audit Committees were evaluated by the executive Directors and took account of communication with the Board and compliance with terms of reference. The evaluation of the Chairman was undertaken by the independent non-executive Directors, led by the Senior Independent Director, and included an assessment of his leadership and direction of the Board. The appraisal of the Chief Executive was completed by the non-executive Directors together with the Chairman. Evaluation of the other individual Directors took account of their contribution and, in the case of the Finance Director, the performance of his executive duties. The Board is also considering the use of external facilitators to evaluate its practices as recommended by the Code.

ICAP plc Page 48

During 2011/12, an evaluation of the Board, the Board committees and the Chairman was conducted using Lintstock as the external facilitator. Lintstock did not provide any other advisory services to ICAP during the year. Interviews were conducted with each Board member and the Group Company Secretary and included feedback from members of the GEMG. The objective of the evaluation was to provide insight into the effectiveness of the Board and to identify actions for improving performance.

The outcome of the review confirmed the changes in the Board’s composition were highly effective.

From the evaluation, the directors believe their expertise was well drawn on during the year and is valued by the business. In evaluating how the Board manages its time, the following items have been identified as requiring further Board oversight and have been included in the Board schedule for 2012/13:

�� Increase efficiency from the business model;�� The regulatory environment;�� HR strategy and succession planning;�� IT strategy;�� The Brazilian business;�� Key customer analysis including customer perception; and�� External market developments.



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IG Group plc Page 54

The UK Corporate Governance Code and the Financial Reporting Council’s guidance on Board effectiveness require the Board to evaluate performance annually, with an external assessment performed every three years. In 2009, the Board commissioned the Board evaluation team of the Institute of Chartered Secretaries and Administrators to carry out a thorough evaluation of the performance of the Board. This took into account emerging governance trends arising from the Walker Report and the UK Financial Reporting Council review.

This year, the Board commissioned an independent external Board effectiveness facilitator, Dr Tracy Long of Boardroom Review, to assist in an evaluation of its effectiveness. The review was designed to assess the contribution that the Board makes to the success of the Company, and to promote its continued effectiveness. The review encouraged the Directors to step back from the day-to-day business of the Board, to question its approach, consider its impact, and prepare for the challenges ahead. The review investigated a range of issues, including the way in which the Board defines its role and approaches its work, and the way in which the Board works together and optimizes its use of time and its contribution to the Company. Overall the review was satisfactory, and the Board will consider its recommendations during the coming year.

In addition to the external Board evaluation, the performance of the individual Executive Directors, other than the Chief Executive, is appraised annually by the Chief Executive, to whom they report. The performance of the Chief Executive is appraised annually by the Chairman. The performance of the Chairman is reviewed by the Non-Executive Directors, led by the Senior Independent Non-Executive Director (Roger Yates) and taking into account the feedback from the Executive Directors.

Imagination Technologies plc Page 39

During the year, the Board reviewed its performance along with that of the Audit and Remuneration Committees. This assessment of performance is carried out by considering the objectives of each body and assessing the degree to which these objectives have been met. In the case of each Director, the performance review takes into account an individual’s level of commitment to the role, effective contribution and achievement in carrying out the role. The Non-Executive Directors are responsible for performance evaluation of the Chairman, taking into account the views of the Executive Directors.

During the year, the Chairman periodically held meetings with the Non-Executive Directors without the Executive Directors being present and, in addition, the Non-Executives periodically held meetings without the Chairman or the Executive Directors being present

IMI plc Page 44

In line with the Code, the Board has agreed that the Chairman should arrange an externally facilitated evaluation process at least once every three years starting from 2012. An internal evaluation of the Board and its committees was completed in 2011, the results of which the Chairman reported to the Board. This process included questionnaires and appropriate face to face discussions including individual meetings between the Chairman and the non-executive directors.

In addition, the other directors met with the senior independent director regarding the performance of the Chairman. The Board received the findings of the evaluation in March 2011 and the directors confirmed that the Board is fulfilling its responsibilities appropriately. The evaluation concluded that the Board and its committees were effective and that each director demonstrated a valuable contribution. The contribution and performance of the directors, all of whom are standing for election or re-election at the 2012 annual general meeting, is further commented on in the notice of the annual general meeting.



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Imperial Tobacco plc Page 71

During the year the Board, assisted by an independent consultant, Equity Communications Ltd, who provided no other services to the Group, reviewed its performance, that of its Committees and individual Directors. The feedback, obtained through detailed questionnaires, was collated into a report which was presented to the Board and used as the basis for one-to- one discussions between the Chairman and each Director.

Our Senior Independent Director met with the Non-Executive Directors and the Board, without the Chairman present, to consider the performance of the Chairman.

The Chairman held meetings with the Non-Executive Directors to consider, amongst other things, the performance of the Executive Directors.

The evaluation did not identify any significant areas for concern nor any requirement to provide extra training for our Directors and, consequently, the Board and its Committees are satisfied they are operating and performing effectively. The evaluation also confirmed that all our Directors have sufficient time, knowledge and commitment to contribute effectively to our Board and its Committees and that it remains appropriately constituted.The main areas identified for review were the ongoing succession plans for Directors approaching retirement, the future balance of Executive and Non-Executive Directors, enhancing opportunities for Non-Executive Directors to meet with the wider management team and ensuring the revised risk and assurance processes are embedded in the organisation and operate effectively.

We have addressed the issues identified in the 2011 Board evaluation and in line with the Board’s succession plans, a number of Directors were appointed during the year and the Group undertook a review of its remuneration policies to ensure they continue to incentivize the delivery of its strategy and further align performance to results. More details of the review are contained in our Remuneration Report on page 77.

Inchcape plc Page 44

In 2011 the Board was evaluated by an external independent third party. The evaluation consisted of a tailored questionnaire focusing on overall effectiveness, strategy, Board knowledge, training and development, succession, risk management, the Committees and administration. The evaluation employed a range of techniques including ‘scoring’ and commentary from participants.

The three main areas where action points were identified were:

2011 Objectives 2011 Achievements

Strategic planning The implementation of the two day Strategy Away Day gave the Board the opportunity to focus entirely on the strategic plan and review progress to date.

Succession planning The Board carried out an in-depth review of succession planning for the Executive Committee at the Strategic Away Day.

Structure and remit of the Audit Committee The Audit Committee membership was reduced to three Non-Executive Directors all with relevant financial experience to enable the Committee to focus in more depth on the key issues.

Focus for 2012

Continue to focus on strategy and processes for measuring performance to date.

Enhance the process for succession planning at Board and Executive Committee level.

Review composition of the Board and its Committees.

The Board discussed the findings of the Board evaluation including the results for each of the Committees and determined the main



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action points and the focus for the 2012 evaluation. The Chairman also met each Non-Executive Director individually to discuss his or her performance throughout the year and personal commentary from the Board evaluations were provided to the Chairman to assist with the personal performance evaluations of the Non-Executive Directors.

The Deputy Chairman and Senior Independent Non-Executive Director met with the Non-Executive Directors to evaluate the performance of the Chairman.

Informa plc Page 45

The Board utilises a formal and rigorous process, led by the Chairman, for the annual internal evaluation of the performance of the Board, its principal Committees and individual Directors. On appointment the Directors are made aware that their performance will be subject to evaluation. The Non-Executive Directors led by the Senior Independent Director meet at least annually to appraise the Chairman’s performance.

A full and extensive external Board evaluation was carried out in 2010 of the corporate governance of Informa plc, including an evaluation of its Chairman. The review resulted in a detailed analysis of the operation and effectiveness of both the Board and its Committees and of compliance with the Code. The feedback was provided both orally and in a written report. The conclusions provided a very positive report on the Company’s governance and provided some suggestions for improvement. These findings were considered by the Board as part of its decision making for 2011. In accordance with the Code the next external Board evaluation will take place within the next two years.

Inmarsat PLC Page 39

The effectiveness of the Board is an essential element of the Company’s overall performance. During 2011, the Board and each of the Audit, Remuneration and Nominations Committees completed an internally facilitated performance evaluation designed to assess the quality and effectiveness of the Board’s decision making. The Directors reflected and commented on decisions taken over the previous 12 months and how debate and presentations could be improved going forward to enhance their own impact and contribution to the success of the Company, and its preparation for future challenges.

The main elements in the evaluation process included individual Directors and Committee members completing separate evaluation questionnaires regarding the processes of the Board and its Committees, their effectiveness and where improvements could be considered. They also undertook a peer review in which they assessed their fellow Directors’ performance and each of the Non-Executive Directors had a discussion with the Company Secretary. The results were compiled and analysed by the Company Secretary and circulated to the full Board and considered as a specific item of Board business.

The evaluation process concluded that during the year, the Board and its main Committees had functioned well with a good balance of the necessary skills required and that the individual Directors had also met the standards expected of them, with each making strong contributions, generally and through the knowledge derived from their specialised areas. With the Non-Executive Directors generally having five to six years experience of the Company’s business, this gave them greater business sector maturity and understanding of competitors’ activities and their impact on the Group, thus aiding their understanding of the strategy for the business and new technologies being considered.

A performance evaluation of the Board will continue to be conducted annually and the process for such evaluation will be reviewed by the Board, considering the Code recommendation that an external review is undertaken at least every three years. It is expected that an external evaluation will be undertaken in 2012.

The Non-Executive Directors unanimously supported the appointment of Rupert Pearce as Chief Executive Officer and continue to be highly supportive of all the Executive team. The culture of openness and transparency with the sharing of updates on Group activities has remained evident following the senior management changes. The reorganisation of the business, which was announced in late 2011, had been briefed to the full Board, particularly in the last quarter of 2011, to ensure that there was full knowledge of, and support for the changes in management structure, and in the reporting team to the new Chief Executive Officer. The Board supported



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the rationale for the changes in business approach to bring together all the Group’s subsidiaries as a unified Inmarsat presence, enabling a more defined market approach to revenue generation.

InterContinental Hotels plc Page 50/51

IHG has always recognised the importance of evaluating the performance of the Board, its main Committees and its Directors. Accordingly, an independent external facilitator assists in the performance evaluation in alternate years.The 2010 evaluation, which was conducted internally by the Company Secretary, identified the following areas as requiring action and during 2011 we made progress on each of these as follows:

Area identified Action taken

The Board should devote sufficient time to consider strategic issues

Specific Board time was scheduled into the Board calendar to discuss strategy more regularly

Non-Executive Directors should be provided with enough opportunities to meet together with Executive Directors being present

Separate meetings were scheduled and attended only by Non-Executive Directors

Non-Executive Directors should provide an appropriate amount of time for Board communication with institutional investors

The Chairman and Non-Executive Directors made themselves available to meet with institutional investors on specific matters in relation to the Board during the year

The 2011 evaluation was conducted with external assistance in accordance with the guidance in the Code during January 2012. Our evaluation was conducted by Lintstock Limited, an independent facilitator, who has no other connection with IHG.

The Board evaluation involved the completion of comprehensive questionnaires in which Directors and the Company Secretary were asked to evaluate the Board, each of its Committees and their respective Chairman and the Chairman of the Board. The questionnaires covered a variety of subjects, including Board composition, appointments, succession planning and dynamics, induction and ongoing training and development, Board expertise and how the Board spends its time. Directors’ views were sought on the Board’s strategic and operational oversight and its input into risk management and internal control. They were also asked about investor and stakeholder relationships. The Board was asked to provide views on how improvements could be made and key priorities that the Board should consider with respect to its performance.

The Chairman’s performance was appraised through feedback from the other Directors through the use of the externally produced questionnaire. The results were reviewed by the Senior Independent Director together with the Non-Executive Directors without the Chairman. All the Non-Executive Directors, including the Chairman, met to appraise the Chief Executive’s performance. The Chairman also separately discussed with each Non-Executive Director their own performance.

The Board received feedback on the outcomes through a report compiled by Lintstock Limited, which was presented and discussed at the Board meeting held in February 2012. The results confirmed that the Board and each of its main Committees continues to operate effectively and that each Director continues to make an effective contribution and retains a strong commitment to the role.

The following actions for the Board were identified for 2012:

�� Improve meeting processes to enable more time for wider Board discussion; �� Allot adequate time on agendas to review the effectiveness of past decisions; �� Continue to encourage discussion on key strategic issues facing the Group; and �� Build upon and improve oversight of the main risks affecting the Group.



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Intermediate Capital plc Page 64

In line with the effective governance requirements of the Code, the Board reviews its own performance annually using a predetermined template designed as a tool to facilitate the evaluation process.

The assessment covers the functioning of the Board as a whole, the functioning of the Executive Committee, the evaluation of individual directors and includes a review of the effectiveness of the Board committees. The Board considers the results of the performance evaluation when making its recommendations regarding the re-election of directors.

In addition, and in accordance with the Code, the Board also employs the services of an external third party to periodically conduct an independent evaluation of the effectiveness and performance of the Board. An independent Board evaluation was undertaken in April 2012 and considered the effectiveness and performance of the Board within relation to: Board composition, expertise, and dynamics; time management and Board support; strategic oversight; risk management and internal control; and succession planning and human resource management.

The independent Board evaluation concluded that the Board was effective in all areas.

The Board recognises that there are no women on the Board, contrary to recently announced Code guidance on Board composition, and takes account of this in its process of selecting new directors.

Intertek plc Page 40/41

Once again, the Board engaged in a performance evaluation process led by the Chairman comprising a series of detailed questionnaires which provide a framework for the evaluation process. This provides a source of information not just on the Board’s performance but also on that of the Chief Executive Officer, individual Directors and the Chairman. There are questionnaires for each of the following: the Board; each individual Director; and the Audit and Risk, Nominations and Remuneration Committees. In 2011 no external facilitated evaluation was carried out as it was considered that an internal evaluation continued to be appropriate. The performance evaluation process will continue to be under review and it is currently proposed that an external evaluation will be undertaken in 2012.

This annual evaluation of the effectiveness of the Board and its Committees ensures that the performance of each individual Director and the functioning and constitution of the Board and each Committee are properly measured and debated.

The Chairman assessed the individual performance of each Director. During 2011 the Senior Independent Director did not have discussions with the other Directors to appraise the Chairman’s performance during the year as Vanni Treves retired at the end of the year. An appraisal of the new Chairman, Sir David Reid, will be held in 2012 in accordance with the Code. Following feedback from the Board evaluation process, which was discussed by the Board in January 2011, presentations from senior management to the Board have continued throughout 2011 and meetings have been held on regional strategy to increase the understanding of operations and opportunities. Each of the presentations made to the Board also includes a section on risk to ensure that all Directors are fully briefed in this area. The performance of the Board and each Director was, and is, effective, and all Directors demonstrate full commitment in their respective roles in the Company evidenced, inter alia, by the Board and Committee attendance records set out in this report. Following the recent changes to the Board membership the evaluations further demonstrate that the Board continues to maintain an appropriate set of skills, that all the Directors add value to the overall effectiveness and success of the Group, and that no significant issues have arisen out of the evaluation process.

The Audit and Risk, Nominations and Remuneration Committees also each held an evaluation of their work and effectiveness during the year, the results of which were reported to the Board by the Group Company Secretary. The reviews concluded that each Committee was operating in an efficient and effective manner. The Board will continue to develop the evaluation process in order to ensure that it can properly review, on an annual basis, its performance and that of its individual members and Committees.



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International Airlines Group Page 42

At the end of the reporting period an internal questionnaire in relation to performance was sent to members of the Board to complete. An analysis of the results, plus an action plan to address any issues that arose was carried out and will be implemented in due course.

Invensys plc Page 51

Board performance evaluation

An annual review is undertaken of the performance of the Board, committees and individual directors. In line with the Code and best practice, the Company decided in 2011/12 to commission its first independently-facilitated Board performance evaluation. Following a review of facilitators in the market, Egon Zehnder, which does not have any other connection with the Company, was appointed to conduct the evaluation process. The process began with a briefing discussion with the Chairman and Company Secretary. The approach that Egon Zehnder adopted to conduct the evaluation was to interview each Board member and certain other senior leaders. A structured discussion framework was used so that the discussions were appropriately structured and maximised the value of time spent with individuals. The face-to-face discussions comprised two parts. The first covered Board roles and processes and the second part addressed the style and content of colleagues’ contributions to arrive at an understanding of Board processes, the behaviours of each member and the Board as a whole. The findings of the discussions were presented to the Board by Egon Zehnder. The review concluded that the Board was aligned in its view of the main issues facing the Company and that it worked effectively as a team.

Summary of 2012/13 actions

The main themes arising from the review, which were agreed would form the basis of the action plan for further improvement in 2012/13, were as follows:

�� Continue the focus on strategic discussions;�� Ensure there is appropriate consideration of project risk, including bidding and control of projects;�� Give increased focus to developing the talent of the Group’s senior leaders;�� Review the format of Board meetings to ensure there is appropriate time to discuss key issues in depth; and�� Ensure that the Board composition continues to have the appropriate balance of skills, experience and diversity.

As part of the evaluation discussions with Egon Zehnder, views on the performance of individual directors were sought. These views, including the performance of the Chairman, were presented to the Board as a whole.

Investec plc Page 195

The Board, its committees and individual directors’ performance is formally evaluated annually based on recognised codes of corporate governance and covers areas of the Board’s processes and responsibilities, according to leading practice.

The performance evaluation process takes place both informally, through personal observations and discussions, and/or in the form of evaluation questionnaires. The results are considered and discussed by the Board.

The chairmen hold regular one-on-one meetings with each director to discuss the results of the formal and informal evaluations and, in particular, to seek comments on strengths and developmental areas of the members, the chairmen and the Board as a whole. Individual training and development needs are discussed with each Board member and any requests for training are communicated to the company secretaries for implementation.

Performance evaluation of the Board and directors as well as training and development are matters that are standing agenda items of the nominations and directors’ affairs committee.



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ITV plc Page 59

The Board has established a process for the annual evaluation of the performance of the Board, its committees, and individual Directors. The Directors are made aware on appointment that their performance will be subject to an annual evaluation and that a Director would not be put up for re-election at an AGM unless the Chairman has decided that they continue to perform effectively and show commitment to the role.

How the evaluation process works

The evaluation is focused around processes, roles and responsibilities, culture, balance of skills and experience, diversity and how the Board works together. In particular the evaluation focuses on how effective they were in assisting the executive in achievement of the Transformation Plan.

In view of the relatively new makeup of the Board, for 2011 the evaluation took the form of interviews by the Chairman with each Board member which resulted in some adjustments to the Board agendas and appropriate changes in Board focus and conduct.It is the Board’s intention to commission an external Board evaluation in 2012/2013.

The Committee Chairmen undertook reviews for each Committee.

Jardine Lloyd Thompson Group plc Page 33

Each year the Board conducts a review of its performance as a Board both collectively and as individuals and identifies areas where it can improve its effectiveness. The Board performance evaluation for 2011 was undertaken by means of individual questionnaires that were summarised and discussed by the Board or the relevant committee. The outcome of this process for the Board resulted in recommended changes in three key areas, namely an increase in the focus on risk issues, improvement in the Board paper production and distribution process and a greater attention to setting and monitoring Board objectives for the year.

Following review, the Board is satisfied that it continues to operate effectively and constructively, with the necessary balance of expertise, experience, independence and knowledge of the business in order to deliver long-term shareholder value.

The non-executive directors, led by the senior independent director, also carried out a performance evaluation of the Chairman during this period.

