Provident Financial is committed to high standards of corporate governance and this section provides an overview of how the company has complied with the provisions of the UK Corporate Governance Code published by the Financial Reporting Council in September 2012.
Further information is available in the Annual report, which includes the review of Key Governance Principles and the Directors’ Remuneration Report.
The board comprises the Chairman, two executive directors, four independent non-executive directors and the Company Secretary. Their responsibilities are summarised in the Governance section of the Annual Report (PDF 1.3MB). The names of the directors and the Company Secretary together with their full biographical details, including the skills and experience they each bring to the board, can be found on the Board of Directors page. There is a clear division of responsibility at the head of the group as the Chairman has overall responsibility for the leadership of the board and for its effective functioning, whilst the Chief Executive manages and leads the businesses through their senior management teams.
There are five principal board committees: the Executive committee, the Remuneration committee, the Audit committee, the Nomination committee and the Risk Advisory committee. All committees have written terms of reference that define their duties, authorities and membership, and these are reviewed annually.
The performance of the board is evaluated annually and the chairman is primarily responsible for this evaluation. In accordance with the UK Corporate Governance Code, an external evaluation is carried out every three years. The evaluation includes questions on different aspects of the operation of the board and its committees and the performance of individual directors. The board considers the results of the evaluation and agrees proposals to address any issues identified. The chairman’s performance is also reviewed annually and the senior independent director is responsible for this evaluation.
The board provides oversight to help ensure that the group and its divisions maintain sound internal control and risk management systems. Through the risk advisory committee, it reviews the assessment of risks and the risk management frameworks.
A consistently applied method is used at divisional and group level to identify the key risks that could have a significant impact on the ability of the group to achieve its objectives. Risk owners within the divisions and the corporate office are identified and given responsibility for ensuring actions are implemented with appropriate review dates. The risk registers are reviewed by the risk advisory group and updated at least quarterly. The risk advisory committee is responsible for monitoring the key metrics identified by the divisions and the group in the management of risk and ensures in particular that customer outcomes remain central to the group’s risk management programme.