APPOINTMENT AS NON EXECUTIVE DIRECTOR.
I am pleased to confirm your appointment as Non-Executive Director of the Society with effect from [DATE].
This letter set outs the terms of your appointment. It is agreed that this is a contract for services and is not a contract of employment.
1. The annual Director's fee effective from 1 December 2016, is £22,850 payable in monthly instalments, on or about the 20th day of each month and is reviewed annually with effect from 1 December. You may be paid an additional sum if you are appointed as the Head of a Board Committee.
2. Under the Rules of the Society (copy enclosed), you must be nominated for election by the members at the next Annual General Meeting following your appointment (this will be the AGM to be held in March 2017). You will see that under Rule 14 you must have a Share Account with the Society with a minimum balance of £500 to be eligible for appointment as a Director.
3. Subject to being so elected, your appointment will thereafter be for a term of three years commencing on the date of the Annual General Meeting unless otherwise terminated earlier by and at the discretion of either party, or otherwise in accordance with the Rules. It is the Society's practice for new Directors' performance to be reviewed after an initial two-year period to enable a decision to be taken. Continuation of your contract of appointment is contingent on satisfactory performance and re-election at forthcoming Annual General Meetings. After each term of three years, the Society's Board shall determine whether or not you should be nominated to the members at the annual general meeting for a further three years which shall be dependent on the review of your performance, including your attendance record during the term. Your appointment is for a maximum term of 12 years or conclusion of the next Annual General Meeting following your 70th birthday, whichever is first.
4. If the Board, in accordance with the rules, at any time shall determine that you shall do so, you shall immediately resign from office as a Director of the Society, without claim for compensation and, in the event of your failure so to do, the Society's Board is hereby irrevocably authorised to appoint some person in your name and on your behalf to sign and deliver such resignation or resignations to the Society.
5. Overall, it is anticipated that a time commitment of at least two working days (possibly three) per month, including preparation time, will be required after the induction phase. This would include attendance at monthly Board meetings, the AGM, and training courses and seminars. Directors are also encouraged to visit Branches and Head Office departments from time to time. In addition, you will be expected to devote appropriate time ahead of each meeting. The Board usually has 10 regular meetings in a year as well as two strategy review meetings. The various Committees of the Board will meet at least four times annually. A Director will be expected to attend all of the Board, Committee and strategy review meetings which they are asked to attend, except in the case of ill-health. Attendance records of Directors are published in the Annual Reports and Accounts.
By accepting this appointment, you confirm that you are able to allocate sufficient time to meet the expectations of your role. You shall not accept appointments as a Director, Executive, employee or consultant for any other organisation, institution or company without the society's Board's prior written consent. During the continuance of your appointment you are required to faithfully, efficiently, competently and diligently perform your duties as a Non-Executive Director and carry out all reasonable and lawful directions given by or under the authority of the Board and use your best endeavours to promote and extend the interests and reputation of the Society.
6. Non-Executive Directors have the same general legal responsibility to the Society as any other Director. The Board as a whole is collectively responsible for promoting the success of the Society by directing and supervising the Society's affairs.
a) provides entrepreneurial leadership of the Society within a framework of prudent and effective controls, which enable risk to be assessed and managed.
b) sets the Society's strategic aims, ensures that the necessary financial and human resources are in place for the Society to meet its objectives and reviews management performance, and
c) sets the Society's values and standards and ensures that its obligations to its members and others are understood and met.
Directors must make decisions objectively in the interests of the Society's members. In addition to these requirements of all Directors, the role of the Non-Executive Director has the following key elements:
a) Strategy – Non-Executive Directors should constructively challenge and contribute to the development of strategy.
b) Performance – Non-Executive Directors should scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance.
c) Risk – Non-Executive Directors should satisfy themselves that financial controls and systems of risk management are robust and defensible, and that these controls and systems will produce accurate financial information.
d) People – Non-Executive Directors are responsible for determining appropriate levels of remuneration of Executive Directors and have a prime role in appointing, and where necessary removing, senior management and in succession planning.
7. It is accepted and acknowledged that you will have business interests other than those of the Society and have declared any conflicts that are apparent at present. In the event that you become aware of any potential conflicts of interest, these should be disclosed to the Chairman and Society Secretary as soon as apparent. Your attention is drawn to Rule 21 in respect of contracts.
8. All information acquired during your appointment is confidential to the Society and should not be released, either during your appointment or following termination (by whatever means) to third parties. You shall not (except in the proper course of your duties) divulge to anyone or otherwise make use of (and shall use your best endeavours to prevent the publication and disclosure of) any confidential information concerning the business or finances of the Society or any of its or their customers.
All papers, notes and memoranda relating to any such confidential information concerning the business of the Society or its customers which shall be acquired, received or made by you as Non-Executive Director, and shall be the property of the Society and shall be surrendered by you to someone duly authorised in that behalf on your ceasing to hold office as Director of the Society or at the request of the Board at any time during your period of office.
These restrictions are subject to any requirement of law or any applicable regulatory body.
9. Immediately after appointment, the Society will provide a comprehensive, formal and tailored induction. We will arrange for Branch and Head Office visits and meetings with the management team.
10. The performance of individual Directors and the whole Board and its Committees is evaluated annually. If, in the interim, there are any matters which cause you concern about your role you should discuss them with the Chairman as soon as is appropriate.
11. To satisfy FCA requirements, the Board must be satisfied that a Director is fit and proper and remains so therefore checks, including credit searches, will be made from time to time.
12. The Society has Directors and Officers Liability Insurance and it is intended to maintain such cover for the full term of your appointment. The current indemnity limit is £10,000; a copy of the policy document is attached.
13. Occasions may arise when you consider that you need professional advice in the furtherance of your duties as a Director. The Society Secretary can be requested to assist and, if external advice is required, the Society will reimburse the full cost of expenditure incurred.
Your appointment as a Director of the Society is subject to the requirements of the Senior Managers Regime. You may be required to apply to the regulator for permission to hold a Senior Manager Function in the future. If the Regulator refuses your application, or withdraws permission at any time, your appointment as Non-Executive Director of the Society will be terminated with immediate effect. You will be required annually to re-affirm that you continue to meet the Fit and Proper requirements to remain in office.
As a Non Executive Director you will hold a role of significant influence and great importance within the Society and it is essential that you understand fully the requirements of the regulatory regime and how these will impact on you in your role.
If the terms, on the above basis, are acceptable to you, please sign the copy letter as your acceptance.
Society Secretary & Legal Counsel
Signed, agreed and approved by:
...................................................... (Name in full)