abrdn plc

Full Year Results 2023

Part 3 of 8

Board of Directors

Our business is overseen by our Board of Directors. Biographical details (and shareholdings) of the Directors as at 26 February 2024 are listed below.

Sir Douglas Flint CBE - Chairman			Stephen Bird - Chief Executive Officer			Jason Windsor - Chief Financial Officer
Appointed to the Board November 2018 Age 68 Nationality British Shares 200,000 Board committees: NC C			Appointed to the Board July 2020 Age 57 Nationality British Shares 782,355			Appointed to the Board October 2023 Age 51 Nationality British Shares Nil
Sir Douglas' extensive experience of board leadership in global financial services has shaped a collaborative approach which helps to facilitate open and constructive boardroom discussion. He maintains a keen interest and involvement in international, financial and governance matters, retaining an expertise which is an important asset to abrdn. This expertise, together with his prior board experience, help to focus board attention on their stewardship responsibilities as well as guiding discussion and challenge on the design and delivery of our strategy. In other current roles, Sir Douglas is Chairman of IP Group plc and Chairman of the Royal Marsden Hospital and Charity. He is a member of a number of advisory boards and trade associations through which he keeps abreast of industry, regulatory and international affairs of relevance to his public company responsibilities. Previously, Sir Douglas served as Group Chairman of HSBC Holdings plc from 2010 to 2017. For 15 years prior to this he was HSBC's group finance director, joining from KPMG where he was a partner, and from 2005 to 2011 he served as a non-executive director of BP plc. He has extensive experience of business in Asia, having been a member of both the Mayor of Shanghai and Mayor of Beijing's Advisory Boards and currently serves on the International Advisory Panel of the Monetary Authority of Singapore. Sir Douglas was awarded the CBE in 2006 and his knighthood in 2018, both in recognition of his service to the finance industry. In June 2022, he was awarded an honorary degree by the University of Glasgow, his alma mater, in recognition of his services to the business community.			Stephen brings a track record of delivering exceptional value to clients, creating high-quality revenue and earnings growth in complex financial markets, and deep experience of business transformation during periods of technological disruption and competitive change. Stephen joined the Board in July 2020 as Chief Executive-Designate, becoming Chief Executive Officer in September 2020. He is an abrdn representative director to the US closed-end fund boards and the SICAV fund boards where abrdn is the appointed investment manager. Previously, Stephen served as Chief Executive Officer of global consumer banking at Citigroup from 2015, retiring from the role in November 2019. His responsibilities encompassed all consumer and commercial banking businesses in 19 countries, including retail banking and wealth management, and operations and technology supporting these businesses. Prior to this, he was Chief Executive for Citigroup's Asia-Pacific business across 17 markets, including India and China. Stephen joined Citigroup in 1998. Over 21 years he held leadership roles in banking, operations and technology across its Asian and Latin American businesses. Before this, he held management positions at GE Capital, where he was director of UK operations from 1996 to 1998, and at British Steel. Stephen is a member of the Investment Association's board of directors, and the Financial Services Growth and Development Board in Scotland. He holds an MBA in Economics and Finance from University College Cardiff and is an Honorary Fellow.			Jason joined abrdn as Chief Financial Officer in October 2023, bringing over twenty-five years of experience in the financial services industry. Having held senior finance roles in investments, insurance and banking, Jason has established a strong track record of leadership in finance, asset management, M&A, and strategy. His most recent role before joining abrdn was Chief Financial Officer of Persimmon plc. Prior to this, Jason was Group Chief Financial Officer of Aviva plc between 2019 and 2022. He had previously been Chief Financial Officer of Aviva's UK General Insurance and UK Life businesses, Chief Capital & Investments Officer, and a director on the board of Aviva Investors. Before joining Aviva in 2010, Jason spent 15 years at Morgan Stanley in London and Singapore, latterly as a Managing Director within its Investment Banking Division, where he advised UK and international banks, insurers and asset managers on M&A, capital raising and strategy. Jason is a governor of Felsted School in Essex. Jason holds a BA (Hons) from the University of Oxford, with a Part II thesis in Atmospheric chemistry.

 

Key to Board committees	R Remuneration Committee RC Risk and Capital Committee A Audit Committee NC Nomination and Governance Committee C Committee Chair
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Jonathan Asquith - Non-executive Director and Senior Independent Director				Catherine Bradley CBE - Non-executive Director				John Devine - Non-executive Director
Appointed to the Board September 2019 Age 67 Nationality British Shares 205,864 Board committees: R C NC				Appointed to the Board January 2022 Age 64 Nationality British and French Shares 12,181 Board committees: A C NC RC				Appointed to the Board July 2016 Age 65 Nationality British Shares 52,913 Board committees: RC C A NC
Jonathan has considerable experience as a non-executive director within the investment management and wealth industry. This brings important insight to his roles as Senior Independent Director and Chair of our Remuneration Committee. Jonathan is a non-executive director of CiCap Limited and its regulated subsidiary Coller Capital Limited. He is also a non-executive director of B-FLEXION Group Holdings SA and subsidiaries including Vantage Infrastructure Holdings and Capital Four Holding A/S. At the end of 2020 he stepped down as Deputy Chair of 3i Group plc after nearly 10 years as a board member. Previously, he has been Chair of Citigroup Global Markets Limited, Citibank International Limited, Dexion Capital plc and AXA Investment Managers. He has also been a director of Tilney, Ashmore Group plc and AXA UK plc. In his executive career Jonathan worked at Morgan Grenfell for 18 years, rising to become group finance director of Morgan Grenfell Group, before going on to take the roles of Chief Financial Officer and Chief Operating Officer at Deutsche Morgan Grenfell. From 2002 to 2008 he was a director of Schroders plc, during which time he was Chief Financial Officer and later Executive Vice Chairman. He holds an MA from the University of Cambridge.				Catherine has more than 30 years'executive experience advising global financial institutions and industrial companies on complex transactions and strategic opportunities. She brings knowledge from working across Europe and Asia, serving on the boards of leading consumer-facing companies, and working with regulators which provides valuable input to her roles as Chair of our Audit Committee and non-executive Chair of interactive investor, a wholly owned subsidiary of the group. Catherine is a non-executive director of Johnson Electric Holdings Limited, and easyJet plc, where she chairs the finance committee. She is also senior independent director of Kingfisher plc. Previously, Catherine served on the boards of leading industrial and consumer-facing companies in the UK, France, and Hong Kong. She was appointed by HM Treasury to the board of the Financial Conduct Authority in 2014 and played an important role in establishing the FICC Markets Standards Board in 2015. Catherine stepped down from these boards in 2020. Between 2021 and 2022 she was also a board member of the Value Reporting Foundation, where she co-chaired the audit committee. In her executive career, Catherine has held a number of senior finance roles in investment banking and risk management: in the US with Merrill Lynch, in the UK and Asia with Credit Suisse, and  in Asia with Société Générale. She returned to Europe in 2014 to start her non-executive career. Catherine graduated from the HEC Paris School of Management with a major in Finance and International Economics. She was awarded a CBE in 2019.				John's previous roles in asset management, his experience in the US and Asia, and his background in finance, operations and technology are all areas of importance to our strategy. John's experience is important to the board's discussions of financial reporting and risk management. He is Chair of our Risk & Capital Committee. John was appointed a director of our business in July 2016, at that time Standard Life plc. From April 2015 until August 2016, he was non-executive Chair of Standard Life Investments (Holdings) Limited. He is non-executive Chair of Credit Suisse International and of Credit Suisse Securities (Europe) Limited, and a non-executive director of Citco Custody Limited and Citco Custody (UK) Limited. From 2008 to 2010, John was Chief Operating Officer of Threadneedle Asset Management Limited. Prior to this, he held a number of senior executive positions at Merrill Lynch in London, New York, Tokyo and Hong Kong. He holds a BA (Hons) from Preston Polytechnic, and MBA in Banking from Bangor University and is a Fellow of the Chartered Institute of Public Finance and Accounting.
Hannah Grove - Non-executive Director				Pam Kaur - Non-executive Director
Appointed to the Board September 2021 Age 60 Nationality British and American Shares 33,000 Board committees: NC R				Appointed to the Board June 2022 Age 60 Nationality British Shares Nil Board committees: A RC
Hannah brings more than 20 years of leadership experience in the global financial services industry. Her expertise includes leading brand, client and digital marketing and communications strategies, including those for major acquisitions, which she combines with deep knowledge of regulatory and governance matters. She is also our designated non-executive director for board employee engagement and sits as a non-executive director on the boards of Standard Life Savings Limited and Elevate Portfolio Services Limited, wholly owned subsidiaries of abrdn group. Before joining our Board, Hannah enjoyed a 22-year career at State Street. This included 12 years as Chief Marketing Officer, retiring from the role in November 2020. She was a member of the company's management committee, its business conduct & risk, and conduct standards committees, and a board member for its China legal entity. Before joining State Street, Hannah was marketing director for the Money Matters Institute, supported by the United Nations, the World Bank and private sector companies to foster sustainable development in emerging economies. In other current roles, Hannah is a member of the advisory board of Irrational Capital. She has also received significant industry recognition as a champion of diversity and inclusion and is a member of the board of advisors for reboot, an organisation that aims to enhance dialogue around race both at work and across society.				Pam has more than 20 years' experience of leadership roles in business, risk, compliance, and internal audit within several of the world's largest and most complex financial institutions during periods of significant change and public scrutiny. She brings considerable expertise in leading the development and implementation of compliance, audit and risk frameworks and adapting these to changing regulatory expectations. Pam currently holds the role of Group Chief Risk and Compliance Officer at HSBC and is also a director of the Hong Kong Shanghai Banking Corporation. Between 2019 and 2022, she served as a non-executive director on the board of Centrica, where she was also a member of the audit and risk committee, the nomination committee and the safety, environment and sustainability committee. Since qualifying as a chartered accountant with Ernst & Young, Pam has progressed through a range of technical, compliance, anti-fraud and risk roles with Citigroup, Lloyds TSB, Royal Bank of Scotland, Deutsche Bank and HSBC. These positions have given her extensive insight into the benefits of effective internal control systems that recognise external regulatory requirements. She holds an MBA and B.Comm in Accountancy from Punjab University, and is a fellow of the Institute of Chartered Accountants of England and Wales.

 

Michael O'Brien - Non-executive Director			Cathleen Raffaeli - Non-executive Director
Appointed to the Board June 2022 Age 60 Nationality Irish Shares 173,780 Board committees: A RC			Appointed to the Board August 2018 Age 67 Nationality American Shares 9,315 Board committees: R RC
Mike has held executive leadership roles within a number of leading global asset managers in London and New York. He brings extensive asset management experience, with a key focus throughout his career on innovation and technology-driven change in support of better client outcomes. A qualified actuary, during his executive career with JP Morgan Asset Management, BlackRock Investment Management and Barclays Global Investors, he was responsible for developing and leading global investment solutions, distribution and relationship management strategies. Mike is a non-executive director of Carne Global Financial Services Limited, and he is a senior adviser to Osmosis Investment Management. He is also an investment adviser to the British Coal Pension Funds. Previously, Mike served on the board of the UK NAPF and was a member of the UK NAPF Defined Benefit Council. He retired in 2020 from his role as Co-Head, Global Investment Solutions at JP Morgan Asset Management. Prior to his move to BlackRock in 2000, Mike qualified as an actuary with Towers Watson, where he served as an investment and risk consultant. Mike graduated from Limerick University with a BSc in Applied Mathematics. He is also a Chartered Financial Analyst and a Fellow of the Institute of Actuaries.			Cathi has strong experience in the financial technology, wealth management and banking sectors with a background in the platforms sector, as well as international board experience. She brings these insights as non-executive Chair of the boards of Standard Life Savings Limited and Elevate Portfolio Services Limited, wholly owned subsidiaries of abrdn group. Her role provides a direct link between the board and the platform businesses that help us connect with clients and their advisers. Cathi is managing partner of Hamilton White Group, LLC which offers advisory services, including business development, to companies in financial services growth markets. In addition, she is managing partner of Soho Venture Partners Inc, which offers third-party business advisory services. Previously, Cathi was lead director of E*Trade Financial Corporation, non-executive director of Kapitall Holdings, LLC and President and Chief Executive Officer of ProAct Technologies Corporation. She was also a non-executive director of Federal Home Loan Bank of New York, where she was a member of the executive committee, and Vice Chair of both the technology committee and the compensation and human resources committee. She holds an MBA from New York University and a BS from the University of Baltimore.

 

 

 

The Corporate governance statement and the Directors' remuneration report, together with the cross references to the relevant other sections of the Annual report and accounts, explain the main aspects of the Company's corporate governance framework and seek to give a greater understanding as to how the Company has applied the principles and reported against the provisions of the UK Corporate Governance Code 2018 (the Code).

Statement of application of and compliance with the Code

For the year ended 31 December 2023, the Board has carefully considered the principles and provisions of the Code (available at www.frc.org.uk) and has concluded that its activities during the year and the disclosures made within the Annual report and accounts comply with the requirements of the Code. The statement also explains the relevant compliance with the FCA's Disclosure Guidance and Transparency Rules Sourcebook. The table on page 140 sets out where to find each of the disclosures required in the Directors' report in respect of all of the information required by Listing Rule 9.8.4 R, and our statement on Board diversity is on page 92.

(i) Board leadership and company purpose

Purpose and Business model

The Board ratifies the Company's purpose set out on page 3 of the Strategic report, and oversees implementation of the Group's business model, which it has approved, and which is set out on pages 12 and 13. Pages 2 to 79 show how the development of the business model in 2023 supports the protection and generation of shareholder value over the long term, as well as underpinning our strategy for growth. A significant development in 2023 supporting these objectives was the continued diversification of the business model through relentless focus on costs within the Investments business, continued investment in the Adviser business and the integration of ii and the Personal Wealth business. The Board's consideration of current and future risks to the success of the Group is set out on pages 76 to 79, complemented by the report of the Risk and Capital Committee on pages 107 to 110.

Oversight of culture

The Board and the Nomination and Governance Committee play a key role in overseeing how the management of the Group assesses and monitors the Group's culture. Through engagement surveys and the Board Employee Engagement programme, the Board acquires a clear view on the culture evident within the Group's businesses and how successfully expected behaviour is being embedded across the group in ways that will contribute to our success.

The Board holds management to account for a range of engagement and diversity, equity and inclusion outcomes, which are seen as important indicators of culture, and which form a key part of the executive scorecard.

The Board and the executive leadership team (ELT) have defined a set of Commitments - Client First, Empowered, Ambitious and Transparent - which embody our cultural aspirations at abrdn and are designed to create the best working environment for our colleagues, so contributing to better customer experience and outcomes. Our culture is defined by these Commitments and the behaviours which underpin them, which are set out on page 48.

Stakeholder engagement

The Annual report and accounts explains how the Directors have complied with their duty to have regard to the matters set out in section 172 (1) (a)-(f) of the Companies Act 2006. These matters include responsibilities with regard to the interests of customers, employees, suppliers, the community and the environment, all within the context of promoting the success of the Company. The table on pages 88 and 89 sets out the Board's focus on its key relationships and shows how the relevant stakeholder engagement is reported up to the Board or Board Committees.

Engaging with investors

The Group's Investor Relations and Secretariat teams support the direct investor engagement activities of the Chairman, Senior Independent Director (SID), CEO, CFO and, as relevant, Board Committee chairs. During 2023, we carried out a comprehensive programme of meetings with domestic and international investors, via a range of 1:1, group, conference and reporting related engagements. Investors had broad interests including progress on cost reduction targets, synergies between the three business units, progress on strategy to drive revenue growth, investment performance, financial performance and share price, capital allocation and strategy for returns to shareholders, the relationship with Phoenix and the role of the share stake, customer cash balances and the regulatory focus on this area given high interest rates, and corporate governance, including approach to ESG and sustainability. The Chairman, SID, CEO and CFO bring relevant feedback from this engagement to the attention of the Board.

The Board ensures its outreach activities encompass the interests of the Company's circa one million individual shareholders. Given the nature of this large retail shareholder base, it is impractical to communicate with all shareholders using the same direct engagement model followed for institutional investors. Shareholders are encouraged to receive their communications electronically and around 400,000 shareholders receive all communications this way. The Company actively promotes self service via the share portal, and more than 203,000 shareholders have signed up to this service. Shareholders have the option to hold their shares in the abrdn Share Account where shares are held electronically and around 91% of individual shareholders hold their shares in this way.

To give all shareholders easy access to the Company's announcements, all information reported via the London Stock Exchange's regulatory news service is published on the Company's website. The CEO and CFO continue to host formal presentations to support both the full year and half year financial results with the related transcript and webcast available from the Investors' section of the Company's website. For 2024, the Company published a Q4 2023 update in mid-January and intends to publish Q1 and Q3 2024 updates after the close of these periods.

The 2023 Annual General Meeting (AGM) was held in Edinburgh on 10 May 2023. The meeting was arranged as a 'hybrid' meeting. This allowed shareholders to participate in the meeting remotely, as well as in person. For those participating remotely, questions could be submitted during the meeting via a 'chat box', many of which were then posed to the Chair by a moderator. The Chair and CEO presentations addressed the main themes of the questions which had been submitted at the meeting. 45% of the shares in issue were voted. Although all resolutions were passed, a number of resolutions received less than 80% of votes cast in favour of the resolution. The results of the vote were primarily driven by a small number of shareholders, and the significant majority of shareholders who voted did so in favour of the resolutions. Following the AGM, the Company Chair and Jonathan Asquith, abrdn's Senior Independent Director, met with shareholders representing more than 80% of the shares voted against the five resolutions, to understand their views.

The resolution to re-elect Catherine Bradley CBE as a Director received 75.89% of votes in favour. One major shareholder applies more stringent requirements than prevailing proxy advisor guidelines in relation to the number of external mandates held, and the number of external mandates held by each Director are within the requirements of the proxy advisor guidelines and in line with market practice. As noted, Catherine has decided not to stand for re-election at the 2024 AGM.

The other resolutions which received less than 80% of votes cast in favour of them related to authority to allot shares, disapply pre-emption rights, buy back issued ordinary shares, and to allot shares in relation to the issuance of Convertible Bonds. The key area of concern cited by shareholders voting against the resolutions related to shareholder dilution and, in relation to share buybacks, shareholdings breaching certain thresholds. While the majority of our shareholders are supportive of the authorities sought the Board have recognised the concerns raised and will reflect these in the resolutions to be proposed at the 2024 AGM. Our 2024 AGM will be held on 24 April in Edinburgh. The AGM Guide 2024 will be published online at www.abrdn.com in advance of this year's meeting. The voting results, including the number of votes withheld, will be published on the website at www.abrdn.com after the meeting.

Engaging with employees

Hannah Grove continued as our designated non-executive Director for employee engagement for a second year. abrdn's Board Employee Engagement (BEE) programme is designed to ensure that employees' perspectives and sentiments are heard and understood by the Board to help inform decision-making, and to support colleagues' understanding about the role of the plc Board and ability to have direct access to our Non-Executive Directors (NEDs).

During 2023, the programme comprised four pillars: (i) Listening Sessions, an opportunity for colleagues to share their perspectives and feedback in smaller group settings throughout the year, (ii) Meet the NEDs sessions, for larger groups of colleagues to interact with Board members and ask questions directly, (iii) Employee Network engagement, focused on both gathering perspectives from abrdn's Diversity and Inclusion cohorts, and recognising them for their contributions, and lastly (iv) Reporting and measurement, including regular thematic updates to the Board and abrdn's ELT, feedback gathered about the programming specifically via post event surveys, and measurement compared to wider abrdn colleague sentiment through the engagement survey.

Based on this strategy, the following are some example activities from 2023:

-    Eleven Listening Sessions were held with groups across various levels, businesses and geographies, including Culture Champions, the Future Leaders cohort, Investment teams, Finimize and interactive investor colleagues.

-    Five Meet the NEDs sessions took place including events with all colleagues in London and Boston, as well as a specific session held by our subsidiary Adviser board directors for Adviser colleagues in Edinburgh.

-    Nine Employee Network engagements: including a recognition event for network chairs with plc Board members in Edinburgh, a session with the newly launched NextGen network in Tokyo, and a roundtable discussion with our US network chairs in Philadelphia.

In 2023, BEE activity spanned eight abrdn locations across the UK, US and APAC, with sessions and events delivered in a combination of in-person, virtual or hybrid formats.

Overall, colleague sentiment garnered was broad in reach in terms of geography, as well as business areas. The BEE programme received positive and constructive feedback from colleagues that participated in the programme. Hannah provided regular updates from the BEE programme to the Board covering themes raised by colleagues including compensation, strategy, the pace of change, technology and empowerment.

In 2024, the BEE programme will maintain its core objectives, gathering feedback and demonstrating actionable outcomes, and focusing on key themes including culture, strategy and connecting the dots across abrdn. Communication and measurement will continue to underpin activity with plans to increase the frequency of updates on the programme to all colleagues throughout the year. We will also continue to benchmark the programme externally to understand best practices and new approaches.

