The Board is responsible for providing leadership for
the Group. It ensures that the right strategy and controls,
together with appropriate financial and human resources,
are in place in order to deliver value – to shareholders and
to the wider community. It also sets standards for ethical
behaviour and for monitoring environmental and health
and safety performance.
Introduction
The Directors consider that the Company has complied with the provisions set out in Section 1 of the Combined Code on Corporate Governance (the Code) as updated in June 2006 throughout the year ended 31 March 2008, with the exception of the provisions relating to independence of Non-executive Directors and membership of the Nominations Committee. As explained in this report, these departures from the Code have now been addressed and the Board considers that the Company is now fully compliant with the Code. Further details of how Land Securities complies with the Code can be found in this report and in the Corporate Governance section of the Company’s website, which also contains the terms of reference of the Audit, Nominations and Remuneration Committees.
The role of the Board
The Board formulates strategy and monitors the operating and financial performance of the Group. It operates in accordance with a written schedule of matters reserved to the Board, a copy of which is available on the Company’s website. This schedule is backed by clearly defined written limits of delegated authority across the Group.
Key matters reserved to the Board include:
- authorisation of significant transactions in excess of £250m
- dividend policy
- internal controls and risk management (via the Audit Committee)
- remuneration policy (via the Remuneration Committee)
- shareholder circulars and listing particulars
- matters relating to share capital such as share buy backs
- treasury policy and significant fundraising
- appointment/removal of Directors and Company Secretary
The Board uses an annual process timetable to ensure that relevant matters are given due consideration.
The Board held nine principal Board meetings at which the following subjects were discussed:
- Strategy - the Board held an annual off-site meeting at which the Company strategy was reviewed in the context of the macro- and micro-economic environment, potential legislative changes, competitor strategies and the need for the Company to create and exploit competitive advantage.
- Business plans - the Board reviewed at six-monthly intervals the five-year forecasts, the annual budget and business plan and the balanced scorecard, all of which are designed to support the Company’s strategy.
- Progress reporting - a detailed monthly Board report was circulated to the Board and at each regular Board meeting the heads of business units provided an update on progress within their areas of responsibility. In addition, the interim and final results, together with a comparison of investment property performance to IPD indices on a six-monthly basis, were reviewed in detail.
- Compliance and external relationships - the Board reviewed Investor Relations, HR and Pensions, Corporate Governance, Health and Safety (with quarterly updates), Environmental performance, Board performance evaluation and Corporate and Social Responsibility matters.
During 2007/08, in addition to the matters outlined above, the Board considered and agreed plans to demerge the Group into three separate businesses. Following recommendations from the Nominations Committee, the Board also reviewed its composition, taking into account the requirement to create effective Boards and Board Committees for three separate quoted entities.
Board balance and independence
The roles of the Chairman and Chief Executive are split, with clear written guidance to support the division of responsibility. The Chairman is primarily responsible for the effective working of the Board, ensuring that all Directors are able to play a full part in its activities. He is also responsible for ensuring effective communication with shareholders and making sure that all Board members are aware of the views of major investors.
