Achieving high standards
The role of the Board is to provide strategic leadership, guidance and perspective to the business on behalf of the shareholders and to ensure that the risks and rewards of the business are properly managed through different phases of the industry’s cycle.
Pat Plunkett, Chairman
2008 Achievements
Successful appointments
Ian Springett, Chief Financial Officer
Ann Grant, non-executive Director
Board evaluation
Addressed 2007 issues and conducted 2008 review
Senior executive remuneration
Group’s remuneration policy reviewed to ensure continued close alignment of the long-term interests of shareholders with those of executives
Business Conduct
Revised Code of Business Conduct, incorporating Ethics and Integrity Policy, adopted
2009 Challenges
Ensure that the Group stays on target with its
key 2009 strategic priorities
Review Board Committee composition and processes
Define and progress succession planning
Undertake key risk reporting, mitigation and progress evaluation
Enhance Board meeting administration systems
2008 was a busy and successful year for Tullow and the Board. The Group delivered a very strong operational performance and is positioned for a further significant step change in size and scale. While it is a very exciting time for Tullow, it is and has been a very challenging time for world economies and stock markets, and it is against this backdrop that the governance and stewardship obligations of company boards have come into sharp focus across all industries. I am happy to report that the Tullow Board, I believe, continues to operate very effectively.
Strategic review
As Tullow’s business has grown and become more complex it is important that the Board continuously reviews and evaluates the Group’s strategy. In 2008, a detailed strategic review undertaken by the Board in the second half of the year re-confirmed the Group’s vision and strategy. However, a more challenging strategic objective was agreed in the context of the Group’s exceptional performance in recent years and Tullow is now targeting a TSR performance in the top quintile for the industry.
In addition, elements of our strategy have been re-calibrated in light of the current economic backdrop. Liquidity and capital management have been addressed through a very disciplined budgetary and capital allocation process that was undertaken across the business. Maintaining financial flexibility has also been addressed with a successful equity placing and bank financing executed in early 2009.
Board composition
| Board member | Year appointed |
Executive Director |
Non-Executive Director |
|---|---|---|---|
| Pat Plunkett | 1998 | x | |
| Aidan Heavey | 1985 | x | |
| David Bamford | 2004 | x | |
| Ann Grant | 2008 | x | |
| Angus McCoss | 2006 | x | |
| Paul McDade | 2006 | x | |
| Steven McTiernan | 2002 | x | |
| Graham Martin | 1997 | x | |
| Clare Spottiswoode | 2002 | x | |
| Ian Springett | 2008 | x | |
| David Williams | 2006 | x |
Enhanced risk management
Risk management and risk factors were also reviewed as part of the strategic review and details of these are outlined in the risk management and risk factors. Key risks for strategic delivery have now been assigned with a Board level sponsor and are being incorporated in Board reporting on a quarterly basis.
Rebalanced Board
The composition of the Board is a key factor in ensuring that the right mix of skills and experience are in place to lead the Group. One of the Board objectives for 2008 was to rebalance the Board in favour of non-executive Directors and this was successfully achieved during the year. Tullow now has 11 Directors comprising six non-executive Directors and five Executive Directors.
Successful management transition
The appointment of Ian Springett as Chief Financial Officer demonstrates the ability of Tullow to attract high-quality individuals to the Group and is a credit to the Nominations Committee. However, the Board recognises that more focus needs to be given to succession planning across the Group and this is incorporated in Board objectives for 2009. In my Chairman’s statement, I have summarised the Board and management changes during 2008.
Performing to the highest level
The Board will continue to keep its work and governance principles under review and to review Board performance annually to ensure that Board members are continually challenged to perform to the highest level.
We always welcome shareholder feedback and if you have any comments or observations about this report please feel free to email me at chairman@tullowoil.com.
Pat Plunkett, Chairman
