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Corporate governance

Leadership

2.1 General principles

 Chairman (who runs the board) and CEO (who runs the company) should be
separate individuals to prevent one individual having too much power.

 Balance between executive directors (EDs) and independent non-executive
directors (INEDs); generally at least 50% of the board should be INEDs.

 NED roles:

– strategy role: this recognises that NEDs have the right and responsibility
to contribute to strategic success, challenging strategy and offering advice
on direction.

– scrutinising role: NEDs are required to hold executive colleagues to
account for decisions taken and results obtained.

– risk role: NEDs ensure the company has an adequate system of internal
controls and systems of risk management in place.

– people role: NEDs oversee a range of responsibilities with regard to the
appointment and remuneration of executives and will be involved in
contractual and disciplinary issues.

 The board should communicate clearly and honestly with stakeholders,
particularly shareholders.

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