AIB Group Structure
AIB Group plc is the holding company for Allied Irish Banks, p.l.c.. It is listed on the main securities market of the Irish Stock Exchange and has a premium listing in the London Stock Exchange. Allied Irish Banks, p.l.c. is a Credit Institution licensed and regulated by the Central Bank of Ireland and is subject to the provisions of the Central Bank of Ireland Corporate Governance Code.
References on these pages to “AIB”, “the Group” and/or “the AIB Group” refer to AIB Group plc and its subsidiaries. References on these pages to the “Company” refer to AIB Group plc and Allied Irish Banks, p.l.c. References to “Board” and/or “Committee” refer to the boards of directors and subcommittees of both AIB Group plc and Allied Irish Banks, p.l.c.
Corporate Governance Practices
Corporate Governance arrangements and practices
With effect from 11 January 2016, AIB is subject to the requirements of the Central Bank of Ireland’s Corporate Governance Code for Credit Institutions (‘the Central Bank Code’), including requirements which specifically relate to ‘high impact institutions’ and additional corporate governance obligations on credit institutions which are deemed significant for the purposes of the European Union (Capital Requirements) Regulations 2014 (“CRD”) (which transposed the EU Capital Requirements Directive into domestic law).
The Company has also adopted the provisions of the UK Corporate Governance Code (the UK Code which is available on www.frc.org.uk).
AIB’s corporate governance practices also reflect Irish company law, the Listing Rules of the Enterprise Securities Market of the Irish Stock Exchange, CRD and, in relation to the UK businesses, UK company law.
Compliance with CRD
Regulation 84 of CRD requires institutions to explain, on their website, how they comply with the certain regulations contained in CRD. The document which sets out how AIB complies with the requirements of Regulations 76 to 83 of CRD, which relate primarily to Governance, Remuneration, and Reporting, can be found here.
The Board of Directors
The Board is responsible for corporate governance, encompassing leadership, direction and control of the Group, and is accountable to shareholders for financial performance. While arrangements have been made by the Directors for delegation of the management, organisation and administration of the Company’s affairs, the following matters are specifically reserved for decision by the Board:
to retain primary responsibility for corporate governance within the Company at all times and oversee the efficacy of governance arrangements;
to determine the Company's strategic objectives and policies, and to ensure that the necessary financial and human resources and operational capabilities are in place for the Company to meet its objectives;
to approve the annual financial plan, interim and annual financial statements, operating and capital budgets, major acquisitions and disposals, and risk appetite limits, designated frameworks and relevant policies;
to appoint the Chairman of the Board, Board Directors, Chief Executive Officer and Members of the Executive Committee, to address related succession planning, and to approve, where appropriate, the removal of persons in charge of Control Functions;
to endorse the appointment of people who may have a material impact on the risk profile of the Company and monitor on an ongoing basis their appropriateness for the role;
to render an account of the Company's activities to its shareholders;
to protect the assets of the Company taking into account the interests of the shareholders and the employees in general with appropriate regard for the interests of other stakeholders; and
to put in place and monitor procedures designed to ensure that the Company complies with the law and good corporate citizenship
The Board is responsible for approving high level policy and strategic direction in relation to the nature and scale of risk that AIB is prepared to assume in order to achieve its strategic objectives. The Board ensures that an appropriate system of internal controls is maintained and that effectiveness is reviewed.
Specifically the Board:
sets the Group’s Risk Appetite, incorporating risk limits
approves designated Risk Frameworks, incorporating risk strategies, policies, and principles;
approves stress testing and capital plans under the Group’s Internal Capital Adequacy Assessment Process (“ICAAP”)
approves other high-level risk limits as required by Credit, Capital, Liquidity and Market policies
The Board receives regular updates on the Group’s risk profile through the Chief Risk Officer’s monthly report, and relevant updates from the Chairman of the Board Risk Committee. An overview of the Board Risk Committee’s activities is detailed below at Board Committees.
AIB has received significant support from the Irish State (‘the State’) in the context of the financial crisis because of its systemic importance to the Irish financial system, as a result of which the State holds c.71.1188% of the issued ordinary shares of the Company. The relationship between AIB and the State as shareholder is governed by a Relationship Framework. Within the Relationship Framework, with the exception of a number of important items requiring advanced consultation with or approval by the State, the Board retains responsibility and authority for all of the operations and business of the Group in accordance with its legal and fiduciary duties and retains responsibility and authority for ensuring compliance with the regulatory and legal obligations of the Group. The Relationship Framework is available here.
The Chairman’s responsibilities include the leadership of the Board, ensuring its effectiveness, setting its agenda, ensuring that the Directors receive adequate, accurate and timely information, facilitating the effective contribution of the Non- Executive Directors, ensuring the proper induction of new Directors, the on-going training and development of all Directors, and reviewing the performance of individual Directors.
Mr Richard Pym was appointed Chairman Designate on 13 October 2014 and assumed the role of Non-Executive Chairman with effect from 1 December 2014. In addition to his role as Chairman, Mr Pym is Chairman of the Nomination and Corporate Governance Committee and a Member of the Remuneration Committee. Mr Pym was formerly Chairman and Director of Nordax Bank AB (publ); he stood down from these roles on 15 October 2015 and 11 May 2016 respectively. He stood down from his position as Chairman of UK Asset Resolution Ltd (‘UKAR’) on 5 June 2016, remaining as a Director of UKAR, and related companies Bradford & Bingley plc and NRAM Limited, until he retired from these roles on 26 July 2016. Mr Pym currently has no other external directorship commitments. Mr Pym’s biographical details are available below at Board of Directors. The role of the Chairman is separate from the role of the Chief Executive Officer, with clearly-defined responsibilities attaching to each; these are set out in writing and agreed by the Board.
