RBS 2010 Annual Report Download - page 234

Sustainability
Sustainability is central to the way the Group is managed. Sustainability
is not just about the many responsibilities and obligations that the Group
has in a legal sense, but about specific issues that need to be addressed
to ensure that the Group is a healthy and respected business operating
on a sustainable basis. There is a clear governance structure for Group
Sustainability that oversees and aligns the Group's approach to the range
of social, ethical and environmental issues which confront the business
on a daily basis. For more information on the governance structure, see
page 44.
The Group continues to do significant work and address challenges
across five key themes: Fair banking, Supporting enterprise, Employee
engagement, Safety and security, and Citizenship and environmental
sustainability. For more information on the Group Sustainability
programme, see pages 43 to 47.
Going concern
The Group’s business activities and financial position, the factors likely to
affect its future development and performance and its objectives and
policies in managing the financial risks to which it is exposed and its
capital are discussed in the Business review. The risk factors which could
adversely affect the Group’s future results are set out on pages 405 to
422. The Group’s regulatory capital resources and significant
developments since 2009 and anticipated future developments are
detailed in the Capital section on pages 126 to 133. The Funding and
liquidity risk section, pages 134 to 142, describes the Group’s funding
and liquidity profile, including changes in key metrics, the build up of
liquidity reserves and the outlook for 2011.
Having reviewed the Group’s forecasts, projections and other relevant
evidence, the directors have a reasonable expectation that the Group and
the company will continue in operational existence for the foreseeable
future. Accordingly, the financial statements of the Group and of the
company have been prepared on a going concern basis.
BBA disclosure code
In September 2010, the British Bankers’ Association published its Code
for Financial Reporting Disclosure. The code sets out five disclosure
principles together with supporting guidance. The principles are that the
Group and other major UK banks will provide high quality, meaningful
and decision-useful disclosures; review and enhance their financial
instrument disclosures for key areas of interest to market participants;
assess the applicability and relevance of good practice recommendations
to their disclosures acknowledging the importance of such guidance;
seek to enhance the comparability of financial statement disclosures
across the UK banking sector; and clearly differentiate in their annual
reports between information that is audited and information that is
unaudited. The Group’s 2010 financial statements have been prepared
in compliance with the code’s principles.
Corporate governance
The company is committed to high standards of corporate governance.
Details are given on pages 235 to 245. The corporate governance
statement forms part of this Report of the directors.
Share capital
Details of the ordinary share capital and preference share capital at 31
December 2010 and movements during the year, are shown in Note 29
on the accounts.
Additional information
Where not provided elsewhere in the Report of the directors, the following
additional information is required to be disclosed by Part 6 of Schedule 7
to the Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008.
The rights and obligations attaching to the company’s ordinary shares
and preference shares are set out in the company’s Articles of
Association, copies of which can be obtained from Companies House in
the UK or at www.rbs.com.
On a show of hands at a general meeting of the company every holder of
ordinary shares and cumulative preference shares present in person or
by proxy and entitled to vote shall have one vote. On a poll, every holder
of ordinary shares present in person or by proxy and entitled to vote shall
have one vote for every share held. On a poll, holders of cumulative
preference shares present in person or by proxy and entitled to vote shall
have four votes for every share held. The voting rights of holders of non-
cumulative preference shares are set out in Note 29 on the accounts. The
notices of Annual General Meetings and General Meetings specify the
deadlines for exercising voting rights and appointing a proxy or proxies to
vote in relation to resolutions to be passed at the meeting.
The cumulative preference shares represent less than 0.01% and the
non-cumulative preference shares represent less than 0.73% of the total
voting rights of the company respectively, the remainder being
represented by the ordinary shares.
There are no restrictions on the transfer of ordinary shares in the
company other than certain restrictions which may from time to time be
imposed by laws and regulations (for example, insider trading laws).
Pursuant to the Listing Rules of the Financial Services Authority (FSA),
certain employees of the company require the approval of the company
to deal in the company’s shares.
The rules governing the appointment of directors are set out in the
company’s Articles of Association and on page 236. The company’s
Articles of Association may only be amended by a special resolution at a
general meeting of shareholders.
RBS Group 2010232
Report of the directors continued