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

MO 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 the adequacy and effectiveness of such activity
  • 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 the 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 which 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

Lisa Bartrip - Non-Executive Director
Christopher Davies - Independent Non-Executive Director
Michael Hordley – Non-Executive Director
Daniel Meredith Jones - Non-Executive Director
Ruth Prior - Independent Non-Executive Director (CHAIR)
Neill Thomas - Senior Independent Director
Robert Whittick - 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 ensure 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 of and matters considered by the Financial Risk Management and the Risk Policy and Compliance Committees, presented by the responsible Executive Directors
  • Internal Audit reports and issue resolution on a quarterly basis, together with the 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:

  • Received updates and considered how the Group responded to the pandemic and the actions taken against the key priorities of the Group at this time, namely the health, safety and wellbeing of employees and business continuity and the continuation of service provision to customers. This included a review by Internal Audit on the ‘exceptions to policy’ as a result of the Covid-19 pandemic
  • Received an update on the review carried out by Oliver Wyman at Motability’s request following a strategic review to rebuild key elements of the Economic Capital model calculations working with a number of external third parties
  • 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 Group’s cyber incident plans as part of Group’s ongoing programme of Cyber Security assurance and the establishment of the Cyber Risk and Security Forum to provide additional oversight and governance of MO’s management of cyber risk
  • Presentations from the respective chairs of MO Reinsurance Limited’s (MORL) Underwriting, Investment and Audit & Risk Committees. This included an update on the impact of the Class 12 Definition and Insurance (Non long term valuation and solvency) Regulations on MORL capital requirements and the proposal to add tri-party repos to the investment portfolio
  • Validation of the annual risk review process, including a review of how the major risks are presented to ensure greater consistency in 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
  • The financial statement for the half year and full year which 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 at such other times as required, and has delegated authority from the Board to:

  • Review the structure, size and composition (including the skills, knowledge and experience) of the Board.
  • Review the leadership needs of the organisation, both executive and non-executive, to ensure the continued 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 in relation to membership of the Audit and Remuneration Committees.
  • Approve any Executive Director’s external non-executive director appointment.
  • Make recommendations to the Board concerning any matters relating to the termination of a Director’s contract of employment or service.
  • 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. There is an ‘open invitation’ to the Senior Independent Director to attend these meetings as appropriate.

During the year, the Nomination Committee covered these matters:

  • The composition of the Board was reviewed and it was recommended to the Board the re-appointment to the Group Board of Alison Hastings, Ruth Owen and Simon Minty, each for a second three-year term.
  • Recommended to the Board an extension of the third term for Paul Helps and Mike Gardner, for one year and two years respectively, to the MO Reinsurance Limited Board to ensure continuity during the insurance transition.
  • Approved the Chief Marketing Officer role for Motability Operations Limited and the appointment of Lisa Thomas.
  • Succession plans for Directors and senior managers were reviewed and the Committee was satisfied that these were appropriate and continue to meet business needs.
  • Agreed the position of the Executive Directors within their remuneration ranges.

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
Rt. Hon. Sir Stephen O’Brien KBE - Chairman
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.