Corporate responsibility

Managing corporate responsibility

The board reviews overall corporate responsibility performance annually and the chairman receives a quarterly progress report. Individual issues are subject to board consideration throughout the year. The chairman has board-level responsibility for corporate responsibility. Our corporate responsibility steering group is chaired by the Group human resources director and comprises senior executives from all business divisions and relevant Group functions. The steering group meets quarterly to recommend strategy and provide direction.

Overall, the board is satisfied that the systems in place to manage corporate responsibility risks are effective and that the relevant risks have been assessed during 2008 and managed in compliance with relevant policies and procedures.

For several years, we have adopted the European Foundation for Quality Management’s Corporate Responsibility Framework to help us align corporate responsibility with business strategy and also with individual balanced scorecard priorities. As part of the process we have a network of senior managers across all business divisions, through whom we conduct an annual self-assessment of our performance with independent oversight and assurance. This allows us to identify strengths and areas for improvement and to prioritise objectives and actions. It also provides a benchmark against which we can compare our performance both internally and externally.

During 2008, Lloyds Banking Group has led a European Commission-sponsored working group along with a number of other major European businesses, business schools, consultancies and non-governmental organisations, in developing a framework for improved communication of non-financial performance between business and investors.

The framework mirrors the priorities developed in Lloyds Banking Group in recent years with an emphasis on colleagues, customers and innovation, community and suppliers, the environment and corporate governance. It is subject to consultation and final proposals will be published in the first half of 2009 but we intend using the framework as the basis of our 2008 corporate responsibility report.