Governance framework

The Board provides leadership of the Group and direction for management. It is collectively responsible and accountable to the Company's shareholders for the long term success of the Group and for ensuring the appropriate management and operation of the Group in pursuit of its objectives.

Statement of Compliance with the UK Corporate Governance Code

The Governance Report set out below is designed to provide shareholders with a summary of the Group's governance policies and practices and an explanation of how the Company has applied the main principles of the UK Corporate Governance Code (the 'Code') as relevant for the Company in 2013. The Directors believe that the Company has complied with the provisions set out in the Code during 2013 save as described below.  A printed copy of the Code can be obtained free of charge from FRC Publications by telephone (+44 (0)20 8247 1264), email (cch@wolterskluwer.co.uk) and online at www.frcpublications.com.

As part of the Board's succession plans and  in order to ensure there was continuity, it was decided to ask Sir Andrew Foster to remain a Director until the 2015 Annual General Meeting ('AGM'). With effect from 1 August 2013, Sir Andrew has served on the Board for more than nine years and is no longer deemed independent under the Code; however, it was felt important that with his significant experience he remain the Chair of the Remuneration Committee and a member of both the Nomination and Audit Committees. The intention is that Sir Andrew will continue to be a member of these Committees until he stands down at the 2015 AGM; the composition of the Committees will then be brought into line with the Code requirements.


Applying the principles of good governance

The Board of Directors

The Board consists of an appropriate balance of Executive and Non-Executive Directors who collectively bring a strong and in-depth mix of business skills and experience and considerable knowledge to assist with Board decisions.

During 2013, at least half of the Board, excluding the Chairman, comprised independent Non-Executive Directors in accordance with the Code.

The Chairman and the Group Chief Executive

The roles of the Chairman and the Group Chief Executive are held separately and the division of responsibilities between these roles is clearly established as shown below. The Chairman is responsible for leading the Board and ensuring its effectiveness. The Group Chief Executive is responsible for running the business of the Group and implementation of the strategy and policies adopted by the Board.

Chairman’s responsibilities

  • Chairing and managing the business of the Board;
  • Together with the Group Chief Executive, leading the Board in developing the strategy of the business and ensuring its effective implementation by the executive management team;
  • Ensuring effective dialogue with investors concerning mutual understanding of objectives;
  • In conjunction with the Nomination Committee, taking responsibility for the composition and replenishment of the Board;
  • Periodically reviewing with the Board its working practices and performance; and
  • Ensuring there is an effective contribution from the Non‑Executive Directors and a constructive relationship between Executive and Non-Executive Directors.

Group Chief Executive’s responsibilities

  • Communicating a shared purpose and the culture, vision and values of the Group;
  • The development and implementation of management strategy;
  • The day-to-day management of the Group;
  • Managing the executive management team;
  • Fostering relationships with key stakeholders;
  • Leading the Group Executive Committee;
  • In conjunction with the Group Finance Director, communicating the Group’s financial performance to investors and analysts; and
  • Liaising with the Chairman to ensure effective dialogue with investors and stakeholders.


Non-Executive Directors

Non-Executive Directors constructively challenge and scrutinise the performance of management and help develop proposals on strategy. The terms and conditions of appointment of the Non-Executive Directors are available for inspection at each AGM, on the Company's website and at its registered office during normal business hours. The Non-Executive Directors disclose to the Board their other significant commitments.

Senior Independent Director

Tim Score was the Senior Independent Director ('SID') of the Company during 2013. As announced on 28 January 2014, Tim Score stepped down from the Board on 25 February 2014 and Jackie Hunt became the SID from 26 February 2014. As well as being available  to shareholders whose concerns have not been resolved through normal channels or when such channels would be inappropriate, the SID provides a sounding board for the Chairman and serves as an intermediary for the other Directors, where necessary. The SID also has responsibility for leading the annual appraisal of the Chairman's performance.

Executive Directors

The Executive Directors are responsible for the day-to-day management of the Group's businesses, implementation of its strategy, policies and budgets and its financial performance. Executive management meetings comprise the Executive Directors and senior management from the divisions and are held regularly to discuss current issues.

Principal committees of the Board

The main Committees established by the Board are the Audit Committee, the Remuneration Committee, the Nomination Committee and the Safety & Environment Committee. Each Committee operates within defined terms  of reference, the full versions of which can be found on the Company's website at www.nationalexpressgroup.com.  Each Committee reports its proceedings to the Board through the submission of reports and minutes as appropriate.

All Board Committees are authorised to obtain legal or other professional advice as necessary, to secure the attendance of external advisors at their meetings and to seek information required from any employee of the Group in order to perform their duties.

The Group Chief Executive heads the Group Executive Committee which meets on a monthly basis and is tasked with approving operational business matters. In addition, the UK, Spanish and North American Executives meet on a monthly basis and matters dealt with at these meetings are reported to the Group Executive Committee.

During the year the Chairman met on several occasions with the Non-Executives without the Executive Directors present to allow informal discussions on a variety of issues.