Johnson Matthey Plc Page 96/97 2010/11 Evaluation Process

Following the appointment of Tim Stevenson as Chairman Designate in March 2011, the Board instigated a formal evaluation of its performance and that of its committees and individual directors. This evaluation was led by Tim Stevenson and was externally facilitated by an independent consultant experienced in Board evaluation. This was the first time that the Board had undertaken an externally facilitated evaluation process. The external facilitator had no other connection with the company and was not subject to any conflict of interest. The evaluation was designed, in particular, to allow Tim Stevenson to gain an objective overview and evaluation of the workings of the Board and its committees, of strengths and weaknesses, of areas for further improvement and of the contributions of individual directors. The review was intended to build on the internal Board review carried out by the Company Secretary in 2009/10.

The methodology of the evaluation included a series of detailed one to one meetings with each director and the Company Secretary in order to gather views and feedback. The external evaluator also attended one full Board meeting as an observer. The review covered the following main areas, which were determined by the Chairman and the external evaluator to be of most importance or value to the Board:

�� Overall Board working and efficiency;



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�� Board composition and balance;�� Succession planning;�� Strategy process;�� Financial and non-financial monitoring;�� Risk management and risk management systems; and�� Board development (including training and site visits).

The full evaluation process was not complete at the date of publication of the 2011 annual report and has since been concluded. Overall feedback from the evaluation was provided in the form of a presentation by the external evaluator at a meeting of the Board in May 2011, which then debated the findings. The Board also discussed the evaluation process itself and agreed that the external evaluation was broadly effective. The external evaluator also provided a comprehensive written report to the Chairman, feedback to the Board committee chairmen and individual feedback for the Chief Executive.

Good progress was noted across all the areas of review, building on initiatives and action developed as a result of prior effectiveness reviews. Certain suggestions were made to ensure continuing progress. The evaluation process gave assurance that each director continued to contribute effectively and demonstrated commitment to the role.

The Chairman agreed with the Board that no actions or changes to Board or committee practice were required in the immediate term following the review but that the output would be considered further following his appointment as Chairman in July 2011 and in the course of the review for 2011/12 to ensure continuing improvement.2011/12 Evaluation Process

As the 2010/11 review process had been externally facilitated, the Board decided to conduct an internal review process during 2012. The evaluation of the performance and effectiveness of the Board and its committees and individual directors is being conducted by the Chairman in collaboration with the Board committee chairmen. The evaluation is not complete at the date of publication of this annual report.

The evaluation process has included one to one interviews by the Chairman with each director and the Company Secretary. The topics being discussed, which were determined by the Chairman to be the principal areas of focus following the externally facilitated review in the previous year, include:

�� Strategy and strategy focus;�� Monitoring financial and non-financial performance;�� Stakeholder relationships;�� Risk and uncertainties;�� Executive remuneration; and�� Key themes for discussion focus in 2012/13.

In carrying out the evaluation, the Board is following the new supporting principle to be included in the Code, as announced by the FRC in October 2011, to the effect that evaluation of the Board should consider, amongst other things, the Board’s diversity, including gender diversity. Further information is set out under ‘Board Evaluation Process’ on page 93.

The Chairman proposes to report the outcome of the evaluation process to the Board meeting in July 2012. The Board will debate the findings and any lessons to be learned and will agree any follow up actions and responsibilities as appropriate. The key outcomes of the evaluation processes and the steps the Board intends to take to address any issues will be reported in the 2013 annual report.

Jupiter Fund Management Page 38

The Board recognises that a continuous and constructively critical evaluation of its performance is an important component of the Group’s success.This year, the Board decided to commission an externally facilitated review of its own effectiveness. This was carried out in December 2011 and January 2012, and was led by Sheena Crane, an external consultant with wide experience in Board review matters. The



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review process covered not only the Board, but also the Audit, Remuneration and Nomination Committees. All Directors, executive and non-executive, participated in one-to-one interviews. The results were discussed by the Board, and will form the basis for our action plan to further develop the Board’s effectiveness. In the context of what was found to be a well-structured Board and governance system, several themes for improvement emerged from the review. In particular, the action plan will focus on maximising the effectiveness of the annual strategy development process; alignment between executive risk management processes and Board approved risk appetite; and on Board involvement in succession planning and talent management. Elements of the action plan will fall within the remit of the main Board Committees. As well as the major themes highlighted above, the review suggested a range of procedural improvements around such matters as continuing training or induction for non-executive Directors and the structure of Board papers and agenda. All of these matters are addressed in an action plan to further develop the Board’s effectiveness that will be implemented during the current year.

With regard to the performance of individual Directors, relevant input from the Board Effectiveness review was fed in to the Nomination Committee process described on page 52. The Chairman’s performance was reviewed by non-executive Directors taking into account the views of the executive Directors. These processes fully supported the recommendations that all Directors should be proposed for re-election at the forthcoming Annual General Meeting.

Kazakhmys plc Page 99

In line with the Company’s policy and in compliance with the provisions of the UK Corporate Governance Code, a full Board performance evaluation process, facilitated by an external consultant, Lintstock Ltd, was undertaken in late 2011/early 2012, the previous externally facilitated Board performance evaluation having been performed in 2008. The process was carefully structured but pragmatic, tailored to bring about a genuine debate of issues that are relevant, aiming to assist in identifying any potential for improvement in the Company’s processes. It entails the completion of detailed questionnaires on the performance of the Board, its committees and its executive and non-executive Directors by each Director (excluding Charles Watson who was appointed on 24 August 2011), which were completed in 2011, and will be followed by one-to-one interviews between the external consultant and each Director and the preparation by the external consultant of a composite written report. The results of the performance evaluation report will be presented and discussed at the May 2012 Board meeting and will be disclosed in next year’s Annual Report and Accounts.

The performance evaluation process undertaken in early 2011 in respect of the calendar year 2010 concluded that the Board and its committees continue to operate effectively and each Director is contributing effectively and demonstrates commitment to his role, although there were certain areas identified for improvement in relation to a greater focus by the Board on risk oversight and strategy. The Board has taken steps during the year to address these areas identified for improvement by receiving more detailed, regular reports from the Audit Committee on the Group’s key risks, in advance of the Board’s annual review of internal control and risk management, and a greater focus on monitoring the strategic issues and the challenges facing the mining industry.

During the year, the Chairman held a number of meetings with non-executive Directors without executive Directors being present. The Senior Independent Director also led the non-executive Directors in evaluating the performance of the Chairman. As part of the evaluation of the performance of the Chairman, the Board remains satisfied that the Chairman is able to fulfil all of the commitments required of his role.

Kingfisher plc Page 29

The Board conducts a review of its performance each year. Following the external evaluation of the performance of the Board conducted in 2010/11, the Board agreed to evaluate its effectiveness for the year under review, via an externally facilitated questionnaire and a series of one-to-one interviews with the Chairman. The questionnaire was developed by reference to the topics discussed and recommendations made during the previous evaluation, and were facilitated by an external facilitator, Lintstock. Responses to the questionnaire were collated and the output was used by the Chairman in his individual meetings with directors as part of the evaluation process.

The areas considered by the evaluation were:



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�� Board composition; �� Board expertise; �� Strategic oversight; �� Risk management and internal control; and �� Succession planning and human resource management.

The results from the evaluation were considered by the Board at its meeting in February 2012. No significant issues were highlighted and the review concluded that the Board was working efficiently and effectively and that the contribution and commitment of each director, and their interaction with each other, was good and that the non-executive directors offered robust challenge where appropriate. As a result of the review, the Board agreed to undertake a review of its annual meeting timetable and to review the cycle for its review of risk management and risk appetite. In addition to the Board review, the Group Chief Executive carried out a performance review of the Group Finance Director. The non-executive directors, led by the Senior Independent Director, conducted the performance review of the Chairman in respect of the financial year. The Board has confirmed that the contribution of each of the directors continues to be effective and that shareholders should be supportive of their appointment or re-appointment. The biographical details of all directors seeking appointment or re-appointment at the 2012 Annual General Meeting are set out on page 21. The Board will continue to review its procedures, effectiveness and development in the year ahead and the Chairman will use the output of the most recent Board evaluation in his individual meetings with directors during the year.

Ladbrokes plc Page 24

The Board undertakes a formal annual evaluation process of its own performance and that of its committees and individual directors which in 2011 was externally facilitated by Lintstock.

Questionnaires tailored to the specific circumstances of the Company were completed by each director in relation to their own performance and on the effectiveness of the Board and its committees.

The Chairman conducts an appraisal of each director. The Senior Independent Director, having consulted with each of the other directors, conducts an appraisal interview with the Chairman. In 2011 a detailed report on the effectiveness of the Board and its committees was produced by Lintstock and the results of which were considered by the Board and the individual committees and actions arising were agreed. The following themes were addressed: Board composition, expertise and dynamics; Board support, time management and Board committees; strategic, operational and risk oversight; succession planning and human resources management; and priorities for change.

Whilst all directors are expected to bring an independent judgement to bear on issues of strategy, performance, resources (including key appointments) and standards of conduct, the independent non-executive directors were selected and appointed for this purpose.The Company Secretary is responsible for advising the Board through the Chairman on all governance matters.



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Land Securities plc Page 76

A formal and rigorous evaluation of the performance of the Board, its Committees, the Directors and the Chairman is conducted each year as we recognise that our effectiveness is critical to the Company’s continued success.

This year marked the third in our three year Board evaluation cycle. In the first year of the cycle, a detailed evaluation was conducted by Independent Audit Limited, who followed up the issues raised in a questionnaire in the second year.

This year’s Board evaluation was based on a series of separate interviews with Directors, conducted by the Chairman and the Group General Counsel and Company Secretary. The items discussed in these interviews included the mix of skills and contributions amongst the Board, the quality and content of Board papers, the risk appetite of the Group in relation to development and investment transactions as well as matters raised in Years 1 and 2.The evaluation established that Directors felt the Board had a good mix of personalities and skills, with no notable gaps. They were pleased with the Chairman’s conduct of the processes to appoint a new Chief Executive and new Non-executive Director, feeling them to be rigorous and inclusive. Some offered suggestions for the skills to consider as the longer serving Non-Executives retired. The consensus was that, with the number of Executive Directors reducing to three, the Board was of a good size and did not require additional members although this would be kept under review and considered again once the new Chief Executive had settled in his role.

A number of Directors encouraged forward looking Board papers, focusing on strategy, trends and new opportunities as these were areas in which Non-executive Directors felt more able to contribute to and add value.

For papers seeking approval for transactions and new developments, Non-executive Directors emphasised the importance of context for management’s recommendation including how the proposals fit with the Group’s strategy and forecasts, and an assessment of the alternatives. Furthermore, it was requested that operational reviews should include regular updates on progress with the Group’s key developments and ongoing transactions, with items likely to be brought to the Board for approval flagged as far ahead as possible.

Directors were supportive of how management incorporated risk and the evaluation of risk within proposals for transactions, funding and new development. They felt that the Group benefited from a strong balance sheet at a difficult time as a result.

Overall, the outcome of the evaluation was very positive, with good progress noted on the areas of focus raised in previous evaluations. Issues raised during the evaluation would be taken forward by the Chairman.

The Chairman’s performance and leadership was reviewed by the Non- executive Directors, led by the Senior Independent Director.



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Legal & General Group plc Page 53/54

The Board is committed to continually improving its effectiveness and each year the Board participates in a formal evaluation of its performance. An update on progress made against the observations from the Board evaluation undertaken in 2010 can be found on page 54. The Board has evaluated its performance during 2011 and I am satisfied that the Board is effective and operates well. As a result of this year’s evaluation, the Board intends to consider refreshing the format of reports to the Board and the Board agenda in order to facilitate further discussion; continue to focus on succession planning and talent management and further enhance the Board’s role in monitoring the Group’s strategic performance during 2012.Each year the Board participates in a formal evaluation of its performance. In 2010 the Board evaluation was undertaken by an external facilitator, Tracy Long, of Boardroom Review. Tracy is an experienced consultant whose only interest with Legal & General is her work with the Board. During 2011, the Board considered the recommendations arising from the 2010 Board evaluation in order to further improve its effectiveness. An update on progress made against the recommendations is set out on the right. The Board has evaluated its performance during 2011. As a result, the Board intends to consider refreshing the Board agenda and format of reports to the Board in order to facilitate further discussion, to continue to focus on succession planning and talent management and to further enhance the Board’s role in monitoring the Group’s strategic performance during 2012.

Recommendation from 2010 Board evaluation Action taken in 2011

Further enhance strategy and market review discussions. The Board reviewed internal and external presentations on the economic outlook and market and sector topical issues.

Increase informal interaction between Board members and senior management outside the formal Board and Committee meetings.

Attendance of senior management at Board meetings, training sessions and director induction meetings has increased. All presenters meet with the Board members informally following Board meetings.

Further leverage non-executive director’s breadth of experience. The Chairman liaises with non-executive directors on relevant agenda items. Specialist focussed briefings on topical macro issues are prepared for individual non-executive directors.

Lloyds Banking Group plc Page 181

Having conducted thorough and rigorous externally facilitated evaluations in 2009 and 2010 (as well as in earlier years), the Board accepted the recommendation of the Nomination & Governance Committee that the 2011 evaluation should be facilitated internally, reverting to an external review for 2012.

The 2011 Board evaluation process was overseen by the Nomination & Governance Committee and took the form of:

�� A detailed questionnaire, drafted by Group Secretariat in conjunction with the Chairman, to assess the effectiveness of the Board, its Committees and individual Directors;�� Individual follow up interviews with the Chairman; and�� Formulation of an action plan for adoption by the Board.

London Stock Exchange Group plc Page 49

This year the Board engaged Spencer Stuart to carry out the Board’s annual effectiveness review. Spencer Stuart was appointed following a review of providers in the market and is not currently engaged in any other work on behalf of the Company.

The evaluation process was carried out through formal interviews with each director. The evaluation covered the following areas:

Overall Impression of the Board; Organisation of the Board; Committee Organisation; Roles and Duties as Directors, including performance of individual directors; Board Composition; Board Involvement and Engagement; Communication with Shareholders and other Stakeholders and Overall Board Effectiveness. The key themes arising from the 2012 evaluation, which will form the basis of the



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2013 action plan, were:

�� Consideration of succession planning and Board composition particularly as the Group diversifies;�� A desire from Non-Executive Directors for greater interaction with the executive at all levels in order to further enhance the Board’s understanding of the business beyond presentations at Board meetings; and�� As the Group expands geographically, consideration of greater use of technology to facilitate fuller participation of all Directors.

Lonmin plc Page 64

The Board believes that annual evaluations are helpful in maintaining and enhancing an effective, challenging and dynamic Board. In FY2010, an externally facilitated evaluation confirmed general Board effectiveness and led to the formation of the Transformation Committee. In FY2011 the Directors completed written assessments, which were then discussed by each Director in one to one meetings with the Chairman. This process confirmed general Board effectiveness and revealed no areas of concern. It identified three priorities for FY2012:

�� Accelerating the delivery of strategy (subject to favourable market conditions) to enhance shareholder value; �� Focusing on safety, transformation and the delivery of operational results, particularly by enhancing cost-effectiveness; and �� Enhancing the corporate risk register by better ranking key risks and prioritising mitigating action accordingly.

In FY2012, management addressed these priorities, and made significant strides in improving operational performance during the year, with material progress made against a wide range of safety, production, transformation and cost control targets prior to the impact of the Events at Marikana. The pressures on the Company’s liquidity position following these events have resulted in the adoption of the new strategy informing the Lonmin Renewal Plan. Progress was also made in relation to risk management, with a prioritisation exercise conducted over and above the ranking of risks inherent in the Company’s risk assessment methodology. The implementation of the CURA integrated risk management software system provides further impetus and support for the implementation of mitigating actions.

The effectiveness of the Chairman and each of the Committees was also reviewed in FY2011. No material issues were identified in these reviews.

The Company is committed to the highest standards of corporate governance. Building and maintaining an effective Board, with members drawn from a diverse range of backgrounds, is of great importance and significant effort has been put into this in recent years; every Director has been appointed on merit and brings valuable skills, knowledge and experience to our deliberations. The continuous improvement opportunity presented by a formal review of the Board’s effectiveness is valuable. Ordinarily, we would have done such a review in August or September 2012, but given the Events at Marikana and the absence of the Chief Executive Officer, the Board judged that it would be inappropriate to conduct such a review in 2012. The Board does not believe that this decision creates any additional risk for Shareholders, and believes that the decision can be justified given that the time otherwise needed for a review was utilised to address the multiple crises then facing the Company. It is currently intended that an independent facilitator will manage a rigorous external review process in 2013.

Man plc Page 87

Every year the Board conducts a review of its performance as a Board both collectively and as individuals and identifies issues on which it needs to work. The table opposite lists the main issues identified for attention in last year’s evaluation and a summary of actions taken during 2010.

2011 evaluation

Our 2011 review was led by an independent third party who interviewed each of the directors and the Company Secretary and sought their assessment of the Board’s performance against key drivers of effectiveness including strategy development, the decision making process, Board relationships, information flows and succession planning. Feedback was also sought on the operation of the principal



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Board Committees and on the contributions of individual directors.

This year’s review indicated that overall the Board and its principal Committees were operating effectively and to high standards of governance. In particular, the Board had set a clear strategy and made a strong case for the acquisition of GLG. The relationship between the Chairman and CEO was considered to be sound and it was felt that major issues were fully discussed before decisions were made.

The following table lists the main issues which were identified as warranting further consideration in 2011 and will be addressed by the Board collectively in the course of this year.

Feedback on individual director’s contribution will be the subject of private discussion between the Chairman and those directors. Feedback on the Chairman has been provided by the Senior Independent Director as noted earlier in this report.

Board evaluation

Areas identified for focus in 2010 Action taken

Articulation of a clear strategic plan and process for execution. Clear workstreams established and progress reported. Substantive delivery of diversification into discretionary strategies through the acquisition of GLG.

Review of risk appetite and risk management oversight. Full Board meeting dedicated to risk. Approval of revised risk appetite statements. Review of Board and Audit and Risk Committee risk governance framework.

Adequacy of senior executive resource and succession planning. Appointment of a COO, a new CIO of Man Multi-Manager, a new Chief Risk Officer and a broad injection of GLG investment management talent.

Board insight into investor expectations and concerns. Chairman’s meeting with top investors. Consultation by the Chairman of the Remuneration Committee on new remuneration proposals. Detailed reporting on investor response to GLG.

Areas identified for focus in 2011

• Provision of more competitor information.• Renewed work on succession planning for executives at and immediately below Board level and the creation of a formal succession plan.• Review of the process for the timely submission of Board papers and circulation of minutes.

Marks and Spencer plc Page 44

In 2010/11 we commissioned our first ever independently- facilitated Board review, conducted by Ffion Hague of Independent Board Evaluation. Our aim was to capture open and constructive feedback from Board members that would:

�� Provide insight into our effectiveness;�� Point to actions for improving our performance; and �� Establish a benchmark for measuring future progress.

While it is considered best practice for Boards to conduct an external review every three years, based on the positive feedback from the Board and the fact that we had a number of new joiners during the year, we decided to adopt a ‘Year 2 Booster’ approach for our 2012 review.

The aim of this approach was to:

�� Check progress against the issues identified in last year’s report; �� Check feedback from new members of the Board and bring them up to speed with the process the Board has undergone;



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�� Identify any new issues that have arisen during the past year. Once again, and in order to ensure consistency, Ffion Hague assisted with this review. The review was conducted according to the guidance in the UK Corporate Governance Code 2010.

What was the focus of the Board review?