On 24 January 2024 the Company announced a transformation programme. In the first half of 2024, a number of BEE initiatives will be focused on employee listening and engagement with opportunity to discuss the commitments made. In addition, we will look to capture insights from the BEE programme to support the Board in its assessment of how the Company's desired culture has been embedded in accordance with the updated requirements of the recently published UK Corporate Governance Code.

Summary of Stakeholder engagement activities

In line with their obligations under s.172 of the Companies Act 2006, the Directors consider their responsibilities to stakeholders in their discussions and decision-making. The table below illustrates direct and indirect Board engagement with various stakeholders. More details of stakeholder engagement activities can be found on pages 55 and 56.

Key stakeholders		Direct Board engagement	Indirect Board engagement	Outcomes
Clients		- The CEO meets with key clients as required and reports to the Board on such meetings. - The CEO takes part in key client pitches to hear directly from clients on their requirements. - The Chair meets with peers and key clients at conferences and industry membership and advisory boards where he represents the Group. - Board members feed into Board discussions any feedback received directly from clients.	- The CEOs of the businesses report at Board meetings on key client engagement, support programmes and client strategies. - Market share data and competitor activity are reported to the Board. - Results of client perceptions survey/customer sentiment index are reported.	- Engagement supported the development of the key client management process, and our client solutions and ESG approaches. - The businesses position the business around client needs with performance accountability measured on that basis. - Investment processes are driven by understanding client needs and designing appropriate solutions taking into account client risk appetite and sophistication.
Our people		- 'Meet the NEDs' BEE sessions for a diverse mix of staff at all levels allows direct feedback in informal settings. - Employee engagement NED in place and active with the employee diversity networks as well as with employees through their representatives. The BEE NED reports regularly to the CEO and the Board. - Each year, the Chair and NEDs all mentor one or two CEO-1 or -2 level emerging talent. - The CEO and CFO run 'Town Hall' sessions.	- The Chief People Officer (CPO) reports to the Nomination and Governance Committee meeting on key hires and employee issues including development needs to support succession planning. - The CPO produces reporting for the Board drawing out key factors influencing staff turnover, morale and engagement. - Viewpoints and employee surveys collect aggregate, regional and functional trend data which is reported to the Board.	- Engagement feedback recognised in Board discussions. - Engagement feedback is a key input to talent and development programmes and the design of reward philosophy.

 

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Key stakeholders		Direct Board engagement	Indirect Board engagement	Outcomes
Community	Business partners/ supply chain	- CEO oversees the Phoenix, FNZ and Citigroup relationships and meets with his opposite numbers as required. - ED direct meetings with core suppliers. - The Risk and Capital Committee reviews the dependency on critical suppliers and how they are managed. - The Audit Committee leads an assessment of external audit performance and service provision. - The Board received detailed papers supporting the outsourcing of technology and business services.	- The Board hears reports on first line key supplier relationships and their role in transition and transformation activities. - Supplier due diligence surveys are undertaken. - Tendering process includes smaller level firms. - Access and audit rights in place with key suppliers. - Modern slavery compliance process in place. - Procurement/payment principles and policies in place. - Certain key suppliers regularly discussed at Audit Committee, Risk and Capital Committee and Board. - Oversight of key outsourcing arrangements reported to the Board.	- The development of our business through our relationships with partners is a critical element of the Board's strategy. - Transformation discussions have included a focus on the quality, service provision, availability and costs of relevant suppliers. - The overriding guidelines for business partnerships have been established as working for both parties and creating efficient operations. - The Board sought executive assurance on the operation and working practice of key suppliers.
	Communities	- Board members present at relevant events and conferences. - Chair/CEO/CFO represent the Group on public policy and industry organisations. - Board is kept up to date with the activities of the abrdn Financial Fairness Trust and the abrdn Charitable Foundation	- Stewardship/sustainability teams report regularly to the Board and Committees. - Feedback on annual Stewardship and TCFD reports. - Review of charitable giving strategy. - ESG presentations to the Board.	- Considered as input to the Group's charitable giving programmes. - Engagement drives the expression of our purpose.
	Regulators/ policymakers/ governments	- Regular engagement by CEO, CFO, Chair and Committee Chairs. - FCA has access to the Board. - 'Dear Board/CEO' letters issued from regulators. - Relevant engagement with regulators in overseas territories.	- CFO and Chief Risk Officer (CRO) update the Board regularly. - Board hears reports on the results of active participation through industry groups.	- Relevant Board decisions recognise regulatory impact and environment.
Shareholders		- Results, AGM presentations and Q&A. - Chair, CEO and CFO meetings with investors. - Chair, Committee Chairs, Senior Independent Director and BEE NED round table with governance commentators. - Remuneration Committee Chair meetings with institutional investors. - Chair/CEO direct shareholder correspondence.	- Regular updates from the EDs/ Investor Relations Director/ Chair/Chair of Remuneration Committee summarising the output from their programmes of engagement. - Analyst/Investor reports distributed to the Board. - As relevant, feedback from corporate brokers. - Dedicated mailbox and shareholder call centre team.	There has been continued dialogue with shareholders on remuneration matters including in the period to the 2023 AGM in respect of the Directors' Remuneration Policy.
	Shareholders

 

Speaking up

The workforce has the means to raise concerns in confidence and anonymously, and these means are well communicated. The Audit Committee's oversight of the whistleblowing policy and the Audit Committee Chair's role to report to the Board on whistleblowing matters is covered in the Audit Committee report on page 99.

Outside appointments and conflicts of interest

The Board's policy encourages executive Directors to take up one external non-executive director role, as the Directors consider this can bring an additional perspective to the Director's contribution. Stephen Bird has representative director roles, on fund boards where abrdn is the appointed investment manager and on the Investment Association. Jason Windsor is a Governor of Felsted School and a Director of Felsted School Trustees Limited.

Any proposed additional appointments of the non-executive Directors are firstly discussed with the Chair and then reported to the Nomination and Governance Committee prior to being considered for approval. The Senior Independent Director takes that role in relation to the Chair's outside appointments. The register of the Board's collective outside appointments is reviewed annually by the Board. Directors' principal outside appointments are included in their biographies on pages 82 to 85. These appointments form part of the Chair's annual performance review of individual non-executive Directors' contribution and time commitment, and similarly that of the Senior Independent Director of the Chair.

The Directors continued to review and authorise Board members' actual and potential conflicts of interest on a regular and ad hoc basis in line with the authority granted to them in the Company's Articles. As part of the process to approve the appointment of a new Director, the Board considers and, where appropriate, authorises their potential or actual conflicts. The Board also considers whether any new outside appointment of any current Director creates a potential or actual conflict before, where appropriate, authorising it. All appointments are approved in accordance with the relevant group policies. At the start of every Board and Committee meeting, Directors are requested to declare any actual or potential conflicts of interests and in the event a declaration is made, conflicted Directors can be excluded from receiving information, taking part in discussions, and making decisions that relate to the potential or actual conflict.

(ii) Division of responsibilities

The Group operates the following governance framework.

Governance framework

Board The Board's role is to organise and direct the affairs of the Company and the Group in accordance with the Company's constitution, all relevant laws, regulations, corporate governance, and stewardship standards. The Board's role and responsibilities, collectively and for individual Directors, are set out in the Board Charter. The Board Charter also identifies matters that are specifically reserved for decision by the Board. During 2023, the Board's key activities included approving, overseeing and challenging:
- The updated strategy and the 2024 to 2026 business plan to implement the strategy. - Capital adequacy and allocation decisions including the decision to sell stakes in HDFC Asset Management. - Oversight of culture, our standards and ethical behaviours. - Dividend policy including the decision framework governing when to return the dividend to growth. - Financial reporting. - Risk management, including the Enterprise Risk Management (ERM) framework, risk strategy, risk appetite limits and internal controls and in particular how this was adapted for blended working including working from home.					- Significant corporate transactions. - Succession planning, in particular in the appointment of Jason Windsor. - The quarterly performance of the Investments business. - The ESG approach, both as a corporate and as an asset manager. - Significant external communications. - The work of the Board Committees. - Appointments to the Board and to Board Committees. - Matters escalated from subsidiary boards to the Board for approval.
The Board regularly reviews reports from the Chief Executive Officer and from the Chief Financial Officer on progress against approved strategies and the business plan, as well as updates on financial market and global economic conditions. There are also regular presentations from the Business CEOs and business functional leaders.
Chair - Leads the Board and ensures that its principles and processes are maintained. - Promotes high standards of corporate governance. - Together with the Company Secretary, sets agendas for meetings of the Board. - Ensures Board members receive accurate, timely and quality information on the Group and its activities. - Encourages open debate and constructive discussion and decision-making. - Leads the performance assessments and identification of training needs for the Board and individual Directors. - Speaks on behalf of the Board and represents the Board to shareholders and other stakeholders.				Chief Executive Officer (CEO) The CEO operates within authorities delegated by the Board to: - Develop strategic plans and structures for presentation to the Board. - Make and implement operational decisions. - Lead the other executive Director and the ELT in the day-to-day running of the Group. - Report to the Board with relevant and timely information. - Develop appropriate capital, corporate, management and succession structures to support the Group's objectives. - Together with the Chair, represent the Group to external stakeholders, including shareholders, customers, suppliers, regulatory and governmental authorities, and the local and wider communities.				Senior Independent Director (SID) The SID is available to talk with our shareholders about any concerns that they may not have been able to resolve through the channels of the Chair, the CEO or Chief Financial Officer, or where a shareholder was to consider these channels as inappropriate. The SID leads the annual review of the performance of the Chair.
								Non-executive Directors (NEDs) The role of our NEDs is to participate fully in the Board's decision-making work including advising, supporting and challenging management as appropriate.
Nomination and Governance Committee (N&G) - Board and Committee composition and appointments. - Succession planning. - Governance framework. - Culture, Diversity, Equity & Inclusion (DEI).		Audit Committee (AC) - Financial reporting. - Internal audit. - External audit. - Whistleblowing. - Regulatory financial reporting. - Non-financial reporting (ESG).				Remuneration Committee (RC) - Development and implementation of remuneration philosophy and policy. - Incentive design and setting of executive Director targets. - Employee benefit structures.			Risk and Capital Committee (RCC) - Risk management framework. - Compliance reporting. - Risk appetites and tolerances. - Transactional risk assessments. - Capital adequacy. - Anti-financial crime.
Executive leadership team (ELT) The ELT supports the CEO by providing clear leadership, line of sight and accountability throughout the business. The ELT is responsible to the CEO for the development and delivery of strategy and for leading the organisation through challenges and opportunities.
Businesses Business CEOs support the CEO to deliver growth across the business: - Investments. - Adviser. - ii.		Talent The Chief People Officer (CPO) supports the CEO in developing talent management and succession planning and culture initiatives.				Efficient Operations Strategy, Technology, Legal and Finance ELT members, including the CFO, support the CEO by overseeing global functions and the delivery of functional priorities.			Control The Chief Risk Officer (CRO) supports the ELT and the CEO in their first line management of risk. The Chief Internal Audit Officer attends ELT controls meetings.

The framework is formally documented in the Board Charter which also sets out the Board's relationship with the boards of the key subsidiaries in the Group. In particular, it specifies the matters which these subsidiaries refer to the Board or to a Committee of the Board for approval or consultation.

Board balance and director independence

The Directors believe that at least half of the Board should be made up of independent non-executive Directors. As at 26 February 2024, the Board comprises the Chair, seven independent non-executive Directors and two executive Directors. The Board is made up of six men (60%) and four women (40%) (2022: men 55%, women 45%). Brian McBride stepped down from the Board on 10 May 2023 and Stephanie Bruce stepped down on 11 May 2023. Jason Windsor was appointed to the Board on 23 October 2023.

The Chair was independent on his appointment in December 2018. The Board carries out a formal review of the independence of non-executive Directors annually. The review considers relevant issues including the number and nature of their other appointments, any other positions they hold within the Group, any potential conflicts of interest they have identified and their length of service. Their individual circumstances are also assessed against independence criteria, including those in the Code. The Nomination and Governance Committee, on behalf of the Board, conducts a particularly rigorous review for any non-executive director whose term exceeds six years. In addition to the above, this review includes any feedback from the Board effectiveness review, ongoing overall contribution, and the output from individual annual performance discussions with each NED conducted by the Chair. John Devine is the only non-executive Director to have served beyond six years, with Cathi Raffaeli and Sir Douglas Flint passing this timeline later in 2024. No issues or considerations were raised through this assessment.

Following the review, the Board has concluded that all the non-executive Directors are independent and consequently, the Board continues to comprise a majority of independent non-executive Directors.

Jonathan Asquith served as Senior Independent Director throughout 2023. In this role, he is available to provide a sounding board to the Chair and serve as an intermediary for the other Directors and the shareholders. He also led the process to review the Chair's performance.

The roles of the Chair and the CEO are separate and are summarised on page 91. Each has clearly defined responsibilities, which are described in the Board Charter.

The Directors have access to the governance advice of the Company Secretary whose appointment and removal is a matter reserved to the Board.

(iii) Board composition, succession, diversity and evaluation

The Board's policy is to appoint and retain non-executive Directors who bring relevant expertise as well as a wide perspective to the Group and its decision-making framework. The Board continues to support its Board Diversity statement which states that the Board:

-    Believes in equity and supports the principle that the best person should always be appointed to the role with due regard given to the benefits of diversity, including gender, ethnicity, age, and educational and professional background when undertaking a search for candidates, both executive and non-executive.

-    Recognises that diversity can bring insights and behaviours that make a valuable contribution to its effectiveness.

-    Believes that it should have a blend of skills, experience, independence, knowledge, ethnicity and gender amongst its individual members that is appropriate to its needs.

-    Believes that it should be able to demonstrate with conviction that any new appointee can make a meaningful contribution to its deliberations.

-    Is committed to maintaining its diverse composition.

-    Supports the CEO's commitment to achieve and maintain a diverse workforce and an inclusive workplace, both throughout the Group, and within the ELT.

-    Has a zero-tolerance approach to unfair treatment or discrimination of any kind, both throughout the Group and in relation to clients and individuals associated with the Group.

 

Board Diversity

Gender

Diagram removed for the purposes of this announcement.  However it can be viewed in full in the pdf document

Nationality

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Diversity activities and progress to meet our targets are covered in the People - Diversity, equity & inclusion section of the Strategic report on page 50. The ELT's diversity policy is covered in the Diversity, equity and inclusion section of the Directors' report on page 138.

Board changes during the period are covered above and in the Directors' report on page 137.

Ethnicity

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In accordance with Listing Rule 9.8.6(9), as at 31 December 2023:

-    at least 40% of the individuals on the board of directors are women;

-    at least one individual on the board of directors is from a minority ethnic background

During 2023, we applied our policy on diversity when searching for a successor to Stephanie Bruce, with Jason Windsor ultimately appointed, as CFO. Consequently, we do not currently meet the requirement under Listing Rule 9.8.6(9)(a)(ii) to have a woman represented in the identified Board leadership positions (Chair, Senior Independent Director, CEO or CFO).

The Board supports the principle that the person best qualified, in the particular circumstances of the role, should always be appointed to the role with due regard given to the benefits of diversity, including the full range of protected characteristics, as well as cognitive diversity. This principle applies to the search for and appointment of all candidates, both executive and non-executive. In reviewing the composition of the Board, the Committee regards the Committee Chair roles as equal in importance to the designated roles, which is reflected in their current composition.

Board appointment process, terms of service and role

Board appointments are overseen by the Nomination and Governance Committee and more information can be found on page 113.

Each non-executive Director is appointed for a three-year fixed term and shareholders vote on whether to elect/re-elect them at every AGM. Once a three-year term has ended, a non-executive Director can continue for a maximum of two further terms, if the Board is satisfied with the non-executive Director's performance, independence and ongoing time commitment. Taking account of their appointment dates the current average length of service of the non-executive Directors is three years. For any non-executive Directors who have already served two three-year terms, the Nomination and Governance Committee considers any factors which have the potential to impact their independence or time commitment prior to making any recommendation to the Board. No Directors came to the end of a three-year term during 2023.

External search consultants may be used to support Board appointments. The Group has used the services of MWM Consulting to support senior management searches. MWM Consulting has no other connection to the Group or the Directors.

Time commitment

The letter of appointment confirms that the amount of time each non-executive Director is expected to commit to each year, once they have met all of the approval and induction requirements, is a minimum of 35 days.

When appointing a non-executive Director, the Nomination and Governance Committee carefully considers time commitments, investor guidelines and voting policies and their application on current directorships. The Committee also reviews in detail the planned changes to a non-executive Director's portfolio and overall capacity, including the balance of listed and non-listed non-executive Director roles. This is also reviewed by the Chairman as part of a formal sequence of bilateral conversations with each Board member during the Company's annual Board Effectiveness process. This covers: time commitment and the impact of any anticipated changes to external appointments over the next 12 months; conflicts of interest and; any training requirements that would support the Board member in their role during the year. The Company supports plc Directors taking active roles on the main group subsidiary boards. Cathi Raffaeli chairs the Standard Life Savings Limited and Elevate Portfolio Services Limited boards, and Hannah Grove also sits on these boards. Catherine Bradley was appointed as the chair of the interactive investor Limited board on 1 January 2024. Time commitment for their roles on these group boards are also considered as part of the annual evaluation process.

Having carefully reviewed various inputs, including those outlined above and each non-executive Director's contribution and capacity in 2023, the Nomination and Governance Committee concluded that all non-executive Directors continue to have sufficient time to dedicate
to their role as independent non-executive Directors of abrdn plc.

The service agreements/letters of appointment for Directors are available to shareholders to view on request from the Company Secretary at the Company's registered address (which can be found in the Shareholder information section) and will be accessible for the 2024 AGM. Non-executive Directors are required to confirm that they can allocate sufficient time to carry out their duties and responsibilities effectively. Their letters of appointment confirm that their primary roles include challenging and holding to account the executive Directors as well as appointing and removing executive Directors.

Director election and re-election

At the 2024 AGM, all of the Directors will retire and stand for election or re-election. As well as in the Board of Directors section, the AGM Guide 2024 includes background information about the Directors, including the reasons why the Chair, following the Directors' annual reviews, believes that their individual skills and contribution support their election or re-election.

Advice

Directors may sometimes need external professional advice to carry out their responsibilities. The Board's policy is to allow them to seek this where appropriate and at the Group's expense. Directors also have access to the advice and services of the Company Secretary. With the exception of professional advice obtained by the Remuneration Committee, as detailed in page 133, no independent professional advice was sought in 2023.

Board effectiveness

Review process

Following the externally facilitated review in 2022, the 2023 effectiveness review was conducted internally, on behalf of the Board, by the Chairman and supported by the Company Secretary. A questionnaire was issued to each Board member, which allowed individual feedback on a confidential basis. This was supplemented by any matters a Director wished to raise as part of their year-end 1:1 discussion with the Chairman.

The tone of the review was positive and concluded that the Board and its Committees continued to operate effectively during 2023, with no material issues or concerns raised and priorities for the coming year clarified. Good progress was noted on those matters identified in the 2022 review, including greater focus on the Company's talent pipeline, the refresh of the NED mentoring programme and work undertaken to improve the flow of information across the Group. As part of this initiative, the Chairman hosted an inaugural conference in September 2023 to bring together non-executive directors from the Group's subsidiary companies and EMEA-based fund boards. The main areas arising from the 2023 review on which the Board looked to see continued improvement in 2024, both in respect of its own effectiveness and that of its Committees, were in relation to improving the insights within and brevity of materials presented, the continued development of management information to support its oversight of the Company's transformation programme and avoiding duplication across the agendas of the Board and its subsidiary companies where this could be achieved. This included the planned use of more joint sessions on matters of shared interest, such as on operational resilience, cyber security and the Company's capital management policies. The report also acknowledged that given the criticality of human talent and technology to future sustainable success, succession planning would remain a core focus for the Board as would technology development given its impact on the future of asset and wealth management.

As in prior years, the report noted the strong levels of Board engagement and participation, both in formal meetings and other Board initiatives, such as the BEE programme. The report also recognised positively Board dynamics, the effectiveness of Board Committees and the breadth of knowledge and experience of Board members. Maintaining these attributes was seen as essential to the Company's successful navigation of current macro-economic challenges and the delivery of its desired strategic outcomes.

Chair

The  review of Sir Douglas's performance as Chair was led by the SID, Jonathan Asquith, supported by the Company Secretary. It was based on feedback given in returned questionnaires specifically regarding the Chairman's performance and discussions between the SID and the other non-executive Directors. The feedback was summarised into a report which was considered by the Directors in a meeting led by Jonathan Asquith and without Sir Douglas being present. It was agreed that the Chair's industry experience, style and development of the Board continued to be of significant benefit to the Group. As with the main Board evaluation, the continued focus on delivery for shareholders and other stakeholders was a key priority and the important role that the Chairman plays in supporting the execution of the Group's strategy was recognised. Jonathan Asquith met with Sir Douglas to pass on feedback from the review directly and his final report was made available to all non-executive Directors.

Directors

An important part of the annual effectiveness review process is the individual evaluation of each member of the Board. This process is undertaken personally by the Chair and this year was conducted through year-end bilateral discussions with each Board member to a specific agenda. These discussions ran alongside the broader effectiveness process and fed into Nomination and Governance Committee's consideration of director re-election and ongoing succession planning. In addition to discussing individual performance, consideration was also given to Non-Executive Directors' time commitment and capacity, conflicts of interest, any individual training and development needs and broader Company engagement opportunities.

