Corporate Governance. UK Corporate Governance Code and the Irish Corporate Governance Annex. Board Composition and Independence

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1 Corporate Goverace Your Board of Directors is committed to the highest stadards of corporate goverace. Good goverace stems from a positive culture ad well embedded values. FBD s core values of itegrity, etrepreeurship, customer focus ad ambitio are cetral to how the Board coducts its busiess ad discharges its resposibilities. Equally, however, these values are as relevat to every employee workig throughout the Group i their iteractios with each other, ad with our customers, shareholders ad other stakeholders. UK Corporate Goverace Code ad the Irish Corporate Goverace Aex The UK Corporate Goverace Code ( the Code ) ad the Irish Corporate Goverace Aex ( the Aex ) codify the goverace arragemets which apply to listed compaies such as FBD. Combied, these represet corporate goverace stadards of the highest iteratioal level. Throughout 2015 ad to the date of this report, we applied the priciples of the Code ad except where otherwise expressly stated complied with the provisios of both the Code ad the Aex. This sectio of the Aual Report sets out the goverace arragemets i place i FBD Holdigs plc. The Board of Directors ad its Role The Group is maaged by the Board of Directors. The primary role of the Board is to provide leadership ad strategic directio while maitaiig effective cotrol over the activities of the Group. The Board has approved a Corporate Goverace Framework settig out its role ad resposibilities. This is reviewed aually as part of the Board s evaluatio of its performace ad goverace arragemets. The Framework icludes a formal schedule of matters reserved to the Board for its cosideratio ad decisio, which icludes: the approval of the Group s objectives ad strategy; approval of the aual budget icludig capital expediture ad the review of the Group s systems of iteral cotrol; maiteace of the appropriate level of capital, the allocatio thereof ad decisios as to the recommedatio or paymet of divideds; approval of Fiacial Statemets; ad the appoitmet of Directors ad the Compay Secretary. This schedule esures that the skills, expertise ad experiece of the Directors are haressed to best effect ad esures that ay major opportuities or challeges for the Group come before the Board for cosideratio ad decisio. The schedule was last reviewed i Jauary Other specific resposibilities of the Board are delegated to Board appoited Committees, details of which are give later i this report. Board Compositio ad Idepedece Durig 2015 the Board comprised two executive Directors ad eight o-executive Directors, icludig the Chairma. This structure was deemed appropriate by the Board. The Board deemed it appropriate that it should have betwee 9 ad 11 members ad that this size is appropriate, beig of sufficiet breadth ad diversity to esure that there is healthy debate ad iput o the mai busiess to be dealt with by it. Six of the o-executive Directors i office at the ed of 2015 were cosidered to meet all of the criteria idicatig idepedece set out i the Code. Date first elected by share-holders Years from first electio to the 2016 AGM Cosidered to be idepedet E Daly May Yes S Dorga Apr Yes E Dowey May Yes L Herlihy - 0 Yes B Hora Apr Yes R O Fly - 0 Yes Neither Mr. Walshe, who is chairma of the Group s largest shareholder, Farmer Busiess Developmets plc, or the Board Chairma, Mr. Berkery, were cosidered to be idepedet. The Group has aouced that the Compay ad its pricipal subsidiary, FBD isurace plc, will have a Board comprised of the same directors ad the dual board structure i operatio up to the ed of 2015 will be retired. This ew structure will be implemeted over the first half of FBD Holdigs plc Aual Report 2015

2 The skills ad experiece idetified by the Board as critical to its compositio ad that of its Committees at this time iclude expertise i isurace or other fiacial services, geeral ad farmig/agri idustry experiece, corporate fiace, corporate goverace, regulatory ad other compliace, fiacial accoutig ad executive reward priciples ad practice. The Board also cosiders it desirable to attract idividuals with techology ad cosumer goods ad services experiece. Directors Biographies Biographical details of the Directors i office o the date of this Report are as follows: Michael Berkery, Chairma Michael Berkery (aged 67) was elected Chairma of the Compay i He was Chief Executive Officer of the Irish Farmers Associatio for 25 years util his retiremet i March He served o the Natioal Ecoomic ad Social Coucil for over 20 years ad was a director of the Agricultural Trust (publisher of the Irish Farmers Joural). He is chairma of FBD Trust Compay Limited, ad a Director of Eable Irelad ad a umber of other compaies. I