Corporate Governance

What is Corporate Governance?

Corporate governance is a complex and wide-reaching field, but in its simplest form, it can be expressed as:-

"... the system by which companies are directed and controlled" (Cadbury Report, 1992)

One of the most important aspects behind corporate governance is the relationship between "stakeholders" - for example, the Board of the company (or for the West Brom, the Society) and the shareholders (or for the West Brom, the members). If a business is governed well, it will attempt to take account of the interests of all stakeholders - and, as far as possible, look for solutions which are in the best interests for all concerned. This does not necessarily mean that decisions will always be welcomed by certain stakeholders - but the decision will at least have been thoroughly discussed by board members who are determined to act in the best interests of the business.

The Society’s Rules and Memorandum

Society's current Rules and Memorandum

The Society's Rules and Memorandum as at 1 October 2015.

Why is Corporate Governance important to the West Brom's members?

Simply put - because the West Brom looks after your wealth, whether it be savings or mortgages. As such, we always want to do the right thing for our members. Corporate governance is a means of ensuring that doing the right thing is achieved through a clear and unbiased decision making process, and that deciding the “right thing” has involved taking account of relevant stakeholders. We want to be able to demonstrate to you that we are taking the responsibility of looking after your wealth seriously - and by having high standards of corporate governance, this will enable us to do this.

As a financial institution, we are not just judged by our members, but also by other institutions that we deal with. These other institutions want to ensure that we are a trustworthy business partner. Showing that we are a trustworthy business partner enables us to achieve better business deals - which can then be used to benefit our members.

The West Brom takes corporate governance very seriously - and we see it as being integral to our decision making process (not some type of “add on” or “box-ticking exercise”). We assess developments in corporate governance, and apply those which are relevant to the building society sector.

Matters reserved to the Board

This comprises matters which ONLY the Board can decide upon. These may be decisions which involve large sums of money, fundamental strategic decisions or decisions as to key personnel. These matters can be delegated by the Board (to one of the Board committees, for example) - but the Board must first consider the matter before doing so.

Remuneration Committee

This Board committee undertakes (amongst other issues) the following:-

  • The development of remuneration policy; and
  • Negotiating the remuneration of individual directors
Nomination Committee

This Board committee (amongst other issues):-

  • Recommends appointments and re-appointments of Directors to the Board.
  • Recommends the composition of Board Committees to the Board.
  • Reviews the structure, size and composition of the Board.
  • Reviews Society statements relating to Corporate Governance. 

The Society has allocated positions with Senior Management Responsibilities in accordance with the PRA’s rules; for example, the individual performing the Society's Chairman Function does not simultaneously perform the Society’s Chief Executive Function.

Audit Committee

This Board committee (amongst other issues):-

  • Provides the Board with assurance regarding the integrity of the financial statements and associated documents.
  • Ensures the adequacy and effectiveness of the Society’s internal control systems.
  • Ensures the effectiveness of the Society’s Internal Audit function - Internal Audit Charter
  • Ensures the effectiveness of the Society’s external auditors. 
Risk Committee

This Board committee (amongst other issues):

  • Oversees the development, implementation and maintenance of the Society’s risk management framework, including its risk appetite statements and metrics to ensure they are appropriate and align with business strategy, current and emerging regulatory, corporate governance and industry best practice.
  • Reviews the processes and procedures for ensuring that all material and business risks are properly identified and appropriate systems of assessing, monitoring and controls are in place.
  • Receives and reviews management reports which assess the nature and extent of the current and emerging risks facing the Society.  
  • Reviews and approves annually the Society’s Risk Management Framework Document, Policy Governance Framework and Credit Risk Policies.
Corporate Governance Links

You may find the following links useful if you want to find out more about Corporate Governance.

Modern Slavery and Human Trafficking Statement

The Society's Modern Slavery and Human Trafficking Statement 2015/16 can be found here.