Corporate Governance
Relations with Shareholders
Institutional shareholders
The Investor Relations team has primary, day-to-day responsibility for managing communications with institutional shareholders through a combination of briefings to analysts and institutional shareholders (both at the interim and year end results and throughout the year), site visits and individual discussions between institutional shareholders and Board members and key senior executives. Regular dialogue with shareholders helps to ensure that the Company’s strategy is understood and that any queries or other issues are addressed in a constructive way.
An annual audit of investor opinion is undertaken on behalf of the Board. This takes the form of structured interviews with individual investors conducted by an independent external adviser, the outcomes of which are fed back to and are considered by the Board. The 2007 audit was conducted with around 30 major investors in the UK, North America and Europe. Collectively these institutions represent a significant proportion of the institutional ownership of HBOS. The majority of interviewees had held meetings with HBOS management over the previous 12 months, most of which were with Executive Directors.
The audit gathered opinion on strategy, financial and operational results (including comments on individual divisions), management, corporate governance and investor communications. The views of these investors were reported to the HBOS Board on a non-attributable basis, giving the Board direct access to investor views on a wide range of performance metrics to help them to develop a balanced understanding of major shareholders. The annual audit of investor opinion complements monthly reports to the Board on market and investor sentiment and opinion, thus ensuring that all Directors have a good understanding of the views of major shareholders.
Private shareholders
The Company Secretary, primarily through a Shareholder Services team, oversees communications with private shareholders.
Each year shareholders receive the Annual Review & Summary Financial Statement and in addition, if they choose, the Annual Report and Accounts. Shareholders can see up-to-date information throughout the year on the Company’s website, www.hbosplc.com. This provides share price information, financial results, copies of presentations to analysts and answers to frequently asked questions.
A shareholder opinion survey was conducted during 2007, focusing on shareholder communications. The findings of this research are being used to improve the service offered to shareholders.
Case Study – AGM
The Company’s AGM takes place at different UK locations each year to maximise opportunities for the Company’s shareholders to attend. The AGM enables shareholders to hear about and question the Group’s performance and the Directors’ stewardship of the Company. Shareholders who wish to raise a question can submit it beforehand, or can ask it at the AGM. The Chairs of the Audit, Remuneration and Nomination Committees are present at the AGM – along with other Directors – to answer shareholders’ questions, through the Chairman of the Board, on the responsibilities and activities of their Committees. In the last three years AGMs have been held in Edinburgh, Manchester and Brighton. The 2008 AGM will be held in Glasgow.