Corporate governance compliance statement

The Board believes that the Quoted Companies Alliance (QCA) Corporate Governance Code best meets the reporting needs of our stakeholders, having regard to the size and complexity of our business.

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The Board recognises the importance of high standards of corporate governance and considers that the Society’s success is enhanced by a strong corporate governance framework.

The remainder of this section provides an explanation of how Dentists’ Provident applies the principles of the Code.

Further information on the Board’s corporate governance procedures can be found in the “About us” section of the website and in the group’s Annual Report.

Establish a strategy and business model which promote long-term value for the members

Our strategy and business model is discussed, agreed and reviewed by the board as a regular agenda item at board meetings.

Since our inception in 1908, we have been fully committed to the not for profit mutual business structure. Being owned by our members, with no shareholders, allows us to focus on building a long term sustainable business, that places the interests of our membership ahead of others. Our strategy has always been to be the quality focused income protection insurance provider of choice for dental professionals in the UK and Ireland. We do this by:

• Providing our members with individualised and comprehensive insurance plans, which are flexible enough to remain fit for purpose throughout a dental professional’s career
• Investing prudently and with a long term mindset, to maximise the returns for our members and to improve the resilience of our finances
• Employing a team of experienced and dedicated industry professionals, to manage the day to day operations
• Taking a fair and disciplined approach to underwriting and claims management
• Treating our members ethically, to build mutually beneficial long term relationships, based on respect and trust
• Distributing our proposition directly and through independent financial advisers, using digital and traditional channels
• Pricing our plans in a clear, sustainable and transparent manner
• Effectively managing our cost base and key risks

This has, and continues to, enable us to maximise the long term value we create for our members, within the context of a mutual business model.

Further information regarding our strategy and business model is set out in the strategic report section of our annual report.

Seek to understand and meet member needs and expectations

We regularly attend industry events to meet with members, prospective members, intermediaries and other dental industry participants, to ensure that we have a clear and up to date understanding of the needs of these important stakeholders.

Many of our directors have held senior positions within the profession and have been involved in the training and education of dental professionals. This gives our key decision makers a unique opportunity to look at the needs of our core market from the top down and from the bottom up.

All directors are members of the Society. This also gives our board a direct connection with our plans and services, and deeper insight into the needs and expectations of other members.

Our products, their suitability, and relevance to our target market are also discussed regularly as part of the board’s strategy discussions.

Take into account wider stakeholder and social responsibilities and their implications for long-term success

Our strategic focus on the long term means that, in order to succeed, we need to recognise our responsibilities to a wider spectrum of stakeholders, including staff, financial intermediaries and suppliers. We are committed to meeting the needs of our key stakeholders with whom we maintain a regular dialogue through a range of communication channels where we actively seek their feedback.

Our team play a critical role in delivering our strategy. We strive to attract, develop and retain high quality individuals with the right skills to drive our business forward. We actively encourage our staff to provide feedback and express their needs, interests and expectations through frequent formal and informal conversations.

We build long standing mutually beneficial relationships with the financial intermediary community through commercial discussions, face to face meetings and press releases. The group also has a dedicated intermediary consultant to better understand and serve their needs.

We are a respected member of the dental community and we take an active interest in matters affecting the dental profession. We continue to support charitable bodies involved in improving dental health and supporting members of the dental profession facing financial or health issues. We also give proper consideration to environmental, social and governance factors within our investment decision making process.

Embed effective risk management, considering both opportunities and threats, throughout the organisation

The principal risks, and plans to manage these, are set out in the ‘principal risks and uncertainties’ section of our annual report.

Our business is underpinned by a robust risk management framework. An effective risk management system allows us to allocate resources more efficiently. The key objectives of our risk management systems are to:

• support decision making by providing timely and appropriate risk information
• protect our solvency and financial position
• protect and enhance our reputation

The ultimate oversight for risk management remains with the board. However, certain duties have been delegated to board committees, who provide regular updates to the board, on activities that fall within their remit.

There are predefined risk appetites for all key risk areas, and risk management policies and procedures are reviewed and updated regularly, to reflect the environment within which we operate.

