The Board

The Board of Stafford Railway Building Society currently comprises nine directors who offer a wide range of personal experience. Profiles for the Chief Executive and Chairman are provided below.

	Susan Whiting Chief Executive Susan was appointed on 4th January 2011, having been Deputy Chief Executive of the Society since 2004. She is a qualified chartered accountant, a member of the institute of taxation and has advised many local businesses and organisations. She is a member of the Board of Stafford Chamber of Commerce and an officer of two local charities.

	Arthur Bailey Chairman Arthur Bailey is a chartered accountant and was formerly senior partner of a medium sized firm. He is now a freelance consultant and non-executive director. He joined the Board of Stafford Railway Building Society in April 2003. In other roles he is Chief Executive of North Staffordshire Risk Capital Fund PLC, a Consultant with Begbies Traynor Group PLC and is a Board member of the Institute of Chartered Accountants in England and Wales.

Election of directors

Members of the Board have to put themselves forward for re-election at intervals of not more than 3 years. The elction process takes place at the AGM each year and members who are unable to attend in person may vote by proxy. The following are the voting figures for resolutions proposed at the 2011 AGM.

Re-election of directors

Name	For	Against	Withheld
David J Gage	1,764	63	18
Michael R Smith	1,770	59	17
Jeremy G Hodgkiss	1,773	48	25
Nicholas HJ Sandy	1,761	64	21

Other resolutions

Resolution	For	Against	Withheld
Annual accounts	1,810	23	13
Directors remuneration	1,721	91	34
Reappointment of auditors	1,769	56	21

Committees

Some of the business of the board is undertaken by committees. The two main committees are the audit committee and the assets and liabilities committee . Terms of reference of these committees are as follows;

Alco terms of reference

1. Membership

1.1 The committee shall comprise at least three members. All members of the committee shall be independent non-executive directors. Members of the committee shall be appointed by the board.

1.2 The Deputy Chief Executive shall be in attendance at all meetings and the arrears manager shall be a regular attendee.

1.3 Only members of the committee have the right to attend committee meetings. However, other individuals such as the chairman of the board, chief executive, other directors, internal and external audit may be invited to attend all or part of any meeting as and when appropriate and necessary.

1.4 Appointments to the committee shall be for a period of one year, which may be extended for further periods of up to five years, provided the director still meets the criteria for membership of the committee.

1.5 The board shall appoint the committee chairman. In the absence of the committee chairman, the remaining members present shall elect one of themselves to chair the meeting.

2. Secretary

The Deputy Chief Executive or his or her nominee shall act as the secretary of the committee.

3. Quorum

The quorum necessary for the transaction of business shall be two members. A duly convened meeting of the committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the committee.

4. Frequency of meetings

The committee shall meet at least four times a year at appropriate times and otherwise as required.

5. Notice of meetings

5.1 Meetings of the committee shall be called by the secretary of the committee in accordance with the quarterly schedule agreed. Additional meetings may be called by of any committee member or at the request of the chief executive if he or she considers it necessary.

5.2 Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the committee, any other person required to attend and all other non-executive directors, no later than three working days before the date of the meeting. Supporting papers shall be sent to committee members and to other attendees as appropriate, at the same time.

6. Minutes of meetings

6.1 The secretary shall minute the proceedings of all meetings of the committee, including recording the names of those present and in attendance.

6.2 Draft minutes of committee meetings shall be circulated promptly to all members of the committee with the papers for the next meeting. Once approved, minutes should be circulated to all other members of the board unless it would be inappropriate to do so.

7. Annual General Meeting

The committee chairman should attend the annual general meeting to answer members questions on the committee’s activities.

8. Duties

The committee shall

8.1 Receive and review arrears reports as follows

8.1.1 Schedules of cases in excess of 2.5% including a provisioning model (Quarterly)

8.1.2 The structure of the provisioning model (at least yearly)

8.1.3 The arrears profile (Quarterly)

8.1.4 Requests for capitalisations approved by the Chief Executive (Quarterly)

8.1.5 Requests by management to capitalise arrears in excess of £1,000. Any such cases to be recommended to the Board where criteria are met (Quarterly)

8.1.6 The position regarding properties in possession (Quarterly)

8.1.7 Details of offers accepted by the Society in respect of properties in possession highlighting any potential loss. Investigation as to the cause of any loss should be documented and reported to the board.

8.2 To review reports on treasury activities from the Society’s brokers. To review both their investment strategy and their counterparty recommendations and to authorise changes in the light of advice received. (Quarterly).

