Corporate Governance

 

AIB Group (UK) p.l.c. (“AIB UK”) is a wholly owned subsidiary of Allied Irish Banks, p.l.c. (AIB), Bankcentre, Ballsbridge, Dublin 4, Ireland.

AIB UK has strong governance arrangements that ensure effective and prudent management of the bank.  These arrangements include:

 

  • A clear organisational structure.
  • Well defined, transparent lines of responsibility.
  • An effective risk management process.
  • Sound administrative and accounting procedures.
  • IT systems and controls.

 

Our governance arrangements comply with UK law, best practice and the requirements of UK financial regulation as set out by the Financial Conduct Authority and Prudential Regulation Authority. 

  • The Board of Directors

    The overall management of the bank and its governance procedures are carried out by the Board of Directors.  There is a range of matters reserved for the Board.  At a high level, these include:

     

    • Determining AIB UK’s strategic objectives and policies;
    • Appointing the Chairman, CEO and Senior management, and addressing succession planning;
    • Monitoring progress towards achievement of AIB UK’s strategic objectives and compliance with its policies;
    • Approving annual operating and capital budgets, major acquisitions and disposals, risk management policies and limits; and
    • Monitoring and reviewing financial performance, risk management activities and controls.

     

    The Board of Directors generally meets on a monthly basis to review the performance of the business and oversee the implementation of the AIB UK strategy.  Additional out-of course meetings or briefings are held on specific issues when required.

     

    The Board is assisted in the discharge of its duties by a number of Board Committees, whose purpose it is to consider, in greater depth than would be practicable at Board meetings, matters for which the Board retains responsibility. The Board Committees report back to the Board with summaries and recommendations.  The composition of such Committees is reviewed annually by the Board.

     

    Our Board of Directors monitors and assesses the effectiveness of our governance arrangements and has the power to address any shortcomings.

  • Board Membership

    The Board is currently made up of 7 Non-Executive Directors (the majority of which are independent) and 3 Executive Directors.  One of the Non-Executive Directors is a shareholders’ nominee who sits on the parent board, and acts as a liaison point between the two boards.  Non-Executive Directors are appointed so that there is a wide mix of backgrounds, experience and expertise.  This ensures a strong and effective leadership which can independently and effectively monitor and challenge the executive management and their decision making.

  • Board Induction

    AIB UK has an induction process for new Non-Executive Directors.  It is designed to ensure they are familiar with the business and its operations.  It comprises of relevant briefing material, details of the business’ strategic and operational plans and also includes a programme of meetings with key individuals such as the CEO and heads of business, as well as support and control functions. On appointment, new Directors are assessed to identify any individual development needs, the Secretariat keeps a log of the training each Director takes part in during the duration of their service; training is also provided regularly by AIB UK for the Board of Directors.

  • Board Evaluation

    The Board of Directors undergo an annual effectiveness review to ensure that the board has sufficient knowledge and skill to perform their duties as Directors and to understand the bank’s activities and its main risks.  The review comprises individual appraisals of each director by the Chairman, and also considers whether individual members have the capacity to commit sufficient time to perform the duties expected of them.

     

    The Board appoints an external assessor to complete an independent review of board effectiveness and governance at least every three years.

     

    Where knowledge and skills gaps are identified, these are discussed and development plans are put in place to address them.

  • Restrictions on Office

    To ensure there are no conflicts of interest and that each Board Member is committing sufficient time and effort to their prescribed duties, AIB UK ensures that Board Members do not hold more than one of the following combinations of directorship in any organisations (except for not for profit organisations) at the same time:

     

    • One Executive Directorship with two Non-Executive Directorships.
    • Four Non-Executive Directorships.

     

    AIB UK recognise that some Directors may be appointed to the Board of an organisation which requires them to act as a Director/Member for a number of subsidiary entities or other related Boards/Committees (e.g. Pension Fund Trustee, Chairty Committee etc) For the avoidance of doubt, AIB UK considers these types of appointments to count as one collective appointment when considering the above restriction. The Nomination and Corporate Governance Committee may, from time to time, consider if any external appointment is affecting the way in which a Director carries out his/her duties and take appropriate action.