September 2015 Mr. Berkery was appoited as a member of the EU High Level Group o simplificatio of Europea Structural & Ivestmet Fuds. Mr. Berkery joied the Board i October Mr. Berkery s extesive career at leadership level i the Irish Agriculture ad Food Idustry brigs to the Board deep isights ito the Irish farmig ad agri-related commuity, which together comprise a substatial customer base for the Group s uderwritig subsidiary, FBD Isurace plc. He brigs to the Board ad to its Committees his facilitatio ad commuicatio skills, busiess ad ecoomic kowledge, idepedece of mid ad experiece of maagemet ad motivatio of people. Emer Daly, idepedet o-executive Director Emer Daly (aged 52) is curretly o-executive Director of Permaet TSB Group Holdigs plc, ad Permaet TSB plc where she also serves as Chairma of the Audit Committee. She also serves as a o-executive Director of Frieds Providet Iteratioal Limited ad Lombard S.A. ad as Chairma of the Audit, Risk ad Compliace Committee for both compaies. Ms. Daly joied the Board, the Audit Committee ad the Remueratio Committee i November Ms. Daly is a Fellow of Chartered Accoutats Irelad ad has valuable experiece of the geeral isurace idustry, havig previously worked i seior roles with PricewaterhouseCoopers ad AXA Isurace. She served as a Director with Axa betwee 2000 ad 2006 with resposibility for Fiacial Operatios, Strategy ad Risk Maagemet. Ms. Daly is also a member of the audit committee of the Departmet of Foreig Affairs ad Trade ad lectures i risk maagemet i the UCD Graduate Busiess School. She previously held o-executive roles with Eigrid p.l.c., Payzoe p.l.c, the Property Registratio Authority ad the Dubli Detal Hospital where she was board chairma for seve years. Ms. Daly brigs to the Board extesive skills, expertise ad experiece i isurace, accoutig, risk maagemet ad goverace. Sea Dorga, idepedet o-executive Director Sea Dorga (aged 64) is curretly o-executive Chairma of the Irish Maagemet Istitute ad is a o-executive Director of Short Brothers plc. He has previously served as chairma ad o-executive director of a umber of compaies ad orgaisatios i the private ad public sectors. He was Chief Executive of IDA Irelad for ie years util his retiremet at the ed of Prior to joiig IDA he was Secretary Geeral of the Departmets of Idustry ad Commerce ad of Tourism ad Trade ad was Chief Executive of The Istitute of Chartered Accoutats i Irelad. Mr. Dorga joied the Board, ad the Audit Committee, i Jauary He was appoited as Chairma of the Remueratio Committee i December 2011, ad as Chairma of the Audit Committee ad Seior Idepedet Director i April Mr. Dorga is a very experieced o-executive Director ad brigs to the Board, ad to its Committees, substatial experiece of corporate goverace, compliace, accoutig, HR ad executive reward ad geeral idustry experiece at leadership level. Eddie Dowey, idepedet o-executive Director Eddie Dowey (aged 54) was the 14th Presidet of the Irish Farmers Associatio up util his resigatio i November He is a director of Bord Bia, the Irish Food Board, a orgaisatio which develops iteratioal markets for Irish food produce. FBD Holdigs plc Aual Report

3 Corporate Goverace (cotiued) He is also a Director of the Agricultural Trust (publisher of the Irish Farmers Joural). Mr. Dowey joied the Board, ad the Audit Committee, i April He was appoited to the Nomiatio Committee i February He stepped dow from the Audit Committee i May I additio to his commercial acume, Mr. Dowey brigs to the Board a deep kowledge of Irelad s agricultural sector ad is at the forefrot of thikig ad strategy for this importat sector of Irelad s ecoomy, a sector i which the Group, through its isurace subsidiary, FBD Isurace plc, has substatial iterest. Liam Herlihy, idepedet o-executive Director Liam Herlihy (aged 64) was, util May of 2015, Group Chairma of Glabia plc, a leadig Irish based performace utritio ad igrediets group, havig served i that role for 7 years durig which he presided over a period of sigificat structural chage ad uprecedeted growth for Glabia. Mr. Herlihy joied the Board i September Mr. Herlihy completed the Istitute of Directors Developmet Programme ad holds a certificate of merit i Corporate Goverace from Uiversity College Dubli. He brigs to the Board a wealth of commercial experiece ad some deep isights ito the farmig ad geeral agricultural idustries i Irelad which, together, comprise the Group s core customer base. Brid Hora, idepedet o-executive Director Brid Hora (aged 62) is a member of the Goverig Authority of DCU ad a Coucil Member of the Irish Maagemet Istitute. Ms. Hora was up util 2014 Deputy Chief Executive of ESB, Irelad s leadig eergy compay, havig bee a Executive Director of ESB sice Before joiig ESB i 1997 as Group Pesios Maager, Ms. Hora headed KPMG Pesio & Actuarial Cosultig. A Actuary ad a Chartered