A priority of the MDDUS Board is protecting the mutual fund of subscriptions and other income for use to deliver our principal activity. As a consequence, the benefits of membership are discretionary as set out in our governing document, the MDDUS Articles of Association.
A private company limited by guarantee, MDDUS is the trading name of the holding company of the Group. There are three wholly owned subsidiaries: MDDUS Insurance Limited, an insurance company; MDDUS Education Limited, a risk and training company; and MDDUS Property Limited, which oversees the management and performance of the investment property portfolio.
MDDUS is not a listed company but it aims to comply with the 'good practice' principles of the UK Corporate Governance Code that are relevant to a mutual organisation. Our corporate governance arrangements were reviewed and updated during 2015/16 and more detailed reporting of our compliance with the Code is planned for 2016/17.
The governing document of MDDUS is the Articles of Association. It provides that the business of MDDUS shall be managed by the Board. Following a recent review of our governance arrangements, it agreed new terms of reference and an updated schedule of matters reserved for its consideration/decision, e.g. the approval of the strategy, substantive changes to the services provided to members and the Annual Report and Accounts.
There are currently 19 directors, comprising 17 non-executive directors and two executive directors: the Chief Executive and the Finance Director. There are three non-clinical non-executive directors on the Board, bringing experience from the fields of business development and financial services, and the actuarial and legal professions. Any member of MDDUS can stand for election to the Board at an Annual General Meeting (AGM). From the AGM in 2017, the Board will generally have not more than 12 non-executive directors. Non-executive directors generally serve not more than 12 years in office, with no individual term extending to more than four years.
In addition to agreeing short-term appointments of non-executive directors between AGMs, the Board also appoints directors to the positions of Chairman and Vice-Chairman. The roles of Chairman and Chief Executive are separate and their profiles, which were recently reviewed and updated, distinguish clearly between leading the Board and executive responsibility for the running of the business.
The Board has agreed a process for evaluating, in consecutive years, its performance and that of individual directors.
The Board usually meets six times a year. It is supported in its work by Board committees and executive management groups.
There are four committees supporting the work of the Board.
The Audit and Risk Committee is charged with, amongst other things, considering the reports of the external and internal auditors and the executive’s responses, endorsing the Annual Report and Accounts to the Board, endorsing the (re-)appointment of the external auditor to the Board, and oversight of risk management and financial and other internal controls.
The Governance and Nominations Committee is charged with, amongst other things, leading an open and transparent process to identify and nominate candidates to fill vacancies on the Board. When nominating suitable candidates, the Committee takes into account the structure, size and composition of the Board. There is a recently revised role profile for non-executive directors (and each of the Board’s office holders) and an induction programme for new directors. The Committee is also responsible for determining, and reviewing the outcomes of, the processes to evaluate the performance of the Board and individual directors.
The Investment Committee is charged with, amongst other things, recommending to the Board the MDDUS Investment and Asset Allocation Strategy and overseeing the performance of the investment managers.
The Remuneration Committee is charged with, amongst other things, determining and keeping under review the remuneration and terms and conditions of service of directors and certain senior staff, having regard to external benchmarking by expert external companies.
All non-executive directors serve on at least one committee, but members of the Investment Committee are prohibited from serving also on the Audit and Risk Committee. Each committee has a clearly defined remit and recently reviewed terms of reference.