Board of Directors - Terms of Reference

Membership
Members of the Board shall be appointed by the Board, on the recommendation of the Nomination Committee, and shall be subject to election by the Members of the Society. The Members of the Society also have the right to nominate candidates for election to the Board. The majority of Board members shall be non-executive directors.

Only members of the Board have the right to attend Board meetings. However, other individuals such as the Secretary, Actuary and external advisers may be invited to attend all or part of any meeting as and when appropriate.

Executive director appointments to the Board shall be for a period of up to three years, which may be extended for further three year periods subject to election or re-election by the Members of the Society.

Any director appointed to fill a casual vacancy shall hold office until the end of the Annual General Meeting immediately following the appointment.

Any non-executive director who has not been elected or re-elected at either of the two preceding Annual General Meetings, or has served as a non-executive director for a total period of nine years or more, will retire from office at the Annual General Meeting in each year and will be eligible for re-election in accordance with the Rules.

The Board shall appoint fellow non-executive directors as Chairman and Vice Chairman. In the absence of the Chairman and/or the Vice Chairman, the remaining directors present shall elect one of themselves to chair the meeting.

Secretary
The Secretary of the Society shall act as the Secretary of the Board.

Quorum
At least half of the number of directors from time to time shall form a quorum, of whom the majority should be non-executive directors. A duly convened meeting of the Board at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Board.

Frequency of Meetings
The Board shall meet at least four times a year and otherwise as required.

Notice of Meetings
Meetings of the Board shall be called by the Secretary at the request of any of the directors or at the request of the internal or external auditors if they consider it necessary.

Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the Board and any other person required to attend no later than 5 working days before the date of the meeting. Supporting papers shall be sent to Board members and to other attendees as appropriate, at the same time.

Minutes of Meetings
The Secretary shall minute the proceedings and resolutions of all meetings of the Board, including the names of those present and in attendance.

The Secretary shall record any conflicts of interest disclosed at the meeting.

Minutes of Board meetings shall be circulated to all members of the Board before the next meeting of the Board.

Annual General Meeting
The directors shall attend the Annual General Meeting, and respond to any questions on the Board's activities.

Duties
The principal duties of the Board are:

• Constructively challenging and helping to develop proposals on the strategy of the Society;
• Setting values and standards for the Society and establishing systems for their communication and monitoring;
• Monitoring the performance of management in meeting agreed goals and objectives and ensuring that the necessary financial and human resources are in place to enable the Society to meet those goals and objectives;
• Satisfying itself as to the adequacy and integrity of financial and other reporting to the Board and Members of the Society;
• Satisfying itself that there are adequate systems of internal control;
• Satisfying itself that systems for identification and management of risks are robust and appropriate; and 
• Ensuring that the Society operates within its Rules, regulatory guidelines and all relevant laws.

Matters reserved to the Board

Strategy and Management

• Responsibility for the overall management of the Society.
• Approval of the Society’s long term objectives and Business Strategy.
• Approval of the annual operating and capital expenditure budgets and any material changes to them.
• Oversight of the Society’s operations ensuring:
  • Competent and prudent management;
  • Sound planning;
  • An adequate system of internal control;
  • Adequate accounting and other records; and 
  • Compliance with statutory and regulatory obligations.
• Review of performance in the light of the Society’s strategy, objectives, business plans and budgets and ensuring that any necessary corrective action is taken.
• Extension of the Society’s activities into new markets, businesses or geographic areas.
• Strategic or other material alliances and partnership agreements.
• Any decision to cease to operate all or any material part of the Society’s business.

Structure and Capital

• Changes relating to the Society's capital and reserves.
• Approval of policies and assumptions relating to the Society's liabilities.
• Major changes to the Society’s corporate structure including any merger with another Friendly Society and the creation, acquisition and/or disposal of any subsidiary or associated undertaking.
• Changes to the Society’s management and control structure.
• Any changes to the Society’s status as a mutual.

Financial Reporting and Controls

• Approval of the annual report and accounts, including the corporate governance statement and remuneration report.
• Declaration of annual bonuses to Members.
• Approval of any significant changes in accounting policies or practices.
• Approval of treasury policies including foreign currency and interest rate exposure management policies.
• Appointment of investment managers.

Internal Controls

• Ensuring maintenance of a sound system of internal control and risk management including:
  • Receiving reports on, and reviewing the effectiveness of the Society’s risk and control processes to support its strategy and objectives;
  • Undertaking an annual assessment of these processes; and 
  • Approving an appropriate statement for inclusion in the annual report.
• Approval of the Society’s risk appetite and risk management policy.

Expenditure and Contracts

• Capital expenditure in accordance with the Authority Limits.
• Operating expenditure in accordance with the Authority Limits.
• Contracts where any of the conditions set out in the Authority Limits (as may be amended from time to time by the Board) are satisfied.
• Any guarantees, indemnities, counter-indemnities and letters of comfort.
• Any material acquisition or disposal of assets.

Communication

• Approval of resolutions and corresponding documentation to be put to Members at a general meeting, including proposals for changes to the Society's Memorandum and Rules.

Senior Management Issues

• Changes to the structure, size and composition of the Board, following recommendations from the Nomination Committee.
• Ensuring adequate succession planning for the Board and senior management.
• Appointments and removal of directors from the Board following recommendations by the Nomination Committee.
• Selection of the Chairman, Vice Chairman and Chief Executive.
• Membership and Chairmanship of Board Committees.
• Appointment or removal of the Society's Secretary.
• Appointment, re-appointment or removal of the internal and/or external auditors, following the recommendation of the Audit Committee.

Remuneration

• Determining the remuneration policy for the executive directors and Chief Executive.
• Determining the remuneration of the non-executive directors, subject to the Memorandum and Rules.
• The introduction of new bonus/incentive plans or major changes to any existing plans, following the recommendation of the Nomination/Remuneration Committee.

Delegation of Authority

• The division of responsibilities between the Chairman and the Chief Executive.
• Approval of the terms of reference of Board Committees.
• Approval of the Authority Limits.

Board Governance

• Undertaking a formal and rigorous review, annually, of its own performance, that of its committees and individual directors.
• Determining the independence of directors.

Policies

• Approval of high level policies including:
  • Code governing withdrawal of funds
  • Corporate Governance
  • Health and Safety.

Other

• The making of any political and/or charitable donations.
• Approval of the appointment of the Society's principal professional advisers.
• Prosecution, defence or settlement of litigation (above £100,000 or being otherwise material to the Society’s interests).
• Approval of the overall levels of insurance for the Society including Directors' and Officers' Liability Insurance.
• Major changes to the rules of the Society’s pension schemes or changes in trustees (where these are employer-nominated).
• Receive reports and recommendations from time to time on any matters which it considers significant to the Group.

This schedule of matters is reserved for Board decisions.