Our approach involved a Board observation; one-to-one interviews with the Chairman and new joiners and structured telephone interviews with those directors who participated in last year’s evaluation. Each participant was asked to evaluate the Board, its Committees, the Chairman and individual Board members. The process took place between January and March 2012. Subjects covered included a general overview as to the ‘state’ of the Board, its operation and how this had changed over the year. Directors were asked for their views on our shareholder engagement and relationships and how these relationships might be improved. Views were sought on the Board’s input into strategy discussions, governance and compliance, risk management and succession planning. Views were also sought on the Board culture and the relationships with senior management as well as how new members are selected and inducted. What did we learn?

From the review, and subjects covered, it is clear that the Board has made progress on most of the points on last year’s action plan, as evidenced by:

�� The dedicated session on succession and talent and the introduction of non-executive lunches to improve engagement with senior management; �� The appointment of Vindi Banga and Miranda Curtis following the retirement of Sir David Michels and Louise Patten; the subsequent appointment of Jan du Plessis as Senior Independent Director; the review and changes to the Remuneration and Audit Committees; �� The opportunity for a more focused review of strategy with two meetings specifically dedicated to this, one in the Stratford store in October and the other more recently in February 2012;�� Further progress on developing the Group Risk Profile and aligning the risks and actions to the strategy outlined in November, which was a key focus for the Audit Committee. However, there is opportunity for us to broaden the debate and explore our understanding of risk, tolerance and appetite in 2012/13; and�� We held our first governance event in June 2011 which was well attended by major shareholders and representative bodies. They clearly welcomed the opportunity to discuss succession and the Board, remuneration and Plan A. We agreed to make this an annual event and the next one is scheduled for June 2012. We have also been actively engaged in the debate on diversity, remuneration and integrated reporting.

When we look at the more detailed table of responsibilities by area, which we put together last year, along with the feedback from the 2011/12 Board assessment, it is clear that there are opportunities for us to:

�� Improve papers and presentations, including context, content and timeliness; �� Create a better framework to facilitate constructive debate, especially in relation to strategy; �� Ensure a more strategic review of the forward agenda; �� Continue our engagement with senior management below Board level; and �� Following intensive induction on joining, review ongoing knowledge and training for all directors.

Action Plan 2012/13

The insights gathered from the Board review has resulted in a clear action plan for the year ahead. The actions address the key areas of succession, development and people, nature and scope of the Board debate, risk management, and shareholder engagement.

During the year, the Board plans to:

�� Continue to drive the agenda on succession planning and development of key managers; �� Continue to improve engagement with shareholders and representative bodies, and transparency and disclosure; �� Continue to review ongoing knowledge and training for all directors; �� Continue to drive better understanding of risk, risk tolerance and appetite; and �� Continue to review long-term forward agenda and papers and framework for Board discussion.



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Meggitt plc Page 44

In February 2012, the Board conducted a self-evaluation. The Chairman led a review and discussion to consider the Board’s performance against some high level objectives and its own terms of reference. The Audit, Remuneration and Nominations Committees have considered their own performance during the year. The Board and Committees were satisfied with their effectiveness. The performance of individual directors has been reviewed by the Chairman and Chief Executive in discussion with other non-executive directors and the non-executive directors have considered the performance of the Chairman, taking into account the views of the executive directors. An external advisor has been appointed to carry out an evaluation of Board effectiveness during 2012.

Melrose plc Page 50

As part of the performance appraisal process both the executive and non-executive Directors are required to complete performance questionnaires on an annual basis in relation to the Board, its three committees of audit, remuneration and nomination and their fellow Directors. All responses are reviewed and collated by the Company Secretary before further action is taken, as necessary. This process also helps to determine if any of the Directors have any specific training requirements.

The Chairman has held meetings with the Directors, including the senior independent non-executive Director, Miles Templeman, to discuss the performance of individual executive Directors and the Board as a whole. It was considered that the individual Directors and the Board as a whole were operating effectively. The non-executive Directors, led by Miles Templeman, the senior non-executive Director, are responsible for the performance evaluation of the Chairman and as part of this process also took account of the views of the executive Directors.

The Board are currently considering the impact on the performance evaluation process with respect to the new requirement under the UK Code to carry out externally facilitated performance evaluations at least every three years. The Company has therefore not yet carried out an external evaluation of its Directors’ performance.

Michael Page Page 49

The Board, as part of its commitment to ensuring effectiveness and evaluating its performance, together with that of its Directors and Committees, conducted an internal review comprising meetings between the Chairman and all other Board members, individually and collectively, concerning all aspects of procedure and effectiveness.

During this review, a number of matters were considered, including overall composition and diversity of the Board.Following completion of this part of the process, the Chairman met again with each of the individual Directors to discuss their views and to give feedback on their performance. The results of the evaluation were reported to the Board and where areas of improvement have been identified, actions have been agreed upon and training will be provided where required.

Millennium and Copthorne Hotels plc Page 51

During the year an internal Board evaluation process has been undertaken, facilitated by the Directors completing on-line questionnaires. The evaluation process focuses on key themes including:

�� Board composition and expertise �� The operation of Board Committees �� Strategic and operational oversight �� Risk management and internal controls �� Succession planning and Human Resource management

Feedback from the evaluation process is compiled by the Company Secretary and is considered by the Board. The Board plans to have an externally facilitated evaluation in 2012.The performance of executive and non-executive Directors is assessed annually by the Chairman. During the year, the Chairman and



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independent non-executive Directors met without the executive Directors in attendance. Evaluation of the Chairman is conducted by the independent non-executive Directors led by the senior independent non-executive Director.

Mitchells & Butler plc Page 31

An evaluation was conducted by the Company Secretary on behalf of the Board in respect of FY 2012, involving the use of questionnaires and discussion. The evaluation covered three areas, first the Chairman, secondly the Board as a whole and thirdly audit-related activities.

Mondi plc Page 60

Following the 2010 external review conducted by Boardroom Review an action plan was agreed that has been reviewed and monitored during 2011. In response to the agreed action plan, during the year a formal review by the Boards of executive succession was undertaken and the joint chairmen met with the chief executive officer on a number of occasions to discuss the proposals. The Boards had the opportunity during 2011 to consider the current and future composition of the Boards and committees with the retirement of Colin Matthews at the conclusion of the annual general meetings and the process for the appointment of his replacement. Suggestions regarding development opportunities have also been implemented. For 2011 an internal review of the Boards, committees and individual directors was undertaken by the joint chairmen with support from the company secretaries. The senior independent director facilitated the review of the performance of the joint chairmen. The evaluations were conducted through a series of questionnaires and interviews. The results were reviewed by the DLC nominations committee and an action plan drawn up that was considered and approved by the Boards.

The key themes arising from the 2011 review were:�� A continued focus on director development and training in light of changing regulation and governance in both South Africa and the UK; and�� The inclusion in the rolling agenda of reviews on industry specifics to broaden understanding of the sector in which Mondi operates.

The Boards continue to benefit from the annual review process, the results from which help guide the future focus of meeting agendas and behaviours.

Morrison Supermarkets plc Page 40/41

The performance of the Board, its committees and its Directors are assessed and appraised regularly. The Chairman is responsible for monitoring the performance of the Chief Executive, who in turn is responsible for monitoring the performance of the Executive Directors.

Independent Board review

A full independent external review of the Board was carried out during the financial year by Boardroom Review (which has no other association with the Company). The review took the form of:

�� Confidential interviews with each of the members of the Board and the Company Secretary;�� A review of Board papers; and observation of Board and Board committee meetings

The effectiveness of the Board was considered within the context of three key criteria:

�� The Board’s ability to achieve its objectives, particularly with regard to the development of strategy, the oversight of risk and control, the monitoring of executive performance, and the protection of shareholder and stakeholder interests; �� The Board’s ability to work together effectively; and �� The Board’s ability to maximize its use of time.



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The conclusions of that review were that the Board demonstrated six areas of strength: its approach to strategy, its knowledge of stakeholder views, its development of internal controls and risk management, its approach to remuneration, its positive culture and contribution, and its combination of formal and informal meetings throughout the year.

These matters were already in the Board’s schedule of matters for regular review, and the Nomination Committee and full Board have, since the report was received, considered both of these matters in detail. Detailed plans have been reviewed and approved.

The Board has accepted the recommendation of the Corporate Compliance and Responsibility (CCR) Committee that there will be a further evaluation process of the Board and its principal committees (Audit, Nomination, Remuneration and CCR) carried out in the current financial year by the Chairman, supported by the Chair of the CCR Committee and the Company Secretary, and in the following financial year, a further independently facilitated external evaluation.

The Board is satisfied that the arrangements for review and appraisal of the performance of the Board, its committees and individual Directors are appropriate. The Board is also confident that the initiatives which have been implemented already or which are in progress will enable the Group to satisfy the best practice recommendations of the Code in relation to Board evaluation.

During the course of the 2011/12 financial year, the Group has continued with its series of Board training sessions, presented by the Group’s external advisers on various key issues of importance to the Group. This training was designed to address matters of specific relevance to the Group and covered a range of topics.

Murray International plc Page 31

The Board and Committees have undertaken their annual performance evaluation, by means of general discussion the individual interviews between Chairman and the other Directors, to ensure that all Directors contributed adequately to the work of the Board and Committees. As part of the Directors’ evaluation process the training need of Directors, if any, were discussed and agreed. The Chairman has been satisfactorily evaluated by his fellow Directors. The Board is satisfied with its current balance, performance and the contributions of its Directors during the year. The Board intends to undertake an externally facilitated evaluation of itself during the next year.

National Grid plc Page 82

The annual performance evaluation process allows the Board to formally record, monitor and look to improve its performance in order to maintain high standards of governance.

After due consideration by Sir John [Parker], Sir Peter [Gershon] and the Nominations Committee of the requirement periodically to conduct an externally facilitated performance evaluation, it was agreed that, in this first year of Board transition including change of Chairman, an internally facilitated approach would be the most appropriate method of evaluation.The performance evaluation process was led jointly by Sir John and Sir Peter until Sir John’s departure and assisted by the Company Secretary & General Counsel. The process consisted of surveys for the Board and each Committee, and one-to-one meetings between each of the Directors and Sir Peter. A summary of the timeline and process is set out in the diagram below.



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The Board and Committee surveys were structured around the provisions of the Code and topics included composition, role and structure of the Board and Committees, meeting scheduling and operation, information and support, and training and development opportunities for Directors. This year all surveys were updated to reflect evolving best practice on diversity. For each question, a choice of four answers was provided and all Committee surveys included open questions to prompt comments and suggestions on how the Committee could enhance its performance, and influence and impact on the business.

Next plc Page 27

The performance of the Board, its non-executive directors and committees was formally evaluated during the year. The evaluation was conducted by directors completing a detailed questionnaire, the results of which were compiled by the Company Secretary for review by the Chairman and the Board as a whole. The Board acknowledged provision B.6.2 of the UK Corporate Governance Code requiring the appraisal be externally facilitated at least every three years. Whilst an externally facilitated appraisal was not held during the current year, the Board is committed to undertaking such a review in the next two years and has begun the search for a suitable third party to facilitate the process. The senior independent non-executive director appraises the performance of the Chairman through discussions with all the directors individually and, together with the Chairman, appraises the performance of the Chief Executive. The performance of the executive directors is monitored throughout the year by the Chief Executive and the Chairman.

Old Mutual plc Page 98

The Board conducts a review of its performance on an annual basis. The review is designed to ensure, among other things, that each director continues to contribute effectively and to demonstrate commitment to his or her role (including commitment of time for Board and committee meetings and any other duties). The results of the review are considered by the Board and appropriate actions taken, if necessary.

The review for 2011 was conducted externally through IDDAS, an independent Board effectiveness consultancy. It was undertaken in line with the Financial Reporting Council’s Guidance on Board Effectiveness, including the emphasis on a Board’s role in creating a high-performance culture and the behavioural aspects of Board performance, related to challenge and decision-making. Consequently, for the first time, the Board’s performance review included psychometric assessment of Board members. This was designed to provide useful collective insights into how to improve team dynamics, communication effectiveness and constructive challenge further within the Boardroom. This insight information was reviewed by the whole Board in a session facilitated by IDDAS and a plan to address recommendations arising from this review over the coming year is currently under development.

The Board’s performance review is now externally facilitated at least every three years in line with the UK Corporate Governance Code.



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Ophir Energy plc Page 39

In preparation for the Initial Public Offering of the Company’s shares in July 2011, the Board undertook a review of its membership and that of its principal Committees as well as a review of the terms of reference of each of those Committees. Following this review and the appointment of further independent Non-executive Directors, a majority of the shareholder appointed Directors elected to stand down immediately prior to the IPO. In view of the changes to Board and Committee membership during the year, the Directors have agreed not to undertake an evaluation of their performance for the period. The first formal evaluation will therefore take place during the second half of 2012 and details of the process undertaken and outcomes reached will be set out in the 2012 Annual Report.

Pearson plc Page 52/53

The Board conducts an annual review of its effectiveness. For the review of 2010, conducted in early 2011, the Board commissioned a Board effectiveness review from an independent third party provider, Boardroom Review (which has no other connection to the company). This review was designed to be forward looking; assessing the quality of the Board’s decision making and debate, its overall contribution to, and impact on, the long term health and success of the business and its preparation for future challenges.

The review covered a variety of aspects associated with Board effectiveness, including the Board’s ability to achieve its objectives, to work together effectively and the management of its time. This was carried out through confidential interviews with all members of the Board, through Board observation and through a review of selected Board papers.

Following the review a discussion document was produced to facilitate the Board’s discussion at their meeting in April, as well as to provide a reference point for the Board’s development and change.

The evaluation for 2010 indicated that the culture of the Board is dominated by a sense of cohesiveness and collaboration; the dynamics encourage openness, transparency and cooperation between executive and non-executive directors. During the review itself, the Board was seen to demonstrate several areas of strength, including:

�� A focused strategic approach;�� A thoughtful approach to control and risk;�� Strong executive leadership and corporate culture;�� A healthy alignment between performance and reward;�� A positive culture, dynamic debate, and leadership from the chairman; and�� The effective management of time and information.

The review also highlighted an opportunity for improvement, relating to the quality of discussion and debate over changes in the competitive environment, particularly with regard to technology and emerging markets. The Board addressed this issue at subsequent Board meetings during 2011, including holding a technology strategy session in October and arranging Board visits to emerging markets; China in June 2011, Brazil and India in 2012.

During the course of the year the executive directors were also evaluated by the chief executive on their performance against personal objectives under the company’s appraisal mechanism. A proportion (which for 2012 may be up to 20%) of the total annual incentive opportunity is based on functional, operational, strategic and non-financial objectives relevant to the executives’ specific area of responsibility. The chairman leads the assessment of the chief executive and the non-executive directors, led by the senior independent director, conduct a review of the chairman’s performance.

For the review of 2011, to be conducted during the early part of 2012, the chairman will meet with each of the directors, executive and non-executive, on a one to one basis and discuss the Board’s effectiveness and progress made against objectives. He will also take the opportunity to discuss with each director their individual training and development needs.



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Pennon Group plc Page 46/47

The Board has well developed internal procedures to evaluate the performance of the whole Board, each Committee, the Chairman, each individual Director and the Group General Counsel & Company Secretary. The evaluation procedure relating to the Board and its Committees was administered this year by an external governance consultancy, Lintstock. All participants’ views were sought via an online questionnaire on a range of questions which were specifically designed by the Chairman and the Group General Counsel and Company Secretary in conjunction with Lintstock to ensure objective evaluation of performance. Responses were then summarised and evaluated by Lintstock for the Board and each Committee to consider and determine whether any changes should be made to be more effective. A meeting between the Chairman, the Group General Counsel & Company Secretary and Lintstock was then held to discuss the high level findings of the evaluation and to consider them in the context of governance developments generally. While performance was again considered to be satisfactory, there were a number of suggestions made to refine the overall effectiveness of the Board which the Board agreed should be introduced over the following months when appropriate. For example it was agreed that performance could be improved further through a number of minor changes to Board reports and discussions at the beginning of each meeting on topical issues.

The Chairman’s performance was evaluated separately by the Non-executive Directors, led by the Senior Independent Nonexecutive Director. The Chairman’s other significant commitments outside the Group have not changed during the year and the Board is satisfied that such commitments do not prejudice the Chairman’s performance in relation to his Group role.

Persimmon plc Page 33

The Board undertakes a written self-evaluation of its performance on an annual basis. The Group Company Secretary provides the Chairman with a report on the Board’s self-evaluation responses. The Chairman makes recommendations to the Board where appropriate to improve Board procedures and governance. In the past this led to the introduction of the Board’s annual strategy meeting, together with revised agendas and processes to enhance the management and governance of the Company. No new recommendations were made for improvements in the Board’s procedures during 2011.The Chairman undertakes annual verbal evaluation of the executive Directors’ performance. The non-executive Directors undertake a verbal annual performance evaluation of the Chairman, taking into account the views of the executive Directors. The Chairman undertakes an annual verbal evaluation of the non-executive Directors.

The Board will be carrying out an externally assisted Board evaluation during 2012 in accordance with Code provision B.6.2.Progress report on 2010 evaluation recommendations

Action Progress

More strategic discussion. In 2010, our Board spent 15% of its time in Board meetings considering strategy. In 2011, this had increased to 32% following the introduction of a dedicated strategy day in May, a half day in November and regular strategic ‘deep dives’ at other Board meetings.

Articulate our risk appetite and significant risks more effectively. The Board Risk Committee undertook a review of the Group’s risk framework during the year as a consequence of which, our Board has a clearer understanding of its attitude to the various risks facing the enterprise. A full report is given by the Board Risk Committee on pages 88 and 89.

Revisit the Group’s delegated authorities so the Board uses its time more effectively.

A new delegated authority matrix was approved by out Board in November 2011. A full report is also available in the Board Risk Committee’s report.



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Focus more on succession planning. In 2010, the Nominations Committee spent 75% of its time leading searches for the new Chairman and the two new Directors appointed in early 2011. It therefore spent considerable time engaged in the practical application of Board Succession planning but little time on wider succession planning. In 2011, the Nominations Committee has continued to focus on succession for our Board but has widened its remit to the management layer below the Board. In addition, from 2012 onwards, our Board will receive two reports a year from the Group Head of Human Resources which will cover succession planning for the entire organisation.

The Chairman has discussed with all Directors their requirements for professional development and training and where appropriate this has been provided to Directors. All Directors have access to the advice and services of the Group Company Secretary and may also seek independent professional advice and training at the Company’s expense, if so required to carry out their duties.

The Audit Committee, Remuneration Committee and Nomination Committee all undertake a written or verbal self-evaluation of their performance each year and as a result of such evaluations a number of procedural changes have been made to Committees’ agendas and procedures to improve the flow of information to Directors. As an example, Group Head Office Directors in charge of major support functions, such as IT and Health and Safety have made presentations to the Audit Committee during the past year.

Petrofac Limited Page 75

I believe that your Board should be continuously trying to improve its effectiveness. The UK Code requires me, however, to evaluate Board performance once a year. In 2010 we conducted an externally facilitated Board evaluation which resulted in some significant recommendations for improving the Board’s performance.

This year, given that we are a Board in transition, I carried out one-to-one interviews with each Director towards the end of 2011 and early 2012, using a set of pre-defined questions. These questions aimed to address the activities and responsibilities of the Board as well as the Board committees. Each interview gave sufficient time for each Director to raise any areas of concern with me, plus the opportunity to discuss any topics relating to our Board’s performance and areas for suggested development.