 Director induction and development

The Chair, supported by the Company Secretary, is responsible for arranging a comprehensive preparation and induction programme for all new Directors. The programme takes their background, knowledge and experience into account. If relevant, Directors are required to complete the FCA's approval process before they are appointed and Directors self-certify annually that they remain competent to carry out this aspect of their role. These processes continue to adapt to meet evolving best practice in respect of the Senior Managers and Certification Regime.

The formal preparation and Induction programme includes:

-    Meetings with the executive Directors and the members of the ELT.

-    Focused technical meetings with internal experts on specific areas including the three businesses, regulatory reporting, ESG, conduct risk, risk and capital management, and financial reporting.

-    Visits to business areas to meet our people and gain a better insight into the operation of the business and its culture.

-    Meetings with the external auditors and contact with the FCA supervisory teams.

-    Meetings with the Company Secretary on the Group's corporate governance framework and the role of the Board and its Committees.

-    Meetings with the Chief Risk Officer on the risk management framework as well as meetings on their individual responsibilities as holders of a Senior Management Function role.

Background information is also provided including:

-    Key Board materials and information, stakeholder and shareholder communications and financial reports.

-    The Group's organisational structure, strategy, business activities and operational plans.

-    The Group's key performance indicators, financial and operational measures and industry terminology.

The induction programme provides the background knowledge new Directors need to perform to a high level as soon as possible after joining the Board and its Committees and to support them as they build their knowledge and strengthen their performance further.

When Directors are appointed to the Board, they make a commitment to broaden their understanding of the Group's business. The Secretariat, Finance, Risk and Reward teams monitor relevant external governance and risk management, financial and regulatory developments and keep the ongoing Board training and information programme up to date. Specific Board and Committee awareness and deep-dive sessions took place on:

-    Geopolitics.

-    Cyber resilience.

-    abrdn's Internal Capital and Risk Assessment (being a risk management process introduced by the Investment Firms Prudential Regime).

-    Operational resilience self-assessment.

-    Sustainability.

-    Technology.

-    FCA Consumer Duty.

-    Anti-Financial Crime.

-    Vulnerable Customers.

-    Asset class deep dives:

o  Fixed income.

o  Equities.

o  Multi-asset Investment Solutions.

o  Real Estate.

o  Real Assets and Alternatives.

(iv) Audit, risk and internal control

The Directors retain the responsibility to state that they consider the Annual report and accounts, taken as a whole, is fair, balanced and understandable, presents an assessment of the Company's position and prospects and presents the necessary information for shareholders to assess the business and strategy. They also recognise their responsibility to establish procedures to manage risk and oversee the internal control framework. The Directors' responsibilities statement is on page 141. The reports from the Audit Committee and the Risk and Capital Committee Chairs show how the Committees have supported the Board in meeting these responsibilities.

The Board's view of its principal and emerging risks and how they are being managed is contained in the  Risk management section of the Strategic report on  pages 76 to 79.

Annual review of internal control

The Directors have overall responsibility for the governance structures and systems of the group, which includes the ERM framework and system of internal control, and for the ongoing review of their effectiveness. The framework is designed to manage, rather than eliminate, risk and can only provide reasonable, not absolute, assurance against material misstatement or loss. The framework covers all of the risks as set out in the Risk management section of the Strategic report.

In line with the requirements of the Code, the Board has reviewed the effectiveness of the system of internal control. The Audit Committee undertook the review on behalf of the Board and reported the results of its review to the Board. The system was in place throughout the year and up to the date of approval of the Annual report and accounts 2023.

The review of abrdn's risk management and internal control systems was carried out drawing on inputs across the three lines of defence taking into account the operation of each component of the Enterprise Risk Management Framework.

The business continues to make control improvements to meet increasing regulatory expectations, particularly, in the areas of operational resilience and third-party oversight. 2023 has seen the business continue to strengthen controls within its operating model through better definition of accountability and processes. Technology advances and the implementation of actions around the Consumer Duty and Operational Resilience regulations continue to drive further improvements in the control environment. The Finance function operates a set of defined processes which operate over all aspects of financial reporting, which includes the senior review and approval of financial results, controlled processes for the preparation of the IFRS consolidation, and the monitoring of external policy developments to ensure these are adequately addressed. These processes include the operation of a Technical Review Committee and the Financial Reporting Executive Review Group to provide senior review, challenge and approval of relevant disclosures, accounting policies, and changes required to comply with external developments.

The Board's going concern statement is on page 140 and the Board's viability statement is on page 74.

(v) Remuneration

The Directors' remuneration report (DRR) on pages 115 to 134 sets out the work of the Remuneration Committee and its activities during the year, the levels of Directors' remuneration and the shareholder approved remuneration policy. The Company's approach to investing in and rewarding its workforce is set out on page 129 of the DRR. The Board believes that its remuneration policies and practices are designed to support the Company's strategy and long-term sustainable success. More information about the policies and practices can be found in the DRR.

Other information

You can find details of the following, as required by FCA Disclosure and Transparency Rule 7.2.6, in the Directors' report and in the Directors' remuneration report:

Share capital

-    Significant direct or indirect holdings of the Company's securities.

-    Confirmation that there are no securities carrying special rights with regard to control of the Company.

-    Confirmation that there are no restrictions on voting rights in normal circumstances.

-    How the Articles can be amended.

-    The powers of the Directors, including when they can issue or buy back shares.

Directors

-    How the Company appoints and replaces Directors.

-    Directors' interests in shares.

Board meetings and meeting attendance

The Board and its Committees meet regularly, operating to an agreed timetable. Meetings are usually held in Edinburgh or London. During the year, the Board held specific sessions to consider the Group's strategy and business planning. The Chair and the non-executive Directors also met during the year, formally at each Board meeting, and informally, without the executive Directors present and where matters including executive performance and succession and Board effectiveness were discussed. The Board scheduled eight formal meetings and a focused strategy meeting in 2023.

Directors are required to attend all meetings of the Board and the Committees they serve on, and to devote enough time to the Company to perform their duties. Board and Committee papers are distributed before meetings other than, by exception, urgent papers which may need to be tabled at the meeting. If Directors are not able to attend a meeting because of conflicts in their schedules, they receive all the relevant papers and have the opportunity to submit their comments in advance to the Chair or to the Company Secretary. If necessary, they can follow up with the Chair of the meeting. Recognising that some Directors may have existing commitments they cannot change at very short notice, the Board has established the Standing Committee as a formal procedure for holding unscheduled meetings. The Standing Committee meets when, exceptionally, decisions on matters specifically reserved for the Board need to be taken urgently. All Directors are invited to attend Standing Committee meetings. The Standing Committee did not meet during 2023.

The Company Chair is not a member of the Audit, Risk and Capital, or Remuneration Committees. He is invited to attend meetings of all Committees, by invitation, in order to keep abreast of their discussions and routinely does so. The table below reflects the composition of the Board and Board Committees during 2023 and records the number of meetings and members' attendance.

	Board	Group Audit Committee	Nomination and Governance Committee	Remuneration Committee	Risk and Capital Committee
Chair
Sir Douglas Flint	9/9	-	4/4	-	-
Executive Directors
Stephen Bird	9/9	-	-	-	-
Jason Windsor1	2/2	-	-	-	-
Non-executive Directors
Jonathan Asquith	9/9	-	4/4	7/7	-
John Devine	9/9	6/6	4/4	-	6/6
Hannah Grove	9/9	-	4/4	7/7	-
Pam Kaur	9/9	6/6	-	-	6/6
Cathleen Raffaeli	9/9	-	-	7/7	6/6
Catherine Bradley	9/9	6/6	4/4	-	6/6
Mike O'Brien	9/9	6/6	-	-	6/6
Former members
Stephanie Bruce (stood down 10 May 2023)	3/3	-	-	-	-
Brian McBride (stood down 10 May 2023)	3/3	-	-	3/3	-

1.             Jason Windsor was appointed on 23 October 2023.

Tenure as at February 2024

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Executive and Non-executive mix

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Board Committees

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The Board has established Committees that oversee, consider and make recommendations to the Board on important issues of policy and governance. At each Board meeting, the Committee chairs provide reports of the key issues considered at recent Committee meetings, and minutes of Committee meetings are circulated to the appropriate Board members. This includes reporting from the Chair of the Audit Committee on any whistleblowing incidents which have been escalated to them. The Committees operate within specific terms of reference approved by the Board and kept under review by each Committee.

All Board Committees are authorised to engage the services of external advisers at the Company's expense, whenever they consider this necessary. With the exception of fees paid to external advisers of the Remuneration Committee, as detailed on page 133, no such expense was incurred during 2023.

Committee reports

This statement includes reports from the chairs of the Audit Committee, the Risk and Capital Committee and the Nomination and Governance Committee. The report on the responsibilities and activities of the Remuneration Committee can be found in the Directors' remuneration report section.

1. Audit Committee report

The Audit Committee assists the Board in discharging its responsibilities for external financial reporting, internal controls over financial reporting and the relationship with the external auditors.

I am pleased to present my report as Audit Committee
(the Committee) Chair.

While the Committee focuses its attention primarily on the Company's financial and non-financial control framework, during 2023 it has also put specific governance emphasis on:

-    the integration of Internal Audit as a key, seamless partner to the Committee.

-    better differentiation, sequencing, and complementarity between the Risk and Capital Committee and the Audit Committee.

-    the governance around internal controls, in particular as the Enterprise Risk Management framework evolves.

-    the introduction of deep-dives on key subject areas to expand the Committee's knowledge.

-    oversight of the Group's evolution as it continues its transition to align its resources and capabilities to meet client needs.

-    significant changes in senior personnel in the Finance function.

 

The Committee also continued to focus on the quality of financial reporting.

While ensuring we fulfil our delegated responsibilities on behalf of the Board, the Audit Committee is a dynamic forum which benefits from a high degree of transparency from management, enabling effective discussion and decision making. This will remain fundamental to the Committee's effectiveness and its oversight of the Company's financial and non-financial reporting and control environment during 2024.

The report is structured in four parts:

(i)  Governance

(ii) Report on the year

(iii)  Internal audit

(iv)  External audit

Catherine Bradley

Chair, Audit Committee

(i) Governance

Membership

All members of the Audit Committee are independent non-executive Directors. For their names, the number of meetings and committee member attendance during 2023, please see the table on page 96.

The Board believes Committee members have the necessary range of financial, risk, control and commercial expertise required to provide effective challenge to management and have competence in accounting and auditing as well as recent and relevant financial experience. Catherine Bradley is a non-executive director of Johnson Electric Holdings Limited and of easyJet plc, where she chairs the finance committee. She is also senior independent director of Kingfisher plc. Catherine has previously chaired the audit committees of Groupe Peugeot Citroen and of the Financial Conduct Authority. John Devine is a member of the Chartered Institute of Public Finance and Accounting. Pam Kaur is a qualified chartered accountant. Mike O'Brien is a fellow of the Institute and Faculty of Actuaries. The Committee members are also members of audit committees related to their other non-executive Director roles.

Invitations to attend Committee meetings are extended to the Chair, the Chief Executive Officer, the Chief Financial Officer, the Group Financial Controller, the Chief Internal Audit Officer and the Group Chief Risk Officer, as well as the External auditors.

The Audit Committee meets privately for part of its meetings and also has regular private meetings separately with the external auditors and the Chief Internal Audit Officer. These meetings address the level of co-operation and information exchange and provide an opportunity for participants to raise any concerns directly with the Committee.

Key responsibilities

The Audit Committee's responsibilities are to oversee, and report to the Board on:

-    The appropriateness of the Group's accounting and accounting policies, including the going concern presumption and viability statement.

-    The findings of its reviews of the financial information in the Group's annual and half year financial reports.

-    The clarity of the disclosures relating to accounting judgements and estimates.

-    Its view of the 'fair, balanced and understandable' reporting obligation.

-    The findings of its review of certain Group prudential external disclosures.

-    Internal controls over financial reporting.

-    ESG disclosures relating to financial and quantitative information.

-    Liaison with the Remuneration Committee on any financial reporting matters related to the achievement of targets and measures.

-    Outcomes of investigations resulting from whistleblowing.

-    The appointment or dismissal of the Chief Internal Audit Officer, the approved internal audit work programme, key audit findings and the quality of internal audit work.

-    The skills of the external audit team and their compliance with auditor independence requirements, the approved audit plan, the quality of the firm's execution of the audit, and the agreed audit and non-audit fees.

In carrying out its duties, the Committee is authorised by the Board to obtain any information it needs from any Director or employee of the Group. It is also authorised to seek, at the expense of the Group, appropriate external professional advice whenever it considers this necessary. The Committee did not need to take any independent advice during the year.

In accordance with the Senior Managers and Certification Regime the Audit Committee Chair is responsible for the oversight of the independence, autonomy and effectiveness of our policies and procedures on whistleblowing including the procedures for the protection of employees who raise concerns related to detrimental treatment. Throughout the year the Audit Committee Chair met regularly with the Chief Internal Auditor, the Chief Sustainability Officer - Investments and the Global Head of Corporate Sustainability to discuss their work, findings and current developments.

Committee effectiveness

The Committee reviews its remit and effectiveness each year. Following the externally facilitated review in 2022, the 2023 review was conducted internally, on behalf of the Board, by the Company Secretary. The review concluded that the Committee continued to operate effectively during 2023 with no material issues or concerns raised. More information about the process involved, and its outcomes, can be found on page 94.

 (ii) Report on the year

Audit agenda

As well as regular reporting, agenda items were aligned to the annual financial cycle as set out below:

Jan-Mar	-    Annual report and accounts 2022. -    Strategic report and financial highlights 2022. -    Financial reporting judgements. -    Process execution event in the Investments business -    Liaison with the Remuneration Committee on any financial reporting matters related to the achievement of targets and measures. -    External auditor's review of Full year results. -    Whistleblowing. -    Sustainability reporting. -    Effectiveness of the Internal Audit function.
Apr-Jun	-    Internal audit findings. -    Prudential and Regulatory reporting -    Initial financial reporting matters for Half year 2023. -    Whistleblowing. -    External auditor's management letter, and audit strategy. -    Risk and Control Self-Assessment (RCSA) reform
Jul-Sep	-    Half year results 2023. -    External auditors' review of Half year results. -    External auditors' independence. -    Internal audit findings. -    Whistleblowing.
Oct-Dec	-    Initial financial reporting matters for Full year 2023, including pension scheme assumptions. -    Non-audit services policy. -    The internal audit plan and charter. -    Internal audit findings. -    Effectiveness of the external auditors and related non-audit services. -    Whistleblowing. -    Sustainability and ESG reporting. -    Risk management and internal control system annual review and future plans. -    CASS reporting update. -    Corporate and Audit Reform update.

 

The indicative proportion of time spent on the business of the Committee is illustrated below:

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Detail of work

The focus of work in respect of 2023 is described below.

Financial and non-financial reporting

Our accounts are prepared in accordance with International Financial Reporting Standards (IFRS). The Committee believes that some Alternative Performance Measures (APMs), which are also called non-GAAP measures, can add insight to the IFRS reporting and help to give shareholders a fuller understanding of the performance of the business. The Committee considered the presentation of APMs and related guidance as discussed further in the 'Fair, balanced and understandable' section below.

The Committee reviewed the Group accounting policies and confirmed they were appropriate to be used for the 2023 Group financial statements. IFRS 17 Insurance Contracts was adopted in 2023. This primarily impacted our HASL joint venture business. Read more in the Basis of preparation in the Group financial statements section.

The Committee reviewed the basis of accounting and in particular the appropriateness of adopting the going concern basis of preparation of the financial statements. In doing so, it considered the Group's cash flows resulting from its business activities and factors likely to affect its future development, performance and position together with related risks, as set out in more detail in the Strategic report. The Committee recommended the going concern statement to the Board.

In addition, the Committee considered the form of the viability statement and in particular whether the three-year period remained appropriate, and concluded that it did. This reflects both our internal planning cycle and the timescale over which changes to major regulations and the external landscape affecting our business typically take place. In formulating the statement, the Committee considered the result of stress testing and reverse stress testing presented to the Risk and Capital Committee. The Committee recommended the viability statement to the Board.

During 2023, the Committee reviewed the Annual report and accounts 2022 and the Half year results 2023. For both periods it received written and/or oral reports from the Chief Financial Officer, the interim Chief Financial Officer, the Company Secretary, the Chief Internal Audit Officer and the external auditors. The Committee used these reports to aid its understanding of the composition of the financial statements, to confirm that the specific reporting standards and compliance requirements had been met and to support the accounting judgements and estimates. Following its reviews, the Committee was able to recommend the approval of each of the reports to the Board, being satisfied that the full and half year financial statements complied with laws and regulations and had been appropriately compiled.

The Committee recognises the importance of sustainability and ESG reporting. During 2023 the Committee discussed and reviewed the sustainability reporting landscape and the related governance framework at a number of meetings. In particular, as part of the review of the Annual report and accounts, the Committee reviewed Task Force on Climate-Related Financial Disclosures (TCFD). The Committee's review focused on ensuring metrics and outcomes were appropriately explained and validated. KPMG in their role as auditor have reviewed our TCFD disclosures as part of their audit engagement. More information can be found on page 105.

Accounting estimates and judgements

The Audit Committee considered all estimates and judgements that Directors understood could be material to the 2023 financial statements. The Committee also focused on disclosure of these key accounting estimates and judgements.

Significant accounting estimates, judgements and assumptions for the year ended 31 December 2023	How the Audit Committee addressed these significant accounting estimates and assumptions
Goodwill impairment reviews
Goodwill is required to be tested annually for impairment and the determination of recoverable amounts for this impairment assessment is a key area of estimation. The impairment assessment is performed by comparing the carrying amount of each cash-generating unit (CGU) with its recoverable amount, being the higher of its value in use (VIU) and fair value less costs of disposal (FVLCD). In 2023 impairments of goodwill were recognised in relation to the abrdn financial planning CGU (impairment of £36m) in the ii segment and in relation to the Finimize CGU (impairment of £26m) within Other business operations and corporate costs (previously in Investments) and therefore the determination of the recoverable amount for these CGUs was a key judgement which directly impacted the amount of the impairment. The impairments include the impact of lower projected revenues as a result of adverse markets and macroeconomic conditions, and for Finimize the impact of lower short-term projected growth following a strategic shift that prioritises profitability over revenue growth. The recoverable amount for abrdn financial planning was determined based on FVLCD, with the primary approach being a multiples valuation approach based on price to revenue and price to assets under advice. The recoverable amount for Finimize was also determined based on FVLCD, with the primary approach being a revenue multiple valuation approach. Goodwill relating to the interactive investor CGU was also tested for impairment and the recoverable amount, based on FVLCD, indicated that no impairment was required.	The Committee spent time reviewing and challenging recoverable amount assumptions at three meetings. For abrdn financial planning the Committee considered several different valuation approaches and discussed the valuation assessment with management and agreed that recoverable amount was within the reasonable range. For Finimize the Committee noted that the business is inherently difficult to value as there are few directly comparable companies and therefore there are a range of reasonable valuations. The Committee discussed the valuation assessment with management and agreed that recoverable amount was within the reasonable range. The Committee agreed with management's view that the goodwill for the interactive investor CGU was not impaired. The Committee noted the inherent sensitivity of the recoverable amounts and supported the disclosure of appropriate sensitivities. Further details on goodwill impairment reviews are disclosed in Note 13 of the Group financial statements.
UK defined benefit pension plan
In compiling a set of financial statements, it is necessary to make some judgements and estimates about outcomes that are dependent on future events. This is particularly relevant to the defined benefit pension plan surplus which is inherently dependent on how long people live and future economic outcomes. For the principal UK defined benefit pension plan, the Committee reviewed the assumptions for mortality, discount rate and inflation.	The Committee considered the proposed assumptions taking into account market data and information from pension scheme advisors. The Committee concurred with management and their actuarial advisors that appropriate adjustments are required to avoid the mortality assumptions being skewed by excess COVID-19 deaths and to allow for the ongoing uncertainty around the pandemic's impact on future mortality improvement. Note 31 of the Group financial statements provides further details on the actuarial assumptions used, and sets out the impact of mortality, discount rate and inflation sensitivities. Note 31 also provides details on the accounting policy applied and accounting policy judgements relating to the Group's assessment that it has an unconditional right to a refund of a surplus, and the treatment of tax relating to this surplus.
Tritax contingent consideration fair value
In 2021, the abrdn group purchased 60% of the membership interests in Tritax Management LLP. Subject to certain conditions, an additional contingent deferred earn-out is expected to be payable to acquire the remaining 40% of membership interests in Tritax should the selling partners choose to exercise put options in respect of each of the years ended 31 March 2024, 31 March 2025 and 31 March 2026. The amount payable is linked to the EBITDA of the Tritax business in the relevant period. abrdn has the right to purchase any outstanding interests at the end of 2026 through exercising a call option. The contingent consideration liability is required to be recognised at fair value, which is primarily dependant on future earnings projections.	The Committee analysed and discussed management's assumptions underlying the fair value of the contingent consideration at 31 December 2023 and agreed that the fair value was within the reasonable range. The Committee reviewed and supported that disclosure of sensitivities to key assumptions should be provided given the inherent uncertainties in the valuation. See Note 36 of the Group financial statements for further details.
Significant accounting estimates, judgements and assumptions for the year ended 31 December 2023	How the Audit Committee addressed these significant accounting estimates and assumptions
Investments in subsidiaries In relation to the abrdn plc Company only accounts, an assessment is made at each reporting date as to whether there are any indicators of impairment in relation to investments in subsidiaries. At year end 2023 management noted that the Company's net assets attributable to shareholders of £4.6bn (post impairments) continues to be higher than the Company's market capitalisation of £3.3bn. Taking this into account along with the continued headwinds facing active asset managers, it was assessed that there were indicators of impairments in relation to the Company's asset management holding companies, abrdn Investment Holdings Limited (aIHL) and abrdn Holdings Limited (aHL). aIHL had also paid up significant dividends in 2023 following the sale of abrdn Capital Limited and the sale of its subsidiary's holding in HDFC Asset Management. Following the performance of valuation exercises, impairments of aIHL and aHL of £169m and £40m respectively have been recognised. Indicators of impairment were also identified in relation to abrdn Financial Planning Limited (aFPL). The goodwill relating to aFPL had been impaired at the consolidated level in 2023. Following the performance of the valuation which also supported the assessment of goodwill above, an impairment of the Company carrying value of £52m has been recognised. The Company's investment in its subsidiary abrdn (Mauritius Holdings) 2006 Limited (aMH06) was impaired during 2023 by £43m. The impairment resulted from the payment of dividends from aMH06 to the Company in 2023. Following the payment of the dividends, the recoverable amount of aMH06 was less than £1m. No other indicators of impairment were identified on any material investment in subsidiaries including ii which, as noted above, is also fully supported by a valuation exercise performed for goodwill purposes. Indicators of reversal of impairment must also be considered and in relation to Aberdeen Corporate Services Limited, following the recent Court of Session ruling on the surplus for the UK principal plan, it is considered appropriate to recognise a reversal of impairment of £13m.	The Committee discussed the investment in subsidiaries impairment assessment with management and noted that the judgements in relation to these assessments were materially the same as the judgements relating to the goodwill impairment reviews. The Committee supported that relevant disclosures were made in the Company only accounts including disclosure that appropriate consideration had been given to the Company net assets being higher than the abrdn market capitalisation. The Committee noted that the Company's distributable profits were £3.1bn following the 2023 impairments which continued to provide support for the dividend policy. Further details on the assessment of investments in subsidiaries are set out in Note A of the Company financial statements section

Principal risks are disclosed in the Strategic report and recommended to the Board by the Risk and Capital Committee. The Committee was satisfied that the estimates and quantified risk disclosures in the financial statements were consistent with the Strategic report. The Committee concluded that appropriate judgements had been applied in determining the estimates and that sufficient disclosure had been made to allow readers to understand the uncertainties surrounding outcomes.