We continually monitor risks, whether this is through the assessment of applications and claims, security testing of our systems or executive level discussions on how changes in dentistry will affect the services we provide. The risk identification and management process is an intrinsic part of our processes and performed daily by all employees and ensures that key risks are appropriately collated and risk owners identified. The status of the risks is reviewed periodically and a structured reporting process is in place to communicate key risks and other relevant information to the board and its committees.

The day to day responsibility for risk management lies with the Chief risk officer. The heads of departments are responsible for operational implementation of risk management policies and procedures and for reacting to new and emerging risks.

In addition, regular operational monitoring, augmented by internal audit and compliance reviews provides assurance on the effectiveness of the control environment.

Maintain the board as a well functioning, balanced team led by the chair

The board’s primary role is to oversee and direct the affairs of the group, and to further the interests of our members in accordance with relevant law and our memorandum and rules. The board meets at least four times a year and its responsibilities are set out in the board handbook, which also details the matters reserved specifically for it.

The main responsibilities of the board include:

• approval and oversight of the group’s objectives and strategy
• responsibility for the group’s overall structure and capital requirements
• oversight of the group’s operations, including approval of annual budgets and plans
• oversight of financial reporting, internal controls and risk and capital management
• approval of any material transactions that affect the group
• dialogue with key stakeholders
• oversight of the corporate governance framework

The board comprises a non executive Chairman, Chief executive, three executive directors and seven independent non executive directors.

The executive directors all work full time for the group. The non executive directors work part time, alongside other commitments outside of the group. A summary of these commitments appears in their biographies in the annual report and the “About us” section of our website. In the Chairman’s opinion, having consulted with the other directors, each member of the board gives the right amount of time to fulfil their responsibilities.

In assessing the independence of directors, we take an objective view of a director’s tenure and we do not consider that after nine years non executive directors automatically cease to be independent. The main threat to independence arises from conflicts of interest, financial dependence and over familiarity, and the most effective way of ensuring independence of thought and action is by focusing on these risks. Each year, we assess the independence of each non executive director, against highly conservative benchmarks, covering conflicts of interest, personal and professional connections and financial integrity.

The governance committee has considered the declarations by the non executive directors and has concluded that all non executive directors, with the exception of the Chairman, remain independent. Giles Kidner was deemed to be independent until their appointment as Chairman. However, in line with common practice, he is no longer classified as an independent non executive director.

The governance committee oversees the process of continued appointments. All directors are reappointed annually by our members, subject to the board being satisfied with their performance and commitment to the role. Over the years, the group has steadily reduced the maximum tenure of non executive directors. Depending on the date of appointment, non executive directors normally retire from the board at the age of 65 or after 15 or 9 years of service. However, for directors appointed on a 9 year term, the Society has the option of offering limited term extension of beyond 9 years to ensure an orderly succession process. In general terms, the Society will seek to avoid more than two director changes in any 12 month period.

Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities

We are committed to ensuring that we appoint and retain non executive directors who bring relevant experience and expertise, strategic and operational skills and insights required to drive the group forward.

We are scrupulous in ensuring that all our appointments are on merit. The governance committee ensures that new directors are selected through a robust recruitment process, targeted at complementing the strengths of the board as a whole. We strive to ensure that our board represents the views and opinions of the different strands of the dental profession, and that our discussions cover the widest range of thoughts, ideas and opinions. As a result, we do not consider that targets based on gender or ethnicity fit with our meritocratic principles, nor would such targets improve our governance framework.

We believe that keeping up to date with key business issues is vital for each director to improve and maintain their knowledge and skills, so they are able to continue discharging their duties effectively. Therefore, we ensure that our non executive directors:

• receive regular training in areas of significance
• attend training courses covering their duties as directors
• receive formal briefings by external experts during board meetings

In addition, as part of each director’s performance appraisal, they are given the opportunity to discuss any individual training and development needs. Each director is responsible for organising their individual training, and for ensuring they remain up to date with the issues affecting the group, and their responsibilities as a director.

The group also has procedures in place for directors to obtain additional independent expert professional advice at the group’s expense. No such advice was sought by any director in 2023.

The directors’ biographies and skill sets are detailed in Annual Report and in the “About us” section of the website.

Evaluate Board Performance based on clear and relevant objectives, seeking continuous improvement

Every year, all directors undergo a formal appraisal, covering their work on the board and any relevant committees. In addition, led by the Chairmen, the various committees evaluate their own performance as a whole. The evaluation of executive directors is led by the Chief executive and the Vice chairman leads the evaluation of the Chairman. The evaluation of all other directors, including the Chief executive, is led by the Chairman.