The Secretary to the Board and I have collated the results of these interviews into a report for the whole Board. This was presented at the end of February 2012 and I will report on the outcome of this work in next year’s report. My appraisal was conducted by Rijnhard van Tets, our Senior Independent Director. Rijnhard did this through a series of interviews with the Directors before meeting with me to present feedback.

Playtech plc Page 53

The Board is committed to an ongoing evaluation process of itself and its committees to assess their performance and identify areas in which their effectiveness, policies and processes might be enhanced. The Chairman and the Chief Executive Officer, in discussion with the senior non-executive director, intend to undertake a review of the performance of individual directors. The senior non-executive director will consider the performance of the Chairman, taking into account the views of the executive directors.

Newly appointed directors can expect a detailed and systematic induction on joining the Board. They meet various members of senior management and familiarise themselves with all core aspects of the Group’s operations. On request, meetings can be arranged with the major shareholders. In 2011, the Board conducted a site visit in Nicosia, Cyprus in July 2011 to view the operations of PT Turnkey Services Limited that are conducted from that location.



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Polymetal International plc Page 77

No evaluation of performance of the Board, its Committees and individual Directors was performed in 2011 due to the short time from admission to the year end (as required under B.6.1).

Premier Oil plc Page 48

The Board believes that there is benefit in the periodic involvement of an independent external facilitator in the annual Board evaluation process, as this brings independent perspective to the process. It is the Board’s current practice to engage such an external facilitator every two years. During 2010, the Board worked with an external facilitator to conduct the annual evaluation review.

During 2011, the Board and committee evaluations were facilitated by the Chairman. The evaluation comprised a written questionnaire and a series of one-to-one interviews by the Chairman with all directors. The questionnaire and interviews covered a number of key areas including strategy, succession planning, Board size and composition, the roles and responsibilities of the Board and its committees, risk management and the relationship between the Board and management. The results of the reviews were considered by the Chairman and the committee chairmen and were then discussed with the relevant committees and collectively by the Board as a whole.

The performance of individual non-executive directors was evaluated by the Chairman, with input from the committee chairmen and the other directors. The performance of the Chief Executive and other executive directors was evaluated by the Chairman and non-executive directors.

No major issues arose from the evaluation process and the directors have concluded that the Board and its committees operate effectively. Recommendations were made to further enhance the performance and effectiveness of the Board and a process of continuous improvement is now being led by the Chairman.

Provident plc Page 63

Following the external Board performance evaluation in 2010, the Board completed the ninth evaluation of its performance in November 2011 and that of its committees and individual directors. The process was carried out by means of an online questionnaire service developed by Independent audit Limited. The process included confidential, unattributable, online questionnaires completed by each director, covering corporate governance; development of strategy and alignment with risk; Board and committee effectiveness, composition, development and succession planning; Board operation and dynamics; collective and individual capabilities and contribution; management information and operational oversight.

The results of the evaluation, which were discussed by the Board as a whole at its meeting in December 2011, confirmed that the Board of directors was balanced and no significant issues were identified. However, the following actions were identified and will be fully considered in 2012:

�� In light of the growing significance of vanquis Bank to the group’s performance, a detailed review of the senior management succession options will be carried out and this will include an assessment of whether it is necessary to appoint an additional executive to the Board in the future.�� Allocation of more time for the audit committee meetings around the interim and full year results, possibly involving additional meetings.�� Company Secretary to assist directors with time management on Board and committee meeting dates.

A performance evaluation of the Board, the Board committees and individual directors will continue to be conducted annually, although the process for such evaluations will be reviewed by the Board on an ongoing basis in order to optimise the process.

We will continue to carry out an external evaluation every three years, the next such evaluation to be carried out in 2013.



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Prudential plc Page 116

Prudential continued its programme of annual evaluation of the performance of the Board and its Committees in respect of 2011, in line with the requirements of the UK Code. The aim is to continue to improve the effectiveness of the Board and its Committees and enhance the Group’s performance.

The review was carried out by an external evaluator, Dr Tracy Long of Boardroom Review, in consultation with the Chairman, the Senior Independent Director and the Group Chief Executive. Boardroom Review has no other connection with the Company. The findings of the review will be discussed by the Board in March and an action plan will be implemented during the year.

In addition, the performance of the non-executive directors and the Group Chief Executive is evaluated by the Chairman in individual meetings. The Chairman also leads the non-executive directors in a performance assessment of the executive directors and the Senior Independent Director leads the non-executive directors in a performance evaluation of the Chairman.

Executive directors are subject to regular review and the Group Chief Executive individually appraises the performance of each of the executive directors as part of the annual Group-wide performance evaluation of all staff.

PZ Cussons plc Page 44

Composition and independence

As at the date of this report, the Board of Directors has 11 members comprising the Non-executive Chairman, the Chief Executive, three other Executive Directors and six Non-executive Directors. The names of the Directors together with their biographical details are set out on pages 32 to 33. The size of the Board allows individuals to communicate openly and to make a personal contribution through the exercise of their individual skills and experience.

The Non-executive Directors have been appointed for their specific experience and expertise and are all considered to be independent of management and free from any business or other relationship which could materially interfere with the exercise of their independent judgement. Mr Harvey is a Non-executive Director of Jardine Lloyd Thompson Plc, which acts as insurance broker to the Company. Mr Lewis is a former partner of Addleshaw Goddard LLP, which acts as legal advisor to the Company. The level of fees payable to each of Jardine Lloyd Thompson Plc and Addleshaw Goddard LLP is not material and the Board is wholly satisfied that it is appropriate to designate each of Mr Harvey and Mr Lewis as independent. Neither of them participated in any way in the provision of services by the relevant supplier to the Company. In addition, in order that his independence is not compromised, if at any time the Board or a Committee of the Board is considering any matter concerning one of the suppliers, it has been agreed that the relevant individual will withdraw from that meeting until such matters have been dealt with.

Mr Lewis is the Senior Independent Non-executive Director and in this capacity he is available to shareholders if they have concerns which contact through the normal channels of Chairman, Chief Executive or Group Finance Director has failed to resolve or for which such contact is inappropriate. After eight years’ service to the Board, with effect from the 2012 Annual General Meeting Mr Lewis will retire and Mr Steel will be appointed Senior Independent Non-executive Director.

Non-executive Directors may serve on the Boards of other companies provided that this does not involve a conflict of interest and that the appointment does not restrict their ability to discharge their duties to the Company in any way.As set out in the Report of the Directors, the Board has resolved to comply with the provisions of the Code and each Director will seek re-election annually.

The Executive Directors’ service contracts and the letters setting out the terms of appointment of the Non-executive Directors are available for inspection at the Company’s registered office during normal business hours and at the Annual General Meeting.



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Diversity

The Company supports the Code provision that Boards should consider the benefits of diversity, including gender, when making appointments and is committed to ensuring diversity not just at Board level but also across the Company’s senior management team, not least because it believes that business benefits from the widest range of perspectives and backgrounds. The Company’s aim as regards the composition of the Board is that it should have a balance of experience, skills and knowledge to enable each Director and the Board as a whole to discharge their duties effectively. Whilst the Company agrees that it is entirely appropriate that it should seek to have diversity on its Board, it does not consider that this can be best achieved by establishing specific quotas and targets and appointments will continue to be made based wholly on merit.

Further details on diversity within the business are set out in the CSR report on pages 20 to 31.

Performance Evaluation

Effectiveness reviews of the Board and its committees are carried out annually. The results are reviewed by the Chairman of the Board or Board committee, discussed in a formal meeting and any appropriate recommendations are recorded and acted upon.

The review process which was undertaken during the year concluded that all Directors continue to contribute effectively and with proper commitment, devoting adequate time to carry out their duties. The performance of the Non-executive Directors is evaluated separately by the Executive Directors. The Remuneration Committee reviews Executive Directors’ performance with guidance from the Chief Executive (other than in respect of his own position).

QinetiQ plc Page 37

In accordance with the UK Code, QinetiQ continues each year to evaluate the performance of the Board and its Committees.

During the year, the Board appointed Independent Audit Limited to undertake a review of the effectiveness of the Board and to facilitate a review by the Audit Committee of its effectiveness. Independent Audit Limited had no other connection with the Company.

For the Board review, Independent Audit conducted interviews with all Board members and the Company Secretary that were wide ranging and covered all aspects of Board performance. The report summarising their findings and detailing recommendations was discussed at the May Board meeting.

The overall conclusion was that the Board is effective in its fulfilment of its governance responsibilities. The report identified areas where improvements could be made and these are being incorporated into the Board’s objectives for the coming year. They include:

�� Achieving greater clarity about the role of the Board in relation to risk strategy and the oversight of risk management;�� Providing more opportunities for the Non-executive Directors to spend time in the business and meet members of senior management;�� Ensuring that the information provided to the Board is fully in line with its needs to allow tracking of progress against strategic objectives and assessing performance, tied into both financial and non-financial drivers of the business; and�� Ensuring effective oversight of the US business given that it is held through a Proxy Agreement.

The detailed, externally-facilitated review of the Audit Committee’s effectiveness was conducted through an in-depth web- based questionnaire, with the results being analysed and reported by Independent Audit. A similar review looked closely at the Board’s approach to risk governance. The reviews have resulted in a number of changes in approach, including the setting up of a Risk Committee of the Board to help ensure an effective focus on risk monitoring and risk management oversight.



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Reckitt Benckiser plc Page 25

The Board maintains an ongoing review of its procedures and its effectiveness and those of its Committees throughout the year. It carries out a formal and rigorous internal evaluation of its performance, that of its Committees and those of individual Directors to assess such performance with a view to improving the effectiveness of the Board and its Committees and Reckitt Benckiser’s overall performance.

For both the 2010 and 2011 Board evaluations, the Chairman identified the areas in scope for a free-form discussion. To encourage debate, open questions were provided prior to the meeting together with an invitation for thoughts on how governance processes could be improved and how the Non-Executive Directors could add value to executive management. Where appropriate, comments were submitted ahead of the meetings.

The scope of the evaluations for both years focused on strategy and the strategy review process; risk management and internal controls; succession planning; communication with management; engagement with investors and external stakeholders; Board meeting processes and professional development and training. The outcomes from each evaluation were recorded and action taken or identified as to be taken. At the 2011 Board evaluation, the outcomes and actions identified from the 2010 evaluation were reviewed and progress on each matter appropriately recorded. These outcomes and actions will also feed into the externally facilitated evaluation to be conducted in 2012 to aid benchmarking and the measurement of progress against prior years.The evaluations of the Board Committees were undertaken with the use of detailed internally generated questionnaires which included a section for additional comments. The scores and additional comments were collated for subsequent discussions.The evaluation of the Chairman’s performance is undertaken by the SID with input from his fellow Non-Executive Directors and the CEO and CFO. The Chairman evaluates each Director’s performance through one-to-one discussions with other Directors. The Remuneration Committee also reviews the performance of the Executive Directors and other members of the Executive Committee.

Reed Elsevier plc Page 56

In 2011 the Corporate Governance Committee appointed an external evaluator (Consilium Board Review), who had no other connection with Reed Elsevier, to carry out an independent evaluation of the Boards’ effectiveness. The external evaluator used questionnaires completed by all directors, had meetings with each of the directors and attended a meeting of the Boards. The Chairman also held interviews with each member of the Boards to individually discuss Board effectiveness and the review of the Chairman was led by the senior independent director. The operation and constitution of the Boards and their Committees were also evaluated and the findings reported to the Boards.

The Committee and the Boards have fully reviewed and discussed the findings of the independent evaluation of the performance of the Boards and their Committees and the individual directors. The senior independent director also led the Committee’s review of the assessment as it related to the Chairman during which he absented himself from the meeting. Based on the assessments of each director and on the Board effectiveness review, the Committee believes that the performance of each director continues to be effective and that they demonstrate commitment to their respective roles in Reed Elsevier.

The Committee also believes, based on the review, that the Boards function effectively and collaboratively and with an appropriate level of engagement with management. In seeking to further its effectiveness, the Boards will work to ensure they achieve an appropriate balance of focus among financial, operational and strategic matters at each Board meeting, in line with the recommendations of the review.

Renishaw plc Page 50

The Board has established a formal process, led by the senior independent director, for the annual evaluation of the performance of the Board. This includes the completion of a questionnaire designed and approved by the Board to provide a framework for the evaluation process. It is the role of the senior independent director to summarise the responses and discuss them with individual directors and with the Board as a whole. The committees undertake a similar evaluation process led by the chair of the relevant committee.



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Rentokil Initial plc Page 29

The Board performance evaluation involved an external independent facilitator engaging with the chairman and company secretary to set the context for the evaluation. Respondents completed online questionnaires addressing the performance of the Board, committees, chairman and individuals. The anonymity of all respondents was ensured in order to promote an open and frank exchange of views. The review addressed the following issues:

�� Board composition, expertise and dynamics �� Board support, time management and Board committees �� Strategic, operational and risk oversight �� Succession planning and human resources �� Priorities for change

The Board considered the output from the review at a meeting earlier this year. The findings indicated that the Board and individual director performance were effective.

Board composition and dynamics were highly rated, subject to bringing about greater diversity which was in progress. Information provided to the Board was highly rated as was strategic and operational oversight. Risk oversight was considered to have shown continued improvement. The continued focus on securing the operational performance of the City Link business was regarded as the key priority for 2012. The Board and committees also agreed a number of practical enhancements to regular meeting content.

Resolution plc Page 86

With the aim of continuously improving the effectiveness of the Board and its Committees, the Board undertakes an annual review of its performance, and of the performance of the Chairman and each individual director. In 2009 and 2010, the review process was facilitated by an external adviser. The Board resolved to carry out an effectiveness review exercise itself in respect of 2011 with some assistance from the Head of Secretariat. During the year, the Board took action based on proposals which had emerged from the 2010 evaluation process.

The review of Board and Committee performance in 2011 was led by the Chairman and, in respect of the Chairman’s performance, by the SID. A series of themes and questions was proposed by the Chairman based on the outcome of the previous evaluation exercise and on matters having an impact on the performance of the Board during the year. These were debated by, and the conclusions recorded on behalf of, the Board, and resulted in an action plan for implementation in 2012. The Board concluded that it and its Committees operate effectively. The Chairman determined that each of the directors makes an active and valuable contribution to the governance of the Group.

Rexam plc Page 61

All directors, including the chairman, receive a formal performance evaluation to which all other members of the Board have the opportunity to contribute. The Board’s 2010 performance evaluation was led by an external independent consultant. In 2011 the annual evaluations of the non-executive directors, senior independent director and chief executive were led by the chairman and supported by the company secretary. In view of the announced change in the chairmanship of the Company, a formal evaluation of the chairman’s performance was not undertaken. The chief executive led the evaluation of the finance director. The chairmen of the respective committees reviewed the performance of their own committees.

The chairman met with the non-executive directors during 2011 to discuss the evaluation of the Board and succession plans.In 2011 each director completed a questionnaire scoring his or her response to statements focusing on the areas identified below and commenting more specifically as appropriate.

Achievement in 2011 of actions identified through the Board performance evaluation in 2010



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Strategic planning Focus on regular reporting to the Board on the progress of strategic issues and actions

Risk management Enterprise risk management function provided regular updates to the Board; Finance Director provided regular updates to the Board on key risks and mitigation measures

Financial and non-financial monitoring New format of financial report; Development and understanding of the Group’s balanced scorecard

Talent management and succession planning Chairman designate and non-executive director appointed in accordance with succession plans; Review of executive leadership team

Board development Participation in Board updates focusing on gender diversity in the Boardroom, the UK bribery Act and changes to the Takeover Code

The results of the 2011 Board performance evaluation were presented to the Board. The evaluation focused on the effectiveness of the Board and its main committees. The directors shared the view that, following this comprehensive review, the Board and its committees continue to operate effectively. However, the Board has agreed that during 2012 the following processes will be further developed and improved:

Board performance evaluation 2011

Board structure Strategy

Board meetings and administration Customers and suppliers

Talent management and succession planning Financial and non financial monitoring

Risk Management

Process 2012 actions following 2011 evaluation

Strategic planning To further refine the strategic review process

Risk management To maintain a clear focus on risk anticipation, risk management and crisis management, aligned to the challenges of the global economic climate

Non financial monitoring To progress non financial monitoring and reporting through the Group’s balanced scorecard

Talent management and succession planning To continue to review and contribute towards succession planning, consideration of the talent pool and people development

Board development To further develop the way in which the Board works together as a unit

Customers and suppliers To continue to develop knowledge of and focus on the Group’s customers and suppliers

A full performance evaluation of the Board and its committees will continue to be conducted annually and an independent external assessment will take place at least every three years as recommended by the Code.

Rightmove plc Page 25/26

The Board conducted a Board evaluation exercise in quarter four of 2011 which was led by the Chairman, assisted by the Company Secretary. All directors provided feedback on the performance and operation of the Board in its committees. The results were discussed in the Board meeting in December 2011. The performance of the individual directors was evaluated by the Chairman with input from all directors. At a meeting Chaired by Jonathan Agnew, Senior Independent Director, (without presence of the Chairman), the Board



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provides input into and reviewed the performance of the Chairman.

Following these evaluations the directors have concluded that the Board and its committees are operating effectively and that each director is contributing effectively and demonstrates commitment to their role.

The Board has agreed to organize an externally facilitated Board evaluation at least once every three years and will take some time to review the external marketplace over the next year to determine an appropriate facilitator and progress alternatives with the aim of introducing an external evaluation in 2012.

Rio Tinto plc Page 70

An annual exercise is undertaken to evaluate the effectiveness of the Board, Board committees and individual directors.For 2011, the Board evaluation process was led by the chairman and managed by the company secretary. Questionnaires were completed by each director, the results of which informed discussions between the company secretary and each individual director. The chairman personally appraises the performance of non-executive directors each year and provides feedback on each individual’s performance and contribution. The Board considered the output from its performance evaluation. Actions included:

�� Regular discussion on Rio Tinto’s strategic position relative to its peers, and high risk topics, such as iron ore pricing, Simandou and Oyu Tolgoi; �� Continued development of directors’ knowledge and understanding of the business and operating environment through the site visits and specific training; and �� Striving for an optimal allocation of human resources, particularly in non-OECD locations where the Group’s dependency and exposure is increasing.

A similar process was followed for the Board committees. Actions included:

�� Mapping the Group’s key risks to the remit of each Board committee and ensuring agendas maintain a focus on these risks; �� Continually improving safety metrics with a goal of zero harm; and �� Maintaining a focus on executive succession planning.

The performance of the chairman is evaluated by the non-executive directors, with input from members of the executive. The process is led by the senior independent non-executive director. The chief executive undertakes a performance evaluation of the other executive directors, with input from the chairman and the non-executive directors. Based upon the results of these evaluations, it was concluded that the Board and its committees are operating effectively and that the individual directors’ performance continues to be effective and demonstrates the level of commitment expected by Rio Tinto.

RIT Capital Partners plc Page 18 & 91

The non-executive Directors participate in discussions regarding the Company’s strategy and performance. They also meet once a year without Executive Directors presents to consider the conclusions of the annual Board evaluation exercise and the performance of the Chairman.

The Code requires the Company to report on the means by which performance evaluation of the Board, its committees and its individual Directors has been conducted. In the year to 31 March 2012, a questionnaire was completed by the Directors covering the processes, efficiency and composition of each of the Board, its committees and the Directors. The summarised responses were evaluated and considered by the Board and separately by the non-executive Directors in a meeting without any Executive Directors being present. Under the Code, the evaluation of the Boards of FTSE 350 companies is required to be externally facilitated at least every three years.



