Corporate Governance
The Co-operative Banking Group Board Committee Reporting Structure
Role of the Board
The Co-operative Banking Group comprises, amongst other companies, Co-operative Insurance Society Limited, CIS General Insurance Limited and The Co-operative Bank plc. The Directors of the Co-operative Banking Group Limited are also appointed to the Co-operative Insurance Society Limited and The Co-operative Bank plc and therefore these companies have a common Board composition. The Board of CIS General Insurance Limited has a separate composition. The Boards are responsible for overall governance and this includes ensuring senior management establish and maintain adequate systems of risk management and that the level of capital held is consistent with the risk profile of the businesses.
Board balance and independence
The Board comprises 11 non-executive Directors and 1 executive Director, including 6 Independent Professional non-executive Directors as defined under the UK Corporate Governance Code. The division of responsibilities between the Chair of the Board (a non-executive Director) and the Chief executive are clearly defined.
Activities delegated to Committees
The Board delegates some key activities to its Committees in order to give specific focus and attention to a number of key governance activities.
Board Committee Summary
Board: Each Board is responsible for our success within a framework of controls, which enables risk to be assessed and managed. It is responsible for setting strategy, maintaining the policy and decision making framework in which this strategy is implemented, ensuring that the necessary financial and human resources are in place to meet strategic aims, monitoring performance against key financial and non-financial indicators, overseeing the system of risk management and for setting values and standards in governance matters. With the agreement of the Financial Services Authority (FSA), the Boards have delegated certain responsibilities to the following Committees. Each of these Committees has a role in overseeing The Co-operative Banking Group and its subsidiaries.
Audit Committee: This committee provides oversight on behalf of Board in relation to: financial reporting and controls to ensure they are appropriate and effective; the monitoring of the adequacy of internal systems and controls; the appointment of external auditors; overseeing the effectiveness and work of Internal Audit; the adequacy and effectiveness of systems and controls in managing all risks against agreed risk appetite.
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Exposures Committee: This committee ensures that Non-Executive Directors are actively involved in major credit decisions (including sanctioning large counterparty transactions) and monitoring large exposures.
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Risk Committee: the Board delegates authority to the Risk Committee for overseeing and monitoring risk. The Risk Committee develops proposals for consideration and approval by Board in respect of overall risk appetite and tolerance, as well as the metrics used to monitor risk management performance. In addition its role includes: approval of risk policy, oversight and challenge of the day to day risk management and oversight arrangements and providing advice to Board on risk strategy
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The Co-operative Banking Group Limited Executive: It is the responsibility of the Executive to implement the strategic objectives as agreed by the Board; the Executive manages the business in line with the risk appetite set by Board.
Remuneration & Appointments Committee: The Committee's role is to determine remuneration and employment policy, oversee contractual arrangements, review salaries, approve incentive schemes and any payments made under such schemes in relation to employees of The Co-operative Banking Group. The Committee also recommends appointments to the Boards which are then put to members for decision.
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Chairs Committee: The Committee's role is to meet on an ad-hoc basis to deal with urgent business that falls between the regular Board meetings.
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With Profits Committee: The Committee carries out the regulatory role as specified in FSA rules including providing independent opinion and oversight on matters that affect with-profits policyholders and provides its opinion to the Board on setting and changing the criteria for exercising discretion in relation to the With-Profits business.
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Integration and Transformation Committee: The Committee provides oversight by in depth review of transformation activity within the organisation in order to give some assurance on progress.
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