Prudential PLC: Management Structure and Governance

Running Head: PLC 0
Prudential PLc
Business Environment
3/13/2019

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Introduction
Prudential PLC is internationally regarded as the top multinational provider of financial
service and life insurance. It was established in 1848 in London with an objective of
delivering loans and services for elite people. They have four separate business units
Prudential Corporation (in Asia), Prudential U.K. (works in England), M & G (in Europe),
and Jackson (in the U.S.). In the Annual report issued in the year 2014, Prudential
Corporation is the dominant market leader with the fastest and largest developing market of
clients in 14 Asian countries involving United Kingdom (Hugo, 2018). They have officially
started its operations in the United Kingdom in 1996 and it is seen that presently it is a well-
equipped brand name of Pru Life UK. They are valued as the developer in the domestic
insurance industry. It ranks first among 34 insurance-associated-investment suppliers within
the country in respect of revenue, profitability, and market growth. Their main objective is to
maintain existing business in developing markets. They are also committed to maintaining
strong expansion in developing markets to attain competitive advantage, which is committed
to differentiation and market positioning (Biondi and Graeff, 2018). In the following, an
effort has been made to discuss the management structure and governance of the
organization. In addition, it also discusses the impacts of external factors on the Prudential
PLC.
Management structure and governance
Prudential PLC is a global financial and insurance service provider situated in London,
United Kingdom. It was established in London to offer loans to working and professional
people. It manages Prudential Corporation Asia, which has asset management and insurance-
related operations across 14 markets. In the U.K. and Europe, M&G prudential, this is
leading investment and savings provided to the clients. In Asia, Jackson National life
Insurance organization is the biggest insurance providers in the U.S (Dupire and Slagmulder,
2018).
It is established in 1848 to deliver loans to professional people, which is secured by life
assurance. It was founded as The Prudential Mutual Loan and investment association, which
is shortened after a series of acquisitions to the organization. It became a limited company as
following the limited liability partnership, which is owned and managed by the less than 100
stakeholders. They also introduce new policies for family, single women, and home

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protection in which the Prudential shares were distributed on the London Stock Exchange. In
the tenure of 1950s and 1960s, it concentrates on long-term saving products, life insurance,
and retirement annuities. It is stated that its business in the United Kingdom has around 6
million clients and concentrates on savings, pension, and investment along with delivering
retirement income through its profitable annuities business.
Their Group Chief Executive and Chairman are Tidjane Thiam and Paul Manduca
respectively, which is appointed in October 2010. There are 15 directors on the board and
among these 6 are executive directors and 9 are non-executive directors (Gürtürk and Hahn,
2016).
Corporate governance
It is stated that Prudential PLC has an exclusive listing on the London Stock Exchange, which
is subjected to the U.K. Corporate Governance Code. It has also listed on the main board of
the Stock Exchange, which is subjected to the Code on the Corporate Governance Practices.
Role of the Board-
The Board has agreed to a governance framework, which depicts the internal approach can be
delegated effectively. It is principally accountable for the success of the board and offers
leadership within a framework of efficient management control accepting appropriate risk
management. These collectively relate to the operational management of the business and
involve pre-determined authority delegating in respect of matter associated with day-to-day
operations and management of the businesses. It also ensures for setting a strategic objective
and they make an effort to place appropriately to attain those objectives and satisfy in a
manner constant with its statutory obligations (Bayer et al., 2018).
The board specifically set out the matters to reserve and enable the Board to control and
operate over the affairs of the company. These involve the approval of corporate objectives,
significant transactions, annual and interim results, operating plans, strategy, and matters
influencing the share capital of the organization. The executive directors are accountable for
operating the business functioning and the non-executive directors are required for bringing
scrutiny and independent judgment. The board can also exercise the powers subjected to the
Company’s Articles of Association to provide a guarantee in maintaining other obligation of
the enterprise (Zhang, 2017).

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Role of the Chief executive and Chairman-
It is stated that the role and responsibility of both the Chairman and Group Chief Executive
are well defined and separate. It is accountable for the governance and leadership of the board
for the implementation and management of the board strategy.
Role of the Senior Independent Director-
The role and responsibility of the Senior Independent Director are to develop contact with the
stakeholders with a view to identifying the issues and concerns as well as offering support to
the Chairman to the other non-executive director (Kokkinis, 2018).
Meetings-
It is stated that the Board held twelve meetings and a separate strategy event. At least one
board meeting is commonly held in a year in the business operation of the group to maintain
a complete understanding of the business (Ebele and Sunday, 2016).
Committees-
These committees are the main elements of the corporate governance framework, which are
described as they need to review the effectiveness of the compliance processes and monitor
the integrity and accounting policies of the group (Roncalli and Weisang, 2015).
Membership-
It is stated that the membership is formed to offer a broad set of commercial, financial, and
other aspects to satisfy the objectives of the committee. They have invited the board
chairperson, the Group Financial Officer, the Company Secretary, and other senior staff,
which contribute to the respective areas of expertise (Mees and Smith, 2019).
Financial reporting-
The committee should focus on reviewing of financial statements along with clarity of
judgment, accounting policies, and significant audit transactions compliance with accounting
laws, regulations, and governance codes (Bernardi, Romagnoli and Doti, 2019).