Corporate Governance

The Annotated Combined Code

The Society’s Committee of Management is committed to reaching and retaining a high level of corporate governance and has taken advantage of the Annotated Combined Code (published July 2005) produced for mutual insurers by the Association of Friendly Societies and the Association of Mutual Insurers. The Committee has implemented such requirements of the Combined Code deemed appropriate and practical and will explain any areas of non-compliance. It does not consider that its governance falls short of any of the requirements to such an extent that there exists an adverse and material departure from the provisions which would lead to a significant failure in ongoing control.

The roles of the Chairman and the Chief Executive are separate with a clear division of responsibilities. All Committee members are subject to rigorous annual appraisal and re-election at three yearly intervals. There are currently eleven members of the Committee; six have served for more than nine years. The Committee considers that those six members have retained their independence in attitude and application. The remaining members meet the definition of independence set out in the code.

Committee of Management

Keith Osterloh - Chairman
Keith, aged 67 was elected to the Committee of Management in 1995. Until his retirement in 2005, he spent most of his professional life in General Dental Practice in Chichester and led national negotiations for his colleagues with government in the late 1980’s. Having served on the Resources and Marketing, and Investment sub-committees he was elected Chairman in 2002.

Paul Mather - Vice Chairman, Resources & Marketing Sub-Committee Chairman
Paul, aged 53 was elected to the Society's Committee of Management in 1992. He is a Director of BNP Paribas Real Estate and has 28 years experience of working in the City of London.

Mike Bruce - Audit Sub-Committee Chairman
Mike, aged 67 was elected to the Committee of Management in 1973. He has a career background in advertising, marketing and public relations; for much of the time as a self employed practitioner. For the past 10 years he has lectured at the University of Huddersfield.

Andrew Wiman – Investment Monitoring Sub-Committee Chairman
Andrew, aged 51 was elected to the Committee of Management in 1992 and has been a member of the Society for 33 years. Although he trained as an accountant, he now works as a Detective for the North Yorkshire Police investigating everything from major fraud to murders.

Neville Lacey
Neville, aged 55 was elected to the Committee of Management in 2006. He is a Chartered Accountant and senior director of a firm of chartered accountants in Chichester. He has been advising boards of various companies on corporate governance compliance and also advises and reports on audit matters to audit committees of those companies. Neville was treasurer and director of a nationally known theatre for five years

John Lant
John, aged 60 was elected to the Committee of Management in 2000 and leads a large group osteopathic practice in Cambridge. He is independent Chair of the Nutritional Therapy Council appointed by the Department of Health, Member of the Family Mediation Council and Mental Health Act Panel Member at Kneesworth House Psychiatric Hospital (Medium Secure). He has extensive experience in statutory healthcare regulation, associated legislation and family legal services. He provides expert advice in the area of professional negligence.

Christine Pleasance
Christine, aged 64 was elected to the Committee of Management in 1999. She is a Dental Hygienist who has spent most of her working career in private practice. She is now working as a tutor to the school of dental hygiene and therapy at Kings College London based at Guys Hospital. She is a past president of the British Dental Hygienist Association.

Emma Pleasance
Emma, aged 38 was appointed to the Committee of Management in March 2008. She has a background in marketing and now runs a successful equestrian training and consulting business.

Susan Pyle
Susan, aged 46 was elected to the Committee of Management in 2004. She was called to the Bar in 1985 and has been practising as a Barrister for over 20 years.

Mike Quinn
Mike, aged 70 was elected to the Committee of Management in 1983. Until his retirement in 1998 he spent his entire career in the financial services industry. He has served on varying sub-committees and was Chairman of the Society from 1994 until 2002. Having reached the maximum age under the Society's rules, he will not be seeking re-election and will retire from the Committee at the Annual General Meeting.

John Reynolds
John, aged 61 was elected to the Committee of Management in 1972 and was Chairman of the Society from 1987 to 1994. He is a Dental Surgeon and having worked previously in General Dental Practice, is currently a Dental Officer in the Dental Reference Service of the NHS.

