Our approach
Board and governance structure
Maintaining high standards of corporate
governance is vital to ensuring effective decision
making by the Board and therefore the ongoing
success of the Company. We also adhere to
various internal governance frameworks and
practices which ensure that we have the right
systems and controls in place to allow the Board to
effectively oversee the business and provide
challenge where needed. These include:
–The UK Group Framework, which defines
clearly our responsibilities and relationship with
Banco Santander SA, our ultimate shareholder,
taking account of our fiduciary and regulatory
responsibilities. This gives us the autonomy to
discharge our responsibilities in the UK in line
with best practice as an independent board
while providing Banco Santander SA with the
oversight it needs. Clarity of roles and
responsibilities is key to ensuring proper
accountability for decisions and outcomes.
–The Corporate Governance Framework (CGF),
which is designed to support the Boards in
discharging their responsibilities and ensuring
an appropriate degree of delegation throughout
the Santander UK group.
We review the CGF regularly to confirm that
governance arrangements remain effective and
appropriate. The corporate governance structure is
supported by internal control and risk management
systems. An important principle applied throughout
the CGF is the delegation of executive authority
from the Board to the CEO, who further delegates
aspects of their authority to Executive level
committees or other individuals. This supports
effective decision making and accountability in
discharging their responsibilities.
Santander UK group structure and ring-
fencing governance arrangements
The substantive business of the Santander UK
group continues to be conducted by Santander UK
plc, our principal ring-fenced bank (RFB). Ring-
fenced banks operate within governance rules
defined and overseen by the PRA who granted
Santander UK plc certain ring-fencing governance
rule modifications, recognising our ownership
structure and chosen ring-fencing business model.
As set out in last years' report, with effect from
1 January 2024, the PRA approved revisions
to our ring-fencing rule modifications which
simplified our governance arrangements,
including the ability to have common Santander
UK Group Holdings plc and Santander UK plc
Board and Board Committee memberships,
subject to certain safeguards. As such, Mark
Lewis, Dirk Marzluf and Nicky Morgan were
appointed to the Board of Santander UK Group
Holdings plc, and the composition of the Board
Committees was aligned.
One of the safeguards agreed is that if a conflict
matter (as defined by the PRA) arises between the
two companies, three INEDs holding PRA senior
management functions (SMF) will have veto rights
on Board decisions. These INEDs are Nicky
Morgan, Mark Lewis and Ed Giera. David Oldfield
will succeed Ed Giera in this role with effect from
10 March 2025. Nicky Morgan will chair the RFB
Board meeting in the event of a conflict matter
decision.
The role and responsibilities of the Board
The Board is collectively responsible for promoting
the success of Santander UK for the benefit of its
stakeholders, taking into account the likely impact
of our decisions in the long-term, as well as
balancing the interests of our other stakeholders
and our contribution to wider society. Our
Stakeholder voice statement in the Strategic
Report explains how we engaged with our
stakeholders in the year.
The key decisions and matters reserved for the
Board's approval, such as the long-term strategy
and priorities, are set out in the CGF. A copy of the
Schedule of Matters Reserved for the Board is also
available on our website, which does not form part
of this Annual Report.
As Chair, I have overall responsibility for the
leadership of the Board, for ensuring its
effectiveness in all aspects of operation and for
promoting a culture of openness and debate.
These responsibilities are formalised in the CGF.
The composition of the Board helps to ensure that
no one individual or small group dominates the
Board's decision-making. The diversity of skills,
experience and background of Directors enables
them to provide constructive challenge, strategic
guidance and offer specialist advice.
There is a clear division of responsibilities between
the leadership of the Board and the executive
leadership of the business. The responsibilities of
the Chair, CEO, Senior Independent Director (SID)
and Non-Executive Directors (NEDs) are agreed
by the Board and set out in separate role
statements within the CGF and are available on
our website, which does not form part of this
Annual Report. The Board is also supported by its
Committees, who make decisions and
recommendations on specific responsibilities
delegated to them. This enables the Board to
spend more of its time on strategic, forward-looking
matters.
Board Committees
The Committees play an essential role in
supporting the Board, giving focused oversight
of key areas and aspects of the business. Their
roles and responsibilities are set out in their
Terms of Reference which are available on our
website and which do not form part of this Annual
Report. The Terms of Reference are regularly
reviewed by each Committee to make sure they
remain appropriate. Cross-Committee
memberships provide visibility and awareness of
matters relevant across the Committees, and the
chair of each Committee reports back to the Board
on its activities after each meeting.
In addition to our five core Board Committees,
shown on the previous page, the Board are also
supported by committees which are stood up as
needed to allow dedicated time for topics at a more
focused forum. In December 2024, we created a
Board Special Projects Committee to focus on
remediation, special projects and transformation
matters.
Each of the core Committees is chaired by and
comprised of only INEDs, except for the Board
Nomination & Governance Committee, where
Pamela Walkden, a Banco Santander group
appointed NED (GNED) is a member.
How governance contributes to the delivery of
our strategy
Our governance arrangements contribute to the
development and delivery of our strategy by
promoting accountability and responsibility, and
ensuring information flows and independent insight
from the NEDs.
While all Directors are collectively responsible for
the success of the Company, the NEDs exercise
objective judgement in respect of Board decisions,
and scrutinise and challenge management
constructively. They also have responsibilities on
the integrity of financial information, internal
controls and risk management.
As a Board, we are responsible for ensuring that
the business is purpose-led and that our decision
making and activities reflect our core purpose to
help people and businesses prosper. We do this by
setting and developing our strategy, approving risk
appetite and policies and overseeing their delivery
and implementation by management. The Board is
accountable to our shareholders for the proper
conduct of the business and seeks to represent the
interests of all stakeholders.
The Board has identified the following key
stakeholders: Customers, Employees, Regulators,
Communities and Investors. For more on how the
Board balances the interests of these
stakeholders, see our Stakeholder voice statement
in the Strategic Report.
Culture and hearing the views of the
workforce at the Board
The Board recognises that culture plays a
fundamental role in delivering our strategic
priorities and ensuring the success of the business,
we are ultimately responsible for ensuring that our
activities reflect the culture we wish to instil
throughout the business to deliver on our values of
simple, personal and fair.
Our Code of Conduct sets out how we and all
employees of Santander UK should act and
behave towards everyone we encounter through
our work. This, alongside our TEAMS behaviours -
Think Customer, Embrace Change, Act Now, Move
Together and Speak Up - contribute to drive our
culture and maintain the standards that underpin it.
All new employees are required to complete
training on the Code of Conduct and annual
refresher training is required for all employees.
Our employees are central to delivering our
strategy, and the Board ensures continuous
engagement with them to create a culture of
inclusivity and belonging, and a healthy working
environment.
