We are wholly owned by our members – we have no shareholders and pay no dividends. A priority of the Board is protecting the mutual fund of subscriptions and other income to deliver our principal activity. This means the benefits of membership are discretionary as set out in our Articles of Association.
A private company limited by guarantee, MDDUS is the trading name of the holding company of the Group. There are four wholly owned subsidiaries: MDDUS Insurance Limited (MIL), our commercial insurance company that is licensed by the Guernsey Financial Services Commission; MDDUS Services Limited, operating as MDDUS Solutions, our UK-based insurance intermediary that places business with MIL and is authorised by the Financial Conduct Authority; MDDUS Education Limited, our education and training company; and MDDUS Property Limited, which oversees the management and performance of our investment property portfolio.
The Board is committed to a high standard of corporate governance. As a member of the Association of Financial Mutuals (AFM), we apply and report against the principles of the AFM Corporate Governance Code (January 2019) (‘the Code’) – namely, purpose and leadership, Board composition, director responsibilities, opportunity and risk, remuneration, and stakeholder relationships and engagements. In doing so, the Board has regard to: the guidance provided in the Code; our business model, management and mutual ownership status; and the overriding statutory and fiduciary duties of a director.
Our corporate governance arrangements are kept under regular review. A more detailed report about our governance arrangements and the application of the Code is provided in our most recent Annual Report and Accounts.
MDDUS Board
The governing document of MDDUS is our Articles of Association. It provides that the business of MDDUS shall be managed by the Board, which has terms of reference and a schedule of matters reserved for its consideration / decision, e.g. the approval of strategy, substantive changes to the services provided to members and the Annual Report and Accounts.
Any voting member of MDDUS can stand for appointment to the Board at an Annual General Meeting (AGM). As at the end of 2022, there were 12 directors, comprising nine Non-Executive Directors (NEDs) and three Executive Directors: the Chief Executive, the Finance Director, and the Director of Professional Services and General Counsel. Collectively, the Directors bring experience from the fields of dentistry, medicine, business development, financial services and law. NEDs generally serve not more than three terms of up to three years in office, subject to the succession planning needs of the Board. All nine NEDs as at the end of 2022 were ‘independent’, having served nine years or less since their first appointment to the Board.
Biographies for our Directors are available on our website.
In addition to agreeing short-term pre-AGM appointments of NEDs, the Board appoints Directors to the positions of Chair, Vice-Chair and Senior Independent Director. The role of Chair is separate to that of Chief Executive and the profile for the former distinguishes clearly between leading the Board and the executive responsibility for running the business.
The Board has an agreed process for evaluating, in consecutive years, its performance and that of individual NEDs.
The Board usually meets six times a year and has a forward business programme, which helps the Chair, the Chief Executive and the Company Secretary to shape the agenda for each meeting. A typical meeting will consider emerging strategic and policy matters, management information (including about progress against the business plan and the management accounts) and minutes and verbal updates from meetings of its committees and subsidiary boards.
MDDUS Board committees
The Board is supported in its work by committees. The membership of Board committees, and the Group’s subsidiaries, is reviewed annually. All NEDs serve on at least one committee. The Executive Directors and Company Secretary attend or are members of each committee.
The Audit and Risk Committee is charged with, amongst other things, reviewing the governance arrangements of the Group and any developments in governance ‘good practice’, considering the reports of the external and internal auditors and the executive’s responses, recommending 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 Investment Committee is charged with, amongst other things, recommending to the Board the MDDUS Investment Strategy and overseeing the performance of the investment managers.
The Remuneration and Nominations Committee is charged with, amongst other things, determining and keeping under review the remuneration and terms and conditions of service of NEDs and the senior Executive, being consulted about our pay and reward practices and leading an open and transparent process to identify and nominate candidates to fill vacancies on the Board, its committees and subsidiaries. When nominating suitable candidates, the Committee takes into account the structure, size and diversity of the Board, the Group’s governance framework and the current and potential needs of MDDUS. Diversity enables more effective discussions and better decision-making, so it is defined by the Committee in its widest sense, to include gender, social and ethnic background, and cognitive and personal strengths. We have an aim of maintaining at least 50 percent female directors. The Committee aims to long-list candidates in light of the succession planning needs of the Board, and to develop the diversity of the Board across all areas. All nominations are based on merit. There is a role profile for NEDs (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, its committees and individual NEDs.
The Actuarial Reserving and Pricing Committee (ARPC) is charged with, amongst other things, reviewing and challenging the actuarial reserving and pricing processes, methodologies and assumptions used in setting the year-end actuarial reserves and pricing, and providing assurance that these have been properly reviewed internally and by external peer-reviewers. The Committee also reviews and challenges the capital management work of our in-house actuaries.
The Executive
The Chief Executive leads our executive and is the chair of the Executive Committee, which considers operational and planning issues, and the Pre-Board Group, which considers draft papers and other advice to the Board. The Director of Professional Services and the Finance Director chair, respectively, the Commercial Delivery Board and the Internal Delivery Board, both of which report to the Executive Committee.
The Membership
MDDUS is wholly owned by our members. Accordingly, the members are encouraged to support our ‘good governance’, for example, by standing for appointment to the Board and / or attending the AGM to receive the Annual Report, to appoint NEDs and the External Auditor and to consider other resolutions. The Notice of the AGM and related papers are published at the earliest opportunity, whilst ensuring compliance with the NED appointment process.
For more information about our governance arrangements, please contact:
Bryan A. Hislop
Company Secretary
0141 228 1255 / secretary@mddus.com
Based on the MDDUS Annual Report and Accounts 2021
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