Lloyds Banking Group

INTRODUCTION

Lloyds Banking Group plc is a leading financial services company. Based in UK it provides a wide range of banking and financial services to both personal and corporate customers. It was formed in January 2009 following the acquisition of HBOS (UK banking company). Since then it specialises in:

·      commercial and corporate banking;

·      retail;

·      life, pension and investment provisions

·      general insurance.

Lloyds Group also operates globally in over 30 countries providing international banking services. The services that corporation offers are delivered through a number of well recognised organisations among which are: Lloyds TSB, Scottish Widows, Bank of Scotland, Halifax, Clerical Medical and Cheltenham & Gloucester and other large branch networks of UK.

Lloyds Banking Group is quoted on the London Stock Exchange and York Stock Exchange. It is also recognised to be “one of the largest companies within the FTSE 100” (Lloyds Corporate Governance Report 2011)

INVESTIGATION & EVALUATION OF LLOYDS BANKING GROUP plc

(i)        key roles of corporation

It is a responsibility of the board of the corporation to achieve a long term success for the company as a whole by being the best bank for the customers and produce stable, sustainable and strong returns for shareholders. Although the directors of the board play an important role in making the decision with relation to how the corporation operates the two key roles in a life of Lloyds Banking Group are the Chairman and Group Chief Executive.

The overall responsibility of Sir Winfried Bischoff, the current Chairman of Lloyds Banking Group, is to be an effective leader of the Board of Directors (Chart 1). He ensures the Board concentrates its attention on the right matters. The chairman always reviews the content of the agendas which are finalised at Board Agenda Review meetings involving the Group Chief Executive, Chairman, Company Secretary, Deputy Chairman and Senior Independent Director. 

The Chairman along with Company Secretary makes sure the Directors receive up-to-date as well as relevant information and are informed of key developments and emerging issues between and during the formal meetings.

On regular basis Sir Winfried Bischoff also meets with Non-Executive Directors without the Executive Directors being present, in order to broaden the Board’s outlook and strengthen its collective judgement.

 In addition to those mentioned above, the key responsibilities of chairman also include advising to Chief Executive, facilitating over the meetings, formation of board committees, evaluation of the board effectiveness, monitoring and evaluating chief executive and representing shareholders to management and management to shareholders. 

The role of chairman is separate from that of the Group Chief Executive, whose responsibility is to manage and lead the business day to day. Taking over in March 2011, the new Group Chief Executive, António Horta-Osório, delegates responsibilities to the Executive Directors, his direct reports and other senior executives who collectively make up the Group Executive.

Generally the Group Chief Executive is known as a decision maker. He also communicates the annual reports of the corporation to the press and the outside world as well as to the employees and the board. Being a leader the chief executive advises the board of directors and also motivates employees to improve the productivity of the corporation.

It is essential that the relationship between both and chairman and CEO are based on mutual understanding of the roles they accomplish within the corporation, so that they can maintain comfortable and profitable culture within the Board.

(ii)      reporting to the shareholders and auditors

The board of Lloyds Banking Group recognises how it is important to develop and promote a mutual culture and understanding between the corporation and its shareholders. Therefore the company holds about 400 meetings every year. The majority of such meetings are conducted by Group Chief Executive and Chief Finance Director.

As a Chairman of Remuneration Committee, Anthony Watson meets the larger shareholders in order to discuss executive remuneration issues. Once the changes happen every shareholder is informed without a delay. If the meeting is required the board of directors assembles shareholders to discuss and find a solution to an arising issue.

The effectiveness of the control system within the corporation is reviewed regularly by the Board and the Audit Committee. The committee often receives reports of feedbacks from the corporation’s auditors and has a discussion with the auditors at least once a year, without executives being present, to ensure that there are no unresolved issues of concern. Any changes concerning the regulations or board operations are finalised in a report and sent away to the auditors for their acknowledgement.

   DESCRIPTION OF RESPONSIBILITIES 

The Board of Directors and Shareholders

One of the main duties of the Board of Directors is to establish and review system of internal control, the purpose of which is ensuring of effective and efficient operations, internal control, quality of internal and external reporting and also compliance with laws and regulations. The Directors of the Board are committed to maintain a “control-conscious culture” across all areas of corporation’s operation (Board of Directors, Annual Report 2011). The directors also communicate to all employees by publishing policies and procedures and providing regular management briefings.

The directors are responsible for preparing the Annual Report, the financial statements and the Directors’ remuneration report in accordance with applicable law and regulations.

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By the means of regular updates at the Board and Committee meetings the Board is advised of the views of major shareholders, who in their turn ensue the board of director properly manages the corporation and complies with all laws. The Board also receives reports every month on market and investor opinion and shareholder analysis.

