RBS 2013 Annual Report Download - page 55
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Report of the Group Audit Committee
53
Report of the Group Audit Committee
Meetings and visits
A total of seven scheduled meetings of the Group Audit Committee were
held in 2013, including meetings held immediately before the annual and
interim financial statements and the quarterly Interim Management
Statements were considered by the Board. The Group Audit Committee
also held two ad hoc meetings. Group Audit Committee meetings are
attended by relevant executive directors, the Internal and External Auditor
and Finance and Risk Management executives. Other executives, subject
matter experts and external advisers are also invited to attend, as
required, to present and advise on reports commissioned by the
Committee. At least twice a year the Group Audit Committee meets
privately with the External Auditor. The Committee also meets privately
with Internal Audit management.
As in previous years, the Committee has undertaken a programme of
visits to those business areas which it considers merit additional focus.
During 2013, the Committee spent a week in Asia to review the Markets,
International Banking, Wealth, Business Services and Group Finance
operations in the region. Internal Audit management made presentations
to the Committee at two separate visits, covering functional strategy,
bench-strength and capability. Internal Audit Technology resources and
capability were discussed during these meetings and over the course of
the year the Committee has monitored progress in strengthening
capability through recruitment and co-sourcing strategies. The Committee
also spent time in Ireland to gain better insight into the issues facing
Ulster Bank and held additional in depth meetings with the Markets,
International Banking and Wealth divisions in the UK.
Membership of the Group Audit Committee
The Group Audit Committee comprises four independent non-executive
directors. The Chairman and members of the Committee, together with
their attendance at scheduled meetings, are shown below.
Attended/
scheduled
Brendan Nelson (Chairman) 7/7
Tony Di Iorio 7/7
Baroness Noakes 7/7
Philip Scott 7/7
All members of the Group Audit Committee are also members of the
Board Risk Committee facilitating effective governance of finance and
risk issues. The Group Audit and Board Risk Committees have strong
links with the Group Performance and Remuneration Committee ensuring
that compensation decisions reflect relevant finance and risk
considerations.
The members of the Group Audit Committee are selected with a view to
the expertise and experience of the Committee as a whole. The Board is
satisfied that all Group Audit Committee members have recent and
relevant financial experience, and that each member of the Group Audit
Committee is an ‘Audit Committee Financial Expert' and is independent,
each as defined in the SEC rules under the US Securities Exchange Act
of 1934 (“Exchange Act”) and related guidance. Full biographical details
of the Committee members are set out on pages 39 to 42.
Performance evaluation
An external evaluation of the effectiveness of the Group Audit Committee
takes place every three to five years with internal reviews by the Board in
the intervening years. An internal review of the Board and its senior
committees took place during 2013 following an external review in 2012.
Overall, the review concluded that the Group Audit Committee continued
to operate effectively.
The role and responsibilities of the Group Audit Committee
The Group Audit Committee’s primary responsibilities are shown below
and are set out in its terms of reference which are reviewed annually by
the Committee and approved by the Board. These terms of reference are
available on the Group’s website rbs.com.