8.3 To review the performance of the Society’s brokers and to report to the board with any recommendations (at least yearly).

8.4 To review large exposures on both sides of the balance sheet (Quarterly)

8.5 To review the performance of commercial mortgages on an individual basis (Half yearly)

8.6 To review the wholesale funding policy (at least yearly).

8.7 Committee Chairman to receive reports of the daily trades for review (daily) and confirm receipt to the committee (yearly)

9. Reporting responsibilities

9.1 The committee chairman shall report to the board on its proceedings after each meeting on all matters within its duties and responsibilities.

9.2 The committee shall make whatever recommendations to the board it deems appropriate on any area within its remit where action or improvement is needed.

10. Other matters

The committee shall

10.1 have access to sufficient resources in order to carry out its duties, including access to the secretariat for assistance as required

10.2 be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members

10.3 give due consideration to laws and regulations.

10.4 oversee any investigation of activities which are within its terms of reference

10.5 arrange for periodic reviews of its own performance and, at least annually, review its constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the board for approval.

11. Authority

The committee is authorised

11.1 to seek any information it requires from any employee of the Society in order to perform its duties

11.2 to obtain, at the Society’s expense, outside legal or other professional advice on any matter within its terms of reference

11.3 to call any employee to be questioned at a meeting of the committee as and when required.

Audit Committee terms of reference

1. Membership

1.1 The committee shall comprise at least three members of the board. Members shall be appointed by the board.

1.2 All members of the committee shall be independent non-executive directors at least one of whom shall have recent and relevant financial experience. The chairman of the board shall not be a member of the committee.

1.3 Only members of the committee have the right to attend committee meetings. However, other individuals such as the chairman of the board, chief executive, other directors, internal audit and representatives from the finance function may be invited to attend all or part of any meeting as and when appropriate and necessary.

1.4 The external auditor will be invited to attend meetings of the committee on a regular basis.

1.5 Appointments to the committee shall be for a period of one year, which may be extended for further periods of up to five years, provided the director still meets the criteria for membership of the committee.

1.6 The board shall appoint the committee chairman who shall be an independent non-executive director. In the absence of the committee chairman, the remaining members present shall elect one of themselves to chair the meeting.

2. Secretary

The Society secretary or his or her nominee shall act as the secretary of the committee.

3. Quorum

4. Frequency of meetings

The committee shall meet at least four times a year at appropriate times in the reporting and audit cycle and otherwise as required.

5. Notice of meetings

5.1 Meetings of the committee shall be called by the secretary of the committee at the request of any of its members or at the request of external or internal auditor if they consider it necessary.

5.2 Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the committee, any other person required to attend and all other non-executive directors, no later than five working days before the date of the meeting. Supporting papers shall be sent to committee members and to other attendees as appropriate, at the same time.

6. Minutes of meetings

6.1 The secretary shall minute the proceedings and decisions of all meetings of the committee, including recording the names of those present and in attendance.

6.2 Draft minutes of committee meetings shall be circulated promptly to all members of the committee. Once approved, minutes should be circulated to all other members of the board unless it would be inappropriate to do so.

7. Annual General Meeting

The committee chairman should attend the annual general meeting to answer member questions on the committee’s activities.

8. Duties

The committee should carry out the duties below

8.1 Financial reporting

8.1.1 The committee shall monitor the integrity of the financial statements of the Society, including its annual report, reviewing significant financial reporting issues and judgements which are contained therein.

8.1.2 In particular, the committee shall review and challenge where necessary -

8.1.2.1 the consistency of, and any changes to, accounting policies.

8.1.2.2 the methods used to account for significant or unusual transactions where different approaches are possible

8.1.2.3 whether the Society has followed appropriate accounting standards and made appropriate estimates and judgements, taking into account the views of the external auditor

8.1.2.4 the clarity of disclosure in the Society’s financial reports and the context in which statements are made; and

8.1.2.5 all material information presented with the financial statements, such as the business review/operating and financial review and the corporate governance statement (insofar as it relates to audit and risk management).

8.2 Internal controls and risk management systems

The committee shall

8.2.1 keep under review the adequacy and effectiveness of the financial controls and internal controls and

8.2.2 review and approve the statements to be included in the annual report concerning internal controls.

8.3 Compliance, whistleblowing and fraud

The committee shall

8.3.1 review the adequacy and security of the Society’s arrangements for its employees and contractors to raise concerns, in confidence, about possible wrongdoing in financial reporting or other matters. The committee shall ensure that these arrangements allow proportionate and independent investigation of such matters and appropriate follow up action

8.3.2 review the Society’s procedures for detecting fraud.

