Corporate governance

 

We believe that good governance is at the heart of every successful business. Three senior committees and further sub-committees focus on the organisation's key areas, reflecting our commitment to excellent corporate governance.

Our governance structure

corp governance structure

Board committees

Audit Committee

Our Audit Committee is comprised of three Independent Non-Executive Directors and four shareholder-appointed Non-Executive Directors. Motability, the Charity, has observer rights.

The Committee is given delegated authority from the Motability Operations Board to:

  • Review and recommend the annual assurance plan to the Board and receive progress reports from Internal Audit
  • Oversee all assurance activity and monitor its effectiveness
  • Review audit reports and monitor management’s progress against agreed actions
  • Appoint and dismiss the external auditors
  • Monitor the objectivity, independence and effectiveness of the external auditors, including the sanction of non-audit work
  • Oversee the operation of the risk management framework, including risks identified in the corporate risk register
  • Receive and review periodic reports from the Financial Risk Management Committee and Risk Policy & Compliance Committee
  • Review key areas of management judgement that may have a material bearing on the financial statements including, but not limited to, the periodic revaluation of residual values, the assessment of the adequacy of MORL’s insurance reserves and other accounting estimates such as maintenance accruals and end-of-contract payments
  • Receive periodic reports from MORL’s Audit & Risk, Underwriting and Investment Committees to ensure that risk management within the subsidiary is managed in a manner consistent with Group policies
  • Consider any substantive control issues arising, including major control failures or incidents
  • Oversee internal and statutory financial reporting, recommending to the Board adoption of the half-year and full-year accounts.

Members

Barry O’Byrne - Non-Executive Director
Lisa Bartrip - Non-Executive Director
Chris Davies - Independent Non-Executive Director
Daniel Meredith Jones - Non-Executive Director
Simon Minty - Independent Non-Executive Director
Ruth Prior - Independent Non-Executive Director (CHAIR)
Neill Thomas - Senior Independent Director
Paul Thwaite - Non-Executive Director

The Committee meets quarterly before meetings of the main Board, at which the Committee chair reports. Matters considered during the year included:

  • The Company’s capital position, incorporating the evolution and quantification of major risks and their implication for capital requirements, as recorded and measured through the risk register, to ensure capital adequacy at all times within the parameters agreed by the Board
  • A treasury report covering policy and factors affecting liquidity (including ongoing Group financial performance, bank finance availability and bond market access) to make sure that satisfactory liquidity is maintained at all times, within the agreed policy
  • Progress reports from the responsible Executive Director on all key aspects of the business
  • Review of the outputs and matters considered by the Financial Risk Management and the Risk Policy & Compliance Committees, presented by the responsible Executive Directors
  • Internal Audit reports and issue resolution on a quarterly basis, together with appropriate resourcing of the function. No significant issues were encountered
  • Reports on any significant control failures or incidents over the previous quarter and resolution to the satisfaction of the Committee.

Other matters the Committee focused on at intervals during the year included:

  • Receiving updates and considering how the Group has responded to the pandemic and the actions taken against the key priorities of the Group at this time. These include health, safety and well-being of employees and business continuity and the continuation of service provision to customers
  • Receiving updates on the outcome of the external reserves forecasting review. The review concluded that there was no systemic bias in the RV forecasting process, the approach to forecasting follows best practice, the Asset Risk team have a deep understanding of the subject matter, the RV forecasting approach is appropriate and fit for purpose and that the approach makes best use of data from external providers
  • Received updates on the strategic project to rebuild the Economic Capital model, which will deliver an enduring approach to the model, data validation and bench-marking of the Group’s Economic Capital requirements
  • Reports were received from management on a continued proactive programme of security initiatives, including the outputs from the Cyber Incident Management response exercise and how these are being factored into the Group’s cyber incident plans as part of the ongoing programme of Cyber Security assurance
  • Presentations from the respective chairs of MO Reinsurance Limited’s (MORL) Underwriting, Investment and Audit & Risk Committees
  • Regulatory and legal compliance obligations, with a continued focus on ensuring compliance with the General Data Protection Regulation (GDPR) and FCA Consumer Credit compliance and the delineation of responsibility between the Legal function and the newly established business compliance function
  • Validation of the annual risk review process, including a review of how the major risks are presented to ensure greater consistency of internal and external risk reporting, a clear demonstration of trends/changes in risk, with explicit links to potential impacts to the business model and strategy
  • The potential impact on residual values arising from sustained negative sentiment towards diesel vehicles and the economic uncertainty related to the UK’s exit from the European Union, and the impact of the pandemic
  • Establishment of a revised Internal Audit plan that will see business-as-usual audits that have been rated ‘green’ being audited at a key control level, with the focus of the internal audit function moving towards advisory engagements in key strategic areas
  • The decision to produce a Management Statement in light of the impact of the Covid-19 crisis and the unprecedented uncertainty around assumptions critical to delivering a robust financial report was considered in depth at the Committee’s May meeting
  • The financial statement for the full year is considered in depth at the Committee’s December meeting, with the benefit of a detailed report on the findings of the external auditors, KPMG, who are in attendance to present their report and respond to questions. In issuing unqualified reports in the year ended 30 September 2020, the auditors provided appropriate assurance and identified no matters of material concern either to themselves or to the Committee.

