Close Brothers Group plc (the “Company”) is committed to high standards of corporate governance, corporate responsibility and risk management in directing and controlling its business. The UK Corporate Governance Code (the “Code”), issued by the Financial Reporting Council, is the governance code which applies to UK companies with a premium listing on the London Stock Exchange.

The version of the Code, published in April 2016, was applicable to the Company throughout the year to 31 July 2018.

It is the board’s view that the Company applied the principles set out in the 2016 Code and complied with its provisions of best practice during the year to 31 July 2018.

The board comprises three executive directors, four independent non-executive directors and the Chairman who contribute a wide range of complementary skills and experience.

Brief biographical details of each director are set out on the Leadership section of the Who we are page of this website.

The non-executive Chairman, Mike Biggs, was considered independent on his appointment as Chairman. The senior independent director is Geoffrey Howe.

The board believes that there is an appropriate balance of executive and non-executive directors on the board, with no individual or small group dominating its decision-making process.

The board has determined its non-executive directors to be independent in character and judgement.

The formal schedule of Matters Reserved for the board is designed to enable the board and executive management to operate within a clear governance framework. The schedule details the areas of the board’s focus which is on activities that enable it to promote shareholders’ interests, including the active consideration of strategy, the monitoring of executive action including sound systems of internal controls, and ongoing board and executive management succession. The board has developed these principles to help it fulfil its responsibilities. The board regularly keeps its work and performance under review.

Matters Reserved for the Board

Board and committee meeting attendance 2016/2017

The board has established four committees, composed entirely of independent non-executive directors, each with responsibility for the review and oversight of activities within its terms of reference.

Audit Committee

The Audit Committee is chaired by Oliver Corbett and its other members are Geoffrey Howe, Lesley Jones and Bridget Macaskill. The Committee normally meets five times a year and the external auditor partner attends these meetings. The Committee chairman, Oliver Corbett, is deemed by the board to have recent and relevant financial experience.

Click here to read the Audit Committee's terms of reference

Remuneration Committee

The Remuneration Committee is chaired by Bridget Macaskill and its other members are Oliver Corbett, Geoffrey Howe and Lesley Jones. The Committee normally meets five times a year.

Click here to read the Remuneration Committee's terms of reference

Nomination and Governance Committee

The Nomination and Governance Committee is chaired by Mike Biggs and its other members are Oliver Corbett, Geoffrey Howe, Lesley Jones and Bridget Macaskill. The Committee normally meets no less than three times a year.

Click here to read the Nomination and Governance Committee's terms of reference

Risk Committee

The Risk Committee is chaired by Lesley Jones and its other members are Oliver Corbett, Geoffrey Howe and Bridget Macaskill. The Committee normally meets five times a year.

Click here to read the Risk Committee's terms of reference

The Company’s latest Corporate Governance report, as included in its Annual Report 2018, is available below. The report includes a statement from the Chairman and sections on:

  • Compliance
  • The board
  • Governance framework
  • Conflicts of Interest
  • Board and committee effectiveness
  • Risk and control framework
  • Risk management framework
  • Substantial shareholdings
  • Stakeholders
  • Engagement with shareholders

Corporate Governance Report 2018

The company’s Sustainability Report, as included in its Annual Report 2018, is available here.

Close Brothers approach to tax

Our approach to tax is part of our wider commitment to responsible finance. For our tax affairs, responsible finance means that we are committed to complying with our tax obligations and doing so in a manner consistent with the spirit as well as the letter of tax laws. This includes a transparent and cooperative relationship with the tax authorities.

In the sections below we outline in more detail the group’s approach to tax and what we do to ensure we deliver on these objectives. Our approach covers all direct and indirect taxes.

Our core businesses – lending, deposit-taking, wealth management and market-making – each have straightforward product offerings. Our tax obligations arise mainly in the UK where our operations and customers are predominately based. Our straightforward business model and approach to our markets reduces the complexity of our tax affairs and helps us maintain a lower risk tax profile.

Approach to risk management and governance arrangements

Close Brothers Group plc ("CBG") is the parent company of the group, and takes ultimate responsibility for the tax affairs of all group companies.

