Directors' Report
Directors
Details of the Group’s corporate governance practices are set out in the Corporate Governance report on pages 114 to 121.
Biographies of the current Directors are given on pages 112 and 113 and the appointments made during the year are summarised below.
Directors appointed during 2007
| Director | Date of appointment |
| Richard Cousins | 1 March 2007 |
| John E Mack | 1 May 2007 |
| Dan Watkins | 5 September 2007 |
| Philip Gore-Randall | 15 September 2007 |
| Mike Ellis | 25 September 2007 |
Sir Brian Ivory and David Shearer stood down from the Board at the AGM on 25 April 2007; Benny Higgins stood down on 10 August 2007 and Phil Hodkinson stood down on 31 December 2007.
Richard Cousins was elected at the 2007 AGM; the remaining four new Directors will retire at the 2008 AGM and offer themselves for election. Dennis Stevenson, Karen Jones and Colin Matthew will retire by rotation and resolutions for their re-election will be proposed at the 2008 AGM. Having completed two three-year terms as a Non-executive Director of HBOS, Charles Dunstone will retire at the forthcoming AGM and will not offer himself for re-election.
The Chairman has endorsed the effectiveness and commitment of all Directors standing for election or re-election at the AGM, and the Senior Independent Director has given a similar endorsement in respect of the Chairman’s re-election.
Particulars of the Directors’ remuneration, interests in shares and share options of the Company and service contracts are given in the Report of the Board in relation to remuneration policy and practice on pages 122 to 145.
The powers of the Directors, along with provisions relating to their appointment and replacement, are set out in the Articles of Association and governed by UK company law. Any alteration to the Articles of Association must be approved by shareholders. The specific authorities delegated to Executive Directors are set out in the Board Control Manual, which is described more fully in the Corporate Governance report.
The Company provides directors’ and officers’ liability insurance, giving appropriate cover for legal action brought against its Directors, and has also agreed to indemnify Directors in circumstances where they are not considered to be culpable. The indemnity, which is a qualifying third party indemnity provision for the purpose of the Companies Act, is for the benefit of all of the Company’s current Directors.
Employees
Information on the Group’s colleague strategy is contained within the Corporate Responsibility report on pages 105 to 110.
The Group’s Total Reward strategy aligns colleagues’ reward with personal, divisional and Group performance. Colleagues are encouraged to share in the success of the Company through participation in its award-winning share plans. Further details of these plans are set out on page 125 of the Report of the Board in relation to remuneration policy and practice, and in Note 37 to the Financial Statements on page 208. Voting rights attaching to shares held in trust under the terms of the share plans can, in general, be exercised by employees.
HBOS adopts a multi-media approach when communicating with its colleagues throughout the Group. This principally involves e-mail, electronic and printed magazines, intranets, business television and face-to-face communication.
A Group-wide electronic magazine, entitled HBOS Today, is used to update colleagues on key business news. It is issued as required (rather than on a set publishing cycle). In 2007, 41 issues were published.
Each day several topical news stories are placed on the Company’s intranet site typically linked to other pages or sites for further information. Television programmes are used, for example, to announce the Group’s annual and half-year results to colleagues.
As well as Group-wide communication, colleagues also receive specific communications tailored at divisional level and are kept informed of matters which concern them as employees. Colleagues can access HBOS HR policies and joint agreements with the recognised trade unions via the internal intranet site.
The views of HBOS colleagues are sought on a regular basis, most notably through an annual opinion survey conducted by MORI and through regular consultation with the recognised trade unions, ACCORD and Unite, with whom the Company has entered into a partnership agreement. The Company continues to support colleagues’ rights to join trade unions. Around half of the current UK workforce are union members and the Company is currently working in partnership with the unions to increase this number.