Director, Ms. Hora was a Commissioer of the Natioal Pesios Reserve Fud from its establishmet i 2001 to 2009 ad a Board member of IDA Irelad from 1996 to Ms. Hora joied the Board, the Remueratio Committee ad the Nomiatio Committee i December Ms. Hora brigs to the Board broad strategic ad commercial experiece, a i-depth uderstadig of HR ad reward issues ad her experiece of corporate goverace ad risk maagemet. Fioa Muldoo, Group Chief Executive Fioa Muldoo (aged 48) joied the Group i Jauary 2015 as Group Fiace Director Desigate ad was appoited as a executive Director ad member of the Board. I October 2015, Ms. Muldoo was appoited as Group Chief Executive. A Chartered Accoutat, Ms. Muldoo was Director of Credit Istitutios ad Isurace Supervisio at the Cetral Bak of Irelad from August 2011 util May Prior to this she was with XL Group for sevetee years ad held a umber of seior roles with this NYSE listed Property & Casualty Isurace firm i Irelad, Lodo ad Bermuda, icludig two years as Group Treasurer util July O 12 Jue 2015, Ms. Muldoo was appoited as a o-executive Director of the Goveror ad Compay of the Bak of Irelad. Ruairí O Fly, idepedet o-executive Director Mr. O Fly (aged 58) is Chairma of Caada Life Iteratioal Reisurace ad Lodo Life ad Geeral Reisurace. He is also a o-executive Director of Irish Life Ivestmet Maagers ad Setata Asset Maagemet ad a member of the Board of Córas Iompair Éirea (CIE). He joied the Board ad the Audit Committee i May Mr. O Fly has over 20 years experiece at CEO ad Board level i the fiacial services idustry i Irelad ad the UK. He was formerly CEO at Caada Life Irelad, Setata Asset Maagemet ad Lifetime Assurace. Mr. O Fly was also a full time member of faculty at the Irish Maagemet Istitute ad he lectures i Corporate Goverace ad Leadership. He graduated from Triity College Dubli with the degrees of Bachelor of Busiess Studies ad MSc.(Mgt.) i Orgaisatioal Behaviour. He has completed the Program for Maagemet Developmet at Harvard Busiess School, ad the Iteratioal Directors Programme at Isead Busiess School. He brigs to the Board extesive experiece at seior executive level i the fiacial services idustry together with his expertise i the areas of strategy, leadership ad corporate goverace. Padraig Walshe, o-executive Director Padraig Walshe (aged 58) is Chairma of Farmer Busiess Developmets plc, the Compay s largest shareholder. He is a past Presidet of COPA, the Europea Farmers Orgaisatio ad of the Irish Farmers Associatio. Mr. Walshe previously served o the Board of FBD betwee 2006 ad 2010, ad rejoied the Board i December FBD Holdigs plc Aual Report 2015

4 Mr. Walshe s extesive leadership experiece at atioal ad iteratioal level ad his deep uderstadig of Irelad s farmig commuity ad the Irish food sector are of immese beefit to the Board. Board Diversity The Board values the major cotributio which a mix of backgrouds, skills ad experiece brigs to the Group ad sees merit i icreasig diversity at Board level i achievig the Group s strategic objectives. Differeces i backgroud, skills, experiece ad other qualities, icludig geder, will cotiue to be cosidered i determiig the optimal compositio of the Board, the pricipal aim beig to achieve a appropriate balace betwee them. While all appoitmets to the Board will have due regard to diversity, they will be made o merit, esurig that the skills, experiece ad traits oted by the Board as beig of particular relevace at ay time are preset o the Board ad icluded i ay plaed refreshmet. Over the comig years ad as opportuities to appoit arise, the Board will cotiue to seek cadidates who have both the requisite skills ad experiece ad who will help the Board achieve greater diversity. As at the date of this report, the Board was comprised as follows: Teure of Director 0 2 years 55% 3 6 years 22% 7 9 years 11% Over 9 years 11% Experiece ad skills The percetage of the Board havig the requisite skills ad experiece were as follows: Isurace or fiacial services 55% Geeral idustry 67% Agri/farmig 44% Corporate fiace 44% Regulatory ad compliace 67% Fiacial accoutig 55% Executive reward 67% Key Roles ad Resposibilities Chairma The role of the Chairma is set out i writig i the Corporate Goverace Framework. He is resposible, iter alia, for: the effective ruig of the Board, settig its ageda ad esurig that it receives accurate, timely ad clear iformatio; esurig that the Board as a whole plays a full ad costructive part i the developmet ad determiatio of the Group s strategy ad overall commercial objectives; ad esurig that the views of shareholders are commuicated to the Board. Group Chief Executive The role of the Group Chief Executive is set out i writig i the Corporate Goverace Framework. She is resposible, iter alia, for: Geder Male 67% Female 33% Executive/o-executive No-executive 89% Executive 11% ruig the Group s busiess; proposig ad developig the Group s strategy ad overall objectives i close cosultatio with the Chairma ad the Board; ad implemetig the decisios of the Board ad its Committees. FBD Holdigs plc Aual Report

