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Chairmans introduction


Achievements during 2009

  • Actuarial expertise on the Board strengthened
  • New Chairman appointed
  • Group representation on subsidiary boards strengthened
  • Risk appetite refined and further embedded into our operational decision making processes

Priorities for 2010

  • Full rollout and embedding of our new Group Operating Model
  • Separation of the functions of the Group Audit and Risk Committee into two separate Board level committees
  • Addressing other recommendations in the Walker Review
  • Planning for Board succession and renewal
  • Active participation in the continuing debate about improving governance

We have made progress in streamlining the Old Mutual Group during 2009, including by strengthening our governance framework and procedures. This was one of our Group Chief Executive, Julian Roberts', five key priorities for 2009 and has been an area of focus throughout the year. We have followed through on his pledge to ensure that appropriate assurance is implemented and maintained over the Group's activities and businesses. As part of this, we have clarified reporting lines at Group Executive Committee level, strengthened the representation of the Group on major subsidiary boards and developed a new Group Operating Model based on strategic control rather than the highly decentralised structure that previously prevailed. As it is implemented during 2010, this model will replace our current Scheme of Delegated Authority.

The recent financial crisis has emphasised the need to be vigilant and proactive in the management of risk. The proposed introduction of Solvency II in Europe, currently scheduled for 2013, will increase further the focus on riskadjusted metrics and have important implications for regulatory capital. Risk management is therefore a key part of our governance process. The Risk and Capital Management Report earlier in this document provides an overview of the progress we have made in this area and describes some of the challenges that lie ahead.

The governance of UK listed banks and other large financial institutions (BOFIs) was the subject of the Walker Review, which published various recommendations in November 2009. Old Mutual is categorised as a BOFI and will be determining its response to these recommendations over the coming months. In addition, we will be addressing certain recommendations that emerged from our own Board effectiveness review conducted during 2009 in conjunction with external facilitators. We have already made a number of changes as a result of these developments, as described in the Report on Governance that follows. As the new Chairman, I will be personally responsible for ensuring that we take the necessary steps to ensure that our governance continues to adapt to the ever more demanding business landscape. I also aim to ensure that the Board retains the right level of expertise and experience to lead the Group as our new strategy is implemented.