47
Governance CRH Sustainability Report 2012
Board of Directors The Board The Directors and management of CRH are committed to maintaining the highest standards of corporate governance and ethical business conduct.
The CRH Board is responsible for the leadership, oversight, control, development and long-term success of the Group. The Board is also responsible for instilling the appropriate culture, values and behaviour throughout the organisation. There is a formal schedule of matters reserved to the Board for consideration and decision. This includes Board appointments, approval of the Annual Report, the Interim Results and the annual budget, major acquisitions, significant capital expenditure and approval of the strategic plans for the Group. There were eight full Board meetings during 2012. It has been CRH’s practice since the formation of the Group in the 1970s that the roles of Chairman and Chief Executive are not combined. A clear division of responsibilities is set out in the Corporate Governance Report of the Annual Report. The Board has delegated responsibility for the management of the Group, through the Chief Executive, to executive management.
Mr. Nicky Hartery, Chairman since May 2012, has been a member of the CRH Board since June 2004. On his appointment as Chairman, he met the independence criteria set out in the UK Corporate Governance Code.
It is also the practice that a majority of the Board comprises non-executive Directors. At present, there are four executive and eight non-executive Directors. The independence of non-executive Directors is considered annually and all non-executive Directors are considered by the Board to be independent. Nonexecutive Directors are expected to challenge management proposals constructively and to examine and review management performance in meeting agreed objectives and targets. In addition, they are expected to draw on their experience and knowledge in respect of any challenges facing the Group and in relation to the development of proposals on strategy. The non-executive Directors generally meet before or after each Board meeting without executives being present. Directors are appointed for specified terms and are subject to the Memorandum and Articles of Association of the company. The Directors are committed to ensuring that the Board is sufficiently diverse and appropriately balanced.
In terms of Board renewal, four criteria are taken into consideration: (i) international business experience; (ii) skills, knowledge and expertise in areas relevant to the operation of the Board; (iii) diversity, including nationality and gender; (iv) the need for an appropriately sized Board. Each, or a combination, of these factors can take priority. Consequently, to date the Board has not set specific objectives in relation to diversity. All Directors retire at each Annual General Meeting and submit themselves to shareholders for re-election. Directors who are seeking re-election are subject to a satisfactory performance appraisal.
Induction and Development New Directors are provided with extensive briefing materials and a tailored induction programme on the Group and its operations. The Chairman conducts a formal evaluation of individual Directors annually, which includes review of training needs where appropriate. Directors can also avail of opportunities to hear the views of and meet with the Group’s investors and analysts. Directors regularly receive copies of research and analysis conducted on CRH and the building materials sector. The Board receive regular updates from the external auditors in relation to regulatory and accounting developments. Updates in relation to other relevant matters, for example, changes in company law, are provided from time to time. Directors also meet with key executives and, in the course of twice-yearly visits by the Board to Group locations, see CRH businesses at first hand and meet with local management.
Company Secretary All Directors have access to the advice and services of the Company Secretary, who is responsible to the Board for ensuring that Board procedures are complied with.