The British Business Bank’s Board and Board Committees each have their own terms of reference. The terms of reference for each of our Committees can be found on our website and are reviewed annually.
British Business Bank plc has a number of Executive Committees namely Investment Committees for each subsidiary and the Product Development Committees. Each of these consists of various members of British Business Bank’s senior management together with Board members when it is required for particular investment decisions.
The Board, the Board Committees and the Executive Committees have been structured to provide a strong governance framework. Each committee has Terms of Reference which set out respective duties and responsibilities. All appointments to the Board, the Board Committees and the Executive Committees are based on diversity of contribution, experience and required skills, irrespective of gender.
The Board has a number of committees all of which are governed by the principles and remit set out in the UK Corporate Governance Code and whose terms of reference can be found on the British Business Bank website.
Under the Chairmanship of Jonathan Britton, the Audit Committee also comprises further independent Non-executive Directors, Teresa Graham and Caroline Green. Maria Turner was a member until her resignation in May 2015.
The Chief Executive, Chief Financial Officer, Chief Risk Officer, General Counsel and Head of Internal Audit attend Committee meetings along with the external auditors who are invited to attend and report at all meetings. The Committee also meets privately with both internal and external audit.
The Committee met five times during the year (in May 2015, June 2015, September 2015, December 2015 and March 2016) and attendance can be found on page 44.
The Committee’s role is to review, monitor and make recommendations to the Board relating to the going-concern nature of the British Business Bank, the integrity of financial reporting, the financial statements and any issues and judgements they contain, the adequacy and effectiveness of the internal and external controls and overseeing the relationship with the British Business Bank’s external auditor. The Committee also has oversight of the Internal Audit and Audit Planning process of the British Business Bank.
During the financial year 2015–16, the Audit Committee considered and approved the following matters:
- the oversight of the British Business Bank’s financial reporting process and the
process for preparation of the consolidated accounts
- reviewed the accounting policies adopted to ensure the British Business Bank as a whole complies with the applicable Accounting Standards and presents consolidated accounts that are true and fair, reviewed methods used to account for significant or unusual transactions where different approaches are possible
- assessed and approved the process for preparing the consolidated accounts
- assessed the extent to which the British Business Bank has complied with Shareholder financial reporting requirements, the annual internal audit programme and an evaluation to assess the effectiveness of both the internal and external audit processes and approaches as part of its agenda during 2016–17 to ensure they are both adequate and appropriate for the organisation.
As required by our Shareholder, the Bank is audited by the Comptroller and Auditor General. The National Audit Office carries out the external audit for and on behalf of the Comptroller and Auditor General. The external auditors have not conducted any non-audit services during the financial year and the Committee considers that the external auditor is both objective and independent.
The significant issues considered by the Committee, with input from the External Auditor, during the year included methodologies and procedures for determining asset valuations and provisions, the significant accounting policies, decisions and judgments, the contents of the Annual Report and Accounts of the Company and resourcing plans for the finance team. The Committee also considered the Internal Audit Planning and the interaction with the External Auditor of the Bank.
The Committee will undertake an evaluation to assess the effectiveness of both the internal and external audit processes and approaches as part of its agenda during 2016 to ensure they are both adequate and appropriate for the organisation. In assessing the effectiveness of the External Auditor, the Audit Committee will have regard to the scope of the audit work planned and executed, standards of communication and reporting, quality of insights on the internal control environment and independence.
Under the Chairmanship of the Senior Independent Director, Christina McComb, the Remuneration Committee also comprises the Chairman Ron Emerson, Teresa Graham and Ceri Smith. The Committee met four times during the year in May 2015, July 2015, November, 2015 and March 2016.
The Committee’s role is to set the remuneration policy for all executive directors, the Chairman and all other senior management, including pension rights and any compensation payments, and to set the terms of the Long and Short-Term Incentive Plans and any incentive schemes British Business Bank plc and its subsidiaries may operate.
During the financial year 2015-16, the Remuneration Committee considered and approved the structure of all compensation payments to directors and all other senior management, the setting-up of the Long-Term Incentive Plan of the Company and reviewed market benchmarks for remuneration and the performance evaluation of senior management.
Further information on the role the remuneration committee performed during the year is contained in the Directors Remuneration Report on page 51.
Under the chairmanship of Teresa Graham in an interim capacity, the Risk Committee also comprises independent Non-executive Directors, Christina McComb, Colin Glass, Ceri Smith and Jonathan Britton. The Committee met four times during the year in May 2015, July 2015, October 2015 and February 2016 and attendance can be found on page 44.
The Committee’s role is to advise the Board on the key risks to the Bank in the pursuit of its objectives, the appropriateness of the Bank’s risk management framework and to undertake a full review of the Bank’s appetite for risk as defined in the Bank’s risk appetite statement and according to the Bank’s business plan. It reviews the risk management framework, benchmarked against financial services companies in the private sector.
During the financial year 2015-16, the Risk Committee considered and approved the Bank’s strategic risk register, looked into conduct and reputational risks associated with individual delivery partners as well as credit performance across a whole range of programmes, reviewed and approved policies on Financial Crime, Information Risk Management and Business Continuity and assessed the wider macro-economic environment for risks specific to the Bank and the fulfilment of its objectives.
Under the Chairmanship of Ron Emerson the Nomination Committee also comprises Non-executive Directors, Christina McComb and Ceri Smith.
The Committee met during November 2015 and attendance details can be found on page 44. At the Committee meeting, nominations of potential Directors were considered and recommended to the Board.
During the financial year 2015-16, the Nomination Committee considered and approved the succession planning for Executive Directors and the SMT, appointment of further Non-executive Directors to the Board and the board evaluation process. It also followed the Bank’s policy on diversity and equality. As highlighted in the corporate statement the Bank used the services of Ridgeway Partners to appoint Non-executive Directors. The Bank has no other connection with Ridgeway Partners.