annual report 2009 - Aer Lingus

Directors’ Report Aer Lingus Group Plc – Annual Report 200931The Minister for Transport of Ireland (acting through the Ministerfor Finance of Ireland in his capacity as shareholder) and the ESOTeach have specific rights under the Company’s Articles of Associationin relation to the nomination and rotation of Directors. These rightsmay not comply with the requirement under the Combined Codethat the Appointments Committee lead the process for Boardappointments and make recommendations to the Board regardingBoard appointments and the requirement under the CombinedCode that all Directors be submitted for re-election at regularintervals. The Minister for Transport of Ireland is entitled tonominate for appointment up to three Directors. The ESOT isentitled to nominate for appointment up to two Directors. Thenumber of Directors eligible to be nominated by the Minister forTransport of Ireland and the ESOT is dependent on the proportionof the total issued ordinary share capital held by each of themrespectively. Up to 5 March 2009, the Minister for Transport ofIreland nominated his full entitlement of three Directors (Mr FrancisHackett, Dr Colin Hunt and Mr Chris Wall). Mr Chris Wall ceasedto be a Director on 5 March 2009 following the expiry of hisappointment as a “Minister’s Nominee”. Mr Leslie Buckley wasappointed as a “Minister’s Nominee” on 18 May 2009 andthroughout the remainder of the year there were three such“Minister’s Nominees” (Mr Leslie Buckley, Mr Francis Hackettand Dr Colin Hunt).During 2009 the ESOT nominated its full entitlement of twoDirectors (Mr David Begg and Mr Michael Johns) (the “ESOTNominees”). Further information is given in the biographies ofcurrent Directors on pages 10 and 11 of the skills and experienceof the Minister’s Nominees and the ESOT Nominees.Retirement and re-electionIn accordance with the Articles of Association, one-third of theDirectors who are subject to retirement by rotation retire from officeat each AGM. All Directors, with the exception of those nominated bythe Minister for Transport of Ireland (acting through the Minister forFinance of Ireland) or by the ESOT, are required to retire by rotationevery three years. All retiring Directors may offer themselves for reelection.Directors nominated by the Minister for Transport of Irelandor ESOT are not subject to these provisions in relation to retirement.It is the Board’s policy to regularly review the chairmanship of itscommittees. Appointments to committees are for a period of up tothree years, which may be extended for a further three-year periodprovided the Director remains independent, or in the case of somecommittees, a majority of the Directors on the committee remainindependent. A Director being a member of the same Board committeefor more than six years may be permitted only after review by theBoard. Recommendations to shareholders for the re-election ofnon-executive Directors for terms beyond six years will be madeonly after review by the Board.Induction and developmentNew Directors are provided with extensive briefing materials onthe Company and its operations. An induction process is clearlyestablished and has been set out in writing and approved by Board.There is in place a procedure under which Directors, in furtheranceof their duties, are able to take professional advice, if necessary, atthe Company’s expense.The Company Secretary is responsible for ensuring that Boardprocedures are followed and all Directors have access to his adviceand services. The Company Secretary ensures that the Board membersreceive appropriate training as necessary. The Company Secretary isresponsible for advising the Board on all corporate governance matters.The Company has an insurance policy in place which indemnifies theDirectors in respect of legal action taken against them in respect oftheir reasonable actions as officers of the Company.MeetingsThe Board has a fixed schedule of meetings each year and maymeet more frequently as required. There were nine scheduledBoard meetings in the year. In addition there were four unscheduledmeetings and six conference call meetings. Therefore, there were atotal of nineteen Board Meetings held in 2009. Details of Directors’attendance at these meetings is outlined in the table on page 35.For regular Board meetings, the agenda will usually comprise reportsfrom the Chief Executive, Chief Financial Officer and executivemanagement. The practice is to have the agenda and supportingpapers circulated to the Directors seven days ahead of each meeting.It is inevitable that there will be occasions when circumstances ariseto prevent Directors from attending meetings. In such circumstances,it is practice for the absent Director to review the Board papers withthe Chairman and convey any views on specific issues. It should alsobe noted that the time commitment expected of non-executiveDirectors is not restricted to Board meetings. All of the Directorsare to be available for consultation on specific issues falling withintheir particular fields of expertise. The Chairman and non-executiveDirectors meet at least annually as a group without the executiveDirectors present. In addition a further meeting each year consistsof the Senior Independent Director and the other non-executiveDirectors, without the Chairman being present.