**Attendance**
		Committee of Management	Investment Monitoring	Audit	Resources & Marketing

K E Osterloh	Retired Dental Surgeon	5 (5)	4 (4)		1 (1)
P Mather	Surveyor	4 (5)	4 (4)		1 (1)
A J Wilman	Accountant	5 (4)	4 (4)
M J Bruce	University Lecturer	4 (5)		2 (2)
N D Lacey	Accountant	3 (5)		1 (2)
J O Lant	Osteopath	5 (5)	4 (4)
C V Pleasance	Dental Hygienist	5 (5)			1 (1)
S D Pyle	Barrister	4 (5)			0 (1)
P M Quinn	Retired Insurance Executive	4 (5)		2 (2)
J F Reynolds	Dental Surgeon	4 (5)		1 (2)

Notes:	1) Figures in parenthesis indicate maximum possible attendances. 3) K E Osterloh and A J Wilman attended two Audit meetings each.

Committee of Management Remuneration

The honoraria and fees paid to members of the Committee of Management in 2007 (2006 in parenthesis) were;

Chairman	£11,400	(£10,350)
Vice Chairman	£10,120	(£9,200)
Sub-Committee Chairman	£ 7,000	(£6,350)
Committee Member	£ 3,850	(£3,380)

No pension payments were made in respect of any Committee of Management member. In addition, meeting attendance fees of £350 (£300) were paid where appropriate.

Committee of Management
Terms of Reference

Objective:: To bring an independent judgment to bear on issues of strategy, performance, resources, including key appointments, and standards of conduct.
Requirements:: To be independent of management and free from any business or other relationship, which could materially interfere with the exercise of their independent judgment.
To be competent and reliable persons able to achieve those objectives in a satisfactory manner.
Responsibility:: There is a joint and several responsibility for each member of the Committee to ensure that the Committee fulfils its obligations and controls its strategy, performance and resource plans.
A member of the Committee is responsible for ensuring that arrangements are made for the fulfillment of the Society’s statutory duties and may be liable to penalties should the Society fail to do so.
To ensure that the person appointed as Chief Executive has the requisite knowledge and experience to discharge the functions of the office.
To ensure that the Secretary is charged with the duty of complying with the statutory requirements and is a competent and reliable person able to discharge those duties satisfactorily.

Sub-Committees

Executive

Membership of the Executive Committee consists of the Chairman, Vice Chairman, Chief Executive and any other Committee members deemed appropriate from time to time. It is authorised to act on behalf of the Committee of Management but always subject to their actions being ratified by that Committee in due course.

Audit

This Sub-Committee reviews and reports to the Committee of Management on the adequacy of the Society’s systems of business risk and control including the adequacy and accuracy of reports made to the Committee of Management and the Financial Services Authority. It receives external and internal auditor’s reports and reports to the Committee of Management on the adequacy of the inspection programme together with recommendations for improvements or changes. It reviews the performance and cost effectiveness of the internal and external auditors making recommendations as necessary. Meetings are held twice a year with the internal and external auditors of the Society but provision is made to meet as needed. It also manages the process of the annual committee members’ appraisal.

Resources and Marketing

This Sub-Committee reviews the structure, size and composition of the Committee of Management giving full consideration to succession planning for the Committee and senior management. It is responsible for identifying and nominating candidates to fill vacancies on the Committee and its Sub-Committees. It also quantifies the resource requirements of the Society and reviews strategies performance of the Society against the targets set in the Business Plan. Meetings are held twice a year but provision is made to meet as needed.

Investment Monitoring

This Sub-Committee ensures that the acquisition and disposal of assets is reviewed in line with the strategy laid down by the Committee of Management and with the fund manager with reference to performance, future opportunities and targets. The Sub-Committee meets at least four times a year.

Sub-Committees Terms of Reference

Objective: To ensure that the appropriate information is obtained and supplied to the Committee of Management.
To receive reports from management and the Society's advisers and report to the Committee of Management on the adequacy of these reports.
To make recommendations for improvements or changes.
Requirements: To be a member of the Committee of Management.
To be free from any business or other relationship which could materially interfere with fulfilling those obligations.
Responsibility: The Sub-Committee Chairmen are responsible for the submission of reports to the Committee of Management.
The Sub-Committee shall meet at such frequency as determined by the Committee of Management.