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Rolls-Royce Holdings plc Page 48

In the autumn of 2011, JCA Partners LLP conducted a Board review which took the form of a facilitated self-evaluation by the Board. The review included confidential, unattributable, one-on-one interviews with each Board member, the incoming Finance Director and the HR Director which covered corporate governance, Board effectiveness, strategy development, risk management and Board and committee organisation, composition, operation and dynamics. All Board members unanimously agreed that the Board was working as an effective whole. The Board reviewed the way it had operated during the Qantas incident and conducted a thorough ‘lessons learnt’ exercise. Following the arrival of a new Chief Executive, and Finance Director, the Board is reviewing future key performance indicators and areas for discussion, which will enable it to assess how the agreed Group strategy is being executed. The Board is reviewing the committee structure to optimise its focus on safety. Also, the nominations committee will give increased focus to long-term succession planning for both executives and Board members.

Rotork plc Page 38

The directors consider that the Board is fully effective and functions well. The Chairman and the Chief Executive have worked closely over recent years to ensure that the best use of the time and talents of the Board are applied at Board meetings. This has resulted in more open discussion and interaction by the Board rather than spending time on verbal reporting into the Board meeting by executive management which can be achieved through written reports. In particular, more time is now spent on strategic discussion and through the year there is a cycle of discussion and further development and refinement of Group strategy.Non-executive directors constructively challenge as well as scrutinise management and business performance levels. This is done in the context of a unitary and unified Board working together for the long term success of the Company.

During the year under review an externally facilitated Board performance evaluation confirmed that directors are individually satisfied with the quality of information that they are provided with and feel they are all able to fully contribute to Board discussion.

The Royal Bank of Scotland Group plc Page 260

The directors agreed that the 2011 evaluation of the Board and its key Board Committees be conducted internally, led by the Group Secretary. The Group Secretary undertook a formal and rigorous evaluation by:

�� Circulating a detailed framework of questions to all directors and regular meeting attendees; �� Collating the responses and conducting structured individual meetings with each director and regular meeting attendees; �� Discussing the outcomes and recommendations with the Chairman; and �� Agreeing the recommendations and outcomes with the Board and Board Committee members.

Amongst the areas reviewed were Board role and composition, Group strategy, risk management, Board meetings and processes, external relationships, Board committees, directors’ support and information, and continuing professional development.

Findings of the Performance Evaluation 2011

The Board has considered and discussed reports on the outcomes of the evaluation and is satisfied with the way in which the evaluation was conducted.

The evaluation concluded that the Board is strong, operating effectively and meeting its objectives. Headed by an excellent Chairman, the Board is currently viewed as an appropriate size, although Board composition should be kept under continual review. Meetings are of an appropriate length and frequency with sufficient opportunity for debate and discussion, although it was suggested the Board continue to make use of evening and lunch slots to facilitate further debate and discussion on key areas such as strategy and risk management.

A summary of the objectives and actions proposed to be taken to address the objectives arising from the 2011 performance evaluation is set out below:



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Key themes Proposed action

Board role and composition In light of John McFarlane stepping down from the Board in March 2012 the composition of the Board and Board committees should be reviewed to ensure the current balance of skills, experiences, independence and knowledge is maintained.

Strategy The Board should continue the focus on Group strategy in the short, medium and log term to ensure the strategy is appropriate and sustainable in the current environment.

Risk management Risk reporting should continue to be developed to ensure the Group Board has adequate oversight of risk management and risk appetite.

Succession planning Group executives should be invited to the Group Board to discuss bench strength and succession planning in their respective functions.

Individual director and Chairman effectiveness reviews

Within the performance evaluation questionnaires, directors were asked to provide feedback on their fellow directors. This feedback was shared with each director by the Chairman, who met with each director individually to discuss their own performance and ongoing professional development. Separately, the Senior Independent Director canvassed the views of the executive directors and met with the non-executive directors as a group, without the Chairman present, to consider the Chairman’s performance. Feedback was sought on governance and stewardship of the Group, relationships with key external and internal stakeholders, execution of the Group’s Strategic Plan and delivery of value and return to shareholders. The Senior Independent Director also canvassed views from United Kingdom Financial Investments Limited (UKFI), the FSA and the Asset Protection Agency. The results of the Chairman effectiveness review were then shared with the Chairman who agreed to consider the points raised and provide separate responses in due course.

Royal Dutch Shell plc Page 83/84

The Board carried out a performance evaluation of itself, its Committees, the Chairman and each of the Directors. This was led by the Nomination and Succession Committee and, unlike the process in 2010, was conducted without the assistance of an external facilitator. In accordance with the Code, it is the intention that the evaluation process will be externally facilitated every three years.

The process consisted of the Chairman holding one-to-one interviews with each of the Directors. The Directors were asked to consider certain specific matters in advance, including the overall performance and composition of the Board, strategic issues and key concerns for 2012. The Deputy Chairman and Senior Independent Director conducted a separate review of the Chairman’s performance which involved each Director completing a confidential questionnaire and an offer to meet and discuss any particular issues. A review of each Board committee was undertaken by the Committee Chairmen which involved the completion of a confidential questionnaire by respective Committee members.

The evaluation of the Board and Board Committees was discussed by the full Board. The Chairman reported on the views of the Directors in relation to Board processes, the nature and tone of discussions, strategy oversight, risk management and internal control, Board committees, succession planning and other such matters. The Board was positive about the progress made in a number of important areas and the Executive Directors in particular welcomed the input on strategic and operation matters from the Non-executive Directors. It was concluded overall that the Board and its committees continued to operate effectively.

The evaluation of the Chairman was discussed by the full Board in the Chairman’s absence. The Deputy Chairman and Senior Independent Director reported that Directors had evaluated the Chairman’s performance in 2011 to be strongly positive. He reported that the Executive Directors had in particular found the Chairman to be supportive, while the Non-executive Directors had commented that they thought he led them and the Board well.



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RSA Insurance Group plc Page 47

In 2010, there was a formal and rigorous review of the Board, its committees and their effectiveness which was undertaken by an external consultancy. In 2011, the review was carried out internally, starting with the committees and concluding with the Board itself.

The 2011, Board review was discussed in December 2011 and took place at the Board Strategy away day in January 2012, to reflect the fact that, in accordance with the programme of planned changes to the Board, one new Executive Director joined the Board in July 2011, two new Non-Executive Directors joined the Board in October 2011 and the Board had a change of Group CEO from 1 November 2011. This allowed a sufficient period of time for the new Board members to provide input to the review process.

Reviews of the Board committees took place in November and December 2011.

The evaluation of the Group Audit Committee focused on the composition of the committee and the number and length of meetings held each year, the information received by the committee and its timeliness and the effectiveness of the committee’s reviews of specific areas. Priorities for change were agreed to be preparatory work for Solvency II, the need to work more closely with the subsidiary audit committees and the executive and the main challenges facing the committee over the next three years, which included change and uncertainty in the regulatory regimes and responding to the risks inherent in a continuing uncertain global economic environment.

Following the Board Risk Committee’s review of its effectiveness, action is being taken to address the length of the agenda and quantity of information received by the Board Risk Committee to enable the committee to focus on key issues such as Solvency II and to be more forward looking.

The evaluation of the Remuneration Committee identified some areas for improvement relating to the reporting of remuneration matters to the Board and the need to have a coordinated training programme for committee members to maintain their knowledge of executive remuneration matters. The committee agreed to progress these actions.

SABMiller plc Page 62

A formal and rigorous evaluation of the performance and effectiveness of the Board and its principal committees is carried out each year, led by the Chairman, with input from the Senior Independent Director, and in consultation with other directors and the Company Secretary. Given the imminent directorate changes, it was not considered appropriate to carry out an externally facilitated performance evaluation for the year under review.

The performance of the Chief Executive is reviewed by the remuneration committee and this review is shared with and considered by the Board. The performance of the Chief Financial Officer is reviewed by the Chief Executive and the remuneration committee, and reported on to the Board by the remuneration committee. Each non-executive director’s performance is evaluated by the Chairman, in consultation with the Senior Independent Director, who in turn consults with the executive directors and the Company Secretary. The Chairman’s performance is evaluated against the same criteria by the Senior Independent Director, the non-executive directors and the Company Secretary, taking into account the views of the executive directors.

In considering the contribution of individual directors for the year under review, performance was assessed against the company’s selected criteria of strategy, expertise in their field, ethics and governance factors, commitment, profile, knowledge of the industry, and team contribution, culminating in an overall contribution rating, while recognising the importance of the different roles played by individual directors in bringing a balanced overall view to the Board. In reviewing the performance of the Board and its committees, the Chairman and the Senior Independent Director were aligned in their conclusion that, measured against the principal duties expected of it, the Board and its standing and ad hoc sub-committees continued to operate effectively and to meet in full their obligations to support management, to monitor performance, and to maintain the Board’s strategic oversight.In a meeting of the Chairman, the Senior Independent Director, the committee chairmen and the Company Secretary, the results of the performance and effectiveness evaluations conducted in respect of the Board, each of the directors, the Chairman, the Senior Independent Director and each of the Board’s four standing committees were reviewed. Regarding the Board committees, each of the committee chairmen present expressed their views regarding the operation of his committee against its terms of reference and the performance and effectiveness of that committee. These views were discussed in an open and constructive manner with



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recommendations arising from the discussions being brought forward to the Board and the respective committees. The conclusion of this meeting was that the Board was balanced and operated effectively and that the Board committees discharged effectively their duties under their respective terms of reference.

The results of the performance and effectiveness assessment process as outlined above were reviewed in full and approved by the Board. Matters identified as requiring further consideration have been addressed, and in particular additional time continues to be made available in the Board’s agenda for focus on strategic matters by holding an ‘away day’ dedicated to strategy.All directors, except for those who are retiring, will be standing for re-election at this year’s annual general meeting. The Chairman confirms that each of the existing directors offering themselves for election or re-election continues to perform effectively and to demonstrate commitment to their role. In particular, the Chairman confirms that, in relation to each of the non-executive directors who will have served for over nine years, the Board is satisfied with his performance and has determined that the length of their service does not compromise their independence. The test of independence does not apply to Mr Bible.

The Board unanimously recommends to shareholders the election of Dr Clark as a director, in consequence of his appointment as Chief Operating Officer. The Board believes that Dr Clark is ideally qualified to succeed Mr Mackay. He has 22 years’ experience with the group and has been a member of the executive committee since 2003 when he was appointed as managing director of SABMiller Europe.

Sage Group plc Page 53

The Board recognises the importance of reviewing its practices and performance on a regular basis. To achieve this, the Board has evaluated its performance and that of its committees and individual members. In the past, the Board has evaluated its performance through the completion of detailed questionnaires and discussions between individual directors and the Chairman. The Code encourages the Board to seek the assistance of a third-party in its evaluation at least once in every three years. In the year under review, therefore, the directors were assisted in their evaluation by an independent third-party, Dr Tracy Long of Boardroom Review. Dr Long is entirely independent of the Group and performs no services for the Group other than assisting in directors’ evaluations. Dr Long met each of the directors for an in-depth interview and attended Board and strategy meetings to view the Board in action. She also reviewed the papers prepared for the Board. Following this review, she prepared a summary of the Board’s strengths and weaknesses, her observations and recommendations. These were shared with all members of the Board and discussed with the Chairman, Chief Executive and Senior Independent director. As a result of the review, the Board is considering practices in a number of areas.

Sainsbury, J plc Page 40/41

The Board agreed that the 2011 evaluation exercise should be facilitated by Manchester Square Partners (who had no other relationship with Sainsbury’s). The key objectives agreed with the Chairman were to ask the Board to assess itself by defining its own objectives and analyse how it was performing against these objectives across number of dimensions. The review was conducted through a discussion framework circulated in advance to Directors, followed by one-to-one in depth interviews with all Directors and the Company Secretary and a review of relevant papers. The performance of the Board Committees was also reviewed, and Directors provided feedback on each others’ contributions.

Manchester Square Partners’ report concluded that the Board was working effectively across many dimensions. The Board identified actions to develop some aspects of Board succession and management transition, and to strengthen further the focus on strategic initiatives.

Following last year’s external evaluation, the Board agreed that this year’s review should be carried out by the Company Secretary, and that the key objectives were to determine whether progress had been made on last year’s action points, to identify any emerging themes and to consider whether the Board and its committees were working effectively. A questionnaire was circulated to all Directors seeking their evaluation of a number of subject matters, including strategy, management transition, succession, Board culture and balance, meetings and processes, investor relations, risk management and Board committees. This was followed up in separate discussions with each of the Directors to take their detailed feedback on any emerging themes. The Company Secretary then presented the principal conclusions to the Board at a meeting convened for that purpose, and the Board discussed the key points and agreed certain actions.



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The Board agreed that good progress has been made on the action points from the 2011 evaluation, especially as regards the focus on the strategic debate which has become particularly important against the background of a challenging and changing market. Steps have also been taken to develop the transition plans at Operating Board level, culminating in the new roles for Roger Burnley and Helen Buck, and a number of internal promotions. The Board concluded that it was working well as a team and was benefiting from a broad range of skills and diversity, with a strong and open culture.

Various actions were agreed from this year’s exercise, including finding more opportunities for the Non-Executive Directors to meet other members of the management team and to learn more about them and their roles.

As part of the Board evaluation exercise, the Senior Independent Director reviewed the Chairman‘s performance with the other Directors and subsequently met him to provide feedback. The Chairman provided feedback to each Director on their individual contribution to the Board and considered their development priorities with each of them.

Schroders plc Page 46

The Board conducted an internal evaluation of its effectiveness and of the principal Board Committees using a Schroders-specific questionnaire. The questionnaire covered a number of areas including strategy, Group performance, risk management and succession planning. The responses were analysed and the principal findings were considered by the Board in March 2012.

The performance of the Chief Executive was considered by the Chairman’s Committee (see below). The outcome was discussed by the Chairman and the Chief Executive.

A meeting of the non-executive Directors, led by Andrew Beeson as Senior Independent Director, assessed the performance of the Chairman. He subsequently discussed the review with the Chairman.

The Board intends to use an external facilitator to conduct the evaluation of its effectiveness in respect of 2012.

Scottish Mortgage Investment Trust plc Page 23

The Nomination Committee met to assess the performance of the Chairman, each Director, the Board as a whole and its committees. Prior to the meeting each Director completed an evaluation form which they discussed individually with the Chairman. The appraisal of the Chairman was led by Mr MM Gray.

The appraisals considered, amongst other criteria, the balance of skills of the Board, the contribution of the individual Directors, the overall competency and effectiveness of the Board an its committees and the contributing professional development undertaken by Directors during the year. Following this proves it was concluded that the performance of each Director, the Chairman, the Board and its Committees continues to be effective and each Director and the Chairman remains committed to the company.

A review of the Chairman’s and other Director’s commitments was carried out and the Nomination Committee is satisfied that there were no significant changes to the Chairman’s other commitments during the year.

The directors are considering the merits of having the Board evaluation externally facilitated.

Segro plc Page 64

When the Board concluded its last external evaluation in 2008, it agreed to repeat the process on a three-yearly basis. Following a review of external facilitators, JCA Group was appointed to undertake an evaluation during the final quarter of 2011. JCA Group had no other connection with the Company. The evaluation was based upon input from all members of the Board, the Company Secretary and the Group HR Director. JCA Group presented the final report to the Board in December, which was followed by a discussion of the conclusions and recommendations. JCA Group confirmed to the Senior Independent Director that all information provided was a fair



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reflection of the feedback from the Directors and was not influenced inappropriately by the Chairman.

The review confirmed that the Board was effective, the quality of Board dialogue was good and that there was a climate of trust and transparency, with a strong level of challenge and no ‘group-think’. The Executive Directors were seen as being open and engaged, while the Non-Executive Directors brought a range of skills and experience, ensuring constructive debate.

A number of recommendations were made for the smooth running of Board meetings including identifying major items for discussion in advance of meetings and ensuring that adequate time is provided to discuss them. Sufficient time should also be set aside for monitoring progress in implementing the new strategy and ensuring it delivers shareholder value. The Directors continue to derive value from site visits and, for Non-Executive Directors, tours and meetings with employees below Board level help them to remain engaged with the business.

JCA Group commented on the performance of the three Board Committees and it was noted that each was performing effectively, but that the Nomination Committee would have to meet more frequently in the coming year to consider Board succession, diversity and the talent pipeline.

The table below sets out the action points identified in the internal Board evaluation carried out in 2010, the progress made during 2011, and the action points identified in the 2011 external evaluation.

The Senior Independent Director, with the Non-Executive Directors, led a performance evaluation of the Chairman. The Chairman, with the Non-Executive Directors, conducted a performance evaluation of the Chief Executive.

Board evaluation

Evaluation 2010 Actions taken in 2011 Evaluation 2011

Encourage the Non-Executive Directors to meet with Senior managers.

Presentations were given by the Group Insurance and Risk Manager, the Head of Treasury, the Head of Investor Relations and the Investment Director.

Continue to receive presentations for senior managers.

Arrange more site visits, especially for Non-Executive Directors.

Non-Executive Directors visited teams and assets in Düsseldorf, Munich, Berlin, Paris, Milan, Manchester and Slough.

Continue with the site visits, tours and meetings with local management.

Allocate additional time to the consideration of risks associated with strategy.

A Board risk workshop was undertaken as well as a review of catastrophic risks and mitigating actions. A Board meeting was devoted wholly to strategy. The Board also reviewed risk appetite.

The Board to dedicated time to review progress with strategy, including the portfolio disposal programme and to focus on the risk management processes that support the strategy.

Formalise the reporting on Bribery Act compliance.

Internal audit of Bribery Act compliance. Procedures put in place for ongoing monitoring.

The Nomination Committee to consider Board succession, diversity and to review the talent pipeline.

Serco Group plc Page 85/86

The Group recognises the importance of a comprehensive evaluation process for the Board and ensures that comments and recommendations are considered carefully and implemented where appropriate to ensure its continued development.

In 2011, the Board commissioned an external review completed by an independent consultant, who, it is confirmed, is not connected with the Company in any way. The objectives of the review were:

�� To provide an independent evaluation of the Board’s structure and composition, processes and decision-making, performance and outcomes and alignment of the Board’s priorities to Company strategy, in line with UK corporate governance standards;



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�� To review the effectiveness of the Audit Committee, Nominations Committee and the Remuneration Committee; �� To provide insight into areas of strength and areas that would further increase the effectiveness of the Board and its Committees.

Each Board Member completed a detailed, structured questionnaire about the Board’s effectiveness and was then interviewed to clarify views where necessary and discuss common themes emerging from the research. The consultant interviewed the Company Secretary, a number of members of the Executive Committee and selected Company advisers to understand their perspectives on the Board’s effectiveness.

A presentation to the Board was given of the results of the evaluation on its conclusion.

The review concluded that the Board operates effectively under strong leadership from the Chairman. Members participate fully in open and constructive debate and appropriate focus is given to key areas of risk and strategy.

Recommendations have been made with respect to increasing Board contact with the key talent and rising stars from across the Group and reviewing the format of management information provided at and between Board meetings. Further, the Board recognised the value of previous detailed sessions held on City and Investor Relations and the evaluation has recommended including another such meeting in the next two years. These, along with more administrative recommendations, have been given due consideration by the Board and actions for each have been agreed accordingly.

In addition, an evaluation of the Chairman’s performance led by the Senior Independent Director (taking into account the views of both the Non-Executive and Executive Directors) was carried out during the year. It is considered that the Chairman provides strong leadership of the Board, his time commitment to learning about the Group not only gives him a more informed view of the Group but enables him to provide a strong sounding Board for the Executive Directors and there is a good level of trust between him and the Chief Executive. The value to Serco employees of the Chairman’s commitment to contract and site visits was also acknowledged.