Relations with Investors have a primal responsibility for managing day-to-day communications with shareholders. Advised by the Group, Chief Executive and Group Finance Director, the Board achieves this through a combination of briefings to shareholders and analysts as well as external visits and individual discussions with institutional shareholders.

The Company Secretary looks after communications and negotiations with private shareholders. And the annual general meeting delivers an opportunity for private shareholders to meet Directors and to hear more about the strategy of the corporation. Shareholders are encouraged to attend the annual general meeting and to raise any questions at the meeting or in advance.

For provision of good corporate governance and in accordance with provisions of the Code of Practice, Directors of the Board of Lloyds Banking Group retire voluntarily and submit themselves for re-election at the annual general meeting. Every shareholder receives a package prior attending such meetings where are set out the details of the directors who seek re-election. Once the shareholder is not satisfied with performance of one or another director he is allowed to seek replacement of that director before the re-election time. Being an owner of the shares any shareholder has a right to claim explanation from the board of directors at anytime.

The Board of Directors and Employees

Lloyds Banking Group provides employment practices and policies which recognise the diversity of the corporation’s workforce and ensure equality for all employees independently their disability, sex, age, race, religious belief or sexual orientation (discuss.bis.gov.uk).

In the UK for instance, Lloyds Banking Group collaborates with the major employer’s groups which campaign for equality of staff, including Employers’ Forum on Age, Employers’ Forum on Disability, Stonewall and the Race for Opportunity. The involvement with these organisations gives the corporation an opportunity to identify and implement best practice for the staff.

All employees of Lloyds Banking Group are always informed of the changes affecting them through such techniques as: briefings, team meetings, internal communications and surveys. Also campaigns that offer the acquisition of shares are available for most staff, with a purpose of encouraging their financial involvement in Lloyds Banking Group.

Lloyds Banking Group always provides employees with comprehensive data of the financial and economic issues affecting the Group. For this the corporation’s management established varies communication channels, among which is a face-to-face briefing campaign that allows Lloyds Banking Group to update the employees on the overall performance and other financial issues throughout the year.

The board of Directors and Suppliers

Lloyds Banking Group also has signed up to the ‘Prompt Payment Code’ (published by the Department for Business Innovation and Skills), with regard to the making of payments to suppliers.

One of the Corporation’s policy relates to agreement of payment terms with suppliers, which normally are settled within 30 days after the date of the invoice, except where other arrangements have been negotiated. It is the policy of the Company to stand by the agreed terms of payment so the suppliers perform according to the terms of the contract.

LEGAL STRUCTURE: LLOYDS BANKING GROUP VS NEW LOOK

Lloyds Banking Group is a public limited company which is listed on the stock exchange. Its shares are freely sold and traded to the public. Its corporate structure was adjusted in 2009 as a result of the acquisition of HBOS plc. Following this the HBOS plc holdings were transferred to Lloyds TSB Bank plc. Thus Lloyds TSB became an immediate parent of HBOS. Lloyds Banking Group continues directly own Lloyds TSB however as a result of this transaction it owns HBOS indirectly.

Such transfer followed a review by the head management of the structure of Lloyds Banking Group. The reason of the transaction was to develop and implement a legal entity structure that is efficient from a financial, capital and regulatory perspectives. It also reduces costs and improves capital efficiencies. The capital ratio of Lloyds Banking Group did not change following the restructure mentioned above.

Lloyds Banking Group is accounted to be a largest British financial services group. For instance in 2011 its revenues concluded £26.812 billion and the number of people employed grew up to 120,449 (2011).

Unlike Lloyds Banking Group, New Look Retail Group is not listed on the stock exchange however has its own board of directors to manage the company effectively. New Look Group is a privately-held business, owned by the company members, which does not trade its shares to the general public on the stock market exchanges . 

Although New Look Retail Group is less visible, it has a huge importance in the world’s economy. For example in 2008 it accounted GBP £1.147 Billion in revenue and employed 30,000 employees worldwide including 17,000 in UK.

DEVELOPING A CODE OF PRACTICE

Over the last decade a number of reports have been commissioned into the subject of corporate governance and as a result a number of codes of best practice have emerged. The purpose of these codes is to increase the transparency and accountability in the manner in which the company is governed.

The codes of best practice are drown up specifically in the context of particular companies however I believe that the principles should equally be applied to all companies in the interest of a further development of the codes of practice.

Researching a few companies and how they comply with the codes of practice I would like to point out there is a number of the key principles that every company should follow:

(i)                 Equitable treatment of shareholders is one of the most important codes in my opinion. Every organisation should respect the rights of shareholders and help them to exercise those rights. For instance, this can be done by delivering open and effective communication as well as encouraging share shareholders to participate in general meetings.

(ii)               Acting in the interests of other stakeholders. Organisation  should recognise there is a legal, social and market driven obligation to non-shareholder stakeholders among which are employees, suppliers, customers, investors, local communities, policy makers, etc.

