GOVERNANCE AND ACCOUNTABILITY

2005 – 8 objectives and targets

Objective 1.

To undertake a review of the CSR risk management process within the Company.

Target

Establish current relevance and review identification and mitigation procedures
Achieved 2005 and ongoing.

Objective 2.

To implement electronic voting for shareholders

Target

Implement for 2005 AGM.
Achieved 2005
Display voting results on Northern Rock website 2005
Achieved 2005

Objective 3.

Evaluate and recommend CSR aspects of Northern Rock web content, including compliance, access and customer satisfaction issues.

Targets

Review current CSR Web content and amend to streamlined document
New web platform being initiated Q1 2006 which will form basis for amendments to be produced
Provide search facility on CSR website
Proposal submitted 2005 PDF document now available full search facility review ongoing
Visual compliance to be checked
A report from external specialists has been commissioned during 2005 and is currently being assessed by Northern Rock
Access buttons to be developed for specific data
New web platform being initiated Q1 2006 which will form basis for amendments to be produced
Provide customer feedback form
New web platform being initiated Q1 2006 which will form basis for amendments to be produced.

Business Ethics and Human Rights
Objective 4.

To produce an ethical policy statement for the Company.

Targets

To produce a policy statement with a staff awareness programme to support the policy.
Ongoing. Group established 2005 to review current content against guidance issued by Institute of Business Ethics
Integrate the ethos of the policy into day operational and policy issues
Ongoing

Objective 5.

Review the Company's stance on human rights issues and formalise outcome.

Target

Expand the current human rights statement - continuing to include employee rights - with reference to specific codes and legislation. Statement to be formally approved and accepted by the Company.
Ongoing

Objective 6.

To summarise the Company's investment and liquidity management policies for reporting purposes.

Target

Produce a clear public statement of policy on investments and liquidity management so stakeholders are able to understand the scope, limits and restrictions on these activities.
Achieved 2005. Statement included under Business Ethics and Human Rights - Group Treasury.

WORKPLACE

Objective 7.

To continue to promote Diversity within the Company workplace.

Target

To include diversity and equality in company-wide Personnel training courses and management workshops 2005
Achieved. Included in “Leading a Team Training Courses”. Employees being promoted to Team leader positions are required to undertake the course, which includes a test on diversity related issues.

Objective 8.

Continue to ensure equal opportunity for all staff through good working practices

Targets

Ongoing monitoring by Personnel/Equality Focus Groups.
Achieved and ongoing. Individual meetings are held with disabled staff to ensure they have all relevant support and adjustments in place.
Ensure working practices are in line with best practice and maintained
Achieved and ongoing. Individual meetings are held with disabled staff to ensure they have all relevant support and adjustments in place.

Objective 9.

Continue to develop employer/employee communication channels

Target

On going commitment to using Infocus, notice boards, intranet and e-mail system to promote and highlight equality and diversity initiatives.
Achieved and ongoing. In addition, an Intranet based training package on diversity is to be delivered to all staff during 2006.

Objective 10.

Develop and promote CSR and environmental awareness through staff job descriptions and appraisal systems.

Targets

Include in all staff job description as issued
Achieved and ongoing. The compliance statement has been included in all Sales and Executive Job Descriptions
Make provision in annual appraisal system to recognise good/under performance in CSR areas.
Achieved and ongoing

Objective 11.

Continue to develop relationship with AMICUS

Target

Appointment of full time on site AMICUS Representative during Q2
Achieved May 2005. We will continue to develop relationships with Amicus during 2006.

Objective 12.

Promote internal opportunities for job promotion and employment vacancies within the Company.

Targets

Produce internal vacancy advertising to all staff
Achieved by the production of a corporate job’s bulletin to all staff.
Open a job shop for staff wishing to explore opportunities for career promotion or change of role internally within the Company
Achieved 2005
Produce successful appointments bulletin.
Achieved 2005. A monthly jobs gazette has been initiated highlighting new starters and promotions within the Company which includes grade level to ensure a transparent pay and grading system

Objective 13.

Increase employee engagement in the Company

Target

In conjunction with Personnel Department, produce a confidential employee satisfaction/opinion survey on a minimum 2-yearly basis, link outcomes to CSR practices.
Under review

Objective 14.

To make CSR an integral part of training material for new starters and management

Target

Understanding to be measured in line with course evaluation
Achieved and ongoing. Comprehension of the training module is undertaken during the training sessions and feedback from the course evaluation is monitored to ensure quality and consistency of the delivery.

Objective 15.

To produce Corporate Training Statistics

Target

To collate, review and report training data
Achieved and ongoing. Statistics are produced on a monthly basis for training course subject areas, reviewed to Chief Executive Officer level and high level statistics supplied for external reporting i.e. 30,200 training days supplied in 2005.

Objective 16.

To continue to promote Health and Safety Awareness and compliance within the Company

Targets

To undertake regular audits of Health and Safety procedures for internally and externally conducted functions
Ongoing. Audits progressed for external contractors. Internal audits to commence Q2 2006.
Produce risk assessment for occupational stress within Northern Rock. Establish and implement measure to minimise risks from occupational stress in conjunction with Personnel Department
Risk assessment completed. Employee Assistance Programme implemented by Personnel Department Q4 2005. Remaining preventative actions identified by risk assessment being progressed for implementation 2006.

Objective 17.

To actively engage contractors and suppliers in regard to CSR issues.