Severn Trent plc Page 47 In November 2011 I commissioned an independent external review of the effectiveness of the Board, which was conducted between December and March. The review was carried out by Boardroom Review and was designed to encourage the directors to step back from the normal business of the Board, and provide them with an opportunity to question the Board’s approach, assess its impact and contribution and prepare for the challenges ahead.

The reviewer conducted confidential interviews with all 11 directors and the Company Secretary and reviewed a selection of Board papers. This enabled the reviewer to consider the Board’s effectiveness and identify any key themes arising from the review, which were then presented to and discussed by the Board at its meeting in March.

The strengths of the Board identified included a good understanding of stakeholder views including the company’s regulators and shareholders; good market information to the non-executive directors; strong Audit, Corporate Responsibility and Remuneration Committees; and open access to executives below Board level.

Areas for further development which were discussed included prioritisation of strategic matters on Board agendas and improving focus on leadership development and succession planning. In fact, during and after the review, progress has already been made in these areas.

Shaftesbury plc Page 51

The Board undertakes an annual review of its performance and the performance of the Committees to ensure that each continues to operate effectively. Following last year’s external evaluation, this year the process was conducted internally.It focused on the areas considered in detail last year including the composition and diversity of the Board and succession planning, particularly for non-executive directors with more than six years’ service. The Nomination Committee and the Board considered the results at the July 2012 Board meeting. No issues were identified following this year’s process.



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Shire plc Page 50

The Board agreed that the 2011 Board performance effectiveness review would be managed internally. A detailed questionnaire was circulated to all Board members by the Company Secretary which focused on assessing various matters including if the Board is spending adequate time on key areas of responsibility, if the information being provided to the Board is of the right calibre, if the Board has appropriate access to senior management and outside advisors, if the Board’s culture promotes active engagement and constructive challenge from all members, if the Chairman demonstrates effective leadership, if Board members are well prepared and, if there are any suggestions to enhance effectiveness and performance. The responses were aggregated by the Company Secretary and were circulated on a non-attributable basis to all the Board. The Chairman had one-to-one discussions with each Board member. Following those discussions and the circulation of the outputs of the questionnaire, the Board met to review the feedback. The Board agreed ways to enhance the operation of the Board including the level of detail provided in feedback from Board Committees and that with the Business expanding and growing geographically, it would be helpful to hold meetings with Board members in additional key sites to enable the Board to engage with talent at those sites. In addition to this process, the Senior Independent Director spoke with each Board member, other than the Chairman, to assess the Board’s views as to the effectiveness of the Chairman. This feedback was shared at a meeting of the Non-Executive Directors, excluding the Chairman, chaired by the Senior Independent Director.

Smith, DS plc Page 37

The Board carried out a comprehensive appraisal of its performance and that of the Committees and the individual Directors between January and March 2012. The review was carried out by an external facilitator, who has no other connection with the Group, and who was appointed to provide a more independent view and a new focus for the 2012 Board evaluation. The review investigated a variety of aspects associated with Board effectiveness, specifically:

1) the way in which the Board defines its role and approaches its work (strategy, risk and control, performance management, and communication); and

2) the way in which the Board works together (culture and dynamics), and optimises its use of time and its contribution to the Company.

The facilitator obtained feedback from each Director through detailed one-to-one interviews and attendance as an observer at a Board meeting. The feedback was collated into a report which was discussed with each Director and then presented to the Board. All Directors and the Company Secretary participated in the exercise. Individual Directors were encouraged to discuss feedback with the facilitator.

Smith & Nephew plc Page 55

Towards the end of 2011, Richard De Schutter, the Senior Independent Director led a review into the effectiveness of the Board and its Committees as a whole as well as reviewing individual contributors. He asked us to complete an online questionnaire and then interviewed each of us individually. With the appointment of a new Chief Executive Officer during the year and the subsequent development of the updated Strategic Priorities and organisational structure, we felt that it would be more beneficial to use an external facilitator for our effectiveness review in 2012, once some of the changes have had time to settle. Richard De Schutter reported back to us on his findings, which we discussed in detail in February 2012.

The review concluded that the Board works effectively and has an appropriate balance of experience and skills. Non-Executive Directors particularly valued receiving regular reports from Olivier Bohuon between meetings and having meetings with myself without management present prior to each Board meeting. We were also satisfied with the positive start made by Olivier Bohuon as Chief Executive Officer and welcomed the progress he was making in implementing the new strategy and in building a strong team.

We identified certain areas for continued improvement throughout 2012:

Ensuring that we spend more time in Board meetings of key strategic issues and not allowing time to be spent on operational matters that impact that priority.



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Implementing a more streamlined process for the appointment of Non-Executive Directors.

Gaining a better understanding of succession planning below Board level.

Taking more time to review our competitors and their strategies better. Reviewing our past decisions on a systematic basis.

Smiths plc Page 75

The Board undertakes a formal and rigorous annual evaluation of its own performance and that of its Committees and each director. The external Board evaluation facilitated by Professor Rob Goffee of the London Business School in respect of the year ended 31 July 2011 identified a number of key strengths of the Board, including the strong and effective leadership provided by the Chairman; the mix of the non-executive directors’ experience and its relevance to the different businesses and strategic priorities of the Company; and the balance of challenge and support provided in Board meetings. Following on from the review the Board noted a number of points which it considered could enhance its performance and set itself a series of written objectives for the year ended 31 July 2012.

These objectives, and the Board performance against them, included:

Objective 2012 Performance

Address Board succession issues, including appointment of new Remuneration Committee Chair and (in conjunction with the Nomination Committee) the recruitment of new Board member(s).

The Nomination Committee, with the support of an independent external search consultant, carried out a recruitment process for a new non-executive director and made recommendations to the Boards. Ms Tanya Fratto joined the Board on 1 July 2012. Ms Anne Quinn succeeded Mr Stuart Chambers (who retired from the Board on 1 July 2012) as Chair of the Remuneration Committee.

In conjunction with the Nomination Committee, give input and guidance to in-depth reviews of members of senior management.

In July 2012 the Nomination Committee considered a detailed review of the Company’s senior managers, including independent third-party assessments and 360˚ reviews of the individuals in question.

Take full ownership of the risk reviews procured by the Audit Committee, including in particular macro and Group-wide issues.

The Board specifically reviewed Group-wide risks in July 2012, and was kept updated throughout the year on issues raised in the Risk reports tendered to each Audit Committee meeting.

Improve understanding of the Group’s IT function and its relevance to profitability.

The Board convened an additional meeting in January 2012 to consider the Group’s IT function. An update was provided to the Board in May on points arising from the January meeting.

In respect of the year ended 31 July 2012 the Board evaluation was conducted by the Company Secretary using internally administered questionnaires, but based on the evaluation conducted the previous year by Professor Goffee and having regard to the objectives set by the Board for the year. The evaluation considered the balance of skills, experience, independence and knowledge of the Company on the Board and its diversity (in the widest sense) and other factors relevant to its effectiveness. The questionnaire required each of the directors to consider the performance of the Board and each of the main Board committees against a number of criteria, including effectiveness of leadership, efficiency of meetings, time and focus given to particular areas, information issues, corporate governance standards and the extent to which the objectives set by the Board had been met. It also looked at how well the Board works together as a unit and the performance of each individual director against a number of criteria. The results of the evaluation are used to inform the Board’s approach going forward.

The directorships in listed companies and other significant commitments of the Chairman and the non-executive directors are shown on pages 64 and 65. It is confirmed that the Chairman and the non-executive directors have sufficient time to fulfil their commitments to the Company and that no executive director holds more than one non-executive directorship of another FTSE 100 company.



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Soco International plc Page 57/58

During 2011, the [Nominations] Committee led the Board in evaluating its own performance and that of its Committees and individual Directors. The evaluation was externally facilitated in confidence by a firm that has provided secretariat and governance advice to the Company. The evaluation entailed both detailed questionnaires and interviews. The external facilitator sought evaluation of the Board and its effectiveness as a whole, but with an emphasis on the critical issues the Board will face in the next three to five years and with increased scrutiny in areas including Director independence, the approach to gender diversity, and Directors’ training. The Directors expressed an appreciation for the fresh perspective and new insight brought about by the externally facilitated process.

The process was undertaken for the purpose of adding value to the quality of the Board and its procedures through identifying and addressing strengths and weaknesses, and the Chairman led discussions with the Committee and the full Board regarding the results. The Senior Independent Director facilitated relevant discussions regarding the role of the Chairman. The results included a commitment by the Board to continue its primary focus on corporate strategy. The Board confirmed its commitment to a rigorous process for the assessment of independence, and is satisfied it has led to an appropriate designation of independent Directors. The Board established a focus on gender diversity as a matter of priority in future recruitment, and management committed to provide more detailed and regular reporting to the Board on the Company’s extensive social programmes. Actions for improvement are being undertaken as deemed appropriate, with effect from the March 2012 Board meeting. Additionally, the evaluation results were utilised to assess Director effectiveness, time commitments of Non-Executive Directors and training and development needs of each Director, which were reviewed by the Chairman. The Committee performed a review of its TOR as part of this process.

Spectris plc Page 42/43

The operation of the Board and its committees is reviewed by the Board as a whole annually. The executive directors’ and company secretary’s performances are appraised annually against objectives established for the prior year. The contributions of the Chairman and non-executive directors are reviewed annually by the senior independent director and the Chairman, respectively, prior to their being proposed to shareholders for re-election. Additionally, the Chairman holds periodic meetings with the non-executive directors only and, led by the senior independent director, the non-executives have the opportunity to meet at least annually without the Chairman present. In considering the Chairman’s performance, his other public company interests were specifically addressed and found to be of benefit to the Board, in that he brings experiences and insights gained from these interests which assist the Board in its deliberations.

An externally-facilitated evaluation of the operation and performance of the Board and its committees was conducted in 2010. An internal process followed during 2011. This included submissions from all Board members in response to a structured questionnaire focused upon the more significant areas identified during the prior year’s external process, notably strategy, Board structure and organisation, succession planning and risk management. A summary of the submissions received, including comparative data from the 2010 process, was considered at the November Board meeting, with a number of areas for further debate and action recorded.

Spirax-Sarco plc Page 38

The Board recognises the value of a formal process whereby there is a comprehensive and honest assessment of the Board’s performance. Accordingly the Board undertakes a formal evaluation of its performance each year using a methodology devised by Towers Watson.

The 2011 review adopted the same format as that used in 2010 in order to allow a constant basis for measuring the outputs of the evaluation. The review concluded that the Board continues to perform well. In particular, the following points were noted:

�� The Board continues to have increased exposure to various departments in the Group and the objective of Directors to have Board meetings at locations around the Group continues to be met�� The performance of the Chairman and the Chairmen of Board Committees continues to be highly rated.

In accordance with the provisions of the Governance Code, the Board intends that Board evaluations will be externally facilitated at least every three years.



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Sports Direct International plc Page 52

There is a formal process in place for the performance evaluation of the Board, its Committees and individual Directors. Each Director is given the opportunity to express their views on the organisation and operation of the Board and its Committees, their effectiveness and contribution to the business, and on any other matter they consider relevant.

An internal Board evaluation was facilitated by the Chairman, who provided the other members of the Board with a confidential questionnaire. The findings were presented to the Board.

The evaluation did not highlight any areas of concern and the Directors are satisfied the Board and its Committees are operating effectively.The Board and the Nomination Committee will consider the output from the evaluation programme in their evaluation of the skills, knowledge and experience of the Board, and in formulating development plans.

In 2014 the Board will facilitate an external evaluation by independent consultants and going forward this will be completed every three years.

SSE plc Page 63

The Board, its Committees and the individual Directors participate in an annual evaluation of performance. The Board evaluation process this year was carried out by internal questionnaire and individual meetings, following an external-led review in 2010. The outcome of the evaluation process was considered at the Board meeting held in January 2012. The findings of the evaluation continued to be positive and the suggestions included further consideration of diversity and succession planning, more specific briefings on matters such as Energy Trading and Risk, and wider sector-related topics to be brought to future meetings. The Directors also participated in detailed reviews of individual performance which were carried out in separate meetings with the Chairman. The process for evaluating the Chairman was managed by the Senior Independent Director which involved a separate meeting with the Non-Executive Directors and included feedback from the Executive Directors. All of the Directors continued to make an effective contribution to the work of the Board and its Committees, were well informed and demonstrated full commitment to their duties. The Board was satisfied that the performance evaluation process identified the main areas for further review. An external evaluation process is carried out every three years as recommended by the Code, with the next one due in 2012/13.

Stagecoach Group plc Page 33

The Board assesses its own performance and the performance of each individual Board member; this assessment is co-ordinated and directed by the Chairman with the support of the Company Secretary. The Senior Independent Non-Executive Director co-ordinates the Board’s assessment of the performance of the Chairman. As part of the assessment process, the Non-Executive Directors meet without the Executive Directors being present. The Non-Executive Directors also meet without the Chairman being present. The Chairman obtains feedback from each individual director on the performance of the Board and other Board members – this involves the completion of a questionnaire and a follow-up discussion. In the same way, the Senior Independent Non-Executive Director obtains feedback from each individual director on the performance of the Chairman. A similar process is undertaken to assess the performance of each of the Board’s committees. From the effective date of the Code, the Group plans to use external facilitation of its performance evaluation no less frequently than every third year.

The Directors have reviewed the effectiveness of the Board as a whole and its committees. Each director has assessed the effectiveness of the Board and each committee of which he or she is a member. The assessment of effectiveness included consideration of:

�� The effectiveness of the formal Board and committee meetings;�� The nature and extent of the Board’s interaction with the management of the Group;�� The timeliness, relevance and accuracy of the information provided to the Board and its committees;�� The allocation of the Board’s time between differing priorities including the time spent on strategic considerations relative to



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other matters; and�� The composition of the Board and its committees.

The Board has considered the results of these assessments and has concluded that overall the Board and its committees continue to operate in an effective and constructive manner.

Standard Chartered plc Page 104/105

Over the last three years we have adopted an evolving, flexible and continuous improvement approach to assessing Board effectiveness. Throughout 2009, we conducted a comprehensive internal governance review. The Board effectiveness review formed part of that process. In 2010, we undertook an externally facilitated review of the Board’s effectiveness facilitated by Dr Tracy Long of Boardroom Review. In 2011 the FSA, through its Core Prudential Programme governance review, completed an in-depth and thorough review of the Group’s corporate governance structure and practices. As part of this, several detailed case studies were used analysing the Board’s effectiveness in relation to key decisions that the Board had taken over the previous year. As a result there has been an extensive external element to our Board’s effectiveness reviews for both 2010 and 2011. To supplement the FSA review, we undertook an internally facilitated review by way of an online questionnaire using the Group’s approved Board evaluation tool.

To demonstrate our commitment to continuously seeking ways in which to improve our governance practices, we undertook a variety of mechanisms to assess the effectiveness of each Board committee, including the use of questionnaires, but not exclusively so. For example, this year, the Remuneration Committee adopted a ‘continuous improvement’ approach by adding a short discussion item at the end of each meeting to discuss areas for improvement in ‘real time’. The Brand and Values Committee sought feedback from executive management on the value that the Committee has added to their business/function. Following the completion of questionnaires, the Board Risk Committee undertook an extensive review of its effectiveness by means of a formal discussion that resulted in the creation of an action plan to address the findings of the effectiveness review, a summary of which can be found on page 117. The Audit Committee held a more informal discussion session, a summary of which can be found on page 113.

So as to ensure that our approach to Board and committee effectiveness remains meaningful we will continue to explore and adopt different approaches to assessing Board and committee effectiveness.

The Board believes that it continues to operate effectively. This is notable given the increasingly turbulent macro-environment and the increased intensity of regulatory change. There is a high level of engagement from our non-executive directors and meaningful interaction with the executive directors. In the review, both executive directors and non-executive directors commented that the Board dynamics remain conducive to the provision and receipt of constructive challenge within the context of our unitary Board approach. As to be expected from a highly effective Board, as part of the Board effectiveness review, our directors identified areas that, with hindsight, might have been handled differently. Our directors also highlighted some areas for further consideration by the Board that have been captured within the Board’s strategic rolling agenda for 2012.

Feedback indicates that the right balance between formal and informal Board interaction is in place. It was noted that informal meetings, such as lunches and dinners, tend to enable even more free flowing debate than the scheduled Board meetings.

Board members welcomed the continued focus on having an ongoing strategic dialogue at Board level. In addition, several Board members commented that the approach to the 2011 annual Strategy Board sessions was excellent. The opportunity to have more time to focus has arisen as a result of increased delegation to and the broadening of the remit of the Board committees. However, in doing so, there is an awareness of the need to avoid the agendas for the Board committees becoming inadvertently cluttered.

Given the Group’s record of sustained record performance over the past nine years, the Board is very mindful that there could be a risk of complacency. A high level of vigilance is required, particularly given the continued external macroeconomic turmoil. Board members thought that, through receiving even more frequent input from external sources, the right balance of internal and external perspectives could be maintained.

In addition to reviewing the Board’s overall effectiveness, each director discussed his or her self assessment with the Chairman on a one-to-one basis. These discussions included details of time commitment including (where relevant) the potential impact of outside



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interests held by each director, engagement plan implementation and other broader contributions to the Board. In relation to the executive directors, there was a particular focus on their role as Board members as distinct from senior executives. Outlines future engagement plans were discussed providing a guideline for the activities that each non-executive director intends to undertake over the next 12 to 18 months. In relation to those directors with longer tenures, continued independence of mindset and perspective was specifically considered. The Chairman reported the outcome of these discussions to the Nomination Committee, who used this as part of its consideration leading to recommending to the Board the re-election of all directors at our Annual General Meeting.

Part of Rudy Markham’s role as Senior Independent Director is to provide the Board’s feedback on Sir John’s performance as part of the Board’s evaluation process. Rudy sought feedback from each Board member and used this to compile a formal letter to Sir John evaluating his performance as Chairman. The feedback concluded that Sir John has unanimous support for his leadership of the Board.

Standard Life plc Page 54

Board effectiveness is key to the Group’s success, so the Board has, through the Nomination and Governance Committee, developed a formal annual review process. This assesses how well the Board, its Committees, the Chairman and Directors are performing collectively and individually and adding value to the Group. It also looks at how their performance could be improved. In 2011, the process continued to develop. After considering potential suppliers, the Board engaged Independent Audit Limited (‘Independent Audit’) as the external facilitator to support a confidential online questionnaire, the analysis of the responses and the development of the resulting action plan. Whilst Independent Audit has had the Standard Life Stakeholder Pension Scheme as its designated pension scheme since 2003, the Committee considered that this did not prevent Independent Audit supporting the review.

All of the survey questions were reviewed and refreshed by Independent Audit to focus on generating robust input from the Directors and to extend the breadth of the questions. Each Director completed questionnaires about the Board, each Committee the Director was a member of, the Chairman’s performance and their own individual performance. Directors were encouraged to expand on their scorings and assessments with narrative comments on where the Board or Committee could improve. The Group Company Secretary and General Counsel, the secretaries of the Board Committees, and the other members of the Executive Team who interact frequently with the Directors and implement their recommendations and decisions, also completed questionnaires.