(iii)             Integrity and ethical behaviour. Integrity should be a fundamental requirement in choosing corporate officers and board members. The board of directors should also develop, conduct and promote ethical and responsible decision making.

(iv)             Disclosure and transparency. Organisations should clarify and make publicly known the roles and responsibilities of their board and management to provide stakeholders with a level of accountability. They should also implement procedures to independently verify and safeguard the integrity of the company’s financial reporting. Disclosure of material matters concerning the organisation should be in time and balanced to ensure all investors have access to a clear and factual information.

AIB is reckoned to be a company that complies with codes of practice in every manner, especially with regard to keeping the shareholders informed of the changes within the organisation. For instance it constantly warns its shareholders whether the price on share will grow or reduce. This also supports a fact of its compliance with the code of practice with relation to being a transparent company willing to disclose the share price change publicly (independent.ie, 24 June, 2011).

Sodium Lauryl Sulphate

What is SLS?

Sodium Lauryl Sulphate (SLS) is a synthetic detergent, cleaning agent and anionic surfactant (substance that makes bubbles), used in many cleaning and hygiene products. SLS is derived from cheap coconut and palm oils that in combination with its high detergent properties make substance the most popular and useful from a whole range of surfactants. SLS is available commercially in powder and pallet forms. In water the pallet form dissolves faster than the powder form.

Why is it used everywhere?

Because it is cheap, SLS is widely utilized as one of the ingredients of detergent for laundry. Due to its highly effective cleansing qualities it is used in any task requiring the removal of oil stains, hence high concentration of the substance is found in engine degreasers, floor cleaners and car washing soaps. For its thickening effects and its ability to create lather SLS is added to liquid soaps, bubble baths, body wash, shampoos and oral hygiene products. Also today SLS obtains popularity in products such as scrubs, shaving creams, hair sprays, make-up removals where it provides a foaming effect. However the foaming effects of soaps do not improve the ability to clean. It is added for visual reasons.

History

SLS was developed during World War II as a synthetic alternative to soap, because the natural ingredients such as animal fats, used to make soap, were in a short supply. Because of its high detergent and grease cleaning properties SLS found its high usage in washing and cleaning navy machines, such as tanks, armoured personnel carriers and aircrafts. Since 1947th in France and later since 1949th in Great Britain and USA, SLS became integral part of the laundry detergents.

After 1952, the manufactures started using it in shampoos. Since a second half of 80s SLS became highly popular among the manufactures of the makeup and the cosmetic industry as a whole. This included: acne treatment, hand and face cream, mascara, around-eye cream, lip balm and eye-liner. During the next decade even some eczema treatments, damaged skin treatments and rash creams contained SLS.

Laboratory Application

In science it is commonly used to prepare the proteins for electrophoresis in SLS-page technique. This compound disrupts non-covalent bonds in the proteins, in turn denatured molecules of proteins lose their usual shape, which increases negative charge of the proteins.  In medicine SLS has also found a usage in the analysis of haemoglobin. Sodium Lauryl Sulphate combines with the oxidized iron sub-unit in haemoglobin creating a stable product which then can be analysed.

Why is there a worry about SLS?

As all lathers and detergents, SLS extracts oils from the skin, in turn this process may cause irritation of skin, as a result causing inflammation (dermatitis). The main symptoms are: dryness, soreness and redness of the skin.

The extent and deepness of irritation caused by SLS depends on: a time during which it comes in a contact with the skin; its concentration in a product and frequency of usage. At the end of the 90s and at the beginning of 2000s some media sources actively speculated on a topic of the danger of SLS, especially its links to the skin cancer and blindness. However these rumours remained not proved. In 2002 in the US the Cosmetic Ingredient Review (CIR) assessed the ingredient for safety in several tests and reported that SLS appears to be safe in skin care products that are applied briefly to the skin and then rinsed off. 

Who should worry about SLS?

According to the several studies conducted by the International Eczema Society and European Paediatric Society for the last three years, there are two groups of people which are most subjected to the influence of SLS: children up to 10 years and people suffering  from aphthous ulcer. The epidermis (outer layer of the skin) is thinner in children than in adults. For this reasons the skin of children is more sensitive to SLS than of adults. There have been several studies that showed the patients had significant aphthous ulcers after using SLS-containing toothpaste, compared with the people using SLS-free toothpaste. Moreover, patients using the SLS-free toothpaste experienced faster healing of ulcers and less ulcer-related pain in average than patients using SLS-containing toothpaste.

What can we do?

When choosing bath or skin care products for a child, it is recommended to pick products that are specially formulated for babies or children. They contain substances that are milder and gentler than SLS, which are derived from sugar. I would also advise not to apply SLS-containing products to skin for a long time and rinse them off as soon as possible. Hence you can reduce the time of influence of SLS on skin as well as prevent any possible irritation.