Catherine Woods was appointed as Deputy Chairman on 1st January 2018. In addition to this role, Ms Woods is the Senior Independent Non-Executive Director, Chairman of the Board Audit Committee and Member of the Board Risk Committee and the Nomination and Corporate Governance Committee. Ms Woods' biographical details are available below at Board of Directors.
Senior Independent Non-Executive Director
The Senior Independent Non-Executive Director is available to shareholders if they have concerns which contact through the normal channels of Chairman or Chief Executive Officer have failed to resolve, or for which such contact is considered by the shareholder(s) concerned to be inappropriate. Ms Catherine Woods was appointed Senior Independent Non-Executive Director with effect from 30 January 2015.
In addition to her role as Senior Independent Non-Executive Director, Ms Woods is Deputy Chairman, Chairman of the Board Audit Committee and Member of the Board Risk Committee and the Nomination and Corporate Governance Committee. Ms Woods’ biographical details are available below at Board of Directors.
In addition to her role as Senior Independent Non-Executive Director, Ms Woods is Chairman of the Board Audit Committee and Member of the Board Risk Committee and the Nomination and Corporate Governance Committee. Ms Woods’ biographical details are available below at Board of Directors.
Independent Non-Executive Directors
As an integral component of the Board, Independent Non- Executive Directors represent a key layer of oversight of the activities of the Company. It is essential for Independent Non- Executive Directors to bring an independent viewpoint to the deliberations of the Board that is objective and independent of the activities of the management and of the Company. Biographical details for each of the Independent Non-Executive Directors are available below at Board of Directors.
Executive Directors have executive functions in the Company in addition to their Board duties. The role of Executive Directors, led by the Chief Executive Officer, is to propose strategies to the Board and following challenging Board scrutiny, to execute the agreed strategies to the highest possible standards. Biographical details for each of the Executive Directors are available below at Executive Committee.
Chief Executive Officer
The Chief Executive Officer is responsible for the day-to-day running of the Group, ensuring an effective organisation structure, the appointment, motivation and direction of Senior Executive Management, and for the operational management of all the Group’s businesses. Mr Bernard Byrne was appointed Chief Executive Officer on 29 May 2015.
The Executive Committee is the most senior executive committee of the Group and is accountable to the Chief Executive Officer. Subject to financial and risk limits set by the Board, and excluding those matters which are reserved specifically for the Board, the Executive Committee under the stewardship of the Chief Executive Officer has responsibility for the day-to-day management of the Group’s operations. It assists and advises the Chief Executive Officer in reaching decisions on the Group’s strategy, governance and internal controls, and performance and risk management.
Group Company Secretary
The Directors have access to the advice and services of the Group Company Secretary, who is responsible for advising the Board through the Chairman on all governance matters, ensuring that Board procedures are followed and that applicable rules and regulations are complied with. The Group Company Secretary facilitates information flows within the Board and its Committees and between Senior Executive Management and Non-Executive Directors, as well as facilitating induction and assisting with professional development as required. Ms Sarah McLaughlin was appointed Group Company Secretary on 21 September 2017. Prior to this, the role of Joint Group Company Secretaries had been held by Mr Robert Bergin and Ms Sarah McLaughlin.
Board of Directors
Richard Pym, CBE - Non-Executive Chairman
Appointed: 13/10/2014 (Chairman Designate) 01/12/2014 (Chairman)
Background & Experience: Mr Pym was co-opted to the Board on 13 October 2014 as Chairman Designate and Non-Executive Director and was appointed Chairman with effect from 1 December 2014. Mr Pym is a Chartered Accountant with extensive experience in financial services. He is a former Chairman of UK Asset Resolution Limited, the entity which manages the run-off of the UK Government owned closed mortgage books of Bradford & Bingley plc and NRAM Limited. Mr Pym is a former Chairman of Nordax Bank AB (publ), The Co-operative Bank plc, Brighthouse Group plc and Halfords Group plc. He is a former Non-Executive Director of The British Land Company plc, Old Mutual plc and Selfridges plc. During 2018, Mr Pym and his family created The Pym Foundation to conduct charitable works and Mr Pym is a trustee of same.
Committee membership(s): Chairman of the Nomination and Corporate Governance Committee and member of the Remuneration Committee
Catherine Woods, BA, Mod (Econ) – Senior Independent Non-Executive Director & Deputy Chairman
Background & Experience: Ms Woods was appointed Senior Independent Non-Executive Director in January 2015 and Deputy Chairman in January 2018. Ms Woods is former Vice President and Head of the JPMorgan European Banks Equity Research Team, where her mandates included the recapitalisation of Lloyds of London and the re-privatisation of Scandinavian banks. Ms Woods is a former director of An Post, a former member of the Electronic Communications Appeals Panel, and a former Finance Expert on the government adjudication panel overseeing the rollout of the National Broadband Scheme. Ms Woods is also a Non-Executive Director of AIB Mortgage Bank and EBS d.a.c.
Committee membership(s): Chairman of the Board Audit Committee, member of the Board Risk Committee & Nomination and Corporate Governance Committee
Simon Ball, B.Sc (Econ), FCA - Non-Executive Director
Background & Experience: Mr Ball has previously held roles as Chairman of Anchura Group Limited and Non-Executive Deputy Chairman and Senior Independent Director of Cable & Wireless Communications plc. Mr Ball has also served as Group Finance Director of 3i Group plc and the Robert Fleming Group. As a Chartered Accountant, he has held a series of senior finance and operational roles at Dresdner Kleinwort Benson, and was Director General, Finance, for HMG Department for Constitutional Affairs. Mr Ball is Senior Independent Director on the board of Commonwealth Games England and a Non-Executive Director of Birmingham Organising Committee for the 2022 Commonwealth Games Limited. Mr Ball is also a Non-Executive Director of AIB Mortgage Bank.
