Corporate governance is the overarching framework that specifies the distribution of roles and responsibilities between the board, committees, functions and individuals.
The corporate governance framework and risk management framework are reviewed at least annually by the board.
The board has four committees composed of non-executive directors:
- Board Audit Committee Terms of reference
- Board Risk Committee Terms of reference
- Nomination Committee Terms of reference
- Remuneration Committee Terms of reference
The bank’s board of directors comprises:
- Alan Hughes, Independent Non-Executive Chairman
- Deborah Hazell, Chief Executive Officer
- Sandy Chen, Independent Non-Executive Director
- James Gunner, Independent Non-Executive Director
- Frances O’Grady, Non-Executive Director
- Susan Sternglass Noble, Independent Non-Executive Director
- Dominic Wade, Chief Financial Officer
- Alex Ryan, Non-Executive Director
- Allan Wylie, Non-Executive Director
The role of the board
The Board is collectively responsible for the long-term success of Unity Trust Bank. It provides strategic direction and guidance to the Executive and management, and monitors performance against financial and non-financial measures and risk appetite. The Board is the custodian of Unity’s vision, values and standards.
The following matters have been reserved for the board to approve and cannot be delegated:
- Unity Trust Bank’s long-term objectives and corporate strategy;
- the annual budget and business plan;
- the annual report, financial statements and dividends;
- recommendation to shareholders of changes to the structure, size and composition of the board;
- the Internal Capital Adequacy Assessment Process (ICAAP);
- the Individual Liquidity Adequacy Assessment Process (ILAAP);
- significant policies;
- any changes to Unity Trust Bank’s executive management structure;
- establishment of board committees and their terms of reference;
- business acquisitions, disposals, investments (other than day to day operation of the treasury portfolio) and all funding arrangements; and
- the delegated financial authorities and any proposals in excess of those authorities.
Division of responsibilities
The division of responsibilities between the chair of the board and the chief executive officer is clearly defined through their role profiles and has been approved by the board.
The Chairman leads the Board, ensuring its effectiveness and promoting high standards of corporate governance. Broadly, the Chairman’s responsibilities are:
- The Board’s composition and development;
- Ensuring proper information for the Board
- Planning and conducting Board meetings effectively
- Encouraging open dialogue between Directors and involving them in the Board’s work
- Acting as Unity’s lead representative in its dealings with the outside world
- Engaging the Board in assessing and improving its performance
- Overseeing the induction and development of Directors
- Supporting and ensuring the Board evaluates the performance of the Chief Executive Officer
Chief Executive Officer
The Chief Executive Officer (CEO) leads the development of strategy and manages all aspects of the performance and management of the business. Broadly, the CEO:
- Leads the development of the Business Plan and implements the Board-approved strategies for achieving Unity’s corporate objectives
- Manages Unity’s risk profile within a framework of internal controls
- Builds and maintains an effective executive and senior management team
- Leads communications with shareholders and key stakeholders
The role of non-executive directors
The role of Unity Trust Bank’s non-executive directors, which includes setting strategy and monitoring the performance of the executive, is documented in their role profiles.
Directors are subject to statutory duties to act in the best interests of Unity Trust Bank, which includes avoiding conflicts of interests and declaring interests as appropriate. This is also included in the role profile, together with an estimate of the time commitment required.
Time commitment of directors
The board has reviewed the external directorships of its directors and considered the current position to be appropriate. It has been agreed that any director taking on further directorships would notify the board in order for the position to be reviewed.
The board undertakes regular effectiveness evaluations, normally through the circulation of a questionnaire by the company secretary, who then collates the results. Questions seek directors’ views on the effectiveness of the board, such as, the way in which the board works together as a whole and the nature of board debate. Directors also answer questions relating to their individual performance.
Induction and continuing professional development
New directors take part in an induction programme which includes meetings with the executives and chair and the provision of key corporate documentation.
The non-executive director learning and development programme is developed and updated based upon an analysis of the directors’ personal development plans and additional requests raised at board meetings.
During and in between board meetings, directors are updated on Unity Trust Bank’s performance, the competitive and regulatory environments in which it operates, corporate governance matters and other changes affecting Unity Trust Bank and the industry in which it operates.
The board has delegated certain responsibilities to a number of committees, each of which operates under written Terms of Reference covering the authority delegated to it by the board.
The Role of the Board Audit Committee
The purpose of the Board Audit Committee is to exercise oversight over Unity Trust Bank’s financial statements, its systems of internal control, and the performance and effectiveness of the internal and external auditors. The responsibilities of the committee are set out in its terms of reference which can be found here.
Role of the Board Risk Committee
The purpose of the Board Risk Committee is advise the Board on the Bank’s overall risk appetite, tolerance and strategy. It also approves loans in excess of executive authority. The responsibilities of the committee are set out in its terms of reference which can be found here.
Role of the Remuneration Committee
The committee’s responsibilities include setting the over-arching principles of bank-wide remuneration, making recommendations to the board in relation to director remuneration and determining the remuneration packages of the executives. The terms of reference can be found here. Unity Trust Bank’s remuneration statement can be found here.
Role of the Nomination Committee
The committee’s responsibilities include reviewing the overall size and structure of the board, which is captured in the annual agenda schedule, and making particular nominations to fill executive and independent director positions. The terms of reference can be found here.
As described in the terms of reference, the committee is authorised to use any resources it deems appropriate, including external legal or other professional advice on any matters within its terms of reference at Unity Trust Bank’s expense, within any budgetary restraints imposed by the board. In reviewing the structure, size and composition of the board, the committee must take account of the need to ensure that the board’s decision-making is not dominated by any one individual or small group of individuals in a manner that is detrimental to the interest of Unity Trust Bank as a whole. Before making a nomination, the committee evaluates the balance of skills, knowledge and experience of the board and, in the light of this evaluation, prepare a description of the role and capabilities required for a particular appointment including the time commitment expected.
Shareholder non-executive directors
The nomination committee assesses shareholder non-executive director candidates, directors who have been nominated to reflect the shareholder base, as to their fitness and propriety to carry out the role including their ability to meet the time commitment expected and the number of outside directorships they hold.
Independent non-executive directors and executive directors
For independent non-executive director and executive directors, the vacancies are advertised and a search firm may be engaged to identify candidates which meet the person specification and skills criteria specified by the nomination committee, which includes fitness and propriety, time commitment and outside directorships where applicable. Candidates are interviewed by the search firm and a panel of the nomination committee members. In all cases, references are obtained. The Nomination Committee makes a recommendation to the board.
Board diversity policy
Unity Trust Bank’s board has agreed to an aspirational aim that the board will comprise a minimum of 33% females by 2022.
Unity Trust Bank has adopted a board diversity policy, which includes practical steps on how to meet that target, including:
- considering diversity when making all independent non-executive director appointments;
- challenging management to ensure the management population is made up of the most talented individuals;
- ensure diversity is considered in succession planning; and
- setting a culture that is values driven and inclusive.
Senior management recruitment
Unity Trust Bank has a recruitment policy covering the selection and appointment of senior management. This policy is reviewed every two years.