5 Corporate Goverace (cotiued) Seior Idepedet Director The Seior Idepedet Director is resposible for: beig available to shareholders if they have cocers which they have ot bee able to resolve through the ormal chaels of the Chairma, the Group Chief Executive or the Fiace Director, or for which such cotact is iappropriate; coductig a aual review of the performace of the Chairma; actig as a soudig board for the Chairma; ad servig as a itermediary for the other o-executive Directors as required. Compay Secretary The Compay Secretary acts as Secretary to the Board ad to its Committees. I so doig, he: assists the Chairma i esurig that the Directors have access, i a timely fashio, to the papers ad iformatio ecessary to eable them to discharge their duties; assists the Chairma by orgaisig ad deliverig iductio ad traiig programmes as required; ad is resposible for esurig that Board procedures are followed ad that the Directors are fully briefed o corporate goverace matters. Board effectiveess ad performace evaluatio Board effectiveess is reviewed aually as part of the Board s performace evaluatio process. The Chairma is resposible for esurig that each Director receives a iductio o joiig the Board ad that he or she receives ay additioal traiig he or she requires. The iductio itself is orgaised ad delivered by the Compay Secretary ad other members of the maagemet team. Board Evaluatio Every year the Board evaluates its performace ad that of its Committees. Directors are expected to take resposibility for idetifyig their ow traiig eeds ad to take steps to esure that they are adequately iformed about the Group ad about their resposibilities as a Director. The Board is cofidet that all of its members have the requisite kowledge ad experiece ad support from withi the Compay to perform their role as a Director of the Group. Towards the ed of 2015, the Board had its evaluatio process exterally facilitated by Praesta Irelad, a idepedet cosultacy which has o other coectios with the Group. The mai coclusio from the evaluatio process was that the Board, its Committees, the Chairma ad idividual Directors are performig very effectively with some suggestios made for further improvemet. The evaluatio process for 2015 took place i December 2015 ad Jauary The purpose of the process was to idetify areas which the Board ca idetify for improvemet ad to affirm positively those areas where it is playig a effective role i leadig the Group. Key recommedatios from the evaluatio process iclude: the amalgamatio of the two Boards of the Group s pricipal etities FBD Holdigs plc ad FBD Isurace plc; the appoitmet of highly experieced isurace executives ad o-executives to this Board; improvemets i certai of the maagemet iformatio comig to the Board; makig appoitmets to the seior maagemet team as quickly as possible; ad improvemets i successio plaig, executive developmet ad Director traiig. Re-electio of Directors The Board has, sice 2011, adopted the practice that all Directors will submit themselves for re-electio at each Aual Geeral Meetig regardless of legth of service or the provisios of the Compay s Articles of Associatio. Access to advice All members of the Board have access to the advice ad the services of the Compay Secretary who is resposible for esurig that Board procedures are followed ad that applicable rules, regulatios ad other obligatios are complied with. I additio members of the Board may take idepedet professioal advice at the Compay s expese if deemed ecessary i the furtherace of their duties. 30 FBD Holdigs plc Aual Report 2015

6 Attedace at Board ad Board Committee Meetigs durig 2015 Board Audit Nomiatio Remueratio M Berkery 15/15-4/4 1/1 E Daly 14/15 6/6-3/3 S Dorga 15/15 6/6 1/1 3/3 E Dowey 13/15 1/2 2/3 - L Herlihy 8/ B Hora 13/15-4/4 3/3 A Lagford 4/4-1/1 - F Muldoo 13/ C O Caoimh 9/ R O Fly 12/12 4/4 - - P Walshe 14/ If a Director is uable for ay reaso to atted a Board or Committee meetig, he or she will receive Board papers i advace of the meetig ad is give a opportuity to commuicate ay views o or iput ito the busiess to come before the meetig to the Chairma. Board Committees The Board has established three Committees to assist it i the executio of its resposibilities. These are: the Audit Committee; the Nomiatio Committee; ad the Remueratio Committee. Each of the Committees has writte terms of referece which were approved by the Board ad set out the Committees powers, resposibilities ad obligatios. These are available o the Group s website The Compay Secretary acts as secretary to the Committees. Miutes of all of the Committees meetigs are either circulated to all of the