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On June 10 2014 the Company issued an unsecured €850.0 million eurobond at 1.875%, fixed for 7 years.
This is Ryanair‘s first ever eurobond debt issuance and is part of its plans to access the debt capital markets to source low cost financing for its new 180 Boeing 737-800 New Generation order, deliveries of which commence in September 2014.
Auditor In accordance with Section 160(2) of the Companies Act 1963, the auditor KPMG, Chartered Accountants, will continue in office.
Annual General Meeting The Annual General Meeting will be held on September 25, 2014 at 9a.m. in the Ryanair Dublin Office, Airside Business Park, Swords, Co Dublin, Ireland.
Ryanair has its primary listing on the Irish Stock Exchange, a standard listing on the London Stock Exchange and its American Depositary Shares are listed on the NASDAQ. The directors are committed to maintaining the highest standards of corporate governance and this statement describes how Ryanair has applied the main and supporting principles of the 2012 UK Corporate Governance Code (the 2012 Code). This Report also covers the disclosure requirements set out in the corporate governance annex to the listing rules of the Irish Stock Exchange, which supplements the 2012 Code with additional corporate governance provisions and is also applicable to Ryanair.
A copy of the 2012 Code can be obtained from the Financial Reporting Council‘s website, www.frc.org.uk. The Irish Corporate Governance Annex is available on the Irish Stock Exchange‘s website, www.ise.ie.
The Board of Directors (the Board) Roles The Board of Ryanair is responsible for the leadership, strategic direction and oversight of management of the Group. The Board‘s primary focus is on strategy formulation, policy and control. It has a formal schedule of matters specifically reserved to it for its attention, including matters such as approval of the annual budget, large capital expenditure, and key strategic decisions.
Other matters reserved to the Board include treasury policy, internal control, audit and risk management, remuneration of the non-executive Directors and Executive management and Corporate Governance.
The Board has delegated responsibility for the management of the Group to the Chief Executive and executive management.
There is a clear division of responsibilities between the Chairman and the Chief Executive, which is set out in writing and has been approved by the Board.
Chairman David Bonderman has served as the chairman of the Board since December 1996. The Chairman‘s primary responsibility is to lead the Board, to ensure that it has a common purpose, is effective as a group and at individual director level and that it upholds and promotes high standards of integrity and corporate governance.
He ensures that Board agendas cover the key strategic issues confronting the Group; that the Board reviews and approves management‘s plans for the Group; and that directors receive accurate, timely, clear and relevant information.
The Chairman is the link between the Board and the Company. He is specifically responsible for establishing and maintaining an effective working relationship with the Chief Executive, for ensuring effective and appropriate communications with shareholders and for ensuring that members of the Board develop and maintain an understanding of the views of shareholders.
While David Bonderman holds a number of other directorships (See details on page 106), the Board considers that these do not interfere with the discharge of his duties to Ryanair.
Senior Independent Director The Board has appointed James Osborne as the Senior Independent Director. James Osborne is available to shareholders who have concerns that cannot be addressed through the Chairman, Chief Executive or Chief Financial Officer and leads the annual Board review of the performance of the Chairman.
Company Secretary The appointment and removal of the Company Secretary is a matter for the Board. All directors have access to the advice and services of the Company Secretary, who is responsible to the Board for ensuring that Board procedures are complied with.
Membership The Board consists of one executive and nine non-executive directors. It is the practice of Ryanair that a majority of the Board comprises non-executive directors, considered by the Board to be independent, and that the Chairman is non-executive. The Board considers the current size, composition and diversity of the Board to be within a range which is appropriate. The composition of the Board and the principal Board Committees are set out in the table below. Brief biographies of the directors are set out on pages 106 and 107. The Board, with the assistance of the Nomination Committee, keeps Board composition under review to ensure that it includes the necessary mix of relevant skills and experience required to perform its role.
(i) Dick Milliken was appointed to the Audit Committee effective from August 5, 2013 (ii) James Osborne retired from the Audit Committee effective August 5, 2013.
Directors can only be appointed following selection by the Nomination Committee and approval by the Board and must be elected by the shareholders at the Annual General Meeting following their appointment. The focus of the Board, through the Nomination Committee, is to maintain a Board comprising the relevant expertise, quality and experience required by Ryanair to advance the Company and shareholder value. Ryanair recognise the benefits of gender diversity. Ryanair‘s Articles of Association require that all of the directors retire and offer themselves for re-election within a three-year period. One third (rounded down to the next whole number if it is a fractional number) of the directors (being the directors who have been longest in office) will retire by rotation and be eligible for re-election at every Annual General Meeting. Accordingly David Bonderman, James Osborne and Michael O‘Leary will be offering themselves for re-election at the AGM on September 25, 2014. In addition, Michael Cawley, who was Ryanair‘s Chief Operating Officer up to March 2014 will also offer himself for appointment to the Board of Directors at the next Annual General Meeting.
In accordance with the recommendations of the 2012 Code, Declan McKeon is Chairman of the Audit Committee and James Osborne, the senior non-executive director, is Chairman of the Remuneration Committee.