Committee membership(s): Board Risk Committee, Remuneration Committee & Nomination and Corporate Governance Committee
Tom Foley, B.Comm, FCA– Non-Executive Director
Background & Experience: Mr Foley is a Non-Executive Director of EBS d.a.c. and AIB Group (UK) p.l.c. Mr Foley qualified as a Chartered Accountant with PricewaterhouseCoopers and has extensive experience within financial services. He is a former Executive Director of KBC Bank Ireland and has held a variety of senior management and board positions with KBC in Ireland and the UK. During the financial crisis, Mr Foley was a member of the Nyberg Commission of Investigation into the Banking Sector and the Department of Finance Expert Group on Mortgage Arrears and Personal Debt.
Committee membership(s): Board Audit Committee
Peter Hagan, BSc, Dip BA– Non-Executive Director
Background & Experience: Mr Hagan is former Chairman and CEO of Merrill Lynch’s US commercial banking subsidiaries and was also a Director of Merrill Lynch International Bank (London), Merrill Lynch Bank (Swiss), ML Business Financial Services, and FDS Inc. Mr Hagan has held various executive positions across the international banking industry, including Vice Chairman and Representative Director of the Aozora Bank (Tokyo) and a Director of each of the US subsidiaries of IBRC. He is at present a consultant in the fields of financial service litigation and regulatory change.
Committee membership(s): Chairman of the Board Risk Committee & member of the Board Audit Committee
Carolan Lennon, B.Sc, MBA – Non-Executive Director
Background & Experience: Prior to her current role of CEO of Eir, Mrs Lennon held a variety of executive roles in Eir Limited, including Managing Director of open eir and Acting Managing Director Consumer and Chief Commercial Officer. Prior to joining Eir, she held a number of senior roles in Vodafone Ireland, including Consumer Director and Marketing Director. Mrs Lennon is a former Non-Executive Director of the DIT Foundation and the Irish Management Institute.
Committee membership(s): Board Risk Committee & Board Sustainable Business Advisory Committee
Helen Normoyle, BBS – Non-Executive Director
Background & Experience: Ms Normoyle is currently the Marketing Director Boots UK and Ireland. She previously held the roles of Chief Marketing Officer at each of Countrywide, the UK’s largest estate agency group and DFS, Britain’s leading upholstered furniture retailer. Prior to joining DFS, she was Director of Marketing & Audiences at the BBC, responsible for the corporation’s marketing, research, planning and audience services. In 2003, she joined Ofcom, the UK’s telecoms and communications regulator as Director of Market Research where she established and led Ofcom’s market research and intelligence team and, latterly, the Media Literacy team. Before joining Ofcom, she held a range of posts over an eight year period at Motorola, including Director of Marketing and Director of Global Consumer Insights and Product Marketing. She started her career working for one of Europe's leading market research agencies, Infratest+GfK, based in Germany.
Committee membership(s): Chairman of the Board Sustainable Business Advisory Committee
Jim O’Hara – Non-Executive Director
Background & Experience: Mr O'Hara is a Non-Executive Director of EBS d.a.c. and EBS Mortgage Finance. Mr O’Hara is the former Vice President of Intel Corporation and General Manager of Intel Ireland, where he was responsible for Intel’s technology and manufacturing group in Ireland. He is currently Chairman of a number of indigenous technology start-up companies. He is a past President of the American Chamber of Commerce in Ireland and former board member of Enterprise Ireland and Fyffes plc.
Committee membership(s): Chairman of the Remuneration Committee & member of the Board Audit Committee, Nomination and Corporate Governance Committee & Board Sustainable Business Advisory Committee
Brendan McDonagh, BBS, MA, FCIM – Non-Executive Director
Background and experience: Mr McDonagh started his banking career with HSBC in 1979, working across Asia, Europe and North America, where he held various roles such as Group Managing Director for HSBC Holdings Inc, membership of the HSBC Group management Board, and CEO of HSBC North America Holdings Inc. Mr McDonagh is a former Director of Ireland’s National Treasury Management Agency. He was previously the Executive Chairman of Bank of N.T. Butterfield & Son Limited. Mr McDonagh is also a Non-Executive Director of EBS Mortgage Finance.
Committee membership(s): Member of the Board Risk Committee and Remuneration Committee
Bernard Byrne, FCA – Chief Executive Officer
Background & Experience: Mr Byrne started his career in 1988 in PricewaterhouseCoopers before moving in 1994 to ESB International as Commercial Director for International Investments. In 1998 he joined IWP International plc as Finance Director, and later Deputy CEO. In 2003, Bernard joined ESB as Group Finance Director. He joined AIB as Chief Financial Officer in 2010 and, before his appointment as Chief Executive Officer of AIB in May 2015, Mr Byrne was an Executive Director on the AIB Board, and held various executive positions including Director of Personal, Business and Corporate Banking. Mr Byrne was President of Banking and Payments Federation Ireland until December 2016 and President of the Institute of Banking Ireland until March 2018.
Committee membership(s): None
Mark Bourke, B.E., ACA, AITI - Chief Financial Officer
Background & Experience: Mr Bourke joined AIB in April 2014 as Chief Financial Officer and member of the Leadership Team and was co-opted to the Board on 29 May 2014. He was appointed to the Board of AIB Group (UK) p.l.c. on 6 July 2017. He joined AIB from IFG Group plc where he held a number of senior roles, including Group Chief Executive Officer, Deputy Chief Executive Officer and Finance Director. Mr Bourke began his career at PricewaterhouseCoopers (PwC) in 1989 and is a former partner in international tax services with PwC US in California. He is a member of Chartered Accountants Ireland and the Irish Taxation Institute.
Committee membership(s): None
The Executive Committee was constituted on 1 November 2018 and is established by, and accountable to, the Chief Executive Officer to assist with the day to day operations of, and the development of strategy for, AIB Group. Previously, the advisory committee to the CEO was called the Leadership Team and all members of the Executive Committee were members of the Leadership Team also.
