Directors’ report: Other information
Key contracts and other arrangements
This information is given pursuant to section 417(5)(c) of the Companies Act 2006. The trading subsidiaries have entered into contracts with the agents, who are self employed. (The exception to this is Hungary where agents are employed for regulatory reasons). Agent agreements govern the relationship and the agents are remunerated primarily by what they collect.
Certain Group companies have entered into agreements with Hughes Network Systems Limited, Mastek UK Limited, Fujitsu Services Limited and Grupo Xertix S.A. de C.V. in relation to IT services provided to the Group.
The Group’s Hungarian subsidiary operates its credit granting activities under licence from PSZAF (the Hungarian Financial Supervisory Authority). The Group’s Romanian subsidiary is monitored by the National Bank of Romania (‘NBR’) in its capacity as monitoring and supervising authority. It is licensed by the NBR and recorded in the General Registry of Non-Banking Financial Institutions. The Group’s Russian subsidiary is a bank which is regulated by the Central Bank of Russia.
Environmental, social and governance matters
During the year, the Company and its subsidiaries made donations of £68,000 for charitable purposes (as defined in paragraph 5 of Schedule 7 of the Companies Act 1985). The Group invested a further £572,000 in cash, employee time and in-kind contributions to charitable and community investment organisations. The Group’s community data is reported in line with the London Benchmarking Group methodology and is independently assured by the Corporate Citizenship Company. No political donations were made.
The board takes regular account of the significance of environmental, social and governance (‘ESG’) matters to the Group. ESG risks are dealt with via the Company’s risk management process. Details of this are set out in the Internal control and risk management section of the corporate governance statement.
The board has identified and assessed the significance of ESG risks to the Company’s short and long-term value as part of the risk management procedures. It recognises that a proactive programme of reputation management through a range of progressive, responsible business initiatives adds to the sustainable long-term value of the Company. Responsibility for this area rests with the Chief Executive Officer, John Harnett.
Key ESG issues for the business that impact upon its stakeholders are: corporate reputation; social or financial exclusion; ensuring work with communities is relevant; and attracting skilled and well motivated labour. Failure to be seen to trade responsibly and failure to gain the necessary approvals to trade from regulators could adversely affect the Company’s reputation and share price.
Adequate information is received by the board to make an assessment of key ESG issues. Corporate affairs activity, health and safety and people management issues were all discussed at board meetings in 2008. The corporate responsibility (‘CR’) steering committee also reports formally to the board at least once a year. Details of training for directors are set out in the Training section in the corporate governance statement.
There are a range of appropriate corporate standards, policies and governance structures covering all operations. Compliance with corporate policies is confirmed formally by means of a self-certification process once a year and is reported to the board. Further details can be found in the corporate governance statement.
The community and environmental data is externally verified. The environmental management system is also subject to an annual independent internal audit against the requirements of ISO 14001. The Group is working towards external assurance against the International Standard on Assurance Engagements (ISAE3000) for CR reporting and has been working with an independent company on this during 2008. This work will continue through 2009.
The remuneration committee is able to consider performance on ESG issues when setting the remuneration of executive directors and, where relevant, ESG matters are incorporated into the performance management systems and remuneration incentives of local business management. When setting incentives the remuneration committee takes account of all implications, including the need to avoid inadvertently motivating inappropriate behaviour.
In 2008, executive directors were given specific objectives relating to ESG issues for the purposes of the annual bonus scheme: these related to employee engagement, talent management and development of employees. Details of the bonus scheme are set out in the Bonuses section of the Statement of the Company’s policy on directors’ remuneration in the directors’ remuneration report.
Full information on specific ESG matters, and how these are managed, can be found in the 2008 Corporate Responsibility report at http://www.ipfincrreport.co.uk/cr08.
Health and safety
The Group attaches great importance to the health and safety of its employees, agents and other people who may be affected by its activities.
The board has approved a Group health and safety policy and a framework for health and safety. It has established a health and safety steering committee which is chaired by the Company Secretary. This committee reports annually to the board by means of a written report. Each subsidiary board is responsible for the issue and implementation of its own health and safety policy as it affects the subsidiary company’s day-to-day responsibility for health and safety. Health and safety is considered regularly at board meetings and each board produces a written report for the health and safety steering committee once a year.