Fair, balanced and understandable

The Committee supported management's continued aim to compile the Annual report and accounts to be 'fair, balanced and understandable'.

abrdn's principles

To create clarity on fair, balanced and understandable for abrdn a set of principles is applied, as set out below:

Fair 'We are being open and honest in the way we present our discussions and analysis, and are providing what we believe to be an accurate assessment of business and economic realities.'	-    The narrative contained in the Annual report and accounts is honest, accurate and comprehensive. -    The key messages in the narrative in the Strategic report and Governance sections of the Annual report and accounts reflect the financial reporting contained in the financial statements. -    The Key Performance Indicators (KPIs) for the period are consistent with the key messages outlined in the Strategic report.
Balanced 'We are fully disclosing our successes, the challenges we have faced in the period, and the challenges and opportunities we anticipate in the future; all with equal importance and at a level of detail that is appropriate for our stakeholders.'	-    The Annual report and accounts presents both successes and challenges experienced during the year and, as appropriate, reflects those expected in the future. -    The level of prominence we give to successes in the year versus challenges faced is appropriate. -    The narrative and analysis contained in the Annual report and accounts effectively balances the information needs and interests of each of our key stakeholder groups.
Understandable 'The language we use and the way we structure our report is helping us present our business and its performance clearly; in a way that someone with a reasonably informed knowledge of financial statements and our industry would understand.'	-    The layout is clear and consistent and the language used is simple and easy to understand (industry specific terms are defined where appropriate). -    There is a consistent tone across and good linkage between all sections in a manner that reflects a complete story and clear signposting to where additional information can be found.

Activities

An Internal Review Group (IRG) is in place which reviews the Annual report and accounts specifically from a fair, balanced and understandable perspective and provides feedback to our financial reporting team on whether it conforms to our standards. The members of the IRG are independent of the financial reporting team and include colleagues from Investor Relations, ESG reporting,
Risk, Internal Audit, Communications and Strategy.

The key points discussed by the IRG covered:

-    The impact of markets on business performance, particularly in relation to the Investments business.

-    The balance of reporting relating to the business risk environment.

-    How previously reported matters had been updated.

Fair, balanced and understandable guidance was provided to relevant stakeholders involved in the Annual report and accounts production process.

The Audit Committee, reviewed the messaging in the Annual report and accounts, taking into account material received and Board discussions during the year.

Three drafts of the Annual report and accounts 2023 were reviewed by the Audit Committee at three meetings. The Committee complemented its knowledge with that of executive management and internal audit. An interactive process allowed each draft to embrace contributions.

The Annual report and accounts goes through an extensive internal verification process of all content to verify accuracy.

The Committee also reviewed the use and presentation of APMs which complement the statutory IFRS results. This review considered guidelines issued by the European Securities and Markets Authority in 2016 and the thematic reviews by the Financial Reporting Council (FRC). A Supplementary information section is included in the Annual report and accounts to explain the rationale for using these metrics and to provide reconciliations of these metrics to IFRS measures where relevant. This section also provides increased transparency over the calculation of reported financial ratios.

Adjusted operating profit and adjusted profit before tax are key profit APMs. The Committee considered whether the allocation of items to adjusted operating profit was in line with the defined accounting policies, consistent with previous practice and appropriately disclosed. Where there were judgemental areas, such as in relation to certain interactive investor related costs, the Committee specifically reviewed the proposed treatments and ensured that the Annual report and accounts provided appropriate disclosures.

The Audit Committee agreed to recommend to the Board that the Annual report and accounts 2023, taken as a whole, is fair, balanced and can be understood by someone with a reasonably informed knowledge of financial statements and our industry.

Prudential reporting

The Committee also considered disclosures relating to IFPR (Investment Firms Prudential Regime) results included in the Strategic report and notes sections of the Annual report and accounts and half year reporting, together with related assurance over these disclosures.

Internal controls

As noted earlier, the Directors have overall responsibility for abrdn's internal controls and for ensuring their ongoing effectiveness. This does not extend to associates and joint ventures. Together with the Risk and Capital Committee, the Committee provides comfort to the Board of their ongoing effectiveness.

Internal audit regularly reviews the effectiveness of internal controls and reports to the Committee and the Risk and Capital Committee.

The Finance function sets formal requirements for financial reporting which apply to the Group as a whole, defines the processes and detailed controls for the consolidation process and reviews and challenges reporting submissions. Further, the Finance function runs a Technical Review Committee and is responsible for monitoring external technical developments. The Committee focuses on ensuring appropriate sign-offs on financial results are provided, and a mechanism for the escalation of issues from major regulated subsidiary Boards is in place.

The control environment around financial and non-financial reporting will continue to be monitored closely.

In early 2023, the Committee discussed the implications of a significant process execution event and this was reflected in 2022 financial reporting.

Whistleblowing

Our people are trained via mandatory training modules to detect the signs of possible fraudulent or improper activity and how to report concerns either directly or via our independent whistleblowing hotline. The Committee Chair is the designated whistleblower's champion and the Committee receives regular updates on the operation of the whistleblowing procedures (Speak Up) from the Conduct and Conflicts Oversight Manager. The anonymised reports include a summary of the incidents raised as whistleblowing, and information on developments of the arrangements in place, to ensure concerns can be raised in confidence about possible malpractice, wrongdoing and other matters.

The Committee oversees the findings of investigations and required follow-up action. If there is any allegation against the Risk or internal audit functions, the Committee directs the investigation. The Committee is satisfied that the Group's procedures are currently operating effectively. The Committee Chair reports to the Board on the updates the Committee receives.

 (iii) Internal audit

The role and mandate of the internal audit function is set out in its Charter, which is reviewed and approved by the Committee annually. Whilst internal audit maintains a relationship with the external auditors, in accordance with relevant independence standards, the external auditors do not place reliance on the work of internal audit. The internal audit plan is reviewed and approved by the Committee at least annually and is flexed during the year to respond to internal and external developments. The function's coverage aligns to the Group's activities and footprint, taking account of local internal audit requirements. Regular reporting is provided to the Committee to illustrate plan progress, any emerging risks or themes and the status of implementation of recommendations.

The Committee assesses the independence and quality assurance practices of the Internal Audit function and agrees the effectiveness of the function, aligned to the Group's objectives on an annual basis. Independent external reviews are also undertaken at regular intervals. The most recent one was completed in H2 2021 by Deloitte who assessed the abrdn internal audit function as having the highest overall rating with conformance against all aspects of the Institute of Internal Auditors' International Professional Practices Framework (IPPF) and the Internal Audit Financial Services Code of Practice (the Standards). The Committee's own review of the function in 2023 was positive and supports the continuous evolution and enhancement of Internal Audit.

The Committee Chair meets the Chief Internal Audit Officer periodically, without management being present.

(iv) External auditors

The appointment

The Committee has responsibility for making recommendations to the Board on the reappointment of the external auditors, determining their independence from the Group and its management and agreeing the scope and fee for the audit. Following its review of KPMG's performance, the Committee concluded that there should be a resolution to shareholders to recommend the reappointment of KPMG at the 2024 AGM.

The Committee complies with the UK Corporate Governance Code, the FRC Guidance on Audit Committees with regard to the external audit tendering timetable, the provisions of the EU Regulation on Audit Reform, and the Competition and Markets Authority Statutory Audit Services Order with regard to mandatory auditor rotation and tendering. The Committee will continue to follow the annual appointment process but does not currently anticipate re-tendering the audit before 2026. This is currently considered to be in the best interests of the Company taking into account the results of the formal review of the effectiveness of the KPMG audit discussed in this section.

The audit was last subject to a tender during the first half of 2016, and on 17 May 2016 the Company announced its intention to appoint KPMG as its auditor for the year ending 31 December 2017, replacing PwC who were the Company's previous auditors.

In March 2017, the proposed acquisition of Aberdeen Asset Management PLC was announced. Consequently, the Standard Life plc Audit Committee (now abrdn plc) sought assurance that KPMG's independence would not be compromised as a result of their previous position as external auditor of Aberdeen Asset Management PLC, from its incorporation in 1983 until 30 September 2015. While recognising that the KPMG tenure had ceased nearly two years prior to the proposed acquisition, a paper outlining the matters which had been considered was brought to the Committee and, following review, the Committee was satisfied that there were no impacting issues.

KPMG's independence has subsequently been regularly reviewed by the Committee and we remain satisfied of their independence. Further detail on this assessment is set out below. We consider KPMG's tenure for abrdn plc and its group of companies to run from the completion of the 2016 tender exercise and their appointment for year end in 2017. The audit for the year ended 31 December 2023 is, therefore, KPMG's 7th year as auditor. The Senior Statutory Auditor is Richard Faulkner.

Auditor independence

The Board has an established policy (the Policy) setting out which non-audit services can be purchased from the firm appointed as external auditors. The Committee monitors the implementation of the Policy on behalf of the Board. The aim of the Policy, which is reviewed annually, is to support and safeguard the objectivity and independence of the external auditors and to comply with the revised FRC Ethical standards for auditors (Ethical Standards). It does this by prohibiting the auditors from carrying out certain types of non-audit services, and by setting out which non-audit services are permitted. It also ensures that where fees for approved non-audit services are significant, they are subject to the Committee Chair's prior approval. KPMG has implemented its own policy preventing the provision by KPMG of most non-audit services to FTSE 350 companies which are audit clients. A 70% fee cap on non-audit services to audit clients is in place.

The services prohibited by the Policy are as set out in the FRC Revised Ethical Standard 2019.

The Policy permits non-audit services to be purchased, following approval, when they are closely aligned to the external audit service and when the external audit firm's skills and experience make it the most suitable supplier.

These include:

-    Audit related services, such as regulatory reporting.

-    Investment circular reporting accountant engagements.

-    Attesting to services not required by statute or regulation (e.g. controls reports).

-    Other reports required by a regulator or assurance services relating to regulatory returns.

-    Sustainability and TCFD report audits/reviews.

-    Fund merger assurance engagements, where the engagement is with the manager and the external auditor is also the auditor of the fund.

KPMG has reviewed its own independence in line with these criteria and its own ethical guideline standards. KPMG has confirmed to the Committee that following its review it is satisfied that it has acted in accordance with relevant regulatory and professional requirements and that its objectivity is not impaired.

Having considered compliance with our Policy and the fees paid to KPMG, the Committee is satisfied that KPMG has remained independent.

Audit and non-audit fees

The Group audit fee payable to KPMG in respect of 2023 was £7.2m (2022: KPMG £6.2m). In addition, £2.8m
(2022: £2.3m) was incurred on audit related assurance services. Fees for audit related assurance services are primarily in respect of client money reporting and the half year review. The Committee is satisfied that the audit fee is commensurate with permitting KPMG to provide a quality audit and monitors regularly the level of audit and non-audit fees. Non-audit work can only be undertaken if the fees have been approved in advance in accordance with the Policy for non-audit fees. Unless fees are small (which we have defined as less than £75,000), the approval of the Committee Chair is required.

Non-audit fees amounted to £1.0m (2022: £1.3m), of which £1.0m (2022: £1.0m) related to other assurance services and £nil (2022: £0.3m) related to other non-audit fee services. Other assurance services in 2023 primarily related to control assurance reports, which are closely associated with audit work. The external auditors were considered the most suitable supplier for these services taking into account the alignment of these services to the work undertaken by external audit and the firm's skill sets. The Committee also monitors audit and non-audit services provided to non-consolidated funds and were satisfied fees for those services did not impact auditor independence.

Further details of the fees paid to the external auditors for audit and non-audit work carried out during the year are set out in Note 7 of the Group financial statements.

The ratio of non-audit fees to audit and audit related assurance fees is 10% (2022: 15%). The total of audit related assurance fees (£2.8m) and non-audit fees (£1.0m) is £3.8m, and the ratio of these audit related assurance fees and non-audit fees to audit fees is 53% (2022: 58%). As noted above the audit related assurance fees are primarily fees in relation to required regulatory reporting, where it is normal practice for the work to be performed by the external auditor.

The Committee is satisfied that the non-audit fees do not impair KPMG's independence.

Audit quality and materiality

The Committee places great importance on the quality of the external audit and carries out a formal annual review of its effectiveness.

The Committee looks to the audit team's objectivity, professional scepticism, continuing professional education and its relationship with management, all in the context of regulatory requirements and professional standards. Specifically:

-    The Committee discussed the scope of the audit prior to its commencement.

-    The Committee reviewed the annual findings of the Audit Quality Review team of the FRC in respect of KPMG's audits. The Committee was satisfied insofar as the issues might be applicable to abrdn's audit, that KPMG had proper and adequate procedures in place for our audit.

-    The Committee approved a formal engagement with the auditor and agreed its audit fee.

-    The Committee Chair had regular meetings with the lead audit partner to discuss Group developments.

-    The Committee receives updates on KPMG's work and its findings and compliance with auditor independence requirements.

-    The Committee reviewed and discussed the audit findings including audit differences prior to the approval of the financial statements. See the discussion on materiality in the following paragraphs for more detail.

-    The Committee also continued to monitor and discuss relevant external matters in relation to KPMG as a firm.

The Committee discussed the accuracy of financial reporting with KPMG both as regards accounting errors that would be brought to the Committee's attention and as regards amounts that would need to be adjusted so that the financial statements give a true and fair view. Differences can arise for many reasons ranging from deliberate errors (fraud etc.) to good estimates that were made at a point in time that, with the benefit of more time, could have been more accurately measured. KPMG have set overall audit materiality at £13.7m (2022: £14m) based on revenue (as set out in the KPMG independent auditors' report). This is within the range in which audit opinions are conventionally thought to be reliable. To manage the risk that aggregate uncorrected differences become material, the Committee supported that audit testing would be performed to a lower materiality threshold for individual reporting units. Furthermore, KPMG agreed to draw the Committee's attention to all identified uncorrected misstatements greater than £0.7m (2022: £0.7m). The aggregated net difference between the reported pre-tax profit and the auditor's judgement of pre-tax profit was less than £5m which was less than audit materiality. The gross differences were attributable to various individual components of the consolidated income statement and balance sheet. No audit difference was material to any line item in either the income statement or the balance sheet. Accordingly, the Committee did not require any adjustment to be made to the financial statements as a result of the audit differences reported by the external auditors.

KPMG has confirmed to the Committee that the audit complies with their independent review procedures.

 

2. Risk and Capital Committee report

I am pleased to present my report as Chair of the Risk and Capital Committee (or the "Committee" for the purpose of this report).

The Risk and Capital Committee supports the Board in providing effective oversight and challenge of risk management and the use of capital across the Group so as to ensure that we meet the expectations of our shareholders, regulators, and clients.

During 2023 the Committee ensured there was a client first focus in the management of risk and capital matters. Particular focus was placed on client and conduct risk, and operational and financial resilience. Throughout 2023, the Committee considered the financial and strategic considerations of the challenging market and economic environment and deepened focus on sustainability and geopolitical risks. The Committee continued to review and challenge key activities undertaken by the business and advise the Board on these, including:

-   Evolution of the Enterprise Risk Management (ERM) framework.

-   Delivery of the Group's ICARA and capital and liquidity.

-   Conduct risks across our three businesses and implementation of the new Consumer Duty and continued support of vulnerable customers.

-   Key project delivery updates from the transformation activity across the Group.

-   The progress to strengthen anti-financial crime and anti-money laundering activity across the Group.

-   Work to mature our approach to managing cyber resilience in line with the US National Institute of Standards and Technology (NIST) framework.

-   The simplification and diversification of the business model.

-   The Group's exposure to emerging risks, including client, sustainability and geopolitical risks and events.

Furthermore, the Committee has closely monitored developments from our regulators across the world as they have progressed the regulatory agenda, including the areas of ESG, operational resilience and innovation in technologies (AI).

Further details on these and other activities carried out by the Committee during the year can be found in the report that follows.

John Devine

Chair, Risk and Capital Committee

Membership

All members of the Risk and Capital Committee are independent non-executive Directors. For their names, the number of meetings and Committee member attendance during 2023, please see the table on page 96.

The Committee meetings are attended by the Chief Risk Officer. Others invited to attend on a regular basis include the Chief Executive Officer, the Chief Financial Officer, Group General Counsel and the Chief Internal Auditor, as well as the External auditors.

Regular private meetings of the Committee's members have been held during the year, providing an opportunity to raise any issues or concerns with the Chair of the Committee. The Committee's members have also held regular private meetings with the Chief Risk Officer and access to management and subject matter experts outside of the Committee meetings, to support them in gaining an in-depth understanding of specific topics.

Key responsibilities

The Company's purpose results in opportunities and exposure to a range of risks and uncertainties. Understanding and actively managing the sources and scale of these opportunities and risks are key to fulfilling this purpose.

The role of the Committee is to provide oversight and advice to the Board, and where appropriate, the Board of each relevant Group company on the following:

-   The Group's current risk strategy, material risk exposures and their impact on the levels and allocations of capital.

-   The structure and implementation of the Group's ERM framework and its ability to react to forward-looking issues and the changing nature of risks.

-   Changes to the risk appetite framework and quantitative risk limits.

-   Risk aspects of major investments, major product developments and corporate transactions.

-   Regulatory compliance across the Group.

-   Specific deep dives including asset classes and the treatment of vulnerable customers.

Further detail on the work performed in each of these areas is set out in the report below. In addition, the Committee acts as the Board Risk Committee for the Group's two main UK investment companies, abrdn Investment Management Limited (aIML) and abrdn Investments Limited (aIL). Accordingly, the CEO of these entities is also invited to attend the Committee meetings.

 In carrying out its duties, the Committee is authorised by the Board to obtain any information it requires from any Director or employee of the Group. It is also authorised to seek, at the expense of the Group, appropriate external professional advice whenever it considers this necessary. The Committee did not need to take any independent advice during the year.

The Committee's work in 2023

Overview

The Committee operates a dynamic agenda and uses each meeting to consider a range of recurring items as well as other items that are more ad hoc and/or more forward-looking in nature. An indicative breakdown as to how the Committee spent its time is shown below:

Diagram removed for the purposes of this announcement.  However it can be viewed in full in the pdf document

The key recurring items which were considered by the Committee are:

-   The 'Views on Risk' report - this provides an independent holistic assessment from the Chief Risk Officer of the key risks and uncertainties faced by the Group's businesses and the monitoring against risk appetites.