Nomination Committee

Our Nomination Committee is comprised of the Non-Executive Chairman and two Independent Non-Executive Directors. The Committee meets twice a year or when required and has authority from the Board to:

  • Review the structure, size and composition of the Board; including skills, knowledge and experience
  • Review the executive and non-executive leadership needs of the organisation, to ensure the ability of the business to operate successfully
  • Develop and review succession and retention plans for Directors and other senior managers, taking into account the challenges and opportunities facing the Company and the skills and expertise which are needed in the future
  • Review proposals for any new Executive and Non-Executive Director appointments
  • Identify and nominate candidates to fill Executive and Non-Executive Directors’ roles (including the role of Senior Independent Director), including the re-appointment of Non-Executive Directors at the end of their term. In identifying suitable candidates, the Committee will use open advertising or the services of external advisers to facilitate the search. The Committee will consider candidates from a wide range of backgrounds and make decisions on the basis of merit against objective criteria
  • Review annually the time required from Non-Executive Directors to fulfil their responsibilities
  • Make recommendations to the Board concerning membership of the Audit and Remuneration Committees
  • Approve an Executive Director’s external non-executive director appointment
  • Receive the gender balance report
  • Make recommendations to the Board concerning any matters relating to the termination of a Director’s contract of employment or service
  • Review the Company’s Early Careers programme
  • Evaluate the effectiveness of the Committee every two years.

Members

Rt. Hon. Sir Stephen O’Brien KBE, Chairman (CHAIR)
Ruth Prior - Independent Non-Executive Director
Neill Thomas - Senior Independent Director

Our Chairman holds meetings with shareholders and reports on any views, issues or concerns to the Board. The Senior Independent Director can attend these meetings when it’s considered appropriate. During the year, the Nomination Committee covered these matters:

  • Appointed executive search agencies for the Chief Executive Officer and the Non-Executive positions
  • Conducted and concluded the search for the new Chief Executive Officer and recommended Andrew Miller to the Board
  • Recommended to the Board the appointments of Matthew Hamilton-James as Interim Chief Executive Officer and Gareth Everson as Interim Finance Director
  • Commenced and concluded a search for the replacement of David Smith, who retired at the end of June 2020, and recommended to the Board the appointment of Chris Davies. He was also recommended as a member of the Audit Committee and Remuneration Committee
  • Approved Andrew Miller’s outside non-executive director appointment
  • Reviewed succession plans for Directors and senior managers. The Committee was satisfied that these were appropriate and continue to meet business needs
  • The composition of the Board was reviewed, and it was recommended to the Board that Ruth Prior be appointed for a second term commencing 1 March 2021
  • Agreed the position of the Executive Directors within their remuneration ranges
  • Considered the gender balance report
  • Carried out an evaluation of the Committee. The overall feedback was that the Committee was run effectively and had discharged its responsibilities in line with good practice.

Remuneration Committee

Our approach

Motability Operations has a clearly defined strategic agenda and framework. This underpins our core purpose of providing worry-free mobility to people with a wide range of different disabilities and offering a wide choice of vehicles at affordable prices. This strategic framework ensures the alignment of business objectives, performance targets and business planning.

With remuneration, our aim is to create a competitive package to attract and retain individuals with the skills, experience, and expertise to run a business of the size and complexity of Motability Operations sustainably. Our policy ensures we do not encourage inappropriate behaviour or actions, and we never reward poor performance or failure.

Members

Chris Davies - Independent Non-Executive Director
Daniel Meredith Jones - Non-Executive Director
Simon Minty - Independent Non-Executive Director
Ruth Prior - Independent Non-Executive Director
Neill Thomas - Senior Independent Director (CHAIR)

Policies

Social and governance policies

We have a range of policies that continuously improve the way we work and make sure we're investing in our employees' long-term wellbeing:

  • Fraud and Bribery Prevention Policy
  • Information Security Management Policy
  • Health & Safety Policy
  • Insider Trading & Information Policy
  • Whistle-blowing Policy
  • People Policy (including policies on Bullying & Harassment; Disability Confidence and Diversity and Grievances)
  • Treating Customers Fairly Policy
  • Modern Slavery Statement

All employees can access these policies through our intranet, and they form part of our new starter induction pack.