Governance

Direct Line Insurance Group plc and its subsidiaries (the "Group") are committed to following and maintaining high standards of corporate governance to ensure we do the right thing by our shareholders, employees, customers and other stakeholders alike, the right way.

We follow a set of principles developed to ensure our business strategies deliver value to our shareholders and other stakeholders and aim to comply with the UK Corporate Governance Code (the "Code") issued by the Financial Reporting Council, as appropriate.

This section explains how the Group is managed and run, through the Board, the Board Committees and our Group Policies.

The Board

The Board of Directors consists of the Chairman, eight independent Non-Executive Directors, one of whom is the Senior Independent Director, and three Executive Directors.

The Board is the principal decision-making forum for the Company and has overall responsibility for leading and controlling the Group. The Board approves the strategy across the Group and is accountable to shareholders for financial and operational performance. It has adopted a formal schedule of matters reserved for the Board which is reviewed annually. The Board believes that it has the appropriate balance of skills, experience, independence and knowledge of the Group to enable it to discharge its duties effectively in accordance with the Code.

Roles of the Chairman, Chief Executive Officer and Senior Independent Director

The Chairman is responsible for setting the Board’s agenda and ensuring that adequate time is available for discussion of all agenda items, in particular strategic issues. The Chairman should also promote a culture of openness and debate by facilitating the effective contribution of Non-Executive Directors ("NED") in particular and ensuring constructive relations between Executive Directors and NEDs.

The Chairman is responsible for ensuring that the Directors receive accurate, timely and clear information. The Chairman should ensure effective communication with shareholders. Outside the Boardroom, the Chairman is involved closely in the high level affairs of Direct Line Group. The Chairman receives support from the control and support functions, as required.

The Chief Executive Officer ("CEO") is responsible and accountable for making recommendations to the Board in relation to the overall strategy and direction of Direct Line Group, strategic alliances and strategic partnerships; the delivery of the strategic and operational plans of Direct Line Group; and maintaining the highest standards of business conduct within Direct Line Group as a whole. 

The Senior Independent Director ("SID") is an Independent NED who provides a sounding board for the Chairman and serves as an intermediary for the other Directors when necessary. The SID is available to shareholders, should they have concerns, or where contact through the normal channels of Chairman, CEO or other Executive Directors has failed to resolve issues or in circumstances when contact through such channels would be inappropriate. Led by the SID, the Independent NEDs meet without the Chairman present at least annually to appraise the Chairman’s performance and on such other occasions as are deemed appropriate.

Board Committees

The Board delegates matters to Board Committees. Clearly defined terms of reference and written limits support these delegations. As envisaged by the Code, the Board has established Audit, Remuneration, Nomination and Board Risk Committees. In addition, the Board has established a Corporate Social Responsibility Committee, an Investment Committee and a Disclosure Committee.

Board Committees

Leadership

Audit

The audit function is overseen by an independent committee of the board of directors, which meets market standards.

2017

 

Fees £m

Proportion

Audit fees

1.9

90%

Audit-related assurance services

0.1

5%

Non-audit fees

0.1

5%

Total fees for audit and other services

2.1

100%

The non-audit fee of £0.1 million related to services provided in reviewing the Group’s executive crisis management advice and training, supporting the Group’s HR Director on remuneration matters and assurance services in relation to the issuance of restricted Tier 1 notes.

Articles of Association

The current articles of association of the Company were adopted by special resolution on 21 September 2012.

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