Corporate Governance

The overall management of the bank and its governance procedures are carried out by the Board of Directors.  There is a range of matters reserved for the Board.  At a high level, these include:

• Determining AIB UK’s strategic objectives and policies;
• Appointing the Board Chair, Managing Director and Senior Management, and addressing succession planning;
• Monitoring progress towards achievement of AIB UK’s strategic objectives and compliance with its policies;
• Approving annual operating and capital budgets, major acquisitions and disposals, risk management policies and limits; and
• Monitoring and reviewing financial performance, risk management activities and controls.

The Board of Directors meets a minimum of six times a year to review the performance of the business and oversee the implementation of the AIB UK strategy. Additional out of course meetings or briefings are held on specific matters when required.
The Board is assisted in the discharge of its duties by a number of Board Committees, whose purpose it is to consider, in greater depth than would be practicable at Board meetings, matters for which the Board retains responsibility. The Committees report back to the Board with summaries and recommendations.  The composition of such Committees is reviewed annually by the Nomination Committee and any changes are recommended to the Board. Each Committee may seek independent advice at the expense of the business if so required.

The Remuneration Committee was disbanded in 2017 as recommended by the Board approved Governance Review. The responsibilities of this Committee were reallocated appropriately to Group HR, the Group Remuneration Committee, the Board Audit Committee and Board.
Our Board of Directors monitors and assesses the effectiveness of our governance arrangements and has the power to address any shortcomings.

Matters Reserved to the Board are available here.

The Board is currently made up of nine Non-Executive Directors (the majority of which are independent) and two Executive Directors.  Two of the Non-Executive Directors are nominated by AIB Group and act as a liaison point between the AIB UK and AIB Group.  Non-Executive Directors are appointed so that there is a wide mix of backgrounds, experience and expertise.  This ensures a strong and effective leadership which can independently and effectively monitor and challenge the executive management and their decision making.

AIB UK has an induction process for new Non-Executive Directors.  It is designed to ensure they are familiar with the business and its operations.  It comprises of relevant briefing material, details of the business’ strategic and operational plans and also includes a programme of meetings with key individuals such as the Managing Director and Senior Management, as well as support and control functions. On appointment, new Directors are assessed to identify any individual development needs. The Secretariat keeps a log of the training each Director takes part in during the duration of their service; training is also provided regularly by AIB UK for the Board of Directors.

The Board of Directors and its Committees undergo an annual effectiveness review to ensure that the Board and its Committees have sufficient knowledge and skill to exercise their duties as Directors and to understand the Bank’s activities and effectively manage its risks.  The review comprises individual appraisals of each Director by the Board Chair, and also considers whether individual members have the capacity to commit sufficient time to exercise the duties expected of them.

The Board appoints an external assessor to complete an independent review of Board effectiveness and governance at least every three years.
Where knowledge and skills gaps are identified, these are discussed and development plans are put in place to address them.

To ensure there are no conflicts of interest and that each Board member is committing sufficient time and effort to their prescribed duties, AIB UK regularly reviews the number of, and time commitment to, any appointments they hold outside the Bank.
AIB UK recognises that some Directors may be appointed to the board of an organisation which requires them to act as a Director/Member for a number of subsidiary entities or other related boards/committees (e.g. Pension Fund Trustee, Charity Committee etc). For the avoidance of doubt, AIB UK considers these types of appointments to count as one collective appointment and considers each on a case by case basis when reviewing external appointments. The Nomination Committee may, from time to time, consider if any external appointment is affecting the way in which a Director discharges his/her duties and take appropriate action.

AIB UK also has a policy in place to ensure that the Board Chair does not simultaneously exercise the Managing Director function.
Each individual member of the Board is asked twice a year to disclose their directorships with other institutions and provide all the necessary details, which are double-checked against records held at Companies House and other relevant registration bodies.

The Board Risk Committee is comprised of four independent Non-Executive Directors and it is responsible for assisting and advising the Board in fulfilling its oversight responsibilities in relation to:

• fostering sound risk governance across the Company's operations, encompassing implementation and maintenance of the Company's overall risk culture, risk management framework and its risk appetite, strategy and policies to ensure they are consistent with the strategy, regulatory requirements, corporate governance principles and industry best practice;
• ensuring that risks and impact within AIB UK Group are appropriately identified, reported, assessed, managed and controlled to include commission, receipt and consideration of reports on key strategic and operational risk issues;
• ensuring that the Company's overall actual and future risk appetite and strategy consider all types of risks, are aligned with the business strategy, objectives, corporate culture and values of the business; and,
• promoting risk awareness culture within the Company.
   

Board Risk Committee Terms of Reference are available here.

The Board Audit Committee is comprised of three independent Non-Executive Directors. Its responsibilities include:

• monitoring the quality and integrity of Bank’s accounting policies, disclosure practices, financial and narrative reports;
• monitoring the independence and performance of the external auditor and  the Parent Group internal audit function as applied to AIB UK through an outsourced arrangement;
• reviewing the adequacy and performance of systems of internal control and the management of financial and non-financial risks; and
• ensuring that the annual report and financial statements present a fair, balanced and understandable assessment of the Bank's position and prospects;
   

Board Audit Committee Terms of Reference are available here.