     

    AIB UK also has a policy in place to ensure that the Chairman of the Board does not simultaneously exercise the CEO function.

     

    Each individual member of the Board is asked twice a year to disclose their directorships with other institutions and provide all the necessary details, which are double-checked against records held at Companies House and other relevant registration bodies.

  • The Nomination and Corporate Governance Committee

    AIB UK has also established a Nomination and Corporate Governance Committee which is made up of Non-Executive Directors.

     

    The responsibilities of the Nomination and Corporate Governance Committee include:

     

    • Undertaking appropriate search and interviews for new Non-Executive Directors, in accordance with the Board’s succession plan.
    • Recommending candidates to the Board for appointment as Directors.
    • Reviewing the size, structure and composition and diversity of the Board.
    • Preparing a description of the roles and capabilities for a particular appointment, including any required time commitments.
    • Considering the Board’s approach to all corporate governance related developments and how these are demonstrated in the Board’s formal governance procedures and each Board Committee’s Terms of Reference.

     

    The search for suitable candidates is a continuous process.  Recommendations for Board Membership are based on merit and objective measurable criteria following a vigorous appraisal and interview process to ensure candidates are of sufficiently good repute and possess the required knowledge, skills and expertise to perform their duties.

     

    The Nomination and Corporate Governance Committee engages a broad set of qualities and competencies when recruiting members to The Board of Directors.

     

    Where necessary the Nomination and Corporate Governance Committee are able to seek outside independent advice at the expense of the business.

  • Equality and Diversity

    The Nomination and Corporate Governance Committee have issued a policy statement promoting gender equality and diversity on the Board, this includes a clear target and plan to address gender imbalance.  The policy is attached.

  • The Remuneration Committee

    AIB UK’s remuneration policies are set and governed by the Remuneration Committee. The scope of the Remuneration Committee’s activities is broad, ranging from setting pay policy to determining appropriate pension arrangements.

     

    The Committee’s responsibilities include recommending remuneration policies and practices, and reviewing performance related and share-based incentive schemes when appropriate. The Remuneration Committee also makes recommendation with regard to the remuneration of the Chairman of the Board, which is done in his absence.

     

    The Committee also determines the remuneration of the CEO, other Executive Directors, and members of the Senior Management Team under guidance from the Group.

     

    The Remuneration Committee also reviews the remuneration components of staff classified by AIB as ‘material risk takers,’ (as defined by the European Banking Authority).

     

  • The Remuneration Code

    AIB UK complies with the Remuneration Code as prescribed by the PRA & FCA.

  • Supervision & Regulation

    AIB Group (UK) plc is a company incorporated in Northern Ireland and is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and the PRA under the Financial Services and Markets Act 2000 (FSMA) to carry on a wide range of regulated activities, including accepting deposits.  It carries on business under the trading names ‘Allied Irish Bank (GB)’ and ‘Allied Irish Bank (GB) Savings Direct’ in Great Britain, and ‘First Trust Bank’ in Northern Ireland.

     

    AIB UK subscribes to the Lending Code of the Lending Standards Board, which is a self-regulatory code setting minimum standards of good practice in relation to lending, including loans, credit cards and current account overdrafts.

     

    First Trust Financial Services Ltd (formally known as First Trust Independent Financial Advisors Limited) is authorised by the FCA to advise on and arrange certain investments, including pension, life policies, securities and non-investment insurance contracts.  The FCA is responsible both for the prudential supervision and for the general supervision of First Trust Financial Services Ltd’s business in the UK.

     

    First Trust Financial Services Ltd ceased providing financial advice in December 2012.  First Trust Bank has entered into an arrangement with Legal and General whereby financial advice will be provided to the bank’s customers under an appointed representative arrangement.