Unless indicated otherwise below, the appointment date of the Executive Committee members was 1 November 2018.
Bernard Byrne, FCA – Chief Executive Officer
Background and experience: Mr Byrne started his career in 1988 in PricewaterhouseCoopers before moving in 1994 to ESB International as Commercial Director for International Investments. In 1998 he joined IWP International plc as Finance Director, and later Deputy CEO. In 2003, Bernard joined ESB as Group Finance Director. He joined AIB as Chief Financial Officer in 2010 and, before his appointment as Chief Executive Officer of AIB in May 2015, Mr Byrne was an Executive Director on the AIB Board, and held various executive positions including Director of Personal, Business and Corporate Banking. Mr Byrne was President of Banking and Payments Federation Ireland until December 2016 and President of the Institute of Banking Ireland until March 2018.
Committee membership(s): None
Mark Bourke, B.E., ACA, AITI - Chief Financial Officer
Background and experience: Mr Bourke joined AIB in April 2014 as Chief Financial Officer and member of the Leadership Team and was co-opted to the Board on 29 May 2014. He was appointed to the Board of AIB Group (UK) p.l.c. on 6 July 2017. He joined AIB from IFG Group plc where he held a number of senior roles, including Group Chief Executive Officer, Deputy Chief Executive Officer and Finance Director. Mr Bourke began his career at PricewaterhouseCoopers (PwC) in 1989 and is a former partner in international tax services with PwC US in California. He is a member of Chartered Accountants Ireland and the Irish Taxation Institute.
Committee membership(s): None
Triona Ferriter – Chief People Officer
Background & Experience: Ms Ferriter joined AIB in January 2017 as Chief People Officer, and a member of the Bank’s Executive Leadership Team. She has years experience in Human Resources operating at a Senior Management level within both US multinational and indigenous Irish companies, working across diverse business functions, including sales and marketing, manufacturing, shared services and retail, mainly in the Pharmaceutical sector. With experience in companies such as Schering-Plough/MSD, Dunnes Stores and Procter & Gamble, her responsibilities have included the full range of Human Resources functions both at a local organisation and pan European level, and key areas of expertise include effective change management through organisation restructuring and development, strategic business partnering and planning, and management of industrial and employee relations in both unionised and non-unionised environments.
Donal Galvin – Group Treasurer
Background & Experience: Donal has worked in domestic and international financial markets over the last twenty years. Prior to joining AIB, he was Managing Director in Mizuho Securities Asia, the investment banking arm of Japanese bank Mizuho, where he was responsible for Asian Global Markets. Before that, he was Managing Director in Dutch Rabobank, where his responsibilities included managing its European and Asian Global Financial Markets business, as well as leading Rabobank’s Global Client Structured Products division. Donal was previously a member of the Leadership Team also.
Deirdre Hannigan – Chief Risk Officer
Background & Experience: Ms Hannigan joined AIB in April 2017 as Chief Risk Officer and member of the Leadership Team. Ms Hannigan began her career in retail banking at AIB before moving to AIB’s corporate banking team. In 1995, she left AIB to be the Head of Corporate Banking at Rabobank Ireland Limited. Since then, Ms Hannigan has gained extensive experience in risk management, including at GE Money—Ireland as the Chief Risk Officer from 2007 to 2010, at GE Capital as Enterprise Risk Management Director (EMEA) from 2010 to 2012 and as Global Credit Risk Review Director (International) from 2012 to 2014, and most recently at the NTMA as Chief Risk Officer. Ms Hannigan is a fellow of both the Association of Chartered Certified Accountants and the Institute of Bankers. Ms Hannigan is also a Chartered Director from the Institute of Directors.
Committee Membership(s): None
Colin Hunt Ph. D – Managing Director, Wholesale Institutional & Corporate Banking
Background & Experience: Dr Hunt joined AIB as Managing Director, Wholesale & Corporate Institutional Banking Division and a member of the Bank’s Executive Leadership Team in August 2016. Prior to joining AIB, he was Managing Director at Macquarie Capital where he led the development of its business in Ireland. Previously, Dr Hunt was a Special Policy Adviser at the Departments of Transport and Finance, Research Director and Chief Economist at Goodbody Stockbrokers, Head of Trading Research and Senior Economist at Bank of Ireland Group Treasury and a country risk analyst at NatWest.
Tom Kinsella, B.Comm, FMII, CBD – Chief Marketing Officer
Background & Experience: Mr Kinsella joined AIB in November 2012 as Group Marketing Director and was appointed to his current role as Chief Marketing Officer and a member of the bank’s Executive Leadership Team in November 2015. In his role he is responsible for ensuring all parts of the organisation are mobilised around providing a great customer experience, in order to realise AIB’s objective of becoming a truly customer focused bank. Prior to AIB he worked in a variety of senior marketing roles in Diageo, working across a wide variety of brands globally and domestically.
Robert Mulhall B.Sc, MA, QFA, CFA – Managing Director, Retail & Commercial Banking Ireland
Background & Experience: Mr Mulhall was appointed Managing Director of AIB’s Retail & Commercial Banking Ireland (formerly known as Retail, Corporate and Business Banking) in October 2015. His career in AIB has spanned almost 20 years and covered a variety of roles up to senior executive management level in areas including Digital Channels Innovation, Retail Banking Distribution, Customer Relationship Management, Business Intelligence, Strategic Marketing, Strategy Development, Operations and Sales Management. Coupled with his AIB career, he also held the position of Managing Director, Distribution & Marketing Consulting, and Financial Services with Accenture in North America from 2013 to 2015. In this capacity he brought his industry experience to build a rapidly growing consulting practice in the fast moving and innovative areas of Financial Services in North America.
