Throughout the year, the Board also tracked progress through to completion against the actions agreed in respect of the 2013 performance evaluation of the Board and its committees. These actions focused on three broad areas:
—Increasing Board time spent on business operations generally and on specifi c markets, which was addressed by extending time spent at Board away visits, allowing greater focus on operational aspects;
—Continuing work on succession planning and reporting to the Board, with particular emphasis on Board committees and executive level succession planning. This has been refl ected in the work of the Nomination Committee and by continuing the more detailed reporting to the Board, introduced during 2013, on senior management development initiatives; and
—Fine tuning the timing, format and content of Board meetings. These elements have been reviewed and adjusted to ensure Board time is used in the best possible way, balancing time spent on strategic and operational issues and management contact with time spent on regulatory and governance issues.
Philip Remnant, the Senior Independent Director, led the performance evaluation of Paul Manduca and was assisted by Independent Board Evaluation in this process. Feedback on the outcome was provided to the Chairman.
2014 Board performance evaluation
Through the evaluation and subsequent discussion at the Board meeting in February 2015, the Board identifi ed areas of particular focus and the related actions set out in the table below:
Theme Action
Board composition Prioritise operational experience, gender balance and relevant geographical representation, where possible, in making new appointments to the Board. Keep the balance of executive and non-executive directors under review.
Relationship with senior management
Consider ways of further increasing informal contact between non-executive directors and senior management, for example, inviting additional senior managers to attend committee meetings where appropriate and continuing to create opportunities for contact with local management during overseas visits. Selection processes Provide more detailed updates and information on
potential Board candidates to the whole Board as early as possible.
Board papers Continue to review and streamline Board and committee papers.
Re-election of directors
All directors will retire from the Board at the 2015 AGM and, with the exception of Lord Turnbull, each wishes to seek re-election. The performance of each director formed part of the overall performance evaluation of the Board and the feedback compiled assisted the Chairman, and the
Nomination Committee, in the assessment of the contribution and commitment of the individual directors. This exercise concluded that each director’s
performance continued to be effective and supported the Nomination Committee’s recommendation to shareholders to re-elect all directors.
The Board believes that the non- executive directors bring a wide range of business, fi nancial and international experience to the Board and its
committees. The executive directors, who head the main businesses of the Group, each bring an in-depth understanding to the Board of their particular business, its markets and challenges, ensuring the Group’s principal activities are represented.
Independence
The independence of the non-executive directors is determined with reference to the United Kingdom (UK) and Hong Kong (HK) corporate governance codes. Prudential is required to affi rm annually the independence of all non-executive directors under the HK Listing Rules and the independence of its Audit Committee members under the Sarbanes-Oxley legislation.
The Board has appropriate processes in place to manage any potential confl icts of interest. Additional information on these processes can be found on page 89.
Throughout the year, the non-executive directors were considered by the Board to be independent in character and judgement and met the criteria for independence as set out in the UK and HK Codes. The Company has received confi rmation of independence from each of the independent non-executive directors as required by the HK Listing Rules.
Alistair Johnston was a partner in the Group’s auditor, KPMG, from 1986 to 2010. However, he did not audit the Prudential Group and he no longer has any fi nancial or other interest in KPMG. The Board does not consider that this former relationship with KPMG affects Alistair’s status as an independent director of Prudential.
Prudential is one of the UK’s largest institutional investors and the Board does not believe that this compromises the independence of those non-executive directors who are on the boards of companies in which the Group has a shareholding. The Board also believes that such shareholdings should not preclude the Company from having the most appropriate and highest calibre non- executive directors.
Induction
The Chairman is responsible for ensuring that induction programmes are provided for all new directors. These are tailored to refl ect the experience of each director and their position as either executive or non-executive directors. On appointment, all directors embark upon a wide-ranging induction programme covering, among other things, the principal bases of accounting for the Group’s results, the role of the Board and its key committees, the Group’s key risks and the risk management framework within which these sit, as well as the compliance environment in which the Group operates. In addition, they receive detailed briefi ngs on the Group’s principal businesses, its product range, the markets in which it operates and the overall competitive environment. These sessions are facilitated through meetings with executive management and other senior members of the management team. Other areas addressed include the directors’ obligations under the different listing regimes, legal and regulatory issues affecting directors of fi nancial services companies, the Group’s governance arrangements and its investor relations programme, as well as its remuneration policies.
Go v ern an c e Bo ar d g o v ernan c e Ongoing development
The Chairman is also responsible for ensuring that all directors continually update their skills, knowledge and familiarity with the Company. Directors regularly receive reports facilitating greater awareness and understanding of the Group’s businesses and the regulatory and industry-specifi c environments in which it operates. The Board’s overseas visit enabled the directors to develop a fuller understanding of the Group’s operations and provided the opportunity to meet with the local senior management teams.
Committee members received detailed presentations at committee meetings focussing on areas of particular relevance to the respective committees and were kept updated on ongoing developments in these areas, as well as the impact these have on the Group. In 2014, the Audit Committee and Risk Committee held a joint session providing an update on the status of Solvency II and the Board received additional information on a number of key regulatory reports such as the Own Risk Solvency Assessment (ORSA) and new investment management metrics developed following the appointment of the Group Investment Director.
In addition, directors were provided with updates throughout the year on other general changes and developments in the
legal and regulatory area that could impact the Group.
Meetings
The Board met on ten occasions during the year, which included an overseas meeting held at the Group’s operations in Jakarta. The Board also held one strategy event during the year. Individual directors’ attendance for meetings throughout the year is set out in the table below.
During the year, the Chairman met with the non-executive directors without the executive directors being present on several occasions.
In the ordinary course of business, Board and committee papers are provided one week in advance of each meeting and where a director was unable to attend Board meetings, their views were canvassed by the Chairman prior to the meeting.
Board and committee meeting attendance during 2014
Number of meetings held
Board 10 Audit Committee 11 Nomination Committee 3 Remuneration Committee 6 Risk Committee 6 General Meeting 1 Chairman Paul Manduca 10 – 3 – – 1 Executive directors Tidjane Thiam 10 – – – – 1 Nic Nicandrou 10 – – – – 1 Pierre-Olivier Bouée1 8/8 – – – – 1 John Foley2 2/2 – – – – 1 Jackie Hunt 10 – – – – 1 Michael McLintock 10 – – – – 1 Barry Stowe 10 – – – – 1 Mike Wells 10 – – – – 1 Non-executive directors Philip Remnant 10 11 3 6 – 1 Howard Davies 10 9 3 – 6 1 Ann Godbehere 10 11 3 – 6 1 Alistair Johnston 10 11 – – – 1 Kai Nargolwala 10 – – 6 6 1 Anthony Nightingale 10 – – 6 – 1 Alice Schroeder 10 11 – – – 1 Lord Turnbull 10 – 3 6 5 1 Notes
1 Pierre-Olivier Bouée was appointed as a director on 1 April 2014. 2 John Foley stepped down as a director from 1 April 2014.