-   Conduct risks in each of abrdn's three main businesses and, in particular, implementation of the Consumer Duty rules.

-   Ongoing activity to enhance and develop abrdn's ERM framework, including the process for risk identification and conformance with the ERM and Policy framework.

-   Performance of the Group's ICARA processes in accordance with IFPR, including the firm's stress and scenario testing programme. The ICARA supports the Committee in understanding changes to the risk profile of the Group and the capital position over time.

 

Through these recurring activities the Committee was able to challenge management's assessment of risks and oversee the key actions being taken to manage these risks.

 

In addition to reviewing these recurring items, the Committee provided oversight of a broad range of topics in 2023. This included consideration of:

Jan-Mar	-    Advice provided to the Remuneration Committee regarding the delivery of performance relative to risk appetites -    Conduct risks for the Investments business -    Findings from the abrdn Investment Management business internal controls report -    Stress testing results from the ICARA process -    Operational resilience annual self-assessment -    Review of abrdn's principal risks and risk disclosures for the Annual report and accounts
Apr-Jun	-    Conduct risks for the ii business -    Consumer Duty implementation update -    Real Assets and Alternative investments -    Anti-financial crime related activity -    Trade and Transaction Reporting
Jul-Sep	-    Conduct risks for the Adviser business -    ICARA 2023 approach -    Digital Assets Products -    Management of IT obsolescence
Oct-Dec	-    ICARA process and FCA supervisory review -    The remit of the Risk & Compliance function -    Consumer Duty implementation progress -    Vulnerable Customers -    Cyber Risk and Cyber Security -    Conflicts of Interest -    2024 Monitoring & Oversight assurance plan

After each meeting, the Committee Chair reports to the Board, summarising the key points from the Committee's discussions and any specific recommendations

Risk exposures and risk strategy

abrdn's risk appetite framework enables the communication, understanding and control of the types and levels of risk that the Board is willing to accept in its pursuit of the strategy of the Group. This includes the business plan objectives and the capital and liquidity it requires.

The Committee has received regular reporting through the 'Views on Risk' report on each of the Group's 12 principal risks, including risk dashboards, commentary and management information.

The Committee continued to monitor the risk appetite measures and limits against the approved Board risk appetites, revised in Q4, 2022. The Committee considered changes to the risk profile in view of the external environment and ongoing transformation of the business.

Through reviewing the Views on Risk reporting, the Committee supports the Board by monitoring risk exposures and the resilience of the capital position under current and stressed conditions. Key items that the Committee discussed during the year in this context included:

-   The risks associated with the delivery of the business plan.

-   Components of the Group's risk appetite framework.

-   The process of completion of the abrdn ICARA and its results.

-   Improvements to anti-financial crime processes.

-   Deepening the focus on conduct risks and embedding Consumer Duty.

-   The management of cyber risk and operational resilience across the Group.

Results from regular stress testing and scenario analysis has supported the Committee in understanding, monitoring, and in managing the capital and liquidity risk profile of the business under stressed conditions. These results provided the Committee with a forward-looking assessment of the Group's financial resilience in response to potentially significant adverse events affecting key risk exposures. The material presented to the Committee included combined stress scenarios which looked at simultaneous stresses impacting on economic conditions, flows and idiosyncratic factors specific to the Group.

From reviewing the stress testing and scenario analysis results, the Committee concluded that the Group was financially resilient and there was no requirement for the business to reduce its risk exposures.

The Committee has also considered the results of reverse stress testing to explore extreme but plausible events that have the potential to cause the business to become unviable. This allowed the Committee to assess the risk of business failure and the ability of the Group to prevent and mitigate this risk. The reverse stress testing considered the impact of a combination of cyber-attacks resulting in the non-viability of the Group.

From reviewing the reverse stress testing results, the Committee concluded that the risk of the Group having to wind down due to this scenario was remote. The Committee also noted that the Group has strengthened controls and resilience and actively manages its relationships with third parties. The Committee receives regular reporting on cyber risks and third party management.

Enterprise Risk Management (ERM) framework

During the year, the business continued to evolve the ERM framework used to identify, assess, control, and monitor the Group's risks.

The Committee has obtained assurance regarding the operation of the ERM framework through its review of regular content within the Views on Risk report. In particular we have used our review of the various risk and capital dashboards, including the consolidated dashboard on key conduct risk indicators and Board risk appetite metrics to understand the Group's risk profile and the conformance and effectiveness of the framework in supporting the management of these risks.

The Committee receives reporting from the Risk and Compliance function on the results of the quarterly risk management survey of regional and functional executives which is used to support identification of key risks facing the business. The completion of this survey, along with subsequent discussion of the results by the Executive Leadership Team, helps to drive greater risk awareness and accountability. Furthermore, through reviewing the results of the survey, the Committee has been able to ensure there is appropriate focus on the key risks facing the business.

Exceptions-based reporting is provided to the Committee through the Views on Risk report. This sets out any matters of significance in respect of the results of Policy compliance reporting and actions being taken in response to risk events. These two items also support the Committee in performing its oversight of the ERM framework.

Regulatory developments and compliance

The Committee reviews and assesses regulatory compliance plans detailing the planned schedule of monitoring activities to be performed by the Risk and Compliance function to ensure there is appropriate coverage. Regular updates on key findings from regulatory compliance activity and progress against the plans were reported to the Committee through the Views on Risk report.

As a Committee we have closely monitored global regulatory developments to understand and anticipate potential implications for the Group and the wider financial services sector. In particular the Committee paid close attention to geopolitical risks and resulting operational implications. The Committee has also closely followed regulatory developments and implementation activity in relation to the new Consumer Duty, operational resilience, and new sustainability regulations globally.

Governance arrangements

The Committee has continued to refer to the work of those non-executive risk committees operating in subsidiary companies to provide oversight and challenge of risks within those subsidiaries. This has included the risk committees in place for abrdn Life and Pensions Limited, Standard Life Savings Limited, and Elevate Portfolio Services Limited.

The Committee receives updates from, and reviews the minutes of, these committees in order to maintain awareness and oversight of risks across the Group. In addition to the Committee reviewing reporting from the subsidiary risk committees, arrangements also exist for the Committee's Chair to attend these subsidiary risk committees on request.

In its capacity since January 2022 as the board risk committee to the Group's two main UK investment firms, the Committee routinely considered the implications of Group risk management activities for these two firms and identified any significant risk concerns to be brought to the attention of the respective Boards, The Chair of the two investment firm Boards has a standing invitation to attend the Risk and Capital Committee.

During the year, the Committee provided advice to the Remuneration Committee regarding the delivery of performance in the context of incentive packages. In particular, the Committee considered whether performance had been delivered in a manner that was consistent with the Group's strategy, risk appetite and tolerances, and capital position. The provision of this advice helps to ensure that the Group's overall remuneration practices are aligned to the business strategy, objectives, culture and long-term interests of the Group and that individual remuneration is consistent with, and promotes, effective risk management.

Committee effectiveness

The Committee reviews its remit and effectiveness each year. Following the externally facilitated review in 2022, the 2023 review was conducted internally, on behalf of the Board, by the Company Secretary. The review concluded that the Committee continued to operate effectively during 2023 with no material issues or concerns raised. More information about the process involved, and its outcomes, can be found on page 94.

 

3. Nomination and Governance Committee report

I am pleased to present the Nomination and Governance Committee (the Committee) report for the year ended 31 December 2023.

The Committee's key priorities this year were to maintain effective board governance processes while the group continued to transition to a more sustainable business model and to support succession planning for the Board and the executive, particularly in relation to the recruitment of our new Chief Financial Officer and Chief Investment Officer, together with the reconfiguration of the leadership team within the Investments business. Additionally, we continued to oversee initiatives supporting the development of talent, leadership, diversity, equity and inclusion. Monitoring the embedding of the Company's values within our expectations of employee and employer behaviours to reinforce our cultural commitments, became an important regular agenda item. This followed the expansion of the remit of the Committee in 2022 to include oversight of culture, recognising the contribution this would make as an important enabler within the Company's transformation programmes. Further detail on this can be found on pages 48 to 53.

Governance Framework

We continued to review our governance framework against the Code principles and provisions and welcomed the revisions made to the Code in early 2024. There were no material changes proposed to our governance framework during 2023.

Board evaluation

Following the externally-facilitated review in 2022, our 2023 Board review was conducted internally and concluded the Board was operating effectively and highlighted areas where further progress could be made in 2024. More information about what the process involved, and its outcomes, can be found on page 94.

Culture, Diversity, Equity and Inclusion

The Committee received regular updates on the work being done to implement the Group's culture, diversity, equity and inclusion programmes. Having worked through four distinct phases of activity regarding embedding culture change from activation to hardwiring, we completed the formal programmatic element of the work in 2023. Diversity, Equity and Inclusion remained a key focus and commitment of the Board, especially given the challenge of historic under-representation of women and minority ethnic colleagues within the fund management industry.

While the Committee fully supported the recruitment and promotion of the person best qualified for individual roles, it challenged the modest deterioration in DEI progress against established targets and was reassured that there was no systematic bias. On the positive side, we made progress in reducing UK gender pay and median bonus gaps and achieved better DEI representation within early careers and talent pipelines when compared with our global workforce statistics. Within this, I was pleased our 2023 graduate intake was 44% female, which provides a building block for a more balanced future talent pipeline while we continue to focus on inclusive recruitment actions to maintain this progress.

The Committee recognised there is still more to do and remains focused and committed to holding the executive to account for delivery of tangible actions.

There is more detail about this below and on pages 50 and 51.

In my statement last year, I reported the sad passing of Lynne Connolly in early 2023 after living with incurable cancer for many years. Lynne headed our DEI programmes for six years and was an inspiration to all of our colleagues. Lynne not only worked hard to make DEI progress in abrdn, she was passionate about working across the business community to make collective efforts. She supported the GenAnalytics/Herald awards (and their Diversity Conference) over the years. I reported last year that we planned to establish an award scheme in her memory and was therefore delighted that we agreed with her family and the organisers of the Scottish Diversity Awards that a special award would be established in her name (The Lynne Connolly Achievement in Diversity Award). The inaugural award was presented at the annual GenAnalytics/Herald awards ceremony on 12 October 2023.

Talent and Leadership

The Committee received regular reports from teams involved with Talent and Organisation Effectiveness, oversighting their plans to deliver effective leadership, talent and performance management across the Group. During the year we have spent particular time on the talent pipeline. It is pleasing that since the last report the Company's approach to talent has continued to develop and become more targeted and systematic. This was particularly reflected in the establishment of various leadership and readiness cohorts and the frequency and detail of the talent discussions occurring at both executive level and with the Committee. Following the launch of a new 18-month long future leaders programme this has already led to the role expansion/promotion of 34% of the introductory cohort.

Board composition

The Committee, on behalf of the Board, assesses the balance of executive and non-executive Directors, and the composition of the Board in terms of the skills, experience, diversity and capacity needed for the Company to be successful. These factors are important to the Board when reviewing overall composition and during the year were reviewed by the Committee, covered in my 1:1 discussions with Directors, all of which fed in to the Board effectiveness review.

As I have covered already in my Chairman's statement, both Stephanie Bruce, our previous CFO and Brian McBride did not seek re-election at the 2023 Annual General Meeting at which their significant contributions to the development of abrdn were recognised. In October 2023 we welcomed Jason Windsor as our new CFO. Jason joined from Persimmon plc having spent the vast majority of his career prior to that in financial services, notably through 12 years at Aviva, latterly as Group Chief Financial Officer.

Our policy on diversity was applied when searching for Stephanie's successor at the long list and short list stage. Whilst we recognise the appointment of Jason means we do not currently meet the requirement to have a woman represented in the identified Board leadership positions prescribed by the UK Listing Rules (Chair, Senior Independent Director, CEO or CFO) the Board, with the support of the Committee, continues to support the principle that the person best qualified, in the particular circumstances of the role, should always be appointed with due regard given to the benefits of diversity, including the full range of protected characteristics as well as cognitive diversity. This principle applies to the search for and appointment of all candidates, both executive and non-executive, and will continue to form an important part of future Board succession considerations. In reviewing the composition of the Board, the Committee regards the Committee Chair roles as equal in importance to the designated roles, which is reflected in their current composition.

Catherine Bradley has advised that she will not seek re-election at the Company's Annual General Meeting on 24 April 2024 and will stand down from that date. She will remain Chair of interactive investor (ii), a wholly owned subsidiary of the Group.  An announcement regarding her successor following the AGM will be made in due course.

There were no other Board or Committee composition changes during the year.

 

Sir Douglas Flint

Chairman and Chair of the Nomination and Governance Committee

Membership

The members of the Committee are the Chairman, the Chairs of Board Committees and the NED responsible for Employee Engagement. For their names, the number of meetings and committee member attendance during 2023, please see the table on page 96.

Stephen Bird, in his CEO role, is invited to Committee meetings to discuss relevant topics, such as the roles within and membership of the ELT, talent development and management succession.

Key responsibilities

The Committee's primary role is to support the composition and effectiveness of the Board, and to oversee the Group's activities to strengthen its talent pipeline. It also oversees ongoing development and implementation of the Group's governance framework and its work to embed appropriate diversity and inclusion policies.

The Committee's key responsibilities are:

-    Identifying and recommending Directors to be appointed to the Board and the Board Committees and ensuring relevant training is provided on appointment and throughout their tenure.

-    Reviewing and assisting in the development and implementation of initiatives to embed the Board's desired outcomes for diversity, equity and inclusion within the Group and to define, monitor and performance manage the behaviours expected of all employees that will be seen to represent the Group's culture.

-    Reviewing Board diversity, skills and experience.

-    Supporting the process and output of the Board's effectiveness review.

-    Overseeing succession planning, and leadership and talent management development throughout the Group.

-    Considering how the Group should comply with current and upcoming corporate governance requirements, guidance and best practice and relevant directors' duties.

The Committee reports regularly to the Board so that all Directors can be involved in discussing these topics as appropriate.

The Committee's work in 2023

An indicative breakdown as to how the Committee spent its time is shown below:

Jan-Mar	-    Reviewed compliance with the UK Corporate Governance Code for the 2022 ARA. -    Reviewed the results of the Committee Effectiveness Review. -    Reviewed progress on Talent and Leadership development activities. -    Recommended the appointment of Jason Windsor as CFO and Peter Branner as CIO. -    Reviewed the recommendations to shareholders to re/elect Directors at the AGM. -    Received an update on the 2022 year-end annual performance process. -    Received the results of the staff engagement survey.
Apr-Jun	-    Reviewed the Group's Culture and Talent Strategy plan. -    Reviewed the management structure and talent pipeline in the Investments business following the dissolution of the Co-CEO model. -    Received an update on Diversity, Equity and Inclusion progress and action plans. -    Reviewed ELT succession planning. -    Reviewed the Group's annual Stewardship Code Report.
Jul-Oct	-    Received an update on Diversity, Equity and Inclusion progress and action plans. -    Reviewed response to the UK Corporate Governance Code Consultation. -    Received an update on ELT and critical role succession plans. -    Received a diagnostic on Group governance and opportunities.
Nov-Dec	-    Received an update on Diversity, Equity and Inclusion progress and 2023-24 priorities. -    Reviewed progress on Talent and Leadership development activities. -    Received the regular update on the activities of the abrdn Financial Fairness Trust.

 

An indicative breakdown as to how the Committee spent its time is shown below:

 

Board and committee appointments and composition

The Committee keeps under constant review the skills, experience and capabilities needed for particular Board roles. This recognises the need to secure a pipeline of potential successors to be able to chair the Board Committees, and also the need to plan ahead to take account of the length of time served on the Board by the current independent non-executive Directors. In addition, it also recognises the skills which the Board will need as it moves forward to oversee the implementation of the Group's approved strategy and takes account of the Group's commitments to achieve and maintain its published Board diversity targets.

Where Board augmentation is needed, an external search consultant is then requested to prepare a list of suitable candidates. From that, the Committee agrees a shortlist. Following interviews with potential candidates, the Committee makes recommendations to the Board on any proposed appointment, subject always to the satisfactory completion of all background checks and regulatory notifications or approvals. Part of this includes considering existing or planned external commitments of candidates to assess their ability to meet the necessary time commitment and whether there are any conflicts of interest to address.

The Committee also oversees the process that recommends continuation of appointments; members of the Committee do not, however, take part in discussions when their own performance - or continued appointment - is being considered.

During the year the Committee considered the appointment of Catherine Bradley as Chair of interactive investor (ii), a wholly owned subsidiary of the Group. As part of the appointment to the ii Board, the Committee reviewed Catherine's time commitment and capacity, and agreed that this was complementary to her roles on the plc Board. Catherine has advised that she will not seek re-election at the Company's Annual General Meeting on 24 April 2024 and will stand down from that date as a Non-Executive Director of abrdn plc. She will remain Chair of interactive investor.

Succession planning and talent management activities

The Committee regularly reviews succession planning activities, including identifying key person and retention risk, and talent development programmes across the Group.

During 2023, in particular, the Committee discussed the future leadership and talent needs of the Group and how the current programmes could be revised to take account of the skills and expertise required by both the Board and the ELT. These programmes are designed to recognise the changing shape of the Group, and also to identify both the talent available within the Group and the need/benefits of external recruitment. Diversity was considered as a core part of these discussions, and progress was reviewed against our diversity goal to achieve minimum 40% women on ELT succession plans.

The Talent and Change agenda is led by the CPO, in conjunction with the CEO.

The Committee spent time during 2023 building on the foundations built in 2022 and looking at the strategic priorities of the talent team to:

-    Bring the best possible people into the organisation and continue to develop our colleagues.

-    Enable people to be the best they can and encouraging movement of talent across our organisation.

-    Create the best possible environment for our people to thrive.

The Committee discussed the team's progress to deliver initiatives to support early careers, talent acquisition, future talent, core capabilities and behaviours and effective performance management. The Committee discussed the inclusive design of the initiatives such as early careers, talent acquisition and future talent and considered the diversity of talent this achieved.

The Committee reviewed the effectiveness of its NED mentoring programme which allows each NED to get to know members of the next generation of talent through individual meetings which take place over the course of the year and evolve based on the needs of each individual being mentored. Having received positive feedback from both mentors and mentees, the mentoring relationships were refreshed in 2023 to continue the Board's exposure to our top talent and the programme will continue in 2024. In addition, we created a new talent group focused on our Executive Succession Talent. The group is our most senior talent group with the purpose of ensuring engagement, retention, and readiness of our identified Executive Leadership Team successors.

During the year, the Committee reviewed the succession and contingency planning for our top performing fund managers. In addition, 47 enterprise-wide roles were identified which are considered as critical to delivering business results and revenue growth. The identification of successors for these roles will create opportunities for talent development as well as ensuring better business continuity.

The Committee regards all of these initiatives as helpful in supporting its oversight of the development of the Company's key talent. Continuing to focus on those commercial roles and those that manage key client and revenue generating relationships will remain an important focus of the Committee.

Board evaluation

The Committee has a key role in supporting the Board evaluation process. Details of the 2023 review are on page 94.

Culture, Diversity, Equity and inclusion

The Committee and the Board spent time with both the CEO and the Chief People Officer understanding their progress against plans to strengthen meaningful measurement and reporting of culture across the Group, including the introduction of the abrdn index, focusing attention on those things that shape culture and tracking progress through our transformation.

The Board and the ELT previously defined a set of commitments which define the Group's culture - Client First, Empowered, Ambitious and Transparent. Information on our cultural commitments can be found on page 48. During 2023 the Committee have overseen the launch and embedding of these commitments against a detailed plan of activities to hardwire these commitments into all key aspects of colleague experience. We measure overall progress against our cultural ambitions through our listening strategy and our employee engagement online platform. Insight and progress is shared and discussed with the Committee.

The Board's diversity statement is on page 92. The Committee has a key role in supporting publication of this statement through its oversight of DEI activities. DEI activities are presented at the Committee at least twice a year to report on progress to deliver against Committee-approved framework, action plans and initiatives. The Committee reviewed progress against the Group's DEI framework priorities, being:

-    Making diversity, equity and inclusion part of our purpose.

-    Maintaining inclusive and equitable ways of working.

-    Attracting and developing diverse talent.

-    Ensuring colleagues feel included and valued every day.

The committee further reviewed relevant DEI trends, data points, and regulation including:

-    Internal colleague sentiment in relation to DEI themes such as data collection and inclusive experience.

-    External landscape and regulation including the FCA and PRA consultation papers related to DEI within financial services.

-    Target setting discussion in line with the UK Government-backed Parker Review.

ESG reporting

During the year, ESG reporting in 2023 - including the UK Stewardship report, and the Sustainability and TCFD report - was predominantly considered by the Board and the Audit Committee. With the publication of the Company's Climate Transition Plan expected in the first half of 2024, the Committee's role and remit of how it can best support the Board's oversight of the delivery of the Company's commitments and the reporting thereof, will be reviewed.

Committee effectiveness

The effectiveness review was conducted internally in 2023 following the external review undertaken in 2022.