Directors i the case of the Audit Committee or are available to ay Director o request i the case of the other two Committees. Each of these Committees has provided a report i the sectios followig. Report of the Audit Committee Membership durig the year CURRENT S Dorga Idepedet o-executive Director, Committee Chairma E Daly R O Fly PREVIOUS E Dowey Idepedet o-executive Director Idepedet o-executive Director, appoited to the Committee o 14 May 2015 Idepedet o-executive Director, stepped dow from Committee o 14 May 2015 The Committee members have bee selected to esure that the Committee has available to it the rage of skills ad experiece ecessary to discharge its resposibilities. The Board has resolved that each of Ms. Daly, Mr. Dorga ad Mr. O Fly have recet ad relevat fiacial experiece. Objective of Committee To assist the Board of the Group i fulfillig its oversight resposibilities for such matters as fiacial reportig, the system of iteral cotrol ad maagemet of fiacial risks, the audit process ad the Group s process for moitorig compliace with laws ad regulatios. Key resposibilities delegated to the Committee reviewig the Group s fiacial results aoucemets ad Fiacial Statemets; overseeig the relatioship with the exteral auditors icludig reviewig their terms of egagemet, idepedece ad fees; reviewig the scope, resources, results ad effectiveess of the Group s iteral audit fuctio; ad performig detailed reviews of specific areas of fiacial reportig as required by the Board or the Committee. FBD Holdigs plc Aual Report

7 Corporate Goverace (cotiued) Meetigs The Committee met o six occasios durig Meetigs are atteded by Committee members ad, o occasio, by ivitatio, the Chief Fiacial Officer. The statutory Auditor ad the Head of Group Iteral Audit are ivited to atted all scheduled meetigs of the Committee. The Committee regularly meets separately with the statutory auditor ad with the Head of Group Iteral Audit, without members of maagemet preset. The miutes of Committee meetigs are circulated routiely to the Board. The Committee chairma also provides a verbal report to the Board after each Committee meetig. The Committee reports formally to the Board aually o the overall work udertake ad the degree to which it discharged the resposibilities delegated to it. Activities of the Committee durig 2015 Durig the year the followig were the mai activities udertake: assessmet of fiacial ad other risks facig the Group ad of the operatio of iteral cotrols; review of all aspects of the relatioship with the exteral auditors, icludig the statutory audit pla, audit fidigs ad recommedatios ad cosideratio of the idepedece of the exteral auditors ad the arragemet i place to safeguard this, icludig parter rotatio, prohibitio o share owership ad levels of fees payable to the statutory auditor for o-audit assigmets; cosideratio of issues of fiacial reportig, particularly those ivolvig substatial judgmet ad the risk of material misstatemet icludig claims estimates ad provisios; review of drafts of Aual Report ad Half Yearly Report prior to their cosideratio by the Board; review of correspodece betwee the Compay ad IAASA, the Irish fiacial reportig regulator, i relatio to the Aual ad Half Yearly Reports; appraisal of the Iteral Audit fuctio, pla, work, report ad issues arisig ad moitorig the scope ad effectiveess of the fuctio; assessmet of compliace with laws, regulatios, codes ad fiacial reportig requiremets; ad reportig to the Board o its activities ad cofirmig the degree to which the Committee s delegated resposibilities had bee discharged through verbal reports to the Board after each meetig ad a formal writte report preseted aually. The specific judgemets ad estimates used i the formulatio of the fiacial statemets ad cosidered by the Committee icluded: claims best estimate ad the margi for ucertaity; chage i the accoutig treatmet of MIBI reserve; asset valuatios; accoutig treatmet of the covertible bod istrumet; reveue recogitio ad the treatmet of ueared premium reserve; accoutig for the defied beefit pesio scheme; ad recoverability of deferred tax asset followig losses icurred i The Committee cosidered specific comprehesive papers o these issues preseted by maagemet ad was satisfied with the treatmet proposed i each case. Havig put the provisio of audit services out to competitive teder durig 2015 the Committee recommeded that PricewaterhouseCoopers be appoited as statutory auditor i respect of the 2016 Fiacial Statemets. This was approved by the Board. This chage was implemeted as a result of requiremets uder the ew Europea Audit Directive ad Regulatios to rotate audit firms every te years. The Committee retais direct oversight over the activities of the Audit Committee of the Group s pricipal subsidiary, FBD Isurace plc, ad routiely receives the miutes of that committee s meetigs oce they are approved. Evaluatio The Committee s activities formed part of the Board s evaluatio process which foud the Committee to be operatig effectively. Sea Dorga O behalf of the Audit Committee 26 February FBD Holdigs plc Aual Report 2015