Target

To produce a confidential supplier/contractor opinion survey on a two-yearly basis. To report and act upon findings.
Achieved 2005. Further survey undertaken and main results published in Report.

Objective 18.

Produce a Corporate Purchasing Policy with Guidance.

Target

Finalise the work of the Procurement Group and link with Corporate Risk Review Programme - produce policy and guidance and training mechanisms for staff report outcomes.
Under review and linked with review of Corporate Code of Conduct and Human Rights.

MARKETPLACE

Objective 19.

To run our business without taking unfair advantage of, or discriminating against, any individual or group of customers in designing, promoting, selling and servicing our products.

Target

Apply principles of Treating Customers Fairly in normal business operations
Achieved and ongoing. Northern Rock has embraced the FSA’s “Treating Customers Fairly” (TCF) initiative and introduced a range of measures to ensure that the requirements of TCF are embedded within our business. The Company has adopted 11 Principles of TCF and compliance with the Principles is monitored on an ongoing basis by our Group Compliance Function. Taken together with initiatives that were already in place such as our Savings Pledge and Base Rate Guarantee, we believe that in many respects this positions the Company well with regard to the FSA’s TCF initiative.

Objective 20.

To obtain feedback from customers in key business areas for use in operational reviews.

Targets

Carry out surveys of selected customer groups and use findings in review processes
Achieved 2005 and ongoing. Northern Rock now employs an external consultancy to objectively monitor our customers’ levels of satisfaction with the products and services we provide. The results of these customer satisfaction surveys are presented to Management on a quarterly basis and the information provided allows us to improve areas where our customers have indicated particular concerns or problems.
Monitor positive and negative comment from complaint handling process and review operations to address issues
Achieved and ongoing. Concurrent with the TCF initiative, we have renewed and reinvigorated our customer complaints handling. As part of this process Senior Management is provided with key performance data which shows why particular complaints have arisen. This “root cause” analysis enables Management to immediately identify particular complaint “hotspots” and take timely action to ensure that matters are improved. This approach has led to a reduction in the level of complaints and issues raised by our customers.

COMMUNITY

Objective 21.

To increase GAYE.

Target

By 2007 to increase contributors to the GAYE scheme by 10% over December 2004 figure
Ongoing

ENVIRONMENTAL

Objective 22.

To review the operation of plant and equipment to confirm that they match business requirements.

Targets

Review the potential impact of the Energy Performance of Buildings Directive 2005 and requirements for the period 2005-2008 arising from it
Ongoing and on target
Liase with outside organisations
Ongoing
Establish requirements and introduce management system
Ongoing
Review process to be established
Ongoing
Review the operation of BMS systems operating within Head Office Sites and the relevance of management data supplied.
Reviewed and under consideration
Honeywell presentation to group on Energy Manager
Achieved 2005
Review alternatives available to Company
Reviewed and under consideration
Trial a natural ventilation system in Solar House, Doxford Park, Sunderland
Achieved 2005, difficulties balancing temperature control in relation to ambient temperatures, still under review to establish whether operationally effective.
Review energy management data in respect of consumption and act upon findings
Reviewed during 2005 and ongoing
Provide retrospective analysis of amendments to plant and equipment to establish outcomes demonstrated as assessed in original cost/benefit analysis submission
To be undertaken
Sub meter Phase 5 site development energy/water/gas use for management purposes
Specification now included in design build
Continue process for improving systems for the management of remote site energy consumption linking with improvement to supplier billing systems
Ongoing

Objective 23.

To reduce our corporate energy emissions per employee

Target

Reduce from the 1996 level of 3.10 tonnes to 2.48 tonnes in 2010
On target

Objective 24.

To control and manage corporate waste arriving from our business operations

Targets

To continue to review operational processes to minimise the production of waste
Ongoing
To comply with legislation and best practice guidelines
Achieved during 2005 and ongoing
To review end waste streams and strategy for disposal
Achieved during 2005 amendments introduced and ongoing
To regularly review existing systems to ensure they reflect corporate requirements
Achieved during 2005 and ongoing during 2005
To work in partnership with on-site out-sourced companies to achieve corporate aims
Achieved during 2005 and ongoing

Objective 25.

To reduce corporate waste

Target

by 5% measured against managed assets
Not achieved during 2005

Objective 26.

To control and manage corporate water use.

Target

To measure consumption against DEFRA Reporting Guidelines and Benchmarks and report outcomes
Achieved during 2005, water consumption below benchmark. Ongoing.

Objective 27.

To maintain the Northern Rock Transport Plan and amend as necessary.
Updated October 2005

Targets

Liase on a regular basis with Newcastle City Council to ensure partnership activity
Achieved and ongoing. City Council has been consulted during 2005 and involved with the contents of next staff survey.
Review model shifts and target
Ongoing
Conduct a transport survey of our staff every 2 years
Next staff survey due 2006.

Objective 28.

To continue to implement the landscape plan for Head Office Gosforth developed by INSITE

Target

Progress communication to CSR Dept
Achieved 2005 and ongoing

Objective 29.

Continue to train staff in environmental awareness and promote internally

Targets

Green Representative re-launch
First Head Office training session held 2005 ongoing during 2006
Incorporate corporate environmental policy and awareness into corporate training schemes
Achieved 2005 and ongoing
Review current internal communications and promote regularly
Achieved 2005 and ongoing

Objective 30.

Ensure Corporate Environmental Policy is reviewed and amended every 3 years or earlier as deemed necessary
Ongoing