Section 172(1) Statement & Stakeholder Engagement Legal & General Finance PLC
Report and Accounts 2021
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The Board of Legal & General Finance PLC (the ‘Company’), considers that is has adhered to the requirements of section 172
of the Companies Act 2006 and have, in good faith, acted in a way that they consider would be most likely to promote the
success of the company for the benefit of its shareholders as a whole and, in doing so, have had regard to and recognised
the importance of considering all stakeholders and other matters (as set out in s.172(1)(a-f) of the Act) in its decision-making.
As part of the wider Legal & General Group (the ‘Group’), taking into account the relative size and complexity of the
Company and centralised nature of the Group, the Board may consider it reasonable for decision making to be handled by
the Group Board. In such cases, this will be articulated in the statement and reference provided to the appropriate section of
the Group’s Annual Report and Accounts.
This statement provides details of key stakeholder engagement undertaken by the Board during the year and how this helps
the Board to factor potential impacts on stakeholders in the decision making process. Additional details of the Group’s key
stakeholders and why they are important to us are set out in the Group’s Annual Report & Accounts, which can be found
here: legalandgeneralgroup.com/investors/results-reports-and-presentations.
General
The Group promotes the highest standards of governance and ensures that these standards cascade throughout the Group
and its subsidiaries. Guiding principles are in place for the relationship between the Group Board and the Boards of the
Group’s principal subsidiaries. This framework promotes full and effective interaction across all levels of the Group to support
the delivery of strategy and business objectives within a framework of best corporate governance practice. A full description
of the Group’s governance arrangements can be found in the Group Annual Report & Accounts, which can be found here:
legalandgeneralgroup.com/investors/results-reports-and-presentations.
Corporate governance underpins how we conduct ourselves as a Board, our culture, values, behaviours and how we do
business. As a Board we are conscious of the impact that our business and decisions have on our direct stakeholders as well as
our wider societal impact.
As part of the director induction process, directors are briefed on their duties, including their duty under s.172 of the
Companies Act 2006. The directors are entitled to request from the Company all such information they may reasonably
require in order to be able to perform their duties as directors, including professional advice from either the Company
Secretary or from an independent advisor at the Company’s expense. On-going training is provided to the directors, as
required, to ensure that their knowledge remains up to date and they continue to be able to discharge their duties as
directors.
In 2019 we implemented a new standard practice across the Group which requires that all Group and subsidiary Board
papers demonstrate that stakeholders have been considered. Details of this have been included in the cover sheet for each
Group and subsidiary Board paper throughout the year where relevant. For each transaction approved by the Board,
including but not limited to material acquisitions and strategic expansion, discussion takes place around employee impact
and impact on other stakeholders, such as customers. The relevance of each stakeholder group may vary by reference to the
issue in question, so the Board seeks to understand the needs of each stakeholder group and any potential conflicts as part of
its decision-making. Additionally, the Group or subsidiary Company Secretary is on hand to provide support to the Board in
ensuring that sufficient consideration and time is given to stakeholder issues during these discussions.
Principal decisions
For the year ended 31 December 2021, the Board considers that the following is an example of a principal decision during the
year:
• Approval of the annual update to the £5,000,000,000 Euro Medium Term Note Programme, under the Euro Medium
Term Note Programme, (i) Legal & General Finance PLC can issue senior unsubordinated notes, (ii) Legal & General
Group Plc can issue both senior unsubordinated notes and subordinated notes; and (iii) Legal & General Group Plc
guarantees the senior notes issued by Legal & General Finance PLC.
• Approval of the transition away from the use of LIBOR (The London Inter-bank Offered Rate) and the move towards
alternative benchmark risk free-rates including SONIA (Sterling Overnight Index Average) and SOFR (Secured
Overnight Financing Rate).
The table below sets out our key stakeholders and provides examples of how we have engaged with them in the period, as
well as demonstrating stakeholder consideration in the decision-making process.