The Nomination Committee is comprised of three independent Non-Executive directors. Its responsibilities include:

• the composition, skills, experience, knowledge, independence, diversity and succession arrangements for the Board and for making recommendations to the Board with regard to any changes considered appropriate; 
• identifying persons who, having regard to the criteria laid down by the Board, appear suitable for appointment to the Board, evaluating the suitability of such persons and making recommendations to the Board; and
• reviewing Board and Senior Executive succession planning.
   

The search for suitable candidates is a continuous process.  Recommendations for Board membership are based on merit and objective measurable criteria following a vigorous appraisal and interview process to ensure candidates are of sufficiently good repute and possess the required knowledge, skills and expertise to perform their duties.
 

Nomination Committee Terms of Reference are available here.

The Technology, Data and Resilience Committee (“TDRC”) is comprised of three independent Non-Executive Directors and it is responsible for assisting and advising the Board in fulfilling its oversight responsibilities in relation to:

• reviewing and challenging the strategy, governance and execution of matters relating to Technology (including Cyber), Data, and Operational Resilience, including model effectiveness, regulatory compliance, serious incident/event reviews and significant IT third-party selection; and
• reviewing and assessing technology related deliverables for key change projects.
   

Technology, Data & Resilience Committee Terms of Reference are available here.

AIB Group (UK) plc’s policy statement on gender diversity in senior management can be viewed here.
The Board Diversity Policy can be found here.

AIB UK complies with the Remuneration Code as prescribed by the PRA & FCA.

AIB Group (UK) plc is a company incorporated in Northern Ireland and is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and the PRA under the Financial Services and Markets Act 2000 (FSMA) to carry on a wide range of regulated activities, including accepting deposits.  It carries on business under the trading names ‘Allied Irish Bank (GB)’ and ‘Allied Irish Bank (GB) Savings Direct’ in Great Britain, and ‘AIB (NI)’ in Northern Ireland.

AIB UK subscribes to the Standards of Lending Practice of the Lending Standards Board, which is a self-regulatory code setting minimum standards of good practice in relation to lending, including loans, credit cards and current account overdrafts.
The standards are incorporated into our product approval process, retail lending policies, account management and customer communication procedures.

This statement applies to all AIB UK entities.

Approach to risk management and governance arrangements in relation to UK taxation

Ownership of tax risks resides with the Boardand our governance ensures that suitably qualified people are involved in decisions related to tax.

We seek to fully comply with our tax filing, tax reporting and tax payment obligations. However, given the size and complexity of the organisation and our volume of tax obligations it is not possible to completely eliminate tax risks. In order to mitigate these risks a number of policies and procedures are in place to manage tax risk and form part of the broader framework for risk management across the Group. Central to this is our Tax Framework (Framework) designed to identify, manage and report tax risks.  The Framework and the policies, standards and guidelines associated with the operation of the Framework are applicable to all employees of AIB and to all AIB Group entities. From time to time we may seek external advice in relation to significant transactions or areas of uncertainty.

We adopt a “three lines of defence” approach to managing tax risk. Generally the business management functions perform a first line of defence and are primarily responsible for ensuring that the Framework and associated policies are communicated, implemented and operate effectively within their business units. Second and third lines of defence are performed by Group Tax and Group Internal Audit respectively.

Tax planning and tax risk

We continue to progress on our three-year strategy to transform the business, grow in scale and enhance our product offerings, while addressing the sustainability agenda.

Our tax risk appetite is aligned to the strategy. We aim to balance the needs of, and obligations to, our stakeholders, including shareholders, customers, regulators and tax authorities.  We do not have any appetite for breaches of tax law, engaging in abusive or artificial tax planning or engaging in any action of tax evasion.  

We have adopted, and comply with, the requirements of HM Revenue & Customs (HMRC)'s Code of Practice on Taxation for Banks. Accordingly, we do not promote or engage in tax planning that does not support genuine commercial activity or give rise to results inconsistent with the underlying economic consequences of the transactions concerned. Any promotion of tax advantaged products is limited to those where the tax consequences are consistent with the intentions of UK Parliament.

We remunerate our employees such that the proper amounts of tax and social security contributions are paid on the rewards of employment.

Relationship with the tax authorities

We proactively engage with HMRC to maintain an open and transparent relationship. This includes discussing, on a real-time or near real-time basis, key developments in our business and the associated potential impacts and may involve disclosing and seeking to resolve a known issue prior to the filing of the relevant tax return.

In the event of differing views we will work constructively with HMRC with an aim of achieving early resolution.

AIB regards the publication of this tax statement for the financial year ending 31 December 2023 as complying with the duty under paragraph 16(2) of Schedule 19 of the Finance Act 2016.

AIB Group (UK) p.l.c. Annual Financial Report 2023

AIB Group (UK) p.l.c. Annual Financial Report 2022