THE CO-OPERATIVE BANK PLC
(the “Bank”)

DIVISION OF RESPONSIBILITIES BETWEEN THE CHAIR AND CHIEF EXECUTIVE

Best practice guidelines under the Capital Requirements Directive IV recommend that there should be a clear division of responsibilities at the head of the company between the Chair who has overall responsibility for the leadership of the Board and the Chief Executive who manages and leads the business. This document was approved by the Board on 6 February 2019.

ROLE OF THE CHAIR

1. Leadership and Management

1.1. Provide leadership and management of the Board.

1.2. Chair the Board and general meetings of the Bank.

2. Culture and Values

2.1. Set clear expectations concerning the Bank’s culture, values and behaviours and the style and tone of Board discussions.

2.2. Demonstrate ethical leadership and promote the highest standards of integrity, probity and corporate governance throughout the Bank, particularly at Board level.

3. Effective decision making

3.1. Provide oversight of the Board agendas (primarily focused on strategy, performance, value creation, culture, stakeholders and accountability) to ensure they cover appropriate topics.

3.2. Ensure that the Board determines the nature and extent of the significant risks that the Bank is willing to embrace in implementing its strategy.

3.3. Ensure that the Board receives accurate, timely and clear information to enable the Board to make sound decisions and effectively monitor performance.

3.4. Ensure that adequate time is available for discussion of all agenda items, in particular strategic issues, and that debate is not truncated.

3.5. Ensure that the Board has effective decision-making processes and applies sufficient challenge to major proposals.

3.6. Ensure that all directors are aware of and able to discharge their statutory duties.

3.7. Encourage all Board members to engage in Board and committee meetings by drawing on their skills, experience, knowledge, and where appropriate, independence.

3.8. Promote a culture of mutual respect, openness and debate by facilitating the effective contribution of non-executive directors in particular and ensuring constructive relations between executive and non-executive directors.

3.9. Develop productive working relationships with all directors and the Chief Executive.

3.10. Consult with the Senior Independent Director on board matters in accordance with relevant regulatory requirements.

4. Board evaluation

4.1 Ensure that the performance of the Board, its Committees and individual directors is evaluated at least once a year and act on the results of such evaluation with support from the Senior Independent Director.

4.2 Consider having regular externally facilitated Board evaluations.

5. Succession planning

5.1. In conjunction with the Nomination Committee, ensure the Board has the right mix of skills, knowledge and experience.

5.2. In conjunction with the Nomination Committee, ensure that adequate planning takes place to ensure rotation of Independent non-executive directors in line with corporate governance best practice.

5.3. In conjunction with the Nomination Committee, develop a plan for effective succession of the Chair and Chief Executive.

5.4. Ensure that a well-developed induction plan is maintained to suit the needs for new directors and that ongoing development needs of the directors are monitored and that they have the opportunity to refresh their skills and knowledge and maintain an understanding of the business.

6. Development

6.1. In conjunction with the Company Secretary, regularly review and agree with each director their training and development needs.

6.2. In conjunction with the Company Secretary, ensure that new directors participate in a full, formal and tailored induction programme.

6.3. Provide guidance and mentoring to new directors as appropriate.

7. Board Governance

7.1. Promote the highest standards of Corporate Governance

7.2. Keep the Matters Reserved to the Board under review to ensure that they are adequate, fit for purpose and meet the needs of the business.

7.3. Ensure that Board committees are properly structured with appropriate terms of reference.

8. Shareholders and other Stakeholders

8.1. Ensure effective communications with shareholders and other stakeholders.

8.2. Ensure that the directors are made aware of the views of those who provide the Bank’s capital, the workforce, customers, shareholders and other key stakeholders.

ROLE OF THE CHIEF EXECUTIVE

1. Leadership

Provide leadership of the Bank.

2. Culture and Values

2.1. Set clear expectations concerning the Bank’s culture, values and behaviours.

2.2. Demonstrate ethical leadership and promote the highest standards of integrity, probity and corporate governance throughout the Bank.

3. Strategy

Recommend strategy and long term objectives for agreement by the Board.

4. Operational decisions

4.1. Implement the Bank’s strategy and long term objectives as agreed by the Board.

4.2. Implement the medium term business plan and the annual budget as agreed by the Board.

4.3. Provide management and day-to-day running of the Bank, with the exception of the matters reserved to the Board.

5. Risk

5.1. In conjunction with the Chief Risk Officer, implement internal control systems to keep within the risk appetite agreed by the Board.

5.2. In conjunction with the Chief Risk Officer, implement a sound Risk Management Framework as agreed by the Board.

6. Governance

6.1 Keep under review the Responsibilities Map, which sets out the governance structure and how the Board has applied the principles and provisions of the Senior Manager Regime.