An externally facilitated board review is also carried out by an independent expert at regular intervals, the last of which was carried out in 2021. The independent reviews require each director to complete a confidential questionnaire in respect of their role on the board and its committees which then forms the basis of a confidential one to one meeting between the appraiser and the director. The questionnaire covers the key areas of strategy, risk management, board composition, roles and responsibilities as well as the overall culture and board dynamics.

The governance committee review the results of the annual and externally facilitated evaluation as a whole and these form the basis of the discussions by the board of its own performance. The committee chairmen are responsible for presenting a summary of committee related themes to other members of the committees and to the board.

The governance committee regularly discusses succession planning for all key individuals, and these discussions consider the skills and experience required, now and in the future. Within this context, the periodic refreshment of the board is essential, to avoid the risks of complacency, groupthink and perhaps most importantly losing touch with segments of our core market. Over the years we have gradually reduced the maximum length of tenure to manage these risks.

Promote a corporate culture that is based on ethical values and behaviours

A strong product suite is only part of a successful strategy. We believe that treating our members, employees and other stakeholders with the same ethics, honesty and respect that we ourselves, as people would expect, is a simple yet powerful differentiator of our business. It is one that has been, and continues to be, a key source of our long term competitive advantage. From the moment individuals engage with us, we treat each step as an opportunity to offer extraordinary service and ethical, honest and fair outcomes.

Conduct and corporate citizenship form key elements of the benchmark used to determine the discretionary bonus allocation for employees. We recognise that conflicts of interests can be a risk to ethical behaviour and mainly for this reason, the Society eschews bonuses for executive directors. In addition, we have put the following processes in place to manage the risk of conflicts:

• restrictions on bonus account transactions at certain times of the year
• annual declarations by staff covering actual and potential conflicts
• ongoing responsibility for staff to disclose, immediately, any changes in their circumstances, which may give rise to a conflict of interest
• restrictions on participating in any discussions or decisions in which an individual has a material personal interest

The group’s performance against its ethical values and cultural norms is monitored by the board’s committees. The committee chairmen report on the work of the committees to the board as a whole on a quarterly basis.

Maintain governance structures and processes that are fit for purpose and support good decision making by the Board

We have a robust system for corporate governance throughout the group, with a clear division of responsibilities for those involved.

The Chairman is responsible for ensuring we meet our overall governance standards, the leadership and management of the board, overseeing the induction, evaluation and ongoing development of directors and for maintaining an open and cooperative relationship with our members and other key stakeholders.

The Vice chairman deputises for the Chairman and supports him in the effective management of the board. The Vice chairman also fulfils the role of the senior non executive director, serving as an important intermediary between the Chairman, the rest of the board, and our members.

The Chief executive is responsible for developing the overall strategy, leadership of the management team and oversight of the day to day operations of the group.

The Secretary is responsible for supporting the Chairman in the effective operation of the board. They also act as secretary to each of the committees and are responsible for supporting each of the directors in discharging their duties effectively.

The secretariat role is currently performed by the Chief finance officer who is responsible for human resources throughout the group. When acting as secretary to the remuneration committee, procedures are in place to ensure they do not participate in any part of the meeting affecting the terms and conditions of their employment, including remuneration.

The board has established various committees to assist it in effectively fulfilling its governance responsibilities. Information on the role and work of these committees is detailed in our latest annual report and the “About us” section of the website.

Communicate how the company is governed and is performing by maintaining a dialogue with members and other relevant stakeholders

We report on our financial performance annually.

We are committed to maintaining an open dialogue with our members to raise understanding and awareness of our products, strategy and performance. We use the annual general meeting and industry events as the primary mechanisms for doing this.

We encourage members to participate in the annual general meeting and notice is given at least 30 days in advance of the meeting. At the annual general meeting, separate resolutions are proposed on each substantive issue. When an issue has been determined at the meeting by a show of hands, the Chairman confirms the number of proxy votes for and against the resolution. The chairmen of the board’s committees are also available to answer relevant questions at the annual general meeting.

Further information about the group, including its current and past results, vote counts and press releases is provided on our website.