Brendan O’Connor, BA, MBA – Managing Director, AIB Group (UK) p.l.c.
Background & Experience: Mr O’Connor joined AIB in 1984 and has held a number of senior roles throughout the organisation both in New York and Dublin including Head of AIB Global Treasury Services, Head of Corporate Banking International and Head of AIB Business Banking. Mr O’Connor joined the Bank’s Executive Leadership Team in February 2013 as Head of Financial Solutions Group. He was appointed to his current role of Managing Director, AIB Group (UK) p.l.c. in October 2015.
Jim O’Keeffe, BA, HDip – Head of Financial Solutions Group
Background and experience: Mr O’Keeffe is a graduate of University College Cork and has over twenty-seven years banking experience with AIB. During his career, he has worked across many aspects of banking from IT to the retail business. From 2004 to 2008, he relocated to AIB’s then subsidiary BZWBK in Poland as Head of Personal & SME Business Development. Following his return to Ireland, from 2009 to 2011 he was Head of AIB’s Direct Channels before taking up his previous role as Head of AIB’s Mortgage Business in June 2011. He was appointed as Head of Financial Solutions Group and a member of the bank’s Executive Leadership Team in November 2015.
Tomás O’Midheach, BComm, MBS, FCCA – Chief Operating Officer
Background & Experience: Mr O’Midheach was appointed to the role of Chief Operating Officer in February 2016. He has over 22 years’ experience in the financial services industry. His banking experience has spanned many diverse areas of banking including Finance, Data, Customer Analytics, Direct Channels and Digital. Mr O’Midheach spent 11 years with Citibank in the UK, Spain & Dublin where he held several senior positions in Finance. He joined AIB in June 2006 to head up a finance operating model transformation and has since held a number of senior executive positions including Head of Direct Channels & Analytics and Chief Digital Officer.
The Chairman sets the agenda for each Board meeting. The Directors are provided with relevant papers in advance of the meetings to enable them to consider the agenda items, and are encouraged to participate fully in the Board’s deliberations. In total, three meetings of the Board of the Company were held from 8 December 2016, the date of the Company’s incorporation, to 21 September 2017. During that time, the Directors of the Company were Garreth O’Brien and David Joseph Lydon, representing McCann Fitzgerald Solicitors, and the meetings related to non-material post incorporation events which included changing the name of the Company and an application to the Irish Stock Exchange for a legal entity identifier number. The Directors of Allied Irish Banks, p.l.c. were appointed to the Company on 21 September 2017. From 21 September 2017 to 8 December 2017, two Board meetings were held at which the business of the meetings related to the terms of the corporate reorganisation, pursuant to which the Company would be introduced as the holding company of the Group. All directors were in attendance at those meetings. Thereafter, the Board of the Company held one scheduled meeting, concurrent with the Board meeting of Allied Irish Banks, p.l.c. in December 2017, during which the business of AIB Group was considered, with all Directors in attendance.
It is the policy of the Board that a majority of the Directors should be Non-Executive. There are 9 Non-Executive Directors and 2 Executive Directors on the Board. The Board deems the appropriate number of Directors to meet the requirements of the business to be between 10 and 14. There is a procedure in place to enable the Directors to take independent professional advice, at the Group’s expense. The Group holds insurance cover to protect Directors and Officers against liability arising from legal actions brought against them in the course of their duties.
Balance and Independence
Responsibility has been delegated by the Board to the Nomination and Corporate Governance Committee for ensuring an appropriate balance of experience, skills and independence on the Board. Non-Executive Directors are appointed so as to provide strong, effective leadership and appropriate challenge to executive management. The independence of each Director is considered by the Nomination and Corporate Governance Committee prior to appointment, and is reviewed annually thereafter. It has been determined that all Non-Executive Directors in office during 2017, namely Mr Simon Ball, Mr Tom Foley, Mr Peter Hagan, Ms Carolan Lennon, Mr Brendan McDonagh, Ms Helen Normoyle, Mr Jim O’Hara, Mr Richard Pym, Dr Michael Somers (who has since retired) and Ms Catherine Woods, are independent in character and judgement and free from any business or other relationship with the Group that could affect their judgement.
An external effectiveness evaluation of the Group Board was conducted during 2017, and an overview of that evaluation is outlined below. During 2018, an external firm, Lintstock, facilitated the external effectiveness review of the Board’s performance and provided opinion on the performance of the Board against peers. Lintstock is an independent external consultancy agency with no other connection to AIB Group. In order to ensure that high quality feedback was received, in addition to an online questionnaire, the review was based on face-to-face interviews with the Directors, the Group Company Secretary, as well as meetings with key members of senior management who attended Board Committees and were responsible for key finance, risk and/or control functions. The review sought the Directors’ views on a range of topics including Board composition and expertise, Board culture and dynamics, the Board’s calendar and agenda, the quality and timeliness of information, strategy and operational matters, risk management and internal control, succession planning, human resource management, and priorities. As part of the process, the Chairman met with each Director to review their individual performance. These reviews included a discussion of the Director’s individual contributions and performance at the Board and relevant Board Committees, the conduct of Board meetings, the performance of the Board as a whole and its Committees, compliance with Director-specific provisions of the relevant Central Bank Code, the requirements of the Central Bank’s Fitness and Probity Regulations, and other specific matters which the Chairman and/or Directors wished to raise. The performance of the Chairman was also assessed during the review, with the Board meeting to discuss the outcome of the review of the Chairman’s performance held in his absence.
A report on the findings of the full review was presented to the Board and the Committees, and the outcome of the review was positive. In addition, Lintstock representatives met with the Board informally to discuss the review in more detail, and the Directors sought further insights as to how the Board compared to international peers on numerous matters. The review Report and the subsequent discussions between Lintstock and the Board concluded that the performance of the Board, its Committees, the Chairman and each of the Directors continues to be effective, with all Directors demonstrating commitment to their roles. The Chairman was commended for his leadership and effectiveness as a public ambassador for the Group. The time committed by the Directors to the Group was in fact noted as significant relative to peers. During the evaluation, many Directors commented favourably on the performance of the Board as a whole, describing it as hardworking, appropriately challenging, and highly engaged.