8.3.3 review the systems and controls for the prevention of bribery and receive reports on non-compliance.

8.3.4 to oversee and review annually the Compliance Monitoring Plan

8.4 Internal audit

The committee shall

8.4.1 monitor and review the effectiveness of the Society’s internal audit function in the context of the risk management system.

8.4.2 approve the appointment and removal of the head of the internal auditors.

8.4.3 consider and approve the remit of the internal audit function and ensure it has adequate resources and appropriate access to information to enable it to perform its function effectively and in accordance with the relevant professional standards. The committee shall also ensure the function has adequate standing and is free from management or other restrictions

8.4.4 review and assess the annual internal audit plan.

8.4.5 review reports addressed to the committee from the internal auditor.

8.4.6 review and monitor management’s responsiveness to the findings and recommendations of the internal auditor.

8.4.7 meet the internal auditors at each meeting of the committee, without management being present, to discuss their remit and any issues arising from the internal audits carried out. In addition, the internal auditors shall be given the right of direct access to the chairman of the board and to the committee.

8.5 External Audit

The committee shall

8.5.1 consider and make recommendations to the board, to be put to the members of the Society for approval at the AGM, in relation to the appointment, re-appointment and removal of the external auditor. The committee shall oversee the selection process for a new auditor and if an auditor resigns the committee shall investigate the issues leading to this and decide whether any action is required

8.5.2 oversee the relationship with the external auditor including (but not limited to)

8.5.2.1 recommendations on their remuneration, whether fees for audit or non-audit services and that the level of fees is appropriate to enable an adequate audit to be conducted

8.5.2.2 approval of their terms of engagement, including any engagement letter issued at the start of each audit and the scope of the audit

8.5.2.3 assessing annually their independence and objectivity taking into account relevant professional and regulatory requirements and the relationship with the auditor as a whole, including the provision of any non-audit services

8.5.2.4 satisfying itself that there are no relationships (such as family, employment, investment, financial or business) between the auditor and the Society (other than in the ordinary course of business)

8.5.2.5 agreeing with the board, if required, a policy on the employment of former employees of the Society’s auditor, then monitoring the implementation of this policy

8.5.2.6 monitoring the auditor’s compliance with relevant ethical and professional guidance on the rotation of audit partner, the level of fees paid by the Society compared to the overall fee income of the firm, office and partner and other related requirements.

8.5.2.7 assessing annually the qualifications, expertise and resources of the auditor and the effectiveness of the audit process, which shall include a report from the external auditor on their own internal quality procedures

8.5.2.8 seeking to ensure co-ordination with the activities of the internal audit function

8.5.3 meet regularly with the external auditor, including once at the planning stage before the audit and once after the audit at the reporting stage. The committee shall meet the external auditor at least once a year, without management being present, to discuss the auditor’s remit and any issues arising from the audit

8.5.4 review and approve the annual audit plan and ensure that it is consistent with the scope of the audit engagement

8.5.5 review the findings of the audit with the external auditor. This shall include but not be limited to, the following

8.5.5.1 a discussion of any major issues which arose during the audit

8.5.5.2 any accounting and audit judgements

8.5.5.3 levels of errors identified during the audit

8.5.5.4 the effectiveness of the audit

The committee shall also

8.5.6 review any representation letter(s) requested by the external auditor before they are signed by management

8.5.7 review the management letter and management’s response to the auditor’s findings and recommendations

8.5.8 develop and implement a policy on the supply of non-audit services by the external auditor, taking into account any relevant ethical guidance on the matter.

9. Reporting responsibilities

9.1 The committee chairman shall report formally to the board on its proceedings after each meeting on all matters within its duties and responsibilities.

9.2 The committee shall make whatever recommendations to the board it deems appropriate on any area within its remit where action or improvement is needed.

9.3 The committee shall produce a report on its activities to be included in the Society’s annual report.

10. Other matters

The committee shall

10.1 have access to sufficient resources in order to carry out its duties, including access to the secretariat for assistance as required

10.2 be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members

10.3 give due consideration to laws and regulations.

10.4 be responsible for co-ordination of the internal and external auditors

10.5 oversee any investigation of activities which are within its terms of reference

10.6 arrange for periodic reviews of its own performance and, at least annually, review its constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the board for approval.

11. Authority

The committee is authorised

11.1 to seek any information it requires from any employee of the Society in order to perform its duties

11.2 to obtain, at the Society’s expense, outside legal or other professional advice on any matter within its terms of reference

11.3 to call any employee to be questioned at a meeting of the committee as and when required

11.4 to have the right to publish in the Society’s annual report details of any issues that cannot be resolved between the committee and the board.