Details of the 2023 review are on page 94 and reflect the themes raised across the Board and its Committees

4. Directors' remuneration report

Remuneration Committee Chair's statement

This report sets out what the Directors of abrdn were paid in 2023 together with an explanation of how the Remuneration Committee reached its recommendations.

Where tables and charts in this report have been audited by KPMG LLP we have marked them as 'audited' for clarity.

The report is structured in the following sections and corresponding page numbers:

	Page
At a glance - 2023 remuneration outcomes	119
At a glance - 2024 Policy implementation in 2024	120
Directors' remuneration in 2023	121
Shareholdings and outstanding share awards	124
Executive Directors' remuneration in context	128
Remuneration for non-executive Directors and the Chairman	131
The Remuneration Committee	133

Approval

The Directors' remuneration report was approved by the Board and signed on its behalf by:

 

Jonathan Asquith

Chair of the Remuneration Committee

26 February 2024

Dear shareholder

On behalf of the Board I am pleased to present the Directors' remuneration report for the year ended 31 December 2023.

Introduction

At the 2023 AGM our directors' remuneration report for 2022 received a 93% vote in favour and our new Directors' remuneration policy (Policy) was approved with a 94% vote in favour. I would like to thank all shareholders for your continued strong level of support and constructive dialogue on remuneration matters, particularly in the period leading up to the 2023 AGM in respect of the Policy.

2023 was another year of significant change for abrdn. While the headwinds facing active asset managers only grew stronger, we reshaped our footprint and took steps to reduce complexity. As set out in the Chairman's statement and the Chief Executive Officer's review, a number of strategic actions were taken to streamline our businesses and set up a platform for growth. These included reducing costs through the consolidation and closure of sub-scale funds, investing in technology capabilities and marketing resources, selling our US Private Equity franchise, securing the agreement to sell our European Private Equity franchise and acquiring the healthcare fund management capabilities of Tekla Capital Management, increasing our holding of closed-end funds.

In a year of continued challenge for the active investment industry, flows and investment performance were disappointing in our Investments business, while rising profits in Adviser and ii were insufficient to counter the decline in revenues in Investments, despite strong cost-cutting in the area. As a result, financial performance metrics came out towards the bottom end of the range. There were better outcomes against non-financial targets, which measured progress on strategic actions taken by management to set the stage for growth while maintaining our focus on our people, culture and customers as we transform our business and continue our efforts to advance sustainable investing and limit our own climate impact.

New Chief Financial Officer's remuneration

We were delighted to welcome Jason Windsor to the Board and the executive team on his appointment as Chief Financial Officer on 23 October 2023. Jason is a highly experienced Chief Financial Officer bringing demonstrable expertise and significant knowledge of our industry from over a decade within Aviva plc, latterly as Group Chief Financial Officer. His deep knowledge and experience in our sector together with his broader financial markets experience provide an ideal complement to the capabilities of the existing executive team.

The remuneration arrangements for Jason Windsor's appointment and Stephanie Bruce's exit were agreed by the Remuneration Committee in conformity with the Policy agreed at the 2023 AGM. As detailed in the announcement on 27 July 2023, Jason's remuneration package comprises:

-       A base salary of £675,000 per annum.

-       A pension allowance of 18% of salary aligned to the maximum contribution available to abrdn's UK-based employees and other benefits in line with our Policy.

-       An Annual Bonus up to a maximum of 150% of salary subject to performance (with 50% of any bonus earned being deferred for three years into abrdn shares, which will vest in three equal annual tranches). The award for performance year 2023 was prorated to reflect his joining the Company part way through the performance year.

-       An annual Long Term Incentive award of 225% of salary (final vesting percentage is based on stretching financial and shareholder return targets over the three-year performance period and the award is subject to a further two-year holding period after vesting).

The structure and quantum of the Chief Financial Officer's remuneration package is consistent with our Policy and falls below the maximum levels permitted under the Policy. Jason's package was calibrated in the context of an assessment of what it would take to attract the required skills and expertise from the market (utilising benchmarking data for similar roles across FTSE Financial Services peer group companies), the expectations of other candidates put forward for the role and Jason's previous remuneration packages.

The Remuneration Committee is confident that the remuneration package, which was shared with the market at the time, has been set at a level that takes into account the skills and experience that Jason brings.

In line with our Policy and standard practice, Jason also received buy-out awards to compensate for remuneration he forfeited on leaving his previous employer. All such awards reflect the value and structure of awards foregone, including the vesting and/or holding periods. Where relevant, these awards include abrdn performance conditions enabling immediate alignment to abrdn performance. Further details are set out on pages 126 and 127.

How our Policy was applied in 2023

Strategic advances in 2023 to enable a leaner Investments business, generate capacity for Adviser clients and generate organic customer growth in ii were balanced by shortfalls in the Investments business's financial performance as the macro environment continued to be challenging for abrdn. With 35% of the annual bonus and 100% of the LTIP driven directly by profit and total shareholder return measures, low rewards for executive Directors reflected the low returns for shareholders balanced by a recognition of the progress made in developing ii and Adviser and in addressing cost issues in Investments.

In this context, the Remuneration Committee is comfortable that the Policy operated as intended.

Annual bonus (detail on pages 121 to 123)

Financial performance (65%)

Financial targets were set with reference to the Board-approved plan including measures on net flows, investment performance and adjusted operating profit before tax. Against the backdrop of a 'higher for longer' rate environment and continued significant macroeconomic and geopolitical headwinds, financial performance was subdued.

Investment performance: performance for fixed income, quantitative, alternative investment strategies and liquidity remained strong. However, Equities were impacted by our AUM bias towards Asia and Emerging Markets and the quality growth style. 2023 was also challenging for multi-asset strategies and real estate valuations experienced early on some of the sharpest corrections for many years and impacted returns over all periods. Overall, performance did not meet the threshold required for a payout under the annual bonus plan.

Net flows: continued challenging asset allocation trends had an adverse impact on flows, with Institutional and Retail Wealth experiencing lower gross flows while net flows improved in Insurance Partners. Although Adviser and Personal Wealth proved more resilient, market conditions and cost of living pressures contributed to net outflows there too, while ii net inflows remained strong despite a subdued retail market. In aggregate, performance on net flows fell below the threshold required to qualify for payouts under the annual bonus plan.

Adjusted operating profit before tax: this came in 5% lower than the prior year, at £249m. ii and the Adviser business increased profitability, with ii including the benefit of a full 12 months' contribution compared to 7 months in 2022. However, this was offset by reduced revenue in the Investments business reflecting net outflows and adverse market conditions. The overall outcome was between threshold and target.

The outcomes for the financial element of the 2023 annual bonus are summarised below.

Financial performance measure	Weighting (% of total scorecard)	2023 outcome (% of total scorecard)
Investment performance	15%	0%
Net flows	15%	0%
Adjusted operating profit before tax	35%	9.42%

This resulted in an overall assessment of 9.42% out of a maximum of 65% on financial measures.

Non-financial performance (35%)

In 2023, we assessed non-financial performance against three baskets of measures: Strategic (three measures aligned to each of our businesses), ESG (comprising Environment and Social categories) and Customer.

Strategic: the Investments business closed or merged over 100 funds, sold the US Private Equity franchise and delivered savings of £102m, generating a leaner business although revenues still fell faster than costs. Adviser delivered its largest and most complex technology upgrade, despite early implementation headwinds, enhancing our platform proposition in advance of the impending launch of adviserOS in 2024. ii enriched its offering in the year with its pilot of ii community, the launch of Investor Essentials and Pension Essentials, alongside further expansion in its SIPP programme and a new approach to brand development, increasing customers by 4% organic growth and gaining market share despite subdued market conditions. ii also launched new website infrastructure in January 2023, modernising the design and improving user experience. The Remuneration Committee took into account these significant strategic actions to better position the businesses for future growth and determined the final outcome of 8% out of 10%.

 

Environment: targeted engagement continued with our largest financed emitters (162 resolutions voted on in 2023). Tracking at a 41% carbon intensity reduction in in-scope public market portfolios compared to our 2019 baseline (25% reduction in in-scope real estate portfolio), we are on track for our target of a 50% reduction by 2030. For our own operational net zero, we remain well-placed to meet our long-term net zero carbon emission target. The Remuneration Committee took into account more than 5 separate qualitative and quantitative performance indicators in agreeing the outcome at 5% out of 5%.

 

Social/people: engagement levels held steady despite continued large-scale transformation and organisational change. Sense of inclusion, the nature of each individual's work and personal motivation levels all continue to score well, although we recognise that there is more work to do. 2023 saw noteworthy steps taken to transform the culture of abrdn, with the culture programme work completing and the final phase of our 'Commitments' work delivered. DEI levers of change held steady. Taking into account more than 15 qualitative and quantitative performance indicators and noting minimal traction on employee engagement levels, the Remuneration Committee determined the final outcome of 6% out of 10%.

 

Customer: in the Investments business, strong relationships with clients persisted with independent client survey feedback highlighting good client service and account management. In Adviser, delivering the recent technology release for the Wrap platform disrupted service for clients in the short term, although our 'Return to Green' activity in H2 2023 saw service levels and client satisfaction improve. For ii, the Remuneration Committee recognised the organic growth in customer numbers, the increase in market share and the continued positive feedback from customers regarding their experience with ii. Taking into account more than 20 qualitative and quantitative performance indicators, the Remuneration Committee determined the final outcome of 7.5% out of 10%.

Considering all components together, this resulted in an overall assessment of 26.5% out of a maximum of 35% on non-financial measures.

Remuneration Committee assessment

To assess whether the outcomes generated by the scorecard were fair in the broader performance and risk context, the Remuneration Committee reviewed the individual components which contributed to the delivery of this performance and the alignment of scorecard outcomes with the experience of a range of stakeholders. Further components the Remuneration Committee considered are set out on page 123.

In particular, the Remuneration Committee carefully considered the experience of employees and how executive Director incentive outcomes compared to employee incentive outcomes. External market conditions have been challenging for abrdn in recent years and this has heavily impacted both executive Director and employee pay outcomes. By design, there are differences in the priorities which drive how these two populations are remunerated; as a result, their relative experiences can be different.

Executive Directors' annual bonus levels reduced from 80.5% (2021) to 30.25% (2022) of maximum opportunity. The increase to 35.92% for 2023 represents an important but limited reversal of that move, recognising the progress that the executive Directors are making in reshaping abrdn to cope with the challenges facing the company and the wider asset management industry.

For key staff below Board level, we have implemented various other reward changes, including granting restricted stock awards and increasing salaries, which have not been awarded to our executive Directors. In this context, the Remuneration Committee concluded that executive Director outcomes reflected the overall employee experience.

The Remuneration Committee concluded that the outcomes delivered by the scorecard were a fair and balanced assessment of performance and no adjustment to them was needed or made.

Summarising these results, the Remuneration Committee approved the following outcomes based on performance against targets:

Executive Director	Final outcome (% of max)	2023 total bonus (£000s)
Stephen Bird	35.92%	786
Jason Windsor	35.92%	701
Stephanie Bruce	35.92%	1032

1. The 2023 total bonus for Jason Windsor is prorated to reflect his appointment to the Board effective 23 October 2023.

2. The 2023 total bonus for Stephanie Bruce is prorated to reflect her stepping down from the Board effective 11 May 2023.

Long-term incentives (detail on pages 123 to 127)

Vesting of the 2021 Long-Term Incentive Plan (LTIP) award granted to Stephen Bird and Stephanie Bruce is based on performance over the three-year period ending on 31 December 2023. A proportion of Jason Windsor's 2021 Long-Term Incentive Buyout is also subject to the performance conditions of the 2021 LTIP (see pages 126 and 127 for more detail). After review, the Remuneration Committee concluded that the performance for the Adjusted Diluted Capital Generation per share metric was between threshold and target and the overall award should vest at 18.75%.

Policy implementation in 2024

Following a review, no change has been made to salaries for the executive Directors or fees for the non-executives for 2024. 

In line with previous practice, we will continue to set stretch targets for the annual bonus and the LTIP to ensure that the maximum opportunity will only be earned for exceptional performance.

The scorecard for the 2024 annual bonus is detailed on page 120 and the targets, which are commercially sensitive, will be disclosed at the end of this performance year in the 2024 Annual report and accounts. The scorecard continues to focus the majority of the opportunity on the achievement of financial targets as set out in our Policy (65%), with the balance measured against non-financial performance including Strategic, ESG and Customer objectives. The Remuneration Committee has agreed a Strategic measure and a basket of key indicators in the other areas which will allow a rounded assessment of performance to be made. Details on these metrics, including how the Remuneration Committee assessed performance against them, will be disclosed retrospectively.

As outlined in the Chairman's statement, the Group is updating one of its key performance indicators moving forward, from adjusted capital generation (ACG) to net capital generation (NCG).

The Remuneration Committee reviewed the impact of this change and agreed that the 2024 LTIP will consist of two equally weighted targets, Net Capital Generation per share Compound Annual Growth Rate (NCG CAGR) and Relative TSR. The new metric of NCG CAGR more closely aligns to the dividend paying capability of the Company over the long term, compared to ACG CAGR, and incentivises the phasing out of restructuring costs in the long term as targeted in the Board-approved business plan. NCG is defined as ACG less restructuring and corporate costs (net of tax). The three-year NCG per share target range has been set at 15%-25% CAGR, which is aligned with the business plan agreed with the Board. The annual development of this measure is not linear and target ranges for any future grants will be calibrated to allow for this. The Remuneration Committee also reviewed the TSR peer group for the Relative TSR metric. Details of the 2024 LTIP grant can be found on page 120.

During the year, the Remuneration Committee remained mindful of the debate and discussions led by the Capital Markets Industry Taskforce on resetting the approach to executive pay for UK listed firms. We continue to welcome the debate on the use of restricted share awards and the promised review of the Investment Association Principles of Remuneration. The Remuneration Committee will review any future guidelines and consider whether there is a beneficial role for restricted share awards in the abrdn remuneration structure.

To help you navigate the report effectively, I would like to draw your attention to the sections on pages 119 and 120 which summarise both the outcomes for 2023 and how the Policy will be implemented in 2024. Further detailed information is then set out in the rear section of the report for your reference as required.

On behalf of the Board, I invite you to read our remuneration report. As always, the Remuneration Committee and I are open to hearing your views on this year's report and our Policy in general.

 

At a glance - 2023 remuneration outcomes

Outcome of performance measures ending in the financial year

The following charts show performance against the target range for the annual bonus and commentary on the 2021-2023 LTIP. Further detail on the assessment of the performance conditions can be found on pages 121 to 123.{graph here}

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1. % AUM above benchmark average of three-year for all asset classes.

2.  Excl. cash/liquidity and Insurance.

2023 annual bonus scorecard outcome

The following table sets out the final outcome for the 2023 annual bonus. A detailed breakdown of the assessment of performance conditions can be found on pages 121 to 123.

	Bonus Scorecard Outcome			Total Bonus Outcome
	Financial metrics (minimum 65%)	Non-financial metrics (maximum 35%)	Board approved outcome (% of maximum)		Salary received in year (£000s)	Maximum opportunity (% of salary)	Total award (% of salary)	Total award (£000s)
Stephen Bird	9.42%	26.5%	35.92%		875	250%	89.80%	786
Jason Windsor1					130	150%	53.88%	70
Stephanie Bruce2					192	150%	53.88%	103

1.  Jason Windsor was appointed to the Board effective 23 October 2023. The salary received in year and total 2023 annual bonus awarded value is prorated to reflect the proportion of the 2023 performance year for which he served at abrdn. For further information, see pages 121 to 127.

2.  Stephanie Bruce stepped down from the Board effective 11 May 2023. The salary received in year and total 2023 annual bonus awarded value is prorated to reflect the proportion of the 2023 performance year for which she served at abrdn. For further information, see pages 121 to 126.

2021-2023 LTIP outcome

The performance period for the 2021-2023 LTIP concluded on 31 December 2023. Performance was assessed against two measures: Adjusted Diluted Capital Generation per share (CAGR) and Relative TSR performance. The performance for the Adjusted Diluted Capital Generation per share (CAGR) metric fell between threshold and target and, therefore, the overall award will vest at 18.75%. Detail of the performance assessment for the 2021-2023 LTIP can be found on page 123.

Total remuneration outcomes in 2023

The chart below shows the remuneration outcomes for the CEO in 2023 based on performance compared to the maximum opportunity.

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At a glance - 2024 Policy implementation

This section sets out how we propose to implement our Policy in 2024. The full Policy, which remains unchanged for 2024 from the Policy approved by shareholders at the 2023 AGM, including detail on how it addresses the principles as set out in the 2018 Corporate Governance Code, can be found in the 2022 Annual report and accounts on pages 120 - 130.

Element of remuneration	Key features of operation	2024 implementation
Salary Core reward for undertaking the role	Normally reviewed annually, taking into account a range of internal and external factors.	Stephen Bird: £875,000 Jason Windsor: £675,000
Pension Competitive retirement benefit	Aligned to the current maximum employer contribution available to the UK wider workforce (18% of salary).	Stephen Bird: 18% of salary Jason Windsor 18% of salary
Benefits Competitive benefits	Includes (i) private healthcare; (ii) death in service protection (iii) income protection (iv) reimbursement of membership fees of professional bodies; and (v) eligibility for the all employee share plan.	No change to benefits provision
Annual bonus To reward the delivery of the Company's business plan	Annual performance assessed against a range of key financial and non-financial measures. At least 65% will be based on financial measures. At least 50% deferred into shares vesting in equal tranches over a three-year period. Awards are subject to malus and clawback terms.	No change to quantum Stephen Bird: 250% of salary Jason Windsor: 150% of salary See below for 2024 performance conditions
Long-term incentive plan To align with our shareholders and reward the delivery of long-term growth	Awards are subject to a three-year performance period, with a subsequent two-year holding period. Dividend equivalents accrue over the performance and holding period. Awards are subject to two equally weighted performance metrics linked to long-term strategic priorities and the creation of long-term shareholder value. Awards are subject to malus and clawback terms.	Stephen Bird: 350% of salary Jason Windsor: 225% of salary 2024 performance metrics are set out below
Shareholding requirements	Executive Directors are required to build up a substantial interest in Company shares. The share ownership policy for executive Directors requires shares up to the value of the shareholding requirement to be held for a period of two years following departure from the Board.	Stephen Bird: 350% of salary Jason Windsor: 225% of salary

Performance conditions for 2024 annual bonus

Financial (65% weighting)	Investment performance (15%), Adjusted operating profit (35%) and Net flows (15%)
Non-financial (35% weighting)	Performance against Customer (10%) and ESG objectives (incorporating people engagement and diversity metrics, and environmental measures) (15%) and progress on a key strategic initiative (10%)

Due to commercial sensitivity, actual targets and ranges will be disclosed at the end of the performance period. The Remuneration Committee retains an appropriate level of flexibility to apply discretion to ensure that remuneration outcomes reflect a holistic view of overall performance, including conduct and culture.

Performance conditions for 2024 Long-term incentive plan

	Target range1
Net Capital Generation per share (50% weighting)2	15% - 25% CAGR
Relative TSR (50% weighting)3	Equal to median - equal to upper quartile
1.  Straight line vesting occurs between threshold and maximum. 25% vesting for threshold performance. 2.  See the Remuneration Committee Chair's letter on page 118 for an explanation of the Net Capital Generation per share (CAGR) metric. 3.             The peer group is made up of the following global asset management peers: AJ Bell, Alliance Bernstein, Amundi, Ashmore Group, DWS Group, Hargreaves Lansdown, IntegraFin Holdings, Janus Henderson Group, Jupiter Fund Management, Liontrust Asset Management, M&G, Ninety One, Quilter, Rathbones Group, Schroders and St James's Place.

Directors' remuneration in 2023

This section reports remuneration awarded and paid at the end of 2023 in further detail, including payments to past Directors.

Single total figure of remuneration - executive Directors (audited)

The following table sets out the single total figure of remuneration for each of the individuals who served as an executive Director at any time during the financial year ending 31 December 2023:

Executive Directors		Basic salary for year £000s	Taxable benefits in year £000s1	Pension allowance paid in year £000s	Bonus paid in cash  £000s	Bonus deferred £000s2	LTIP with period ending  in the year £000s3	2019 EIP £000s	Buyout Awards £000s	Total  for the year £000s	Total fixed £000s	Total variable £000s
Stephen Bird	2023	875	1	158	393	393	323	-	-	2,143	1,034	1,109
	2022	875	1	158	331	331	-	-	-	1,696	1,034	662
Jason Windsor4	2023	130	-	23	35	35	4	-	712	939	153	786
Stephanie Bruce5	2023	192	-	34	51.5	51.5	-6	-	-	329	226	103
	2022	538	1	97	122	122	791	(139)	-	1,532	636	896

1.             This includes the taxable value of all benefits paid in respect of the relevant year. Included for 2023 are medical premiums at a cost to the group of £606 per annum for executive Directors.

2.             This represents 50% of the total bonus award and is delivered in shares which will vest in equal tranches over a three-year period.