Recommendations from the 2017 review, each of which is being acted upon, included:
– Volume of Board/Committee papers: The most common observation by Directors concerned the volume of documentation and information which they received. Directors would like to receive more concise reports with clearer signposting of the key issues;
– Conduct of Board/Committees: Several Directors said that they would value more time in agendas for discussion, while recognising the pressures on meeting time and the significant body of work that Committees, in particular the Risk and Audit Committees, are expected to undertake;
– Culture: Directors are keen to take a more leading role in the continued enhancement of the organisation’s culture – which is deeply customer-focused, with a clear emphasis on setting the ‘tone from the top’; and
– Strategy: Potential alternative approaches to the time the Board sets aside each year to focus solely on strategy, including consideration of the longer-term horizon and the impact of changing technology and the competitive landscape.
Attendance at Board Meetings
Prior to 8 December 2017, attendance at the meetings of Allied Irish Banks, p.l.c. are counted as attendance for the purposes of the table below. Thereafter, concurrent meetings of the Company and Allied Irish Banks, p.l.c. are counted as a single attendance. In total, fourteen scheduled meetings and six additional out of course meetings were held during 2017. Attendance at Board Committees is reported in the respective Committee reports of the Annual Financial Report.
Name Board Scheduled Board
(out of course)
Directors A B A B
Dr. Michael Somers*
Column A indicates the number of scheduled meetings held during 2016 which the Director was eligible to attend; Column B indicates the number of meetings attended by each Director during 2017.
*Dr. Michael Somers resigned with effect from 31st December 2017.
Conflicts of Interest
The Board approved Code of Conduct and Conflicts of Interest Policy sets out how actual, potential or perceived conflicts of interest are to be evaluated, reported and managed to ensure that Directors act at all times in the best interests of the Group and its stakeholders. Executive Directors, as employees of the Group, are also subject to the Group’s Code of Conduct and Conflicts of Interests Policy for employees.
Terms of Appointment and time commitment
Non-Executive Directors are generally appointed for a three year term, with the possibility of renewal for a further three years on the recommendation of the Nomination and Corporate Governance Committee. Any additional term beyond six years will be subject to annual review and approval by the Board. Appointments to the Boards of AIB Group plc and Allied Irish Banks, p.l.c. are co-terminous.
Following appointment, in accordance with the requirements of the Company’s Constitution, Directors are required to retire at the next Annual General Meeting (‘AGM’), may go forward for reappointment, and are subsequently required to make themselves available for reappointment at intervals of not more than three years. The Company’s first AGM is scheduled for 25 April 2018. All Directors of Allied Irish Banks, p.l.c. retired from office at the AGM held in 2017 and offered themselves for reappointment. This practice will continue from 2018 onwards for AIB Group plc.
Letters of appointment, as well as dealing with terms of appointment and appointees’ responsibilities, stipulate that a specific time commitment is required from Directors. A copy of the Directors’ letters of appointment are available on request to members of the Company for inspection during business hours from the Group Company Secretary.
Induction and Professional Development
There is an induction process in place for new Directors, the contents of which varies for Executive and Non-Executive Directors. In respect of the latter, the induction is designed to provide familiarity with the Group and its operations, and comprises the provision of relevant briefing material, including details of the Group’s strategic, business and financial plans, and a programme of meetings with the Chief Executive Officer and the Senior Management of businesses and support and control functions. A programme of targeted and continuous professional development is in place for Non-Executive Directors.
The Board recognises and embraces the benefits of diversity among its own Members, including diversity of skills, experience, background, gender and other qualities and is committed to achieving the most appropriate blend and balance of diversity possible over time. Since February 2015 a Board Diversity policy has been in place which sets out the Board’s position on diversity in general and specifically highlights the Board’s target to seek to enhance the representation of females on the Board. During the annual review of the policy undertaken this year, the Nomination & Corporate Governance Committee challenged the Policy statement and the gender target. The Committee’s review resulted in a recommendation to the Board of a refreshed Policy statement and an increased minimum target for female representation on the Board of 30%, to be achieved, we hope, by the end of 2020. The Board supported the new Policy statement and the increased target unanimously. The current percentage of females on the Board is 27%. The target, along with the Policy, is monitored and challenged by the Nomination and Corporate Governance Committee, in conjunction with Board succession plan and skills matrix. Any proposed changes are presented to the Board for approval.
A copy of the Board Diversity Policy is available here.
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 composition of such Committees is reviewed annually. Each Committee operates under terms of reference approved by the Board. The terms of reference of the Board Audit Committee, the Board Risk Committee, the Nomination and Corporate Governance Committee and the Remuneration Committee are available below. The minutes of all meetings of Board Committees are circulated to all Directors for information and are formally noted by the Board. Papers for all Board Committee meetings are also made available to all Directors, irrespective of membership. This provides an opportunity for Directors who are not members of those Committees to seek additional information or to comment on issues being addressed at Committee level. The Board has established a Sustainable Business Advisory Committee, comprising Non-Executive Directors and Leadership Team Members, to support the execution of the Group’s sustainable business strategy, which includes the development and safeguarding of the Group’s ‘social license to operate’ such that the Group plays its part in helping its customers prosper as an integral component of the Group’s business and operations. Further details in relation to related activities are available on pages 20 to 24. In carrying out their duties, Board Committees are entitled to take independent professional advice, at the Group’s expense, where deemed necessary or desirable by the Committee Members. Reports from the Board Audit Committee, Board Risk Committee, Nomination and Corporate Governance Committee and the Remuneration Committee are presented in the Annual Financial Report. The Committee reports reflect the activities of the Committees of Allied Irish Banks, p.l.c. during the year to 8 December 2017, and the Company’s Committees held after that date, when it was part of the AIB Group, at which the business of the Group was discussed.