Risk Committee terms of reference

1. Membership

1.1 The committee shall comprise at least three members. Membership shall include the chairman of the board. A majority of members of the committee shall be independent non-executive directors. Members of the committee shall be appointed by the board.

1.2 The Chief Executive shall be a committee member or in attendance at all meetings and the appropriate manager shall be a regular attendee.

1.5 The board shall appoint the committee chairman who shall be a non-executive director. In the absence of the committee chairman, the remaining members present shall elect one of themselves to chair the meeting.

2. Secretary

The Society secretary or his or her nominee shall act as the secretary of the committee.

3. Quorum

4. Frequency of meetings

The committee shall meet at least three times a year at appropriate times and otherwise as required.

5. Notice of meetings

6. Minutes of meetings

6.1 The secretary shall minute the proceedings of all meetings of the committee, including recording the names of those present and in attendance.

7. Annual General Meeting

The committee chairman should attend the annual general meeting to answer member questions on the committee’s activities.

8. Duties

The committee shall

8.1 advise the board on the overall risk appetite, tolerance and strategy, taking account of the current and prospective macroeconomic and financial environment drawing on financial stability assessments such as those published by the Bank of England, the FSA and other authoritative sources that may be relevant for the Society’s risk policies.

8.2 oversee and advise the board on the current risk exposures of the and future risk strategy

8.3 in relation to risk assessment –

8.3.1 keep under review the overall risk assessment processes that inform the board’s decision making, ensuring both qualitative and quantitative metrics are used

8.3.2 review regularly and approve the parameters used in these measures and the methodology adopted

8.3.3 set a standard for the accurate and timely monitoring of large exposures and certain risk types of critical importance.

8.4 review the Society’s capability to identify and manage new risk types.

8.5 before a decision to proceed is taken by the board, advise the board on proposed strategic transactions including, ensuring that a due diligence appraisal of the proposition is undertaken, focussing in particular on risk aspects and implications fo risk appetite and tolerance and taking independent external advice where appropriate and available.

8.6 review reports on any material breaches of risk limits and the adequacy of proposed action.

8.7 keep under review the effectiveness of the risk management systems and review and approve the statements to be included in the annual report concerning risk management.

8.8 provide qualitative and quantitative advice to the remuneration committee on risk weightings to be applied to performance objectives incorporated in executive remuneration.

8.9 consider and approve the remit of the risk management function and ensure it has adequate resources and appropriate access to information to enable it to perform its function effectively and in accordance with the relevant professional standards. The committee shall also ensure the function has adequate independence and is free from management or other restrictions.

8.10 The committee shall have responsibility for the following processes

8.10.1 Oversee allocation of capital to risk types

8.10.2 ICAAP

8.10.3 Basle updates

8.10.4 Stress testing

8.10.5 Assess overall effectiveness / appropriateness of management information

8.11 The committee shall have responsibility for the following documents

8.11.1 Risks and controls register

8.11.2 Basis risk return

8.11.3 Business continuity plan

8.11.4 Liquidity and financial risk management policy

8.11.5 Liquidity risk tolerance statement

8.11.6 Contingency funding plan

8.11.7 Contingency plan for retail funding outflow.

8.11.8 The liquidity GAP

9. Reporting responsibilities

9.1 The committee chairman shall report to the board on its proceedings after each meeting on all matters within its duties and responsibilities.

9.2 The committee shall make whatever recommendations to the board it deems appropriate on any area within its remit where action or improvement is needed.

9.3 The committee shall produce a report of its activities and the Society’s risk management and strategy to be included in the Society’s annual report.

10. Other matters

The committee shall

10.1 have access to sufficient resources in order to carry out its duties, including access to the secretariat for assistance as required

10.2 be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members

10.3 give due consideration to laws and regulations.

10.4 oversee any investigation of activities which are within its terms of reference

11. Authority

The committee is authorised

11.1 to seek any information it requires from any employee of the Society in order to perform its duties

11.2 to obtain, at the Society’s expense, outside legal or other professional advice on any matter within its terms of reference

11.3 to call any employee to be questioned at a meeting of the committee as and when required.

Stafford Railway Building Society is regulated by the Financial Services Authority, register number 206063, http://www.fsa.gov.uk/register/firmSearchForm.do

The information contained on this site is to provide guidance to prospective borrowers and should not be interpreted as a statement of Society policy. All mortgage applications are subject to an appraisal of the financial standing of the applicant(s) and any guarantor(s).

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