8 Report of the Nomiatio Committee Membership durig the year CURRENT M Berkery B Hora E Dowey PREVIOUS A Lagford Committee Chairma, o-executive Director, Board chairma Idepedet o-executive Director Idepedet o-executive Director, appoited to the Committee o 27 February 2015 Chief Executive Officer stepped dow from Committee o 27 February 2015 Evaluatio The Committee s activities formed part of the Board s evaluatio process which foud the Committee to be operatig effectively. The compositio of the Committee at the ed of 2015 fully met the requiremets of the Code as a majority of Committee members were Directors cosidered to be idepedet. Michael Berkery O behalf of the Nomiatio Committee 26 February 2016 Objective of Committee To esure that the Board ad its Committees are made up of idividuals with the ecessary skills, kowledge ad experiece to esure that the Board is effective i dischargig its resposibilities. Key resposibilities delegated to the Committee reviewig the structure, size ad compositio of the Board ad makig recommedatios to the Board for ay appoitmets or other chages; recommedig chages to the Board s committees; ad advisig the Board i relatio to successio plaig both for the Board ad the seior executives i the Group. Durig the year the Committee cosulted a umber of exteral firms to assist it i the idetificatio of suitable idividuals for appoitmet to executive ad o executive positios ad i the draftig of employmet cotracts. Meetigs The Committee met four times durig 2015 to cosider potetial cadidates for appoitmet to the Board to fulfil vacacies which arose durig the year ad to oversee the detailed successio plaig process udertake i the Group s pricipal subsidiary, FBD Isurace plc. At its meetig i May, the Committee reviewed ad approved the Board successio pla. FBD Holdigs plc Aual Report

9 Corporate Goverace (cotiued) Report of the Remueratio Committee Membership durig the year CURRENT S Dorga E Daly B Hora PREVIOUS M Berkery Committee Chairma, ad idepedet o-executive Director Idepedet o-executive Director Idepedet o-executive Director No-executive Director, stepped dow from the Committee o 27 February 2015 Objective of Committee To assist the Board of the Compay i esurig that the level of remueratio i the Group ad the split betwee fixed ad variable remueratio are sufficiet to attract, retai ad motivate executive Directors ad seior maagemet of the quality required to ru the Compay i a maer which is fair ad i lie with market orms, while ot exposig the Compay to uecessary levels of risk. Key resposibilities delegated to the Committee determiig the broad policy for the remueratio of the Compay s executive Directors, Compay Secretary ad other seior executives; determiig the total remueratio packages for the foregoig idividuals, icludig salaries, variable remueratio, pesio ad other beefit provisio ad ay compesatio o termiatio of office; Activities of the Committee durig 2015 The pricipal activities udertake by the Committee durig 2015 iclude: aual review of remueratio arragemets for executive Directors ad other seior executives, icludig bouses paid for performace i 2014 ad the coditios attachig to the 2015 bous pla; review ad approval of the Report o Directors Remueratio for 2014; makig of two coditioal awards of shares uder the FBD Performace Share Pla ad settig the coditios attached; ad approvig the terms ad coditios of appoitmet of the Group Chief Executive i Q The Committee Chairma cosulted a umber of exteral firms i the draftig of the CEO employmet cotract ad i selectig appropriate coditios to attach to the LTIP awards. Full details of Directors Remueratio are set i the Report o Directors Remueratio o pages 38 to 46. Evaluatio The Committee s activities formed part of the Board s evaluatio process which foud the Committee to be operatig effectively. Sea Dorga O behalf of the Remueratio Committee 26 February 2016 esurig that the Compay operates to recogised good goverace stadards i relatio to remueratio; makig awards of shares uder the Group s approved share scheme; ad preparatio of the detailed Report o Directors Remueratio. Meetigs The Group Chief Executive may atted meetigs of the Committee but oly by ivitatio ad ot at a time whe his or her idividual remueratio arragemets are discussed. The Committee met three times durig FBD Holdigs plc Aual Report 2015