Board Audit Committee
Members: Ms Catherine Woods (Chairman), Mr Tom Foley, Mr Peter Hagan, Mr Jim O’Hara
The Committee is appointed by the Board to assist the Board in fulfilling its oversight responsibilities in relation to:
the quality and integrity of the Group’s accounting policies, financial and narrative reports, and disclosure practices;
the effectiveness of the Group’s internal control, risk management, and accounting and financial reporting systems;
the adequacy of arrangements by which staff may, in confidence, raise concerns about possibly improprieties in matters of financial reporting or other matters;
the independence and performance of the Internal and External Auditors.
The Committee’s Terms of Reference are available here.
The Board Audit Committee Report on the Committee’s activities relating to the financial year ended 31 December 2017, including a letter from the Committee Chairman, can be found on pages 195 to 196 in the Annual Financial Report.
Board Risk Committee
Members: Mr Peter Hagan, Chairman, Mr Simon Ball, Mr Brendan McDonagh, Ms Catherine Woods, Ms Carolan Lennon
While the Committee has a wide range of responsibilities, its primary roles and responsibilities are:
providing oversight and advice to the Board in relation to current and potential future risks facing the Group and risk strategy in that regard, including the Group’s risk appetite and tolerance;
ensuring the effectiveness of the Group’s risk management infrastructure; – compliance with relevant laws, regulation obligations and relevant codes of conduct;
monitoring and reviewing the Group’s risk profile, risk trends, risk concentrations and risk policies;
considering and acting upon the implications of reviews of risk management undertaken by Group Internal Audit and/or external third parties.
The Committee’s Terms of Reference are available here.
The Board Risk Committee Report on the Committee’s activities relating to the financial year ended 31 December 2017, including a letter from the Committee Chairman, can be found on pages 200 to 201 in the Annual Financial Report.
Nomination and Corporate Governance Committee
Members: Mr Richard Pym (Chairman), Mr Simon Ball, Mr Jim O’Hara, Ms Catherine Woods.
The Nomination and Corporate Governance Committee has oversight responsibility for:
reviewing the size, structure and composition of the Board, including its numerical strength, the ratio of executive to Non-Executive Directors, the balance of skills, knowledge and experience of individual Members of the Board and of the Board collectively, and the diversity and service profiles of the Directors, and making recommendations to the Board with regard to any changes considered appropriate;
identifying persons who, having regard to the criteria laid down by the Board, appear suitable for appointment to the Board, evaluating the suitability of such persons and making recommendations to the Board;
reviewing the size, structure, composition, diversity and skills of the Board Committees and subsidiary company Boards and the independence of Non-Executive Directors;
reviewing Board and Senior Executive succession planning;
reviewing and assessing the adequacy of the Company's corporate governance policies and practices.
The Committee’s Terms of Reference are available here.
The Nomination & Corporate Governance Committee Report on the Committee’s activities relating to the financial year ended 31 December 2017, including a letter from the Committee Chairman, can be found on pages 204-206 in Annual Financial Report.
Members: Mr Jim O’Hara (Chairman), Mr Simon Ball, Mr Brendan McDonagh, Mr Richard Pym.
The Remuneration Committee has responsibility for:
– recommending Group remuneration policies and practices to the Board;
– ensuring that the remuneration policy and practices are subject to an annual central and independent internal review;
– the remuneration of the Chairman of the Board (which matter is considered in his absence);
– determining the remuneration of the Chief Executive Officer, other Executive Directors, and the other members of the Leadership Team, under advice to the Board; including the Heads of Risk, Compliance, Group Internal Audit and the Group Company Secretary;
– reviewing the remuneration of Identified Staff, who are individuals classified as ‘material risk takers’ in accordance with the EU Capital Requirements Directive (CRD IV) Remuneration Guidelines of the European Banking Authority (‘EBA Guidelines’);
– performance-related and share-based incentive schemes, when appropriate.
The Committee's Terms of Reference are available here.
The Remuneration Report including Committee’s activities relating to the financial year ended 31 December 2017, and a letter from the Committee Chairman, can be found on pages 207-222 in the Annual Financial Report.
External Auditor Independence
A policy on fees paid to the Auditor (“the Policy”) is in place outlining the circumstances in which the Statutory Auditor (“the Auditor”) is permitted to provide non-audit services to AIB. This Policy is reviewed and approved by the Board Audit Committee (“BAC”).
AIB Group will not engage the Auditor to provide permitted non-audit services without the prior approval of the BAC. The BAC may pre-approve, at the beginning of each year, permitted services subject to an individual contract limit. Contracts of greater value will require individual approval. Where pre-approval has not been granted, permission to engage the Auditor will be granted on a case-by-case basis either at scheduled BAC meetings or, alternatively, if approval needs to be granted outside of the scheduled meetings, the BAC Chair and one other Committee member may grant such permission which will be reported to the BAC at the next scheduled meeting. Where it is feasible, non-audit related services contracts will be put out to tender among suitably qualified firms.
The utilisation of pre-approved limits is a matter for the Finance function. As an additional governance control, all requests to engage the Auditor in non-audit service are required to be submitted in writing to the Finance Function.
In considering the proposed retention of the Auditor for non-audit services, the BAC reviews and monitors the independence and objectivity of the Auditor, taking into consideration relevant legislation, ethical guidance and the level of non-audit services relative to audit services.
Pre-approved services are divided into the following four categories.