The CBG board of directors sets the group's tax policy, including the approach to tax risk management and governance. The Audit Committee of the CBG board reviews material developments in the area of taxation at least annually and more frequently as required.

Ensuring compliance with the group’s tax risk management and governance policies is part of our group-wide Risk and Control Framework, outlined on pages 59-60 of our 2017 Annual Report and Accounts (which can be read at www.closebrothers.com).

The group maintains internal procedures which document the roles and responsibilities in relation to management of all tax types. These procedures ensure that tax sensitive matters are addressed on a timely basis by staff of appropriate experience and seniority. A tax review is required for all new products and services and for significant transactions and business developments which might involve tax risk.

The responsibility for early identification of potentially tax sensitive matters is assigned primarily to senior finance managers (who have timely awareness of developments in their business areas) and to the group’s tax team. The group employs suitably qualified and experienced tax specialists who work closely with their finance colleagues and the wider business, and take the lead role in assessing the need for external advice.

The group regularly reviews all business areas to identify and document tax risks. Tax processes are in place to manage these risks, including testing of the systems and internal controls relied on to produce accurate tax returns.

Level of risk in relation to UK taxation that the group is prepared to accept

We manage tax risk within the risk appetite set by the Board. The group has a low appetite for tax risk.

We seek to minimise uncertainty in relation to our tax affairs by proactively identifying and addressing potential tax issues. Where the tax risk profile of a material transaction or other business development is unclear then typically we will seek external advice, and if the position is still unclear then we discuss with HM Revenue & Customs.

Attitude towards tax planning

CBG takes a conservative approach to tax planning, and has undertaken to abide by the Code of Practice on Taxation for Banks in relation to all group companies. As a result:

  • Group companies do not engage in tax planning other than that which supports genuine commercial activity;
  • The tax affairs of the group reflect the underlying economic realities of the group's business (unless the relevant tax legislation is clearly designed to give a different result);
  • We do not promote products and services to customers unless we reasonably believe the tax result for the customer is not contrary to the intentions of Parliament;
  • Remuneration packages for group employees are structured so that the proper amounts of tax and national insurance contributions are paid.

Consideration of our future relationship with the tax authorities will form part of any decision whether to proceed with tax planning.

We also consider the risk of public reputational damage which could result from our participation in tax related arrangements, even where we believe the outcome is otherwise consistent with the above principles.

Subject to the above the group will seek to pursue its commercial objectives in a tax efficient manner.

The group’s approach towards its dealings with tax authorities

The group seeks to maintain a favourable long-term relationship with the tax authorities, and works proactively to achieve this. As a predominately UK group our main tax authority relationship is with HM Revenue & Customs.

Employees of group companies are required to maintain an open, professional, and constructive relationship with the tax authorities. For any material issues, they will seek to work collaboratively to achieve early resolution and hence certainty, and will make full and accurate disclosure of the relevant facts.

We are in regular contact with HM Revenue & Customs personnel, in particular those assigned an ongoing relationship with our group. Where appropriate we can and do discuss tax issues with them in real-time.

We consider that the above statements meet the group’s obligation under para 16(2) Schedule 19 Finance Act 2016 for the year ended 31 July 2018.

Close Brothers Group has a zero tolerance to bribery and corruption. This policy extends to all the group’s business dealings and transactions in all countries in which it or its subsidiaries and associates operate. All directors and employees are required to comply with this policy.

Please click below to view the company's Articles of Association. If you would like a hard copy, contact:

The Company Secretary
Close Brothers Group plc
10 Crown Place
London EC2A 4FT

Email: enquiries@closebrothers.com

Articles of Association

Special business resolutions passed at the Annual General Meeting 2017

The board has overall responsibility for maintaining a system of internal control to ensure that an effective risk management and oversight process operates across the group. The risk management framework and associated governance arrangements are designed to ensure that there is a clear organisation structure with distinct, transparent and consistent lines of responsibility and effective processes to identify, manage, monitor and report the risks to which the group is, or might become, exposed.

For more information on the risk management framework, please click here.