Do not use products containing SLS if you or your children have eczema or sensitive skin. You can buy SLS-free soaps at most chemists. Although they do not foam, they are just as effective at cleaning the skin. However, SLS-free products cost more than "traditional" formulations.

Euthanasia

Introduction

We are all familiar with euthanasia in circumstances where people want to end their lives when faced with a terminal or incurable diseases in order to relieve themselves of their suffering. In these cases the people who die ask for euthanasia. However there are cases where people cannot make such requests. But how about people with no reasonable excuses who wish to commit a suicide and would like to be assisted with this?

This issue has been at the centre of the very heated debates since the mid of 1800s.

Defining Euthanasia

Before discussing the problem itself, of critical importance, in my opinion, is how we define euthanasia.  First time in medical context euthanasia was used by an English philosopher and jurist Francis Bacon in the seventeenth century. He referred to an easy, painless, happy death, which was a physicians' responsibility to relieve the body's sufferings. Nowadays one of the definitions says, euthanasia is "painless inducement of a quick death". However some people argue this definition, as it leaves open a number of possible actions, could not be seen as euthanasia. For example in a case where a person kills another, painlessly but with this death he or she gains benefits (i.e. inheritance, etc).

There is another situation, such as an accidental death which is quick and painless but not intentional. According to oxford English dictionary euthanasia is "the painless killing of a patient suffering from an incurable and painful disease or in an irreversible coma", where "suffering" is a vital condition. However this approach to define euthanasia has also counterexamples such as a killing of person suffering from a fatal or an incurable disease, where personal gain is suspected. The third, wider, definition incorporates intentionality and says - "the death must be intentional rather than accidental, with the motive to relieve suffering" (euthanasia definition, euthanasia.com) Referring to this definition, some people argue that the motives must be in the best interest of person, who expresses intention to end his/her life. And at the same time a person who performs euthanasia must not benefit from it. Thus as we can see, the definition of euthanasia must encompass four main points:

·         death must result from intention of one person to kill another person, who terminally or incurable ill;

·         the means must be painless and quick;

·         the "killer" must be motivated only by the best interest of person who dies.

Types of Euthanasia

Next part of definition arises many debates around itself and concerns "voluntarily". There are three types of euthanasia:

·         voluntary, when actions are conducted with the consent or after request of the patient;

·         non-voluntary - when procedures are conducted but the consents of the patients are unavailable, because of mental or deep-physical illnesses. For instance in a case of a child euthanasia or when the person is in a coma;

·         involuntary - occurs when actions are performed against the will of the patients who are able to give reasonable consents, (they do not choose to die) or where not asked.

Voluntary, non-voluntary and involuntary euthanasia can all be further divided into passive and active types.

The passive type incorporates withholding of vital treatments such as antibiotics, nutrients necessary for the support of life. The active euthanasia is a cause of the usage of lethal substance, such as injections.

Issues around Euthanasia

One more problem that arouse around euthanasia is so called "the doctrine of double effect". This states that "bad results can be morally accepted if they are the site effects of good actions". This principle is used to justify the situations when a doctor gives the drugs to a patient in order to relieve symptoms even though they know such actions may shorten the patient's life. Very often such a drug is morphine.

 But this is usually when reasonable doses of drugs are uncounted, because doctors have not the aim to kill his patients. The bad result of the patient's death is a site effect of the good result when reducing the patient's pain. But what if the dose was fatal (much larger than it needs to relieve pain) and who can estimate the dose for every patient separately?

People who are against euthanasia claim that it weakens society's respect for the sanctity of life. In other words, by the accepting euthanasia the society accepts that lives of the disabled or sick worth less than others. They insist that it is too difficult to define and separate when it is done in a person's best interest or not, and the defining borders are too subtle and very often overlap.

Another group of reasons is concerning the very government, where euthanasia may be a useful weapon to silence the dissentients as well as became a cost effective way to treat the terminally ill.

The main opposed power in this issue is the religion. Many religions are against euthanasia. They believe a human life belongs to God, because it was given by Lord, hence only the creator can take it away. Another explanation of religion rejecting euthanasia is attitude to suffering, where it says that endurance is a God's plant to purify soul of a sufferer a and his/her relatives, as a way to enter the Heaven.

Pro- euthanasia activists often point to the countries such as Netherlands, Switzerland, Belgium and state of Oregon in the US where euthanasia is legal today. On the other hand some media reports reveal that elderly people in these countries carry cards or certified letters saying they do not want to be euthanized, for a fear it would be carried out against their will.

Conclusion

Although we all understand that it is not just the pain and suffering the incurable and terminally ill individuals have to endure, but also the pain and suffering of their friends and families that should be taken into a consideration. However the border between euthanasia and murder is very subtle and unclear that sometimes we cannot even define what is what.