3.             The values reported for 2023 are the market values of the LTIP awards that will vest, at 18.75% of maximum, based on the three-year performance measurement period ending on 31 December 2023. The share price at the date of vesting is not known at the date of publication of this report. Therefore, the number of abrdn plc shares that will vest (excluding dividend equivalent shares accrued) has been multiplied by the average share price over the quarter ending 31 December 2023 (166.52 pence). This amount will be restated in the 2024 Annual report and accounts once the share price at date of vesting is known.

4.             Jason Windsor was appointed to the Board effective 23 October 2023. All figures reflect amounts paid/awarded since the date of appointment. The value of buyout awards above represents the buyout awards granted without performance conditions. The value of the LTIP with period ending in the year relates to the proportion of his 2021 Long-Term Incentive Buyout award subject to abrdn performance conditions. For further information, see pages 126 and 127.

5.             Stephanie Bruce stepped down from the Board effective 11 May 2023. All figures reflect amounts paid/awarded until this point. See pages 123 and 124 for further information on payments made to Stephanie Bruce as a past director.

6.             Details of the 2021-2023 LTIP outturn for Stephanie Bruce are presented on page 124.

Base Salary (audited)

There was no change to the base salaries of executive Directors in 2023.

Pension (audited)

Under the Policy approved at the 2023 AGM, the executive Directors received a cash allowance in lieu of pension contribution of 18% of base salary.

Annual Bonus Plan

The following section contains details on the targets and the Remuneration Committee's assessment of outcomes for the period 1 January 2023 to 31 December 2023 against each of the elements of the executive Director bonus scorecard.

Financial performance metrics - 65% of total scorecard outcome

	Weighting (% of overall scorecard)	Threshold (25% of maximum)	Stretch (100% of maximum)	Actual	Result (% of overall outcome)1
Investment performance - % AUM above benchmark average of three-year and five-year for all asset classes	15%	50%	70%	42%	0%
Core Investment net flows2 (£bn)	9.75%	(8.4)	2.8	(14.1)	0%
UK Savings & Wealth (Adviser & ii) net flows (£bn)	5.25%	3.5	9.7	0.7	0%
Adjusted operating profit before tax3 (£m)	35%	247	324	249	9.42%

1.             Straight-line vesting between threshold and stretch targets.

2.             Excluding cash/liquidity and Insurance.

3.             Targets and actual outcome exclude US Private Equity franchise for Q4 2023 in line with completion of sale of the US Private Equity franchise in Q4 2023.

Category	Highlights from assessment	Result (% of overall outcome)
Strategic (10%): Achievement of key strategic actions across our businesses	There were a number of strategic initiatives across our three businesses that were critical to the long-term success of the Group. Three key strategic measures were chosen; one for each of our businesses. -  Investments: through a number of actions to simplify the business, including closing or merging over 100 funds and the sale of our US Private Equity franchise, we went beyond our £75m cost reduction target to deliver savings of £102m. -  Adviser: delivered the largest and most advanced technology release ever completed on the Wrap platform., setting us up to further enhance our platform proposition with the impending launch of adviserOS in 2024. -   ii: excluding recently migrated customers, customer numbers of ii increased by 4%, despite a subdued market. ii's market share also increased over 2023 and its proposition was significantly enhanced with the launch of Investor Essentials, Pension Essentials and the pilot of ii community. ii also launched new website infrastructure in January 2023, modernising the design and improving user experience.	8%
Environment (5%): Progress towards portfolio decarbonisation and Operational Net Zero targets	The environmental measures we selected focused on the important contribution our Company has to make as a global institutional investor and a responsible Company. The Remuneration Committee considered more than five quantitative and qualitative measures. Our Sustainability and TCFD report, available on our website, contains further detail on our performance in this area. Key factors in the determination were: -  Targeted engagement continued with our largest financed emitters and encouraged improvement through 162 resolutions voted on in 2023. -  We continue to enhance the tools to measure carbon intensity and in 2023, we were tracking at a 41% carbon intensity reduction in in-scope public market portfolios compared to our 2019 baseline (25% reduction in in-scope real estate portfolio), remaining on track for our target of a 50% reduction versus our 2019 baseline by 2030. -   For our own operational net zero, we remain well on track to meet our long-term net zero carbon emission target of 50% less than our 2018 baseline by 2025, with a 69% reduction versus our 2018 baseline in 2023.	5%
Social/people (10%): Noteworthy steps taken to transform the culture at abrdn, maintenance of engagement score and sustained progress on gender representation and ethnicity diversity targets	abrdn is a people business and we believe that in order to succeed it needs to embed diversity, equity and inclusion within a strong and shared cultural framework, enabling us to continue to attract and maintain an engaged and diverse talent base. The Remuneration Committee considered more than 15 quantitative and additional qualitative measures, including data points relating to gender representation across the workforce, employee engagement, gender and ethnicity data and new hire statistics. -  Despite difficult market conditions and continued large-scale transformation and organisational change, our People engagement levels held steady at 54% (2022: 50%). We recognise that there is still more to do to improve employee engagement levels in our business. -  2023 saw noteworthy steps taken to transform the culture at abrdn, with the culture programme work completing and the final phase of our 'Commitments' work delivered. -  Our Gender Pay Gap has been reduced for the sixth consecutive year. -  Females and individuals identifying as minority ethnic in total new hires both increased year on year to 44% and 9% respectively. -   Maintained strong scores on employee perceptions of abrdn as an inclusive organisation and whether people from diverse backgrounds can succeed at abrdn.	6%

 

Category	Highlights from assessment	Result (% of overall outcome)
Customer (10%): Measured across the Adviser, ii and Investments businesses	Our three-business model gives us a diverse customer base, from institutional to adviser to retail. We measure our success in delivering for our customers with reference to business-specific quantitative and qualitative metrics that holistically capture the experience of our different client groups. The Remuneration Committee considered more than 20 quantitative and qualitative measures from internal and external sources. Key factors in the determination were: -   In the Investments business, good relationships with clients persisted with independent client survey feedback highlighting good client service and account management. Client relationship meetings with Phoenix highlighted transparency, trust and responsiveness via high-quality resolutions as key attributes of the partnership. -   In Adviser, our 'Return to Green' activity in H2 2023 saw service levels and client satisfaction improve from the early disruption caused by the technology upgrade implementation headwinds. AdviserAsset, which provides an external view of our client service and user experience, rated Elevate and Wrap as Platinum for the 6th and 9th consecutive years respectively. -   In ii, there was an increase in customer numbers, an increase in market share and continued positive feedback from customers regarding their customer experience with ii.	7.5%

In considering whether the bonus outcomes derived from the scorecards were fair in the context of the overall results, the Remuneration Committee took into account the feedback received from the Audit Committee and the Risk and Capital Committee on material accounting, reporting and disclosure matters and the management of risk within the business.

2021-2023 LTIP outcome

The following table details the targets and assessment of outcomes for the 2021-2023 LTIP. The performance period for this award concluded on 31 December 2023. The Remuneration Committee concluded that the performance for the Adjusted Diluted Capital Generation per share (CAGR) metric was between threshold and target and, therefore, the overall award will vest at 18.75%.

	Threshold (25%)	Maximum (100%)	Actual outcome	% vesting
Adjusted Diluted Capital Generation per share (CAGR) (50%)	8%	20%	10%	37.5%
Relative TSR (50%)1	Median	Upper quartile	Below median	0%

1.             The peer group was made up of the following global peers: Man Group, Ameriprise, M&G, Affiliated Managers, Alliance Bernstein, Franklin Resources, SEI Investments, DWS Group, Amundi, Janus Henderson Group, Invesco, Schroders, T Rowe Price, St James' Place, Quilter, Ashmore and Jupiter Fund Management.

As a result of the above outcomes, details of the awards that vested are as follows:

 

Executive Directors	Number of shares granted	Proportion of award vesting	Number of shares vesting1	Value of vested shares (£)2
Stephen Bird	1,033,650	18.75%	193,809	322,731
Jason Windsor3	11,5304	18.75%	2,162	3,600

1.  Excluding dividend equivalents.

2.  Based on average abrdn plc share price over the quarter ending 31 December 2023 (166.52). The amount attributable to share price appreciation is £nil.

3.  Values for Jason Windsor reflect the proportion of his 2021 Long-Term Incentive Buyout award subject to abrdn performance conditions. See pages 126 and 127 for further information.

4.  Number of shares granted to Jason Windsor is the number of abrdn plc shares granted under his 2021 Long-Term Incentive Buyout, which is 183,024, multiplied by the proportion of his 2021 Long-Term Incentive Buyout subject to abrdn performance conditions, which is 6.3%. See pages 126 and 127 for further information.

Payments to past Directors and payments for loss of office (audited)

Payments made to former executive Directors that have not been previously reported elsewhere are reported if they are in excess of £20,000.

Stephanie Bruce stepped down from the Board effective 11 May 2023 and went on garden leave effective 11 May 2023 to her termination date of 31 December 2023. Between 11 May 2023 and 31 December 2023, Stephanie received salary, pension allowance and taxable benefits, totalling £409,218.

The Company has also made a payment in lieu of notice of basic salary, pension allowance and taxable benefits, in monthly instalments (subject to mitigation) over the remainder of Stephanie Bruce's contract (being a further two months and eight days to 8 March 2024). The final monthly instalment is due to be paid in March 2024. The total of the three payments will be £121,071.

Stephanie Bruce was entitled to a capped contribution towards legal fees incurred in connection with her exit arrangements. The contribution towards legal fees did not exceed £20,000.

The table below summarises total payments to Stephanie Bruce as a past director for 2023:

Payment element	Amount (£)
Salary, pension allowance and taxable benefits whilst on garden leave	409,218
Payment in lieu of notice of basic salary, pension allowance and taxable benefits	121,071
2021 - 2023 LTIP	113,4171

1         Based on average abrdn plc share price over the quarter ending 31 December 2023 (166.52 pence). The amount attributable to share price appreciation is £nil.

For Stephanie's outstanding incentive awards, in accordance with the relevant plan rules, the following treatment applied:

-  Unvested deferred bonus awards (including the pro-rated 2023 bonus) will continue to vest on normal vesting dates and will remain subject to malus and clawback.

-  Unvested LTIP awards will continue to vest on normal vesting dates and will remain subject to the satisfaction of the relevant performance conditions (measured over the full performance period), holding periods and malus and clawback. All LTIP awards will be prorated based on the proportion of the performance period completed to Stephanie's termination date.

-  The Company's post-cessation shareholding requirements apply for a two-year period from Stephanie's date of departure from the Board on 11 May 2023.

Shareholdings and outstanding share awards

This section reports our executive Directors' interests in shares.

Directors' interests in shares (audited)

Our shareholding requirements for executive Directors are detailed on page 120. The Policy requires executive Directors to accumulate and maintain a material long-term investment in abrdn plc shares. The Remuneration Committee reviews progress against the requirements annually. Personal investment strategies (such as hedging arrangements) are not permitted for the purposes of reducing the economic exposure arising from the shareholding requirements.

The following table shows the total number of abrdn plc shares held by the executive Directors and their connected persons:

						Unvested shares
	Total number of shares owned at 1 January 2023	Shares acquired during the period 1 January 2023 and 31 December 2023	Total shares owned as at 31 December 2023	Options exercised during the period 1 January 2023 and 31 December 2023	Vested but unexercised share options	Subject to performance conditions1	Not subject to performance conditions2	Shares lapsed3
Stephen Bird	782,355	-	782,355	-	190,610	3,992,940	532,499	945,765
Jason Windsor	-	-	-	-	-	1,320,515	450,611	-
Stephanie Bruce4	606,633	41,757	648,390	81,879	9,496	879,438	234,742	1,092,457

1.  Includes: 2021, 2022 and 2023 LTIP awards for Stephen Bird and Stephanie Bruce (awards subject to performance targets over three-year periods) and Long-Term Incentive Buyout awards for Jason Windsor (see details on pages 126 and 127). The number of share options presented under awards subject to performance conditions exclude shares to be awarded in lieu of dividend equivalents.

2.  Includes: deferred bonus awards for Stephen Bird and Stephanie Bruce and Bonus Award Buyouts for Jason Windsor. The number of share options presented under awards not subject to performance conditions include shares to be awarded in lieu of dividend equivalents.

3.  For Stephen Bird, the share options lapsed relate to the outcome of the 2020 LTIP award - see page 109 of the 2022 Annual report and accounts. For Stephanie Bruce, the share options lapsed relate to the outcome of the 2020 LTIP award, the 2019 Executive Incentive Plan (EIP) and the prorating of her 2022 and 2023 LTIP awards for time employed during the performance periods.

4.  On 30 November 2023, Stephanie Bruce exercised the second tranche of the deferred portion of her 2020 annual bonus award and the first tranche of the deferred portion of her 2021 annual bonus award. The vested but unexercised share options for Stephanie are the share options under the first tranche of her 2019 EIP award, prorated for the vesting outcome - see page 111 of the 2022 Annual report and accounts.

The following table shows the number of qualifying awards included in assessing achievement towards the shareholding requirement, as at 31 December 2023. The total Qualifying holding includes shares held outright (which derive from vested and exercised awards plus any purchased shares) as well as Qualifying unvested or unexercised awards. Purchased shares are valued at the higher of the cost of the purchase as disclosed in RNS announcements or the closing market price on 31 December 2023. Qualifying unvested or unexercised awards include 50% of the value (as a proxy for the payment of tax due on the exercise of the awards) of awards not subject to performance conditions and which have not yet vested.

	Qualifying unvested or unexercised awards
	Number of shares under the deferred share plan which are not subject to performance conditions	Number of shares under option under long-term incentive plans which are no longer subject to performance conditions	Total Qualifying holding (shares owned from table above and 50% of Qualifying unvested or unexercised awards)1	Value of holding2	Shareholding requirement (as % salary)	Basic salary	Total of the value of shares owned and 50% of the value of qualifying awards at 31 December 2023 as a % of salary	Shareholding requirement met?
Stephen Bird	723,109	-	1,143,910	£2,408,664	350%	£875,000	275%	In progress
Jason Windsor	450,611	-	225,306	£402,508	225%	£675,000	60%	In progress
Stephanie Bruce3	225,248	18,990	770,509	£1,458,340	300%	£538,125	271%	In progress

1.  Of the total number of shares shown, Stephen Bird purchased 750,000 shares at a total cost of £1,705k and Stephanie Bruce purchased 238,571 shares at a total cost of £508k.

2.  The closing market price at 31 December 2023 used to determine the value of non-purchased shares was 178.65 pence.

3.  The 18,990 shares under option under long-term incentive plans which are no longer subject to performance conditions, for Stephanie Bruce, are the second and third tranches of her 2019 EIP award, prorated for the vesting outcome - see page 111 of the 2022 Annual report and accounts.

Executive Directors who have not yet satisfied the shareholding requirement are expected to accumulate shares until they have fully met their shareholding requirement. They are required to hold 100% of vested shares (post-tax) granted under the Company's share plans (including any dividend equivalents) until they have met their shareholding requirement. All other shares acquired and held by the executive Director or owned indirectly by a partner or family trust also count towards the shareholding requirement.

Stephen Bird and Jason Windsor, who were appointed during 2020 and 2023 respectively, have not yet met the shareholding requirement. However, the Remuneration Committee is satisfied with the progress they have made towards their respective requirements given their tenure.

Under the Policy, an executive Director is required to hold shares up to the value of their shareholding requirement for 24 months following departure from the Board. However, if at the date of departure from the Board, the executive Director holds shares with a value lower than the value of the requirement, the number of shares held at the date of departure from the Board must be retained for 24 months thereafter. Any self-purchased shares are not subject to this requirement. Accordingly, Stephanie Bruce is required to retain any shares (excluding self-purchased shares) until 11 May 2025.

Awards granted in 2023 (audited)

The table below shows the key details of the LTIP, deferred and buyout awards granted in 2023:

Participant	Type of award	Basis of award	% of salary	Face value at grant	Number of shares awarded	% payable for threshold performance	Details on performance conditions
Stephen Bird	Nil-cost option	LTIP1	350%	£3,062,500	1,512,121	25%	Award is subject to performance against targets measured over three years as set out on page 107 of the 2022 Annual report and accounts
	Nil-cost option	Deferred Bonus1	Not applicable	£330,859	163,363	Not applicable	Not applicable
Jason Windsor	Nil-cost option	2021 Long-Term Incentive Buyout2	Not applicable	£289,233	183,024		See 'Chief Financial Officer buyout awards' section below
	Nil-cost option	2022 Long-Term Incentive Buyout2		£816,441	516,637
	Nil-cost option	2023 Long-Term Incentive Buyout2		£981,136	620,854
	Nil-cost option	2021 Bonus Award Buyout (bought-out)2	Not applicable	£85,697	54,228		Not applicable
	Nil-cost option	2021 Bonus Award Buyout2		£257,860	163,171
	Nil-cost option	2022 Bonus Award Buyout2		£368,545	233,212
Stephanie Bruce	Nil-cost option	LTIP1, 3	200%	£1,076,250	531,402	25%	Award is subject to performance against targets measured over three years as set out on page 107 of the 2022 Annual report and accounts
	Nil-cost option	Deferred Bonus1	Not applicable	£122,087	60,281	Not applicable	Not applicable

1.  The share price used to calculate the number of shares for the LTIP and Deferred Bonus awards was 202.53 pence (the five-day average price over the five dealing days prior to the grant date of 11 April 2023).

2.  The share price used to calculate the number of shares for the Buyout awards was 158.03 pence (the five-day average price over the five dealing days prior to Jason Windsor's date of appointment on 23 October 2023).

3.  As set out in the announcement on 12 April 2023, time pro-rating will be applied to the number of shares (if any) over which the Stephanie Bruce's 2023 LTIP award vests by reference to the proportion of the award performance period that had elapsed at her termination date of 31 December 2023.

 

Chief Financial Officer buyout awards

Jason Windsor was granted buyout awards to compensate for remuneration he forfeited on leaving his previous employer to join abrdn. As set out in the announcement on 6 November 2023, buyout awards granted to replace forfeited awards that were subject to performance conditions remain subject to performance conditions. The relevant proportion of each buyout award will be adjusted to reflect the actual vesting of the relevant forfeited awards they replace.

The following principles were applied in agreeing these buyout awards:

-  The buyout awards do not exceed the value of the awards forfeited. A conversion rate was used to calculate the number of abrdn plc shares awarded using the five-day average abrdn plc and Persimmon Plc share prices over the five dealing days prior to Jason Windsor's date of appointment to the Board.

-  The vesting timelines of the buyout awards are the same as those which applied to the forfeited awards.

-  Buyout awards granted to replace forfeited awards that were subject to performance conditions remain subject to performance conditions. These awards are subject to:

o abrdn performance conditions for the proportion of the original performance period for which Jason Windsor is an abrdn employee.

o Performance conditions set by his previous employers for the proportion of the original performance period for which Jason Windsor was not an abrdn employee.

-  The buyout awards were granted subject to continued employment and the malus and clawback conditions in the Policy approved at the 2023 AGM.

Jason is eligible to receive a buyout award in relation to the potential bonus foregone for the period 1 January to 13 October 2023 as a result of leaving his previous employer. This buyout award will reflect the performance outcome of his previous employer (Persimmon plc) and will be determined by the Remuneration Committee following the publication of the Persimmon plc 2023 Annual report and accounts. Any buyout award will be made 50% in cash and 50% in deferred shares and will be disclosed in the 2024 Annual report and accounts.

For the awards granted in respect of the forfeited Long Term Incentive awards, the following proportion of each award is subject to abrdn / previous relevant employer performance conditions respectively.

Award	Proportion subject to performance conditions set by previous employer1	Proportion subject to abrdn performance conditions
2021 Long-Term Incentive Buyout	93.7% (Aviva performance conditions)	6.3% (2021-2023 performance conditions)
2022 Long-Term Incentive Buyout	60.3% (Persimmon performance conditions)	39.7% (2022-2024 performance conditions)
2023 Long-Term Incentive Buyout	26.9% (Persimmon performance conditions)	73.1% (2023-2025 performance conditions)

1.  Awards will vest subject to the Remuneration Committee's assessment of the extent to which the original performance conditions set by previous employers would have vested. The assessment will be informed by the previous employers' public disclosures.

Share dilution limits

All share plans operated by the Company which permit awards to be satisfied by issuing new shares contain dilution limits that comply with the guidelines produced by the Investment Association (IA). On 31 December 2023, the Company's standing against these dilution limits was 0.00% where the guideline is no more than 5% in any 10 years under all discretionary share plans in which the executive Directors participate and 0.51% where the guideline is no more than 10% in any 10 years under all share plans.

As is normal practice, there are employee trusts that operate in conjunction with the Executive LTIP, the abrdn Discretionary Plan, the deferred elements of the abrdn plc annual bonus plan, the Aberdeen Asset Management deferred plans and the abrdn all-employee plans. On 31 December 2023, the trusts held 58,344,840 shares acquired to satisfy these awards. Of these shares, 11,469,400 committed to satisfying vested but unexercised option awards. The percentage of share capital held by the employee trusts is 3.17% of the issued share capital of the Company - within the 5% best practice limit endorsed by the IA.