The questions covered how the Board goes about:

�� Making sure that there is a clear consensus around strategic direction �� Assessing risks and the effectiveness of the risk identification approach �� Forming a view of the organisational culture �� Working together as a team �� Providing strategic and ethical leadership �� Holding management accountable �� Communicating internally and externally with stakeholders �� Meeting its legal and regulatory responsibilities �� Making sure it has the right mix and diversity of experience and the role, responsibilities and effectiveness of Board Committees.

St James’s Place Capital plc Page 58/59

As stated in the Annual Report for 2010, the Board committed to undertaking externally-led evaluations every three years in accordance with the new UK Corporate Governance Code and the first such evaluation was carried out in 2011 by Independent Audit Limited, which does not have any other connection with the Company.

The evaluation was designed to assess the quality of the Board’s decision-making and debate, its overall contribution to, and impact on, the long-term health and success of the Company, and its preparation for future challenges. The independent external evaluation covered a variety of aspects associated with Board effectiveness and was conducted through the use of confidential interviews with all Directors, some senior managers, some of the Board’s advisers (e.g. the external auditors) and a review of past Board papers. Following



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the review, Independent Audit drafted a report and attended a Board session to discuss observations arising from the evaluation. As a result an action plan to address the key findings has been formulated.

One of the main recommendations of the report was for the Chairman and Chief Executive to review the composition of the Board Committees from 2012, in light of the Board changes set out above. This has been carried out, with several changes being approved by the Board with effect from the start of 2012, including the appointment of Sarah Bates as Senior Independent Director and various changes to the composition of Board Committees. There are five sub-Committees of the Board: Audit, Risk, Investment, Remuneration, and Nomination and the changes to the non-executive membership of these Committees from 2012 are set out in the table below. The Chairman intends to review the membership of the Board Committees later in 2012, following the appointment of Baroness Wheatcroft. It is expected that Iain Cornish will become Chairman of the Audit Committee later in 2012.

Committee Composition at end of 2011 Composition from 2012

Audit Mike Power (Chair)Derek NethertonCharles Gregson

Mike Power (Chair)Iain CornishCharles Gregson

Risk Mike Power (Chair)Sarah BatesRoger Walsom

Mike Power (Chair)Roger WalsomIain Cornish

Investment Vivian Bazalgette (Chair)Sarah BatesMichael Sorkin

Vivian Bazalgette (Chair)Sarah Bates

Remuneration Sarah Bates (Chair)Roger WalsomVivian Bazalgette

No Change

Nomination Charles Gregson (Chair)Michael SorkinMike Wilson

Charles Gregson (Chair)Mike PowerIain Cornish

The report noted that, given the recent changes to the Board, it would be important for the Nomination Committee and the Board as a whole to review the existing skills and experience of the members of the Board and to decide any areas where any additional skills would be welcome.This would then help to establish the attributes needed for future non-executive recruitment to the Board, as and when the need arises. This will be one of the priorities of the Nomination Committee in 2012, together with the regular review of the succession plan for the executive team and the ongoing development of the executives operating below the Board.

As regards the meetings of the Board, there was general consensus that the current number of meetings was appropriate, that the Board was provided with a comprehensive pack of papers and that there was enough time to discuss the issues that needed to be debated. There was also general agreement that the Strategy Day held in September 2011 had been very successful, particularly in respect of the discussions regarding the Group’s strategy in light of the implementation of the FSA’s Retail Distribution Review reforms, although various changes to the structure and content of future Strategy Days were suggested. The report also identified a number of recommendations for the conduct of the Board meetings in the future, including that the Board should carry out more detailed discussions on the principal risks impacting the Group at least once a year, in addition to the regular discussions that currently take place around the reports provided by the Group Risk Director at each Board meeting.

As regards the various Committees of the Board, the report did not identify any material issues, given the well-established Committee process and standing agendas. However, given the changes to the composition of the Board Committees from 2012, it was recommended that the various Chairs of the Committees meet to discuss their terms of reference so there are no gaps, or overlaps. This process is well underway and revised Terms of Reference for the various Committees have been approved by the Board, where appropriate. Various other recommendations have also been adopted, including a review of the papers provided to the Audit Committee by the Internal Audit function (in light of the appointment of a new Head of Internal Audit), a review of the risk schedules provided to the Risk Committee and a review of the structure of the Investment Committee meetings, following which a sub-Committee has been set up, with delegated powers, to carry out more of the regular monitoring of the Group’s investment managers.



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Independent Audit also discussed with the Chairman any comments on the individual performance of members of the Board, which were discussed by the Chairman with the relevant directors at their next one-to-one meeting.

TalkTalk Telecom Group plc Page 19

Each Board member has been subject to an internal performance review during the year, where the balance of skills, knowledge and experience of each Director was reviewed. This was undertaken by each member of the Board completing detailed questionnaires. The results of these were analysed by the Chairman, Senior Independent Director and the Board as a whole against the broad criteria of overall Board effectiveness and individual contributions.As part of the performance review the ability of each Director, in particular the Non-Executive Directors, to demonstrate the required time commitment to the role was assessed.

As a result of this performance evaluation the Chairman confirms that each of the Directors seeking re-election at the AGM continues to be effective and has demonstrated the appropriate commitment to the role.

The Senior Independent Director also met with the other Non-Executive Directors to assess the Chairman’s effectiveness taking into account the views of Executive Directors.

In line with the Code, an external performance evaluation of the Board will be conducted during the FY2014.The Company Secretary ensures that the Board is made aware of new laws, regulations and other information appropriate to the Group to ensure that all Directors continually update their skills, knowledge and familiarity of the Group in order to fulfil their roles. Additionally each Director has access to the advice and services of the Company Secretary and also has the ability to take independent external advice if required.

Tate & Lyle plc Page 43

Having undertaken an externally-facilitated review in 2011, the Board agreed that the 2012 Board effectiveness review would be facilitated by the Chairman. As part of the process, the Chairman held one-to-one meetings with each director and the Company Secretary, and the Deputy Company Secretary gathered feedback from senior management who attend Board and/or Committee meetings via a tailored questionnaire. The main themes and observations on the Board’s effectiveness were summarised in a report to the Board. It concluded that the Board continued to operate in an effective manner but made a number of recommendations for improvements including those recommendations summarised on the right. Progress on agreed actions is being monitored by the Company Secretary and will be reported in the Annual Report 2013.

2012 Board effectiveness review:

Recommendations Agreed actions

Understading and knowledge of the speciality food ingredients market to be strengthened.

More time has been allocated to the consideration of the speciality food ingredients markets in Board meetings and Board training sessions.

Nominations Committee to increase its focus on succession planning.

Increased emphasis will be given to succession planning for future Nominations Committee meetings.

Opportunities for senior line managers’ involvement in the CR Committee to be identified amd implemented.

A wider range of senior managers will be invited to attend all or part of the CR Committee’s meetings, based on the items under discussion.

Arrangements for updating the Board where there is an interval of more than two months between Board meetings should be enhanced.

Interim updates will be provided to the Board via the Board portal following an agreed schedule.

The rolling Board agenda should be overhauled to better reflect the Group’s agreed strategy and focus.

The rolling agenda has been overhauled with increased emphais on strategic issues.



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With regard to the performance of individual directors, the review concluded that all directors continue to make an effective contribution to the Board’s work, are well prepared and informed about issues they need to consider, and that their commitment remains strong. Individual feedback was also provided to each director.

The Board effectiveness review included a review of the Audit, Corporate Responsibility, Nominations and Remuneration Committees and each Committee also undertook an evaluation of its own work and effectiveness during the year. The results of the reviews were discussed by the Board which concluded that each Committee operated effectively throughout the year.

During the year, the non-executive directors met without the Chairman, under the chairmanship of the Senior Independent Director, to appraise the Chairman’s performance (the Senior Independent Director having first sought the views of the executive directors). In addition, the Chairman held a private meeting with them non-executive directors to appraise the Chief Executive’s performance.

Taylor Wimpey plc Page 33/34

The 2010 Board evaluation was reported on in detail in last year’s Report and one of the action points which came out of that was the need to maintain an ongoing review of Board composition including refreshment. This has been achieved as follows:

�� Andrew Dougal resigned as a Director on 21 April 2011 after a long and distinguished period of service on the Board as an Independent Non-Executive Director; �� Katherine Innes Ker resigned as a Director on 21 April 2011 after a long and distinguished period of service on the Board as an Independent Non-Executive Director; �� Kate Barker CBE was appointed as an Independent Non-Executive Director on 21 April 2011; �� Mike Hussey was appointed as an Independent Non-Executive Director on 1 July 2011; �� Sheryl Palmer, the President and CEO of the Group’s North American businesses, resigned as a Director on 20 July 2011 following the sale of those businesses; and �� James Jordan was appointed as Group Legal Director and Company Secretary on 21 July 2011 having been Group Company Secretary and General Counsel of the Company since 2007, and previously held the same position with George Wimpey plc.

The 2010 Board evaluation also highlighted a small number of other action points – all of which have been addressed – namely to improve further the overall Board process (including the need to enhance the overall Group succession planning processes), to provide additional information to the Board with regard to certain operational matters and to increase the number of specialist topics and presentations to be considered by the Board.

It is a requirement of the Code that, from 2011, the evaluation process be externally facilitated at least every three years. The 2011 evaluation was overseen by an external facilitator, Egon Zehnder International Limited, a specialist in the assessment of top-level management resources. Egon Zehnder provides no other services to the Company.

The 2011 evaluation process took the form of a detailed questionnaire prepared by Egon Zehnder covering all aspects of the Board and its Committees, which each Director completed on a confidential non-attributable basis. This was then followed by a meeting between each Director and representatives from Egon Zehnder to go through the responses to the questionnaire and to discuss each Director’s views on the Board, the Board Committees and individual Directors.

As part of the process, the Chairman received comments on each Director from Egon Zehnder, following which he liaised directly with each individual Director to discuss the feedback on them from the exercise. Similarly, the Senior Independent Director received comments from each Director via Egon Zehnder on the Chairman, which he then reviewed with the Chairman.Following completion of the exercise, Egon Zehnder formally presented their main findings and conclusions to the Board. The review also confirmed the ongoing independence of character and judgement of each Non-Executive Director.

The report from Egon Zehnder was further reviewed by the Board and unanimously approved.

The 2011 Board evaluation and feedback from Egon Zehnder focused on a number of appraisal areas including: the balance of skills, experience and knowledge on the Board; information flows; the level of entrepreneurial leadership; strategy and the effectiveness and



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leadership of the Board Committees (i.e. the Audit, Nomination and Remuneration Committees).

The overall feedback from Egon Zehnder on the Board as a team was very positive including, the balance of the Board due to its diversity of skills and the Board’s resilience, energy and openness.

Following receipt of the report and presentation of it from Egon Zehnder the Board then separately reviewed each specific appraisal area in detail and agreed actions where necessary – these include continuing the general refreshment of the succession planning process including with regard to the senior management teams, the improvement of reporting to the Board in certain defined areas and arranging for additional time to be devoted by the Board on strategy and risk related matters. The agreed actions will be kept under regular review by the Board.

TelecityGroup plc Page 50

Critical to the success of the Board and its Committees in achieving their aims is the effectiveness with which they operate. Accordingly, we take our evaluation of this very seriously. Even before the UK Code took effect for the Group, we had adopted the three-year cycle that it recommends.

Comprehensive questionnaire incorporating learning from prior year external process completed by all Directors covering the following areas:� Board membership and diversity (including with regard to gender)� Content and operation of Board meetings and quality of information presented at these� Quality of internal and external reporting� Similar matters for each of the Board Committees� Key strategic and operation issues� Training, induction and Director self-assessment� The Chairman’s performance

Interviews by the Senior Independent Director with the other DirectorsIncluding discussion on:� Clarification or expansion of answers in the questionnaires� Any additional matters which the relevant Director or Senior Independent Director wished to raise� The performance of the Chairman� The individual Director’s performance and training requirementsThe Chairman held the equivalent interview with the Senior Independent Director



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Results of the questionnaire and interviews and drawing of conclusionsThe results were reported to the Board and its Committees in a manner that did not identify individuals’ specific responses ensuring that these responses could be as open, frank and informative as possible. Following review of the results, the Board drew conclusions and agreed actions including:� To enhance further the structure and content of Board meeting agendas and reports;� To review the membership of the Board Committees during 2012;� For the Board and its Committees to set annual objectives in their work;� To consider shorter-term and longer-term strategic issues more independently of each other;� To provide the Board with great and more frequent external input on strategic matters; and� To enhance further the induction process for future new Directors.

Follow-up meetings and discussions� The Chairman and non-executive Directors met in the absence of the executive Directors to discuss performance of the executive Directors� The non-executive Directors met in the absence of the Chairman to review his performance� The Chairman reviewed training requirements established from the evaluation process for the individual Directors and the Board as a whole

A summary of the 2011 Board and Committee evaluation process led by the Chairman and Senior Independent Director, and internally facilitated by the Company Secretary, is shown in the flow chart to the right.

Templeton Emerging Markets Trust plc Page 34

The Board has undertaken a formal evaluation of its own performance and that of its Committees and individual Directors including the Chairman. The Board has also considered the independence of each Director. The evaluation of the Board, of its Committees, and the performance of individual Directors, was facilitated by independent consultants, Trust Associates Limited. Apart from reviewing the level of Directors’ fees in 2011 (see page 44), Trust Associates Limited has no other connection with the Company. The evaluation process was carried out through one to one interviews and discussions between Trust Associates Limited and each Director. Trust Associates Limited also spoke to representatives from the Investment Manager and Corporate Stockbroker. An evaluation of the Chairman by his fellow Directors was facilitated by Sir Peter Burt, the Senior Independent Director, who then met with the Chairman to discuss its content.

Formal performance evaluations will continue to take place at least annually with the appointment of an external facilitator every three years.

The performance and cost of service providers are considered annually by the Board.

Tesco plc Page 54

The Board conducted an external Board evaluation during the year. The review was led by an experienced facilitator and combined in-depth interviews with each Director and a questionnaire completed by members of the Board.

The results of the review were considered in detail by the Board. The review recognised that with both a new Chairman and a new Chief Executive appointed during the year this was a time of transition. The Board welcomed the opportunity this presented to complete a broad updating of governance and Committee structures. Overall, the review suggested that there was good engagement between Board members and that Board processes (including the performance of Committees, a new forward agenda and the quality of information flows) were of a good standard. There was a high level of alignment about the key strategic issues facing Tesco.

An important part of the review was establishing criteria against which the future performance of the Chairman, the Directors individually and the Board as a team could be reviewed. The Board endorsed a set of criteria under these headings as follows:



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Board performance evaluation criteria

Chairman Board leadership and managementCoaching and developmentEnsuring accountability

Directors Strategic orientationResults orientationCollaborationIndependenceEngagement

Board BalanceAlignmentResilienceEnergyOpenessEfficiency

Annual reviews of the performance of the Remuneration and Audit Committees have been carried out, led by each Committee’s Chairman. These reviews have confirmed that each Committee continues to operate effectively. For further details, please refer to the sections dealing with the Audit Committee (on page 58) and the Remuneration Committee (on page 57).

Our CEO reviews the performance of each Executive Director and the outgoing Chairman has reviewed the performance of the CEO and each Non-executive Director. Having completed these evaluations, the CEO and Chairman have confirmed that each individual whose performance they have assessed continues to be effective and committed to their role. The new Chairman, Sir Richard Broadbent, only assumed his role on 30 November 2011, so it was judged to be too soon for the Senior Independent Director to carry out a performance assessment.

During the year, both the outgoing Chairman and the new Chairman met with the Non-executive Directors, without the Executive Directors present, to discuss Board issues and how to build the best possible team.

3i group plc Page 75

During the year, the Board conducted its annual evaluation of its own performance and that of its committees and individual Directors. The evaluation process in the year to 31 March 2012 was conducted internally by the Chairman with the assistance of the Company Secretary. The results of this year’s evaluation process were reported to and discussed by the Board.The Board performance evaluation included consideration of the overall functioning of the Board. Particular topics considered included: the optimum balance of attendance at Board meetings by managers below Board level, the balance of Board agendas, the adoption of a regular calendar of Board presentations and briefings, enhancements to the structure and content of Board packs, monitoring by non-executive Directors of investment approvals at Investment Committee, and increased portfolio company and investment team visits. The Board evaluation process also included consideration of the size, balance and composition of the Board including its diversity, including as to gender. The evaluation process was valuable in enabling Directors to identify a number of areas where its working practices could usefully be developed.

In his role as Senior Independent Director, Mr R H Meddings led a review by the Directors of the performance of the Chairman and subsequently reported back to the Board.

Travis Perkins plc Page 50/51

During the year, the Board undertook an evaluation of its performance and the performance of its committees and the individual directors. The Board’s policy is to engage an external facilitator to assist this process at least every three years, and in 2011, the Board appointed Egon Zehnder in this role, since they had conducted a thorough external evaluation four years earlier and there was no conflict of interest



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with the Company. The Board firmly believes that search firms are better equipped to perform this work than individual consultants.

Egon Zehnder conducted interviews with each director and the Company Secretary separately. These interviews formed the basis of a report, which Egon Zehnder presented to the Board in October. The conclusion, following an extensive discussion of the report by the Board, was that overall the Board operated very effectively.

However, following discussion of suggestions for improvement, the Board will focus on a number of areas in 2012, to improve further its performance. Those areas are:

�� Continued monitoring of succession planning, both at Board and senior executive level; �� In addition to non-executive director mentoring, increased attendance at Board meetings by senior executives; �� More use of external expertise to improve the Board’s knowledge. E-commerce was an area particularly emphasised.

In 2012, the Board will conduct an internal review of its performance.

Tui Travel PLC Page 57

An effectiveness survey of the Board and its Committees (Audit, Remuneration & Nomination) was undertaken during June/July 2012. The survey comprised a series of questions in relation to the running of, and business conducted at, Board meetings and the performance of individual Directors (including the Chairman). The survey was undertaken online and was facilitated, and the responses collated, by an external provider which has no connection with the Company. Each Director was asked to place a score against a variety of questions and the Directors were able to make additional comments where appropriate.

Summary reports were produced by the external facilitator following analysis of the responses by broad category and by reference to a traffic-light system showing the number of red, amber and green scores. These reports, which included conclusions reached by the facilitator, were presented to a meeting of the Board in September 2012 on an anonymous basis and were considered and debated. Various action points were agreed.

Tullow Oil plc Page 79

2011 Performance

At a two-day offsite mid-year, the Board received strategic presentations from heads of business units and functions and reviewed the overall Group strategy. Approximately 40% of Board time in 2011 was devoted to strategic discussions, assisted by presentations from external parties

The Board is satisfied the appropriate discussion took place in 2011 around the principal identified risks, with particular emphasis last year on health and safety issues (including malaria prevention), bribery and corruption and organisational overstretch. As a result some policy and procedural improvements were identified which will be carried forward for action 2012.

The appointment of Simon Thompson to replace Pat Plunkett as Chairman was made. A clear succession plan for other non-executive Directors is now being implemented, at a pace designed to ensure a measure of continuity.

A revised remuneration structure for Executives Directors was developed in 2011 and approved by shareholders.

The composition of Board committees was reviewed and a restructuring agreed which was implemented shortly after year end.

While the Board believes there is always room for improvement in Board visibility and communications, there were a significant number of Group-wide events in 2011 at which Board members were able to meet a wide cross section of employees.



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All directors underwent some training in 2011, usually of a type identified by themselves as being required or helpful in their respective roles, rather than as part of a formal plan. The Board intend to introduce more formality into this process in 2012.

A thorough review was carried out of web-based Board administration packages and a supplier selected . this will be implemented in the first half on 2012.