Senior Management regularly briefs the Board, including new members, in relation to operating, financial and strategic issues concerning the Company. The Board also have direct access to senior management as required in relation to any issues they have concerning the operation of the Company. The terms and conditions of appointment of non-executive directors are set out in their letters of appointment, which are available for inspection at the Company‘s registered office during normal office hours and at the Annual General Meeting of the Company.
The Board has carried out its annual evaluation of the independence of each of its non-executive directors, taking account of the relevant provisions of the 2012 Code, namely, whether the directors are independent in character and judgement and free from relationships or circumstances which are likely to affect, or could appear to affect, the directors‘ judgment. The Board regards all of the directors as independent and that no one individual or one grouping exerts an undue influence on others.
The Board has considered Kyran McLaughlin's independence given his role as Deputy Chairman and Head of Capital Markets at Davy Stockbrokers. Davy Stockbrokers are one of Ryanair's corporate brokers and provide corporate advisory services to Ryanair from time to time. The Board has considered the fees paid to Davy Stockbrokers for these services and believe that they are immaterial to both Ryanair and Davy Stockbrokers given the size of each organisation's business operations and financial results. Having considered this relationship, the Board has concluded that Kyran McLaughlin continues to be an independent non-executive director within the spirit and meaning of the 2012 Code Rules.
The Board has also considered the independence of David Bonderman given his shareholding in Ryanair Holdings plc. As at March 31, 2014, David Bonderman had a beneficial shareholding in the Company of 7,655,671 ordinary shares, equivalent to 0.55% of the issued share capital. Having considered this shareholding in light of the number of issued shares in Ryanair Holdings plc and the financial interest of the director, the Board has concluded that the interest is not so material as to breach the spirit of the independence rule contained in the 2012 Code.
The Board has further considered the independence of Messrs. David Bonderman, James Osborne, Kyran McLaughlin and Michael Horgan as they have each served more than nine years on the Board. The Board considers that each of these directors is independent in character and judgment as each has other significant commercial and professional commitments and each brings his own level of senior experience gained in their fields of international business and professional practice. When arriving at this decision, the Board has taken into account the comments made by the FRC in their report dated December, 2009 on their review of the impact and effectiveness of the Code, in particular their comment that independence is not the primary consideration when assessing the composition of the Board, and that the over-riding consideration should be that the Board is fit for purpose. For these reasons, and also because each director‘s independence is considered annually by the Board, the Board considers it appropriate that these directors have not been offered for annual re-election as is recommended by the 2012 Code. The Nominations Committee have confirmed to the Board that they consider the directors offering themselves for re-election at the 2014 AGM to be independent and that they continue to effectively contribute to the work of the Board. The Nominations Committee recommends that the Company accept the re-election of the directors.
Board Procedures All directors have access to the advice and services of the Company Secretary and the Board has established a procedure whereby directors wishing to obtain advice in the furtherance of their duties may take independent professional advice at the Company‘s expense.
Directors meet with key executives with a particular focus on ensuring non-executive directors are fully informed on issues of relevance to Ryanair and its operations. Extensive papers on key business issues are provided to all directors in connection with the Board meetings. All directors are encouraged to update and refresh their skills and knowledge, for example, through attending courses on technical areas or external briefings for non-executive directors.
The Company has Directors & Officers liability insurance in place in respect of any legal actions taken against the directors in the course of the exercise of their duties. New non-executive directors are encouraged to meet the executive director and senior management for briefing on the Company‘s developments and plans.
The Board meets at least on a quarterly basis and in the year to March 31, 2014 the Board convened meetings on nine occasions. Individual attendance at these meetings is set out in the table on page 24. Detailed Board papers are circulated in advance so that Board members have adequate time and information to be able to participate fully at the meeting.
The holding of detailed regular Board meetings and the fact that many matters require Board approval, show that the running of the Company is firmly in the hands of the Board. The non-executive directors meet periodically without executives being present. Led by the senior independent director, the non-executive directors will meet without the Chairman present at least annually to appraise the Chairman‘s performance and on such other occasions as are deemed appropriate.
Remuneration Details of remuneration paid to the directors are set out in Note 19 to the consolidated Financial Statements on pages 189 to 191. Also, please see the Report of the Remuneration Committee on Directors‘ Remuneration on page 29.
Non-executive directors Non-executive directors are remunerated by way of directors‘ fees. A number of non-executive directors have share options. While the 2012 Code notes that the remuneration of the non-executive director should not include share options, the Board believes that the quantum of options granted to non-executive directors is not so significant as to raise any issue concerning their independence. Michael Horgan is remunerated on a consultancy basis on safety issues and also by way of share options.
Full details are disclosed in Note 19(b) and 19(d) on pages 190 to 191 of the consolidated financial statements.
Executive director remuneration The Chief Executive of the Company is the only executive director on the Board. In addition to his base salary he is eligible for a performance bonus of up to 100% of salary and other bonuses dependent upon the achievement of certain financial targets and a pension. It is considered that the significant shareholding of the Chief Executive acts to align his interests with those of shareholders and gives him a keen incentive to perform to the highest levels.
Full details of the executive director‘s remuneration are set out in Note 19(a) on page 190 of the consolidated financial statements.
Share Ownership and Dealing Details of the directors‘ interests in Ryanair shares are set out in Note 19(d) on page 191 of the consolidated financial statements.