Promoting all-employee share ownership

The Company promotes employee share ownership with a range of initiatives, including:

-  The abrdn plc (Employee) Share Plan which allows eligible UK employees (our largest jurisdiction) to buy abrdn plc shares directly from earnings. A similar tax-approved plan is used in Ireland. At 31 December 2023, 1,338 individuals in the UK and Ireland were actively making monthly contributions averaging £74. At 31 December 2023, 1,632 individuals were abrdn plc shareholders through participation in the Plan.

-  The Sharesave Plan which was offered in 2023 to eligible employees in the UK. This plan allows UK tax resident employees to save towards the exercise of options over abrdn plc shares with the option price set at the beginning of the savings period at a discount of up to 20% of the market price. At 31 December 2023, 1,472 employees were saving towards one or more of the Sharesave offers.

Executive Directors' service contracts

Service contracts for both executive Directors are not for a fixed term but have notice periods in line with the executive Director's role:

-  Six months by the executive Director to the employer.

-  Up to 12 months by the employer to the executive Director.     

Executive Directors' external appointments

Executive Directors can accept a limited number of external appointments to the boards of other organisations and can retain any fees paid for these services. Stephen Bird and Stephanie Bruce held representative directorships on behalf of the Group during the year. Jason Windsor is a Governor of Felsted School and a Director of Felsted School Trustees Limited. The executive Directors received no fees for their external appointments in 2023. Significant external positions held during the year are set out below.

Executive Director	Role and Organisation	2023 Fees
Stephen Bird	Member of the Financial Services Growth & Development Board1 Board member at the Investment Association2 Member of the President's Committee for the Confederation of British Industry3 Member of the Lord Mayor's Strategic Advisory Board for the Finance for Growth Project4	£nil £nil £nil £nil

1.  Appointed on 17 January 2022.

2.  Appointed on 27 April 2022.

3.  Appointed on 3 February 2023.

4.  Appointed on 18 April 2023.

Executive Directors' remuneration in context

Pay compared to performance The graph shows the difference in the total shareholder return at 31 December 2023 if, on 1 January 2014, £100 had been invested in abrdn plc and in the FTSE 350 respectively. It is assumed dividends are reinvested in both. The FTSE 350 has been chosen as abrdn plc has been a member of this index for the full 10-year period.

Diagram removed for the purposes of this announcement.  However it can be viewed in full in the pdf document

The following table shows the single figure of total remuneration for the Director in the role of Chief Executive Officer for the same 10 financial years as shown in the graph above. Also shown are the annual incentive awards and LTIP awards which vested based on performance in those years.

Year ended 31 December	Chief Executive Officer	Chief Executive Officer single total figure of remuneration (£000s)	Bonus outcome/ annual incentive rates against maximum opportunity (%)	Long-term incentive plan vesting rates against maximum opportunity (%)
2023	Stephen Bird	2,143	35.92	18.75
2022	Stephen Bird	1,696	30.25	-
2021	Stephen Bird	2,795	80.5	-
2020	Stephen Bird	1,044	48	-
	Keith Skeoch	1,075	48	-
20191	Keith Skeoch	1,050	9	-
20181,2	Keith Skeoch	814	10	-
	Martin Gilbert	814	10	-
20172	Keith Skeoch	3,028	82	70
	Martin Gilbert	1,317	56	-
2016	Keith Skeoch	2,746	81	31.02
2015	Keith Skeoch	1,411	87	40.77
2015	David Nish	2,143	90	40.77
2014	David Nish	6,083	95	100

1.  The outcome has been updated to reflect the EIP vesting.

2.  Co-CEOs.

Relative importance of spend on pay

The following table compares what the Company spent on employee remuneration to what is paid in the form of dividends to the Company's shareholders. Also shown is the Company's adjusted profit before tax which is provided for context as it is one of our key performance measures:

	2023	% change	2022
Remuneration payable to all Group employees (£m)1	529	-4%	549
Dividends paid in respect of financial year (£m)	267	-9%	295
Share buybacks and return of capital (£m)	302	0%	302
Adjusted profit before tax (£m)	330	30%	253

1.  In addition, staff costs and other employee related costs of £78m (2022: £88m) and £4m (2022: £11m) are included in restructuring and corporate transaction expenses and in cost of sales respectively. See Note 6 of the Group financial statements for further information.

Annual percentage change in remuneration of Directors compared to UK based employees

The table below shows the percentage year-on-year change in salary, benefits and annual bonus in the relevant year for the executive Directors, along with any percentage change in fees for the non-executive Directors, compared to the average Group employee. Year-on-year movement on base salaries or Director fees is primarily attributable to part-year appointment changes.

			% Base salary/fee				Annual bonus outcome				% Benefits1
		2023	2022	2021	2020	2023	2022	2021	2020	2023	2022	2021	2020
Executive Directors	Stephen Bird	-	-	100%	-	19%	-62%	234%	-	-	-	-	-
	Jason Windsor2	-	-	-	-	-	-	-	-	-	-	-	-
	Stephanie Bruce3	-64%	-	-	74%	-58%	-62%	69%	54%	-100%	-	-	100%
Non-executive Directors4, 5	Sir Douglas Flint	-	-	-	-	-	-	-	-	-	-	-	-
	Jonathan Asquith	-	-	-	202%	-	-	-	-	-	-	-	-
	Catherine Bradley	20%	-	-	-	-	-	-	-	-	-	-	-
	John Devine	-	6%	-3%	-2%	-	-	-	-	-	-100%	-	-100%
	Hannah Grove	21%	334%	-	-	-	-	-	-	-	-	-	-
	Pam Kaur	72%	-	-	-	-	-	-	-	-	-	-	-
	Brian McBride	-69%	-13%	59%	-	-	-	-	-	-	-	-	-
	Michael O'Brien	72%	-	-	-	-	-	-	-	-	-	-	-
	Cathleen Raffaeli	1%	10%	-	-	-	-	-	-	-	-	-	-100%
	Group employees6	5.4%	-	-	2.5%	-20%	-47%	50%	-52.5%	-	-	-	17%

1.  The change in benefits figures for employees (including executive Directors) are based on the change in medical premium paid by the Group on their behalf. Benefits do not include pension contributions for these purposes.

2.  Jason Windsor was appointed to the Board effective 23 October 2023. Therefore, there are no prior years' remuneration figures to use for comparison.

3.  Stephanie Bruce stepped down from the Board effective 11 May 2023. 2023 remuneration figures for Stephanie used for the purposes of year-on-year comparison reflect amounts paid until the date on which she stepped down from the Board.

4.  Remuneration for non-executive Directors and the Chairman is disclosed on page 131.

5.  Brian McBride stepped down from the Board effective 10 May 2023. Catherine Bradley was appointed to the Board effective 4 January 2022 and Pam Kaur and Michael O'Brien were appointed to the Board effective 1 June 2022. See the single total figure of remuneration - non-executive Directors table on page 131 for more detail on differences in year-on-year remuneration.

6.  Disclosure is made on the basis of the period 1 April 2022 to 1 April 2023.

How pay was set across the wider workforce in 2023

Our principles for setting pay across the wider workforce are consistent with those for our executive Directors, in that the proportion of the remuneration package which is linked to performance increases for more senior roles within the Company as responsibility and accountability increase.

Base salaries are targeted at an appropriate level in the relevant markets in which the Group competes for talent. The Remuneration Committee considers the base salary percentage increases for the Group's broader UK and international employee populations when determining any annual salary increases for the executive Directors. In 2023, Group-wide pay was determined with a focus on factors such as individual skills and experience and position relative to market. Having considered the market position of our executive Director pay, the Remuneration Committee determined that there was limited scope to make any adjustment and, therefore, no increases were applied in 2023.

The eligibility criteria for participation in variable pay plans is set so that more senior individuals have a greater proportion of their pay linked to performance. For roles where variable remuneration eligibility is retained, our clear approach is designed to support and reward performance at a Company, team and individual level. Performance related variable remuneration includes deferred variable compensation at a suitable level for the employee's role, ensuring a performance link over a longer time horizon than a single year. Variable remuneration for employees, including executive Directors, is determined as a total pool which is distributed across the business based on the performance of each business line and function. Individuals are then considered for a bonus payment on the basis of their individual performance objectives and goals, taking into account conduct.

The Group operates a Compensation Committee comprising the Chief People Officer (Chair), Chief Financial Officer and Chief Risk Officer, the role of which is to consider the implementation of the remuneration policy across the Group. The terms of reference of the Compensation Committee are set by the Remuneration Committee and the Chair of the Compensation Committee formally reports to the Remuneration Committee on all matters which fall within the Compensation Committee's remit.

Pay ratio

The table below sets out the ratio of CEO pay to the median, 25^th and 75^th percentile total remuneration of full-time equivalent UK employees. We have identified the relevant employees for comparison using our gender pay gap data set (snapshot data from 5 April 2023), referred to as Methodology B in the legislation. This was chosen by the Remuneration Committee as it utilised a data set which had already been processed and thoroughly reviewed and this enabled timely reporting for disclosure purposes. Some employing entities are excluded from the gender pay gap calculation in line with the regulations due to the number of individuals employed by these entities being less than 250. The Remuneration Committee considered this would not have a material impact on the outcome of the pay ratio calculation given the limited number of individuals this excludes, relative to the total population being captured, and the range of the remuneration for those excluded individuals, which was spread across quartiles.

The remuneration paid to each of the individuals identified under methodology B was reviewed against other individuals within the quartile both above and below. The individuals identified at the 50^th and 75^th percentiles had been promoted in the year; therefore, the next identified individuals were selected. Benefits figures were based on the medical premium paid by the Company on behalf of employees.

The ratio has increased from 2022, which reflects the fact that the CEO has a greater level of remuneration at risk which is dependent on Company performance; based on both financial and non-financial performance in 2023, the bonus for the CEO paid out at 35.92% of maximum, compared to 30.25% of maximum in 2022 and the LTIP vested at 18.75% of maximum in 2023 compared to it lapsing in its entirety in 2022. External market conditions have been challenging for abrdn in recent years and this has heavily impacted both executive and employee pay outcomes. By design, there are differences in the priorities which drive how these two populations are remunerated; as a result, their relative experiences can be different.

The Remuneration Committee is comfortable that the pay ratio reflects the pay and progression policies and Remuneration Philosophy across the Company as set out above. Further detail on the make up of workforce pay is set out below.

	Year	Method	25th percentile	50th percentile	75th percentile
Stephen Bird	2023	Option B	39	27	19
Stephen Bird	2022	Option B	35	25	16
Stephen Bird	2021	Option B	62	45	25
Stephen Bird/Keith Skeoch	2020	Option B	49	30	18
Keith Skeoch	2019	Option B	34	23	13
Keith Skeoch	2018	Option B	30	19	12

 

	Base salary  (£000s)	Total pay (£000s)
CEO remuneration	875	2,143
25th percentile employee	46	55
50th percentile employee	66	78
75th percentile employee	80	113

Remuneration for non-executive Directors and the Chairman

Single total figure of remuneration - non-executive Directors (audited)

The following table sets out the single total figure of remuneration for each of the non-executive Directors who served as a Director at any time during the financial year ending 31 December 2023. Non-executive Directors do not participate in bonus or long-term incentive plans and do not receive pension funding.

Non-executive Directors		Fees for year ended 31 December £000s	Taxable benefits in year ended  31 December  £000s	Total remuneration for the year ended 31 December £000s
Sir Douglas Flint1	2023	475	-	475
	2022	475	-	475
Jonathan Asquith	2023	139	-	139
	2022	139	-	139
Catherine Bradley2	2023	131	-	131
	2022	109	-	109
John Devine	2023	131	-	131
	2022	131	-	131
Hannah Grove3	2023	159	-	159
	2022	126	-	126
Pam Kaur4	2023	109	-	109
	2022	63	-	63
Brian McBride5	2023	33	-	33
	2022	105	-	105
Michael O'Brien4	2023	109	-	109
	2022	63	-	63
Cathleen Raffaeli6	2023	166	-	166
	2022	164	-	164

1.  Sir Douglas Flint is eligible for life assurance of 4x his annual fee. This is a non-taxable benefit.

2.  Catherine Bradley was appointed to the Board effective 4 January 2022, appointed to the Nomination and Governance Committee and as Chair of the Audit Committee effective 18 May 2022 and appointed to the Risk and Capital Committee effective 1 October 2022.

3.  The subsidiary Board fees for a member of the Standard Life Savings Limited and Elevate Portfolio Services Limited Boards increased from £37,500 to £50,000 p.a. effective 1 August 2023. Total fees include subsidiary Board fees of £50,000 p.a. (previously £37,500 p.a.) as a member of the Standard Life Savings Limited and Elevate Portfolio Services Limited Boards and Board Employee Engagement fee of £15,000 p.a. Hannah Grove was also appointed to the Remuneration Committee effective 1 October 2022.

4.  Pam Kaur and Michael O'Brien were appointed to the Board and the Audit and Risk and Capital Committees effective 1 June 2022.

5.  Brian McBride stepped down from the Board effective 10 May 2023.

6.  The subsidiary Board fees as Chair of the Standard Life Savings Limited and Elevate Portfolio Services Limited Boards increased from £55,000 p.a. to £60,000 p.a. effective 1 August 2023.Total fees include subsidiary Board fees of £60,000 p.a. (previously £55,000 p.a.) as Chair of the Standard Life Savings Limited and Elevate Portfolio Services Limited Boards.

The non-executive Directors, including the Chairman, have letters of appointment that set out their duties and responsibilities. The key terms are set out in the Policy which can be found in the 2022 Annual report and accounts on pages 120 - 130. The service agreements/letters of appointment for Directors are available to shareholders to view on request from the Company Secretary at the Company's registered address (which can be found in the Shareholder information section) and will be accessible for the 2024 AGM. Details of the date of appointment to the Board and date of election by shareholders are set out below:

Chairman/ non-executive Director	Initial appointment to the Board	Initial election by shareholders
Chairman
Sir Douglas Flint	1 November 2018	AGM 2019
Senior Independent Director
Jonathan Asquith	1 September 2019	AGM 2020
Non-executive Directors
Catherine Bradley	4 January 2022	AGM 2022
John Devine	4 July 2016	AGM 2017
Hannah Grove	1 September 2021	AGM 2022
Brian McBride	1 May 2020	AGM 2020
Cathleen Raffaeli	1 August 2018	AGM 2019
Pam Kaur	1 June 2022	AGM 2022
Michael O'Brien	1 June 2022	AGM 2022

 

Implementation of policy for non-executive Directors in 2024

The following table sets out abrdn non-executive Director fees to be paid in 2024. Fees for 2024 remain at the current level.

Role	2024 fees	2023 fees
Chairman's fees1	£475,000	£475,000
Non-executive Director fee2	£73,500	£73,500
Additional fees:
Senior Independent Director	£25,000	£25,000
Chair of the Audit Committee	£30,000	£30,000
Chair of the Risk and Capital Committee	£30,000	£30,000
Chair of the Remuneration Committee	£30,000	£30,000
Committee membership (Audit, Risk and Capital and Remuneration Committees)	£17,500	£17,500
Committee membership (Nomination Committee)	£10,000	£10,000
Employee engagement	£15,000	£15,000

1.  The Chairman's fees are inclusive of the non-executive Directors' core fees and no additional fees are paid to the Chairman where he chairs, or is a member of, other committees/boards. The Chairman is eligible to receive life assurance, which is a non-taxable benefit.

2.  For non-executive Directors, individual fees are constructed by taking the core fee and adding extra fees for being the Senior Independent Director, chair or member of committees and/or subsidiary boards where a greater responsibility and time commitment is required.

Non-executive Directors' interests in shares (audited)

The following table shows the total number of abrdn plc shares held by each of the non-executive Directors and their connected persons:

	Total number of shares owned at 1 January 2023 or date of appointment if later	Shares acquired during the period 1 January 2023 to 31 December 2023	Total number of shares owned at 31 December 2023 or date of cessation if earlier
Sir Douglas Flint	200,000	-	200,000
Jonathan Asquith	153,714	52,150	205,864
Catherine Bradley	12,181	-	12,181
John Devine	28,399	24,514	52,913
Hannah Grove	33,000	-	33,000
Pam Kaur	-	-	-
Brian McBride1	-	-	-
Michael O'Brien	-	173,780	173,780
Cathleen Raffaeli	9,315	-	9,315

1.  Stepped down from the Board effective 10 May 2023.

Sir Douglas Flint, as Chairman, is subject to a shareholding guideline of 100% of the value of his annual fee in abrdn plc shares to be reached within four years of appointment. The total investment cost of Sir Douglas Flint's shareholding was £495k, equivalent to 104% of his annual fee.

The Remuneration Committee

Membership

During 2023, the Remuneration Committee was made up of independent non-executive Directors. For their names, the number of meetings and committee member attendance during 2023, please see the table on page 96.

The role of the Remuneration Committee

To consider and make recommendations to the Board in respect of the total remuneration policy across the Company, including:

-  Rewards for the executive Directors, senior employees and the Chairman.

-  The design and targets for any employee share plan.

-  The design and targets for annual cash bonus plans throughout the Company.

-  Changes to employee benefit structures (including pensions) throughout the Company.

The Remuneration Committee's work in 2023

Jan-Mar	-  2022 Directors' remuneration report and Policy. -  Approve performance for the 2022 bonus targets and 2020 LTIP targets. -  Set 2023 annual bonus scorecard targets and 2023 LTIP targets. -  Updates from the Risk and Audit Committees on relevant matters for the Committee's consideration when determining pay outcomes. -  Approve Stephanie Bruce's exit remuneration arrangements. -  Review remuneration outcomes for executive Directors and the Material Risk Taker population. -  Review and update the Group Remuneration Policy to reflect regulatory changes.
Apr-Jun	-  Approve Jason Windsor's remuneration package. -  Update on external market trends. -  Review regulatory remuneration disclosures and documentation. -  Agree pay ratios with regard to the relevant regulations. -  Remuneration decisions for senior employees within the Remuneration Committee's remit.
Jul-Sep	-  Mid-year review of performance against targets for annual bonus and in-flight LTIP awards for the executive Directors. -  Update the Remuneration Committee and Compensation Committee's Terms of Reference.
Oct-Dec	-  Review gender pay gap data. -  Review Group Remuneration Policy for 2024 implementation. -  Review bonus pool allocation principles and approve overall funding. -  Review 2023 remuneration proposals.

At various points throughout the year the Remuneration Committee also:

-  Made remuneration decisions for the executive leadership team and other senior employees within the Remuneration Committee's remit, including approving the design of one-off incentive plans linked to transformation projects.

-  Received updates relating to regulatory changes and market best practice.

-  Reviewed minutes of subsidiary Committee meetings and their governance documents.

External advisers

During the year, the Remuneration Committee took advice from PwC LLP (a member of the Remuneration Consultants Group (RCG)) who were appointed by the Remuneration Committee after a retender process was conducted in 2022, as disclosed in the 2022 Annual report and accounts on page 118. As PwC LLP is a member of the RCG, the Remuneration Committee is satisfied that the advice given from PwC LLP during the year was objective and independent. The remuneration advisors do not have connections with abrdn that might impair their independence.

A representative from our external adviser attends, by invitation, all Remuneration Committee meetings to provide information and updates on external developments affecting remuneration as well as specific matters raised by the Remuneration Committee. Outside the meetings, the Remuneration Committee's Chair seeks advice on remuneration matters on an ongoing basis. As well as advising the Remuneration Committee, PwC LLP also provided tax, accounting support, risk management, consultancy and assurance services to the Company during the year.

Fees paid to PwC LLP during 2023 for professional advice to the Remuneration Committee were £130,250.

Where appropriate, the Remuneration Committee receives input from the Chairman, Chief Executive Officer, Chief Financial Officer, Chief People Officer, Global Head of Reward and the Chief Risk Officer. This input never relates to their own remuneration. The Remuneration Committee also receives input from the Risk and Capital Committee and the Audit Committee.

Remuneration Committee effectiveness

The Remuneration Committee reviews its remit and effectiveness each year. Following the externally facilitated review in 2022, the 2023 review was conducted internally, on behalf of the Board, by the Company Secretary. As part of the review the views of the Board were sought on the performance of the Remuneration Committee and how Directors felt they were updated on its activities following each meeting. This was supplemented by any matters a Director wished to raise as part of their year-end 1:1 discussion with the Chairman.

The review concluded that the Remuneration Committee continued to operate effectively during 2023 with no material issues or concerns raised. The main areas in which the Remuneration Committee looked to see continued improvement in 2024 were in relation to the insight and brevity of materials presented and avoiding duplication across agendas of this Committee and others. More information about the process involved, and its outcomes, can be found on page 94.

Shareholder voting

We remain committed to ongoing shareholder dialogue and take an active interest in voting outcomes.

The Policy was last subject to a vote at the 2023 AGM on 10 May 2023 and the following table sets out the outcome.

Policy 2023 AGM	For	Against	Withheld
% of total votes	94.29%	5.71%
No. of votes cast	675,020,934	40,860,480	189,168,584

The Directors' remuneration report was subject to a vote at the 2023 AGM on 10 May 2023 and the following table sets out the outcome.

2022 Directors' remuneration report	For	Against	Withheld
% of total votes	93.76%	6.24%
No. of votes cast	666,444,586	44,325,192	194,280,220