2012 Board Objectives

Strategy Annual strategy review to focus on risk management; resource allocation within the portfolio of exploration, appraisal and development projects; and building organisational capacity to meet our growth expectations.

Strategy to be regularly updated, incorporating external views on economic and political developments in host countries.

Risk management Continue to ensure that the Group’s financial and operating risks are identified and that adequate systems and processes are in place to monitor and mitigate them, with a particular focus on:1. External stakeholder relationships;2. Portfolio management;3. Improving quality of Board reporting on evolving risk;4. Building organisational capacity;5. EHS and asset integrity; and6. Maintaining and enhancing the Tullow culture.

Succession planning Improve quality of succession planning for the Board and Senior Management.

Implement succession plan for the Chair of the Audit Committee and two other non-executive Directors.

Board Committees Review remuneration structure and KPIs to ensure alignment with evolving strategic objectives and risk management.

Agree strategy and criteria for Direction succession at the full Board.

Reduce size of Nominations Committee and use it to execute the agreed strategy.

Board visibility, engagement and communication Ensure appropriate frequency of Board level interactions with employees, key decision makers and other opinion formers in countries of operation.

Review ‘Talk Back’ staff climate survey and take appropriate actions.

Board procedures Implement electronic distribution of Board papers.

Implement 12 month rolling agenda to enhance Board planning.



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UBM plc Page 68

The Board evaluation in 2010/2011 was conducted as an internal exercise, through the use of confidential questionnaires which were completed by all Board directors and the responses discussed further in individual meetings with the Group People and Culture Director. A separate questionnaire was completed in respect of the Chairman’s performance and the results collated by the Senior Independent Director.

The Board considered the results in February 2011; the consensus view was that the Board was operating to a good degree of effectiveness. Areas identified for action included:

�� Reviewing the structure of the Board agenda and allocation of time for the Board to discuss progress towards strategic goals; �� Clarifying the remit and composition of the Nomination Committee; �� Keeping directors up to date on relevant developments in legislation and corporate governance

Good progress was made during the year in addressing these issues through changes made to the Board agenda and allocation of additional time specifically for discussion on strategy; changes to the Nomination Committee as described on page 66; and formal presentations to the Board from external advisors on relevant legislation and corporate governance practice.

It was agreed that the Board evaluation in 2011/2012 should be conducted through an external facilitator and Lintstock were appointed in September 2011 to conduct this process. Lintstock provide an on-line corporate governance management system to the Company but have no other connection with it. The process involved confidential questionnaires which were completed by directors and other senior executives who attend Board or committee meetings or otherwise interact with the Board; individual interviews with directors were then conducted by Lintstock to develop the responses to the questionnaires. The areas covered included Board composition, expertise and dynamics; time management and Board and Committee support; strategic oversight; risk management and internal control; and succession planning and human resource management. The results were distilled into a report which was considered by the Board in February 2012 and the findings will be reviewed further during the year.

Evaluation of the performance of individual non-executive directors is carried out by the Chairman with input from the Senior Independent Director (‘SID’) and Chief Executive; the Chief Executive’s performance is evaluated by the Chairman and SID and the Chief Financial Officer’s performance is evaluated by the Chief Executive.

The non-executive directors met on several occasions during the year without executives present.

Ultra Electronics plc Page 50

A Board evaluation process is operated which runs on a two year cycle.

During 2011 each Director completed a confidential evaluation on each of his colleagues on the Board. This was facilitated by an independent external consultant who provided the Chairman with a detailed summary of the results for each Director. The Chairman provided feedback to the Board as a whole, whilst each Director was provided with personal summarised feedback of the views of his colleagues. Strict anonymity was maintained throughout the exercise with only the Chairman being aware of the source of individual views and comments.

The next stage of the evaluation cycle will take place in 2012 where the Board will evaluate its performance as a whole. This second stage will cover the Board structure, processes and administration together with the dissemination of information to Directors.



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Unilever plc Page 2/37

Following our internal evaluation of the Boards’ activities and effectiveness in 2010, we appointed an external consultancy in 2011 to carry out the evaluation. Their report was presented to the Boards in December and concluded that overall the Boards were operating effectively. The report made a number of valuable recommendations and, as a result, Board meetings will now build knowledge-sharing sessions into the agenda where Directors can discuss experiences on specific topics of relevance to Unilever.

The Chairman, in conjunction with the Vice-Chairman & Senior Independent Director, leads the process whereby the Boards formally assess their own performance, with the aim of helping to improve the effectiveness of the Boards and their Committees. The evaluation process consists of an internal exercise performed annually with an independent third-party evaluation carried out at least once every three years.

The internal evaluation process includes an extensive bespoke and confidential questionnaire for all Directors to complete. The detailed questionnaire invites comments on a number of areas including Board responsibility, performance, operations, effectiveness, training and knowledge. In addition, each year the Chairman conducts a process of evaluating the performance and contribution of each Director, including an interview with each. The evaluation of the performance of the Chairman is led by the Vice-Chairman & Senior Independent Director and the Chairman leads the evaluation of the Chief Executive Officer, both by means of confidential, bespoke questionnaires. Committees of the Boards evaluate themselves annually under supervision of their respective chairmen taking into account the views of respective Committee members and the Boards.

As a result of the recommendations from the 2010 evaluation, Board meetings were organised to ensure there was sufficient time to allow for greater contributions from the Non-Executive Directors.

United Utilities Group plc Page 41/42

During the year, as recommended by the code that the annual Board evaluation should be externally facilitated every three years, the Board instructed Lintstock Limited (Lintstock or the facilitator) to undertake an evaluation of the Board’s performance, its committees and of its individual directors. Lintstock is wholly independent from, and has no other relationship or connection with, United Utilities. The Board and committee evaluation exercise took place from December 2011 to February 2012. Lintstock discussed the context of the evaluation with the Chairman and Company Secretary and then tailored questionnaires specifically for United Utilities, which were completed by all Board members, committee members and by the senior managers directly responsible for supporting the various committees. Questionnaires were also completed by third party advisors to the various committees. The content of the questionnaires assessed the performance of:

�� composition of the Board (including gender diversity), expertise and dynamics;�� support, time management and Board committees; �� oversight;�� management and internal control;�� planning and human resource management; and �� for change.

The questionnaires were confidential between the individual and the facilitator. The facilitator analysed the responses and thereafter presented their conclusions to the Chairman which were circulated and discussed by the Board. The Chairman discussed with each individual director their own performance and Nick Salmon (as our senior independent director) discussed the Chairman’s performance with the facilitator, and findings were discussed together as a Board. The facilitator also provided written feedback to Board committee chairs who in turn discussed the findings with their fellow committee members.Having served on the Board for more than six years, the individual evaluation process for Paul Heiden, David Jones and Nick Salmon demonstrated that they each remained committed to their roles and each allocated sufficient time to the company in their roles as effective independent non-executive directors.



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Observations arising from, and areas considered in, the Board evaluations

Comments/actions

There was broad consensus as to the key strategic priorities of the group, the main risks being faced and the mitigating actions being taken to address them.

Common Board membership between the UUW and UUG Boards had led to an improvement in the Board’s oversight of strategy and risk under the new executive team.

Board succession planning was considered to be effective in relation to the current composition of the Board.

Succession plans had been agreed with clear requirements and attributes, in order of priority, established for potential successors.

Relations between the non-executive directors and the executive directors were highly rated.

Efforts by executive directors to improve communication and understanding has led to positive relationships.

Support by management for the information needs of the Board. The Board felt that they were well supported with management providing them with appropriate information and assistance when required.

Performance of the Chairman and the operation of the Board committees.

The performance of the Chairman and the performance and operation of the Board committees were highly rated. All Board committees were working effectively in discharging there duties.

The migration to common Board membership of the UUG and UUW Boards.

There was unanimous support for the extension of Board members’ responsibilities to become directors of UUW as this better reflected the strategic direction of the group.

The role of the Board in overseeing effective succession plans for the executive and senior management.

Steps were being taken for the Board to meet more members of senior management and assess their abilities in surroundings other than formal Board meetings.

The level of satisfaction with the content and format of management reports was high but some refinements could be made in the presentations made to the Board.

Greater focus would be given on highlighting the key issues for the Board to consider when preparing presentations.

Vedanta Resources plc Page 70

During the year, the performance of the Board, its main committees and the individual Directors were formally and rigorously evaluated under the direction of the Chairman. The evaluation was carried out by circulation of a detailed questionnaire concerning the Board, its Committees and the individual Director’s performance. The responses were collated and summarised. The Chairman spoke individually to all the Directors in respect of the results and the Board also collectively discussed the results. A summary of the areas reviewed and results of the evaluation are shown below.

Area Assessed Main Comments Action

The Board� Leadership� Setting strategy� Risk management� Management of resources� Reviewing performance� Communication with shareholders� Board composition and structure

Strong entrepreneurial leadership with sound management of risk and human and financial resources. Board process and provision of information was good

The need to develop relationships with stakeholders was recognised. There was also awareness of need to review Board composition

Continue active engagement with stakeholders re social responsibility issues in particular

Review recruitment possibilities in light of Board composition



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Individual Directors� Preparation� Contribution� Development of knowledge and skills� Contribution to strategy and risk� Relationships with Board members� Training needs

Directors were well prepared and contributed effectively to meetings. A variety of methods were used for training

Good strategy and risk management discussions were held and Board relationships were very good

Chairman to review training/development needs

Performance of Board Committees� Performance against the Committee’s remit

Performance of all the Committees remains effective with the Audit Committee in particular receiving excellent comments

Nomination Committee to focus on succession planning and nurturing top talent

Sustainability Committee to engage and develop Group wide policy

As in previous years, the Non-Executive Directors, led by the Senior Independent Director, considered as part of the evaluation process, the performance of the Chairman and provided him with feedback.

Victrex plc Page 36

A formal evaluation of the Board, Board Committees and individual Directors’ performance is carried out annually. As part of the annual Board evaluation process, Directors’ training and development needs are considered by the Chairman. The 2012 Board evaluation comprised an internal evaluation process including questionnaires and individual meetings between the Chairman and each Director and appropriate follow up discussions. The Chairman’s performance is reviewed by the Remuneration Committee in conjunction with the Chief Executive. The other non-executive Directors’ performance is evaluated by the Chairman in consultation with the executive Directors. Executive Directors’ performance is reviewed by the Remuneration Committee in conjunction with the Chief Executive, except in the case of his own performance review.

The evaluation process concluded that the Board and its Committees remain effective in fulfilling their responsibilities appropriately and that each Director continues to demonstrate a valuable contribution. Actions agreed as a result of the Board evaluation included continued development of the Group’s strategic planning and talent management processes.

The 2011 Board evaluation was the Board’s and its Committees (Nominations Committee, Audit Committee, Remuneration Committee and Risk Management Committee) first external evaluation of performance, as required by the Code every three years. The external evaluator, JCA Group, had no other connection with the Company. The external evaluation process included assessment of the performance of individual Board members. Once this formal evaluation had taken place, the Chairman held one to one meetings with all the Directors, including the Chief Executive. The Senior Independent Director held a separate meeting with the external evaluator regarding the performance of the Chairman.

Vodafone Group PLC Page 67

Performance evaluation of the Board, its committees and individual directors takes place on an annual basis and is conducted within the terms of reference of the Nominations and Governance Committee (see www.vodafone.com/governance). Every three years the performance evaluation is conducted by an external advisor. The last external evaluation took place in respect of the 2010 financial year.

This year, Board members were asked to consider and comment on the performance of the Board as a whole as well as to reconsider the report of the Board’s self-assessment in the 2011 financial year. The Chairman led the assessment of the directors. He held one-to-one interviews with each director and these discussions were facilitated by the directors being asked to consider a number of questions in advance. Amongst other things, directors were asked for their views on company strategy; key challenges for the business; the mix of skills, experience, independence, knowledge and diversity on the Board (including gender); effectiveness of the Board’s engagement with shareholders; and how well the Board operates. The output of the interviews were discussed with the Board at the March Board



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meeting following a review by the Nominations and Governance Committee.

Each Board committee undertook a detailed self-assessment questionnaire and the respective chairman reported feedback to the Board at the Board meeting in March. The Senior Independent Director led the review of the performance of the Chairman.

The Board found the performance of each director to be effective and concluded that the Board provides the effective leadership and control required for a listed company. The evaluations found the Board committees were working well. As a result of recommendations made in this year’s Board performance evaluation, each Board meeting is now preceded by a meeting of the Chairman and non-executive directors; more time is being given during Board meetings to discuss organic growth opportunities; and more opportunities are being given to directors to visit local markets and various Group businesses. The Board will continue to review its procedures, its effectiveness and development in the financial year ahead.

Annually, the Nominations and Governance Committee reviews performance of the Executive Committee and reports the output to the Board.

Weir Group plc Page 37

Our 2011 review of Board effectiveness was led by an independent third party who undertook interviews with the chairman, each of the directors and the external auditors, in addition, an assessment of the chairman’s performance was carried out by the senior independent director. Feedback was sought on the operation of the principal Board committees and on the contributions of individual directors.

The review considered the effectiveness of leadership, governance arrangements and management practices in a number of areas including:

�� Board constitution including the mix of skills, knowledge and experience.�� Relationships between the Board, committees and executive directors.�� Responsibilities, delegated authorities and reporting lines.�� Succession planning, induction and training.�� Communication with shareholders.

The review concluded that there was an effective Board led by a strong chairman. A number of detailed recommendations will be followed up by the chairman.

Whitbread plc Page 31

There were three aspects to this year’s evaluation:

�� As in previous years, each director completed a formal questionnaire on the performance of the Board and each of the Board committees; �� The Chairman also met or spoke to all directors on a one-to-one basis; and �� An external evaluation of the Board was facilitated this year by Lorna Parker, an independent consultant and former Managing Director and Partner of Spencer Stuart. As part of this review, Lorna met each of the directors, the Company Secretary and the Group HR Director to discuss the effectiveness of the Board and its processes.

The outcome of the review was discussed with the Chairman and Senior Independent Director and then as an agenda item at the Board meeting in March 2012, which was attended by Lorna Parker. The review concluded that there is ‘an open, supportive, cohesive but challenging and disciplined culture within the Board room.’ All the directors expressed a high degree of satisfaction with their experience on the Board.



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Suggestions for improvement included:

�� The introduction of a formal annual update from the Company Secretary and auditors on legal or regulatory issues directly affecting the Company;�� Holding meetings at Company sites when there are new concepts/developments; and�� Holding the planning and review meeting for the Nomination Committee in March each year when confirming the recommendation for re-election of directors.

Individual directors:

The Chairman has one-to-one meetings with each director to discuss their performance.

Chairman:

Every year the Senior Independent Director meets with the non-executive directors without the Chairman present to discuss the performance of the Chairman. The Senior Independent Director also speaks with the executive directors to gain their views before discussing the results of the evaluation with the Chairman.

William Hill plc Page 55

During the year the Board carried out an internal evaluation of its own performance. This was dealt with by the individual directors supplying answers to a questionnaire in October 2011, the results of which were discussed at the December 2011 Board meeting. The Board performance report identified that improvements could be made in both the effective management of our relationship with shareholders and succession planning and talent management review. It was suggested that there ought to be an agreed personal development plan for various members of the executive team, to ensure that there is suitable Board visibility of the people just below Board level. This will be brought to the Board by April 2012. Overall, the Board considered that the results received demonstrated that the Board was effective during the year. An external Board evaluation is due to be carried out in 2012.

Wolseley plc Page 72

An externally facilitated review was conducted this year in accordance with the Code. The review was conducted by Dr Tracy Long of Boardroom Review. Neither Dr Long nor Boardroom Review has any connection with the Company. Dr Long attended the March 2012 Board and Committee meetings and conducted in-depth confidential interviews with each of the Directors and the Group Company Secretary and General Counsel. The review considered the way in which the Board defines its role and approaches its work (strategy, risk and control, performance management, and communication); and the way in which the Board works together (culture and dynamics), and whether it optimises its use of time and its contribution to the Company.

The Board review undertaken by Dr Long included a review of the effectiveness of each of the Committees and of each Director and the Company Secretary and the findings were presented to the Chairman. Each was found to perform effectively and no material concerns were raised.

Also, during the year, the Non-Executive Directors, led by the Senior Independent Director, undertook the performance evaluation of the Chairman for which they are responsible. Such evaluation took into account the views of the Executive Directors.The review concluded that the Board was highly effective and focused on the clarification of Wolseley’s strategy and its implementation. Dr Long praised the quality of financial information provided to the Board, noting that it had improved and that a strong Audit Committee was increasing the attention given to risk management and internal controls. It was noted that the size and composition of the Board encouraged open and robust debate. The Chairman was commended for his experienced and supportive approach; and the Group Chief Executive was commended for providing strong operational leadership. The culture and contribution of the Board to the Company’s development were recognized as strengths. No critical issues were identified but a number of areas were identified for further improvement which are summarised below. As at the date of this report, the Board has already begun to implement a number of these action points into its processes and procedures.



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Action Responsibility

Greater focus on competitive benchmarking, monitoring customer trends and strengthening supply chain

Board

Enhance Board oversight of risk by way of further improvements to the Internal Audit function and all Directors to participate in Audit Committee deliberations where risk is discussed

Audit Committee and Internal Audit

Further improvement of the talent development process in addition to the scheduled six-monthly review

HR

Address further gaps in the composition of the Board Board and Nominations Committee

Maximise the use of the Board’s time together, with more arrangement briefings and site visits

Chairman and Company Secretary

Wood Group plc Page 40

The Board completed a formal evaluation of its own performance and of its committees, individual directors, and of the Chairman for the year. This involved directors completing detailed questionnaires, the results of which were analysed by the Company Secretary and presented for discussion both at a full Board meeting and separate meetings between each director and the Chairman. The non-executive directors, led by the senior independent director, are responsible for the performance evaluation of the Chairman, taking into account the views of the executive directors.

WPP Group plc Page 107

For the Board’s review of its own operations, each director completed a confidential questionnaire and identified opportunities for improvement. Separate conversations were then held between each director and either the chairman or the senior independent director, who also led the non-executive directors’ assessment of my performance as chairman. From these findings, we continued implementing changes to enhance the Board’s performance.

Xstrata plc Page 89

Board evaluation is undertaken annually, and every three years is conducted by an external facilitator. In 2011 the Board undertook an evaluation of its own performance and that of its committees and of its individual directors in accordance with the Code. The process was devised and conducted internally under the direction of the Nominations Committee, following the previous year’s external process, and was based on responses to a questionnaire. Subjects covered in the questionnaire included the number, timing and conduct of Board meetings, Board meeting processes, the composition and balance of the Board, Board and committee performance, Board communication and shareholder relations. In addition the Chairman assessed the individual performance of directors in interview with each director. The results of the evaluation revealed that the directors are satisfied with the number, conduct and processes of Board meetings and with the performance of the Board and its committees. However, it was agreed that so far as possible committee meetings should be held the day before Board meetings to ensure that there is always sufficient time for all meetings.

The directors believe that our Company’s performance over its first ten years is a strong reflection of Xstrata’s entrepreneurial leadership. As regards composition, the Board responded to the Davies Committee recommendations and expressed its intention to appoint a female director with the appropriate criteria and of the right calibre. The Board does not, however, believe it is appropriate to appoint a director solely on the basis of gender, race, or religion or on any other basis than an assessment of his or her capacity to make a significant contribution to Xstrata’s Board and to enhance the Company’s ability to create value for its shareholders.

ICSA Board Evaluation16 Park CrescentLondonW1B 1AH

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