1. Audit Services, which includes the annual audit services engagement terms, and any changes in terms, conditions and fees which result from changes in audit scope or the structure of the AIB Group, and other matters including:
audits under generally accepted auditing standards;
quarterly reviews under the statement of Auditing Standards No.100 ‘Interim Financial Information’
2. Audit Related Services, including assurance and associated services that are reasonably related to the performance of the audit or review of the Group’s Financial Statements;
3. Tax Services, including certain tax compliance, expatriate tax, and tax consultation services, can be provided by the Auditor provided that they have no direct or material effect, separately or in aggregate on the financial statements, that the estimation of the effect on the audited financial statements is comprehensively documented and explained in the additional report to the BAC and the principles of independence laid down in Directive 2006/43/EC are complied with;
4. Other Consultancy Services, including certification of capital or revenue grants, due diligence assistance and providing services and/recommendations in new accountancy provisions or standards.
No authority within AIB can grant approval to engage the Auditor to provide certain prohibited services. Prohibited services are outlined in the Policy and include:
Certain Tax Services, relating to the preparation of tax forms, payroll tax, custom duties, identification of public subsidies, tax incentives, support regarding tax inspections unless required by law, calculation of direct, indirect and deferred tax and the provision of tax advice;
Services that involve any part in the management or decision-making of AIB;
Bookkeeping or any services relating to the preparation of accounting records or the financial statements;
Design or implementation of internal controls or risk management procedures relating to the preparation and/or control of financial information or designing and implementing financial information systems; Valuation Services;
Certain Legal Services;
Services related to the Group’s internal audit function;
Services linked to financing, capital structure and allocation or investment strategy;
Promoting, dealing or underwriting shares in AIB;
Certain Humans Resources Services.
A new EU regulatory framework on statutory audit entered into force in May 2014 through (1) a revised Directive 2014/56/EU, which includes measures to strengthen the independence of statutory auditors, make the audit report more informative, and strengthen audit supervision throughout the EU, and (2) a new Regulation 537/2014, which introduces stricter requirements on the statutory audits of public-interest entities, such as listed companies, credit institutions, and insurance undertakings. Member States had 2 years to implement the revised Directive, with the Regulation becoming directly applicable to Member States on 17 June 2016.
The Policy will be updated once national transposition has completed to reflect all additional relevant matters arising therefrom.
Risk Oversight and Accountability
The financial statements for the financial year ended 31 December 2017 have been prepared on a going concern basis as the Directors are satisfied, having considered the principal risks and uncertainties impacting the Group, that it has the ability to continue in business for the period of assessment. The period of assessment used by the Directors is twelve months from the date of approval of these annual financial statements.
In making their assessment, the Directors considered a wide range of information relating to present and future conditions. These included financial plans covering the period 2018 to 2020 approved by the Board in December 2017, liquidity and funding forecasts, and capital resources projections, all of which were prepared under base and stress scenarios. In addition, the Directors considered the principal risks and uncertainties which could materially affect the Group’s future business performance and profitability and which are outlined on pages 58 to 68 in the ‘Risk management’ section of this report.
Directors' Statement on Risk Management and Internal Controls
The Board of Directors is responsible for the effective management of risks and opportunities and for the system of internal controls in the Group. The Group operates a continuous risk management process which identifies and evaluates the key risks facing the Group and its subsidiaries. The system of internal controls is designed to ensure that there is thorough and regular evaluation of the nature and extent of risks and the ability of the Group to react accordingly, rather than to eliminate risk. This is done through a process of identification, measurement, monitoring and reporting, which provides reasonable, but not absolute, assurance against material misstatement, error, loss or fraud. This process includes an assessment of the effectiveness of internal controls, which was in place for the full year under review up to the date of approval of the accounts, and which accords with the Central Bank of Ireland’s 2015 Corporate Governance requirements for Credit Institutions and the UK Corporate Governance Code. Further information can be found on page 208 of the Annual Financial Report.
Relations with Shareholders
The Group has a number of procedures in place to allow its shareholders and other stakeholders to stay informed about matters affecting their interests. In addition to the Annual Financial Report, which is only sent to those shareholders who request it, the following communication tools are used by the Group:
The Shareholders’ Report (‘the Report’) is a summary version of AIB’s Annual Financial Report. The Report, which covers AIB’s performance in the previous year, is sent to shareholders who have opted to receive it instead of the full Annual Financial Report. The summary report does not form part of the Annual Financial Report and is referred to for reference purposes only.
This website contains, for the years since 2000, the Annual Financial Report, the Interim Report/Half-yearly Financial Report, and the Annual Report on Form 20-F for the relevant years. In accordance with the Transparency (Directive 2004/109/EC)(Amendment)(No.2) Regulations 2015, this and all future Annual and Half-Yearly Financial Reports will remain available to the public for at least ten years. For the period 2008 to 2013, the Annual Financial Report and the Annual Report on Form 20-F were combined. The Group’s presentation to fund managers and analysts of annual and interim financial results are also available.
Annual General Meeting (“AGM”)
All shareholders are invited to attend the AGM and to participate in the proceedings. At the AGM, it is practice to give a brief update on the Group’s performance and developments of interest for the year to date. Separate resolutions are proposed on each separate issue and voting is conducted by way of poll. The votes for, against, and withheld, on each resolution, including proxies lodged, are subsequently published on the Group’s website. Proxy forms provide the option for shareholders to direct their proxies to withhold their vote. It is usual for all Directors to attend the AGM and to be available to meet shareholders before and after the meeting. The Chairman of the Board Committees are available to answer questions about the Committee’s activities. A help desk facility is available to shareholders attending. The Company’s 2019 AGM is scheduled to be held on 24 April 2019, at The Ballsbridge Hotel, Pembroke Road, Ballsbridge, Dublin 4, Ireland, and it is intended that Notice of the Meeting will be posted to shareholders at least 20 working days before the meeting, in accordance with UK code requirements.