10 Shareholder Egagemet The Board is committed to esurig that excellet lies of commuicatio exist ad are fostered betwee the Group ad its shareholders. A plaed programme of ivestor relatios activities is udertake throughout the year which icludes: briefig meetigs with all major shareholders after the full year ad half yearly results aoucemets; regular meetigs betwee istitutioal ivestors ad aalysts with the Group Chief Executive, Chief Fiacial Officer ad/or Head of Ivestor Relatios to discuss busiess performace ad strategy ad to address ay issues of cocer; ad respodig to letters ad queries received directly from shareholders ad from proxy adviser firms. Should a sigificat proportio of votes be cast agaist a resolutio at ay geeral meetig, the Board will edeavour to idetify the shareholders cocered ad will iitiate a cotact with them with the view to uderstadig the reasos for the adverse vote. The Board receives a regular report from the Head of Ivestor Relatios which icludes details of all meetigs held, feedback received ad issues either of iterest or of cocer raised. Aual Geeral Meetig The Compay s Aual Geeral Meetig is held each year i Dubli. The 2016 meetig will be held o 29 April. Who atteds? All of the Directors; Seior Group executives; Shareholders; ad Compay Advisers Members of the media are also ivited ad permitted to atted. What busiess takes place at the meetig? the Group Chief Executive makes a presetatio o the results ad performace to the meetig prior to the Chairma dealig with the formal busiess of the meetig itself; all shareholders preset, either i perso or by proxy ca questio the Chairma, the Committee Chairme ad the rest of the Board durig the meetig ad afterwards; ad the Chairma the deals with the formal busiess of the meetig. All shareholders are ecouraged to ask questios ad to raise ay issues at the meetig. Whe this part of the meetig has cocluded, all formal resolutios are dealt with o a show of hads. Oce the vote is declared by the Chairma, the votes lodged with the Compay i advace of the meetig are displayed promietly i the veue for those preset to see. Immediately after the meetig is cocluded the results are published o the Group s website ad also via the Irish ad Lodo Stock Exchages. The otice of the Aual Geeral Meetig is issued to shareholders at least 20 workig days i advace of the meetig. Iteral Cotrol The Board has overall resposibility for the Group s system of iteral cotrol ad for reviewig its effectiveess. Such a system is desiged to maage rather tha elimiate the risk of failure to achieve busiess objectives ad ca provide oly reasoable ad ot absolute assurace agaist material misstatemet or loss. I accordace with the revised FRC guidace for directors o iteral cotrol published i September 2014, Guidace o Risk Maagemet, Iteral Cotrol ad Related Fiacial ad Busiess Reportig, the Board cofirms that there is a ogoig process for idetifyig, evaluatig ad maagig ay sigificat risks faced by the Group, that it has bee i place for the year uder review ad up to the date of approval of the Fiacial Statemets ad that this process is regularly reviewed by the Board. FBD Holdigs plc Aual Report

11 Corporate Goverace (cotiued) The key risk maagemet ad iteral cotrol procedures which covers all material cotrols iclude: skilled ad experieced maagemet ad staff i lie with fit ad proper requiremets; roles ad resposibilities icludig reportig lies clearly defied with performace liked to compay objectives; a orgaisatio structure with clearly defied lies of resposibility ad authority; a comprehesive system of fiacial cotrol icorporatig budgetig, periodic fiacial reportig ad variace aalysis; a Risk Committee of the Board of FBD Isurace plc, the Group s pricipal subsidiary, ad a Risk Maagemet Framework comprisig a Risk Fuctio headed by a Chief Risk Officer, a clearly stated risk appetite ad risk strategy supported by approved risk maagemet policies ad processes i the areas of uderwritig, reisurace, claims reservig, ivestmet ad treasury; a Executive Risk Committee i FBD Isurace plc comprisig seior maagemet whose mai role icludes reviewig ad challegig key risk iformatio ad to assist the Risk Committee, described earlier, i the discharge of its duties betwee meetigs; a Actuarial fuctio; a Compliace fuctio; a Iteral Audit fuctio; a Audit Committee whose formal terms of referece iclude resposibility for assessig the sigificat risks facig the Group i the achievemet of its objectives ad the cotrols i place to mitigate those risks; disaster recovery framework i place ad regularly tested; busiess cotiuity framework i place ad regularly tested; the risk strategy, framework ad appetite are articulated i a suite of policies coverig all risk types ad supported by detailed procedural documets. Each of these documets is subject to aual review ad approval by the Board; ad performace of a Forward Lookig Assessmet of Ow Risk ( FLAOR ) likig of risk maagemet strategy ad capital maagemet. The Aual Budget, Half Yearly Report ad Aual Report are reviewed ad approved by the Board. Fiacial results with comparisos agaist budget are reported to executive Directors o a mothly basis ad are reported to the Board at each Board Meetig. The risk maagemet, iteral cotrol, reportig ad forecastig processes are importat to the Board i the exercise of its goverace ad oversight role. It costatly strives to further improve their quality. The Group has established a Speak Up Policy for employees the purpose of which is to reassure employees that it is safe ad acceptable to raise ay cocer that they may have about malpractice ad to eable them to raise such cocers safely ad properly. This policy is reviewed by the Audit Committee aually ad circulated thereafter to all Group employees. The Board has reviewed the effectiveess of the Group s system of iteral cotrol. This review took accout of the pricipal risks facig the Group, the cotrols i place to maage those risks ad the procedures i place to moitor them. The Board is satisfied that the cotrols ad procedures i place were effective throughout the period covered by this report ad up to the date of its approval. Viability Statemet The Directors have assessed the prospects of the Group ad its ability to meet its liabilities as they fall due i the medium term. The Directors selected a three year timeframe as this correspods with the Board s strategic plaig process. The objectives of the strategic plaig process are to cosider the key strategic choices facig the Group ad to build a fiacial model with various scearios. This assessmet has bee made with referece to the Group s curret positio ad prospects, the Group s strategy, the Board s risk appetite ad the pricipal risks ad ucertaities facig the Group, as outlied o pages 118 to 129. The Directors review ad reew the Group s three year pla at least aually. Progress agaist the strategic pla is reviewed regularly by the Board ad seior maagemet. Associated risks are cosidered withi the Board s risk maagemet framework. 36 FBD Holdigs plc Aual Report 2015

12 The strategic pla has bee tested for a umber of scearios which assess the potetial impact of some of the strategic ad commercial risks facig the Group. The Group performs a FLAOR at least aually which subjects FBD s solvecy capital levels to a umber of extreme stress scearios. This was last performed i December Based o the results of these tests the Directors cofirm that they have performed a robust assessmet of the pricipal risks facig the Group, icludig those that would threate its busiess model, its future performace ad solvecy ad that they ca have a reasoable expectatio that the Group will be able to cotiue i operatio ad meet its liabilities as they fall due over the period of the assessmet. Goig Cocer The Group s busiess activities, together with the factors likely to affect its future developmet, performace ad fiacial positio are set out i the Chairma s Statemet ad the Review of Operatios, as are the fiacial positio of the Group, its cash flows, liquidity positio ad borrowig facilities. I additio, ote 40 of the Fiacial Statemets icludes the Group s policies ad processes for risk maagemet. The Group has experieced very sigificat challeges durig 2015 ad has take decisive actio to retur the busiess to profitability. This icludes focusig its resources o its farmig ad small busiess customers together with pursuig a cosumer strategy uder a sigle brad. I parallel FBD has take sigificat uderwritig ad ratig actio to reduce risk i its book. The Group took decisive actio to improve its capital positio durig 2015, which icluded the issuig of a Solvecy II compliat tier II covertible bod of 70m, the divestmet of its property ad leisure joit veture for 48.5m ad the ivestmet of the et proceeds as equity i FBD Isurace plc ad the de-riskig of the Group s defied beefit pesio scheme, which was closed to future accrual i September These actios have esured that the Group s pricipal subsidiary, FBD Isurace plc, met its Solvecy II capital requiremets before the effective date of 1 Jauary The Directors have a reasoable expectatio that the Compay ad the Group have adequate resources to cotiue i operatioal existece for the foreseeable future beig a period of at least twelve moths from the date of this report. As a result they cotiue to adopt the goig cocer basis of accoutig i preparig the Fiacial Statemets. I formig this view, the Directors have reviewed the Group s budget for 2016 ad forecast for 2017 ad 2018, which take accout of reasoably foreseeable chages i tradig performace, the key risks facig the busiess ad the medium-term plas approved by the Board i its review of the Group s corporate strategy alog with the Group s capital projectios ad requiremets uder the ew Solvecy II regime effective from 1 Jauary The Directors have cocluded that there are o material ucertaities that cast sigificat doubt over the compay s ad the Group s ability to cotiue as a goig cocer. FBD Holdigs plc Aual Report