Final Results - Part 3 of 8

RNS Number : 2293R

abrdn PLC

28 February 2023

 

abrdn plc

Full Year Results 2022

Part 3 of 8

2. Board of Directors

Our business is overseen by our Board of Directors. Biographical details (and shareholdings)
of the Directors as at 28 February 2023 are listed below.

Sir Douglas Flint CBE - Chairman			Stephen Bird - Chief Executive Officer			Stephanie Bruce - Chief Financial Officer
Appointed to the Board November 2018 Age 67 Nationality British Shares 200,000 Board committees: NC  C			Appointed to the Board July 2020 Age 56 Nationality British Shares 782,355			Appointed to the Board June 2019 Age 54 Nationality British Shares 545,960
Sir Douglas' extensive experience of board leadership in global financial services helps to focus Board discussion and challenge on the design and delivery of our strategy. His wide-ranging expertise in international, financial and governance matters is an important asset to abrdn, while his collaborative approach helps to facilitate open and constructive boardroom discussion. In other current roles, Sir Douglas is chairman of IP Group plc, chairman of the Royal Marsden hospital and charity and 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. From 2005 to 2011 he also 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. He also served as HM Treasury's Special Envoy for Financial and Professional Services to China's Belt and Road Initiative between 2017 and 2022. 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, the Confederation of British Industry's President's Committee, 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.			Stephanie joined the Board of abrdn plc in June 2019 as Chief Financial Officer.  Stephanie is also our representative director on the Board of Phoenix Group Holdings. Stephanie is a highly experienced financial services practitioner with significant sector knowledge, both commercial and technical. She brings wide ranging experience of working with boards and management teams of financial institutions in respect of specialist areas that include capital, financial and commercial management, reporting, risk and control frameworks and regulatory requirements. Before joining abrdn, Stephanie was a partner at PwC from 2002, where she led the financial services assurance practice and was a member of the Assurance Executive. Her responsibilities comprised strategy and business growth, client service, product development, operations and talent management across the UK business. Previously, she led various business areas in PwC, with the primary responsibilities being for clients, business growth and people. During her career, she has specialised in the financial services sector working extensively with organisations across asset management, insurance and banking, with national and international operations. She has also undertaken directorships with HDFC Life and Virgin Money Investments. Stephanie is a member of the Institute of Chartered Accountants of Scotland and served as chair of the Audit Committee. She is an associate of the Association of Corporate Treasurers and holds a Bachelor of Laws (LLB) from the University of Edinburgh. She is also a trustee of the digital education charity Hello World.

Key to Board committees

R  Remuneration Committee RC  Risk and Capital Committee A  Audit Committee NC  Nomination and Governance Committee C  Committee Chair

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 66 Nationality British Shares 153,714 Board committees: R C NC

Appointed to the Board January 2022 Age 63 Nationality British and French Shares 12,181 Board committees: A C NC RC

Appointed to the Board July 2016 Age 64 Nationality British Shares 28,399 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 BFlexion Group Holdings SA, the parent company of Swiss private investment firm BFlexion, and a number of its subsidiaries including Capital Four Holding A/S and Vantage Infrastructure Holdings. Previously, he has been deputy chairman of 3i Group plc and chairman of Citigroup Global Markets Limited, Citibank International Limited, Dexion Capital PLC and AXA Investment Managers. He has also been a non-executive 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 an executive 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 of 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 and standard setters. Catherine 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. Previously, Catherine has 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 finally 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. 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 Chairman of Standard Life Investments (Holdings) Limited. He is non-executive chairman 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 an MBA in Banking from Bangor University, is a Fellow of the Chartered Institute of Public Finance and Accounting and a member of the Chartered Banker Institute.

Hannah Grove - Non-executive Director

Pam Kaur - Non-executive Director

Brian McBride - Non-executive Director

Appointed to the Board September 2021 Age 59 Nationality British and American Shares 33,000 Board committees: NC R

Appointed to the Board June 2022 Age 59 Nationality British Shares Nil Board committees: A RC

Appointed to the Board May 2020 Age 67 Nationality British Shares Nil Board committees: R

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 employee engagement, and sits as a non-executive director on the boards of Standard Life Savings Limited and Elevate Portfolio Services Limited. 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. 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.

Brian brings a wealth of digital experience and global leadership experience in both executive and non-executive directorship roles. His direct experience of developing digital strategies and solutions in consumer-facing businesses, in rapidly evolving markets, is of great benefit to the Board's discussions. Brian is currently chair of Trainline PLC and the lead non-executive director on the board of the UK Ministry of Defence. He is also a senior adviser to Scottish Equity Partners. In June 2022 he was appointed as president of the Confederation of British Industry, having held the role of vice president since February 2022. In his executive career, Brian has worked for IBM, Crosfield Electronics and Dell before serving as chief executive officer of T-Mobile UK and then managing director of Amazon.co.uk. As a non-executive director, Brian has served on the boards of AO.com, the BBC, Celtic Football Club PLC, Computacenter PLC, Kinnevik AB and S3 PLC, and as chair of ASOS PLC. He has also served as a non-executive director on the boards of Standard Life Savings Limited and Elevate Portfolio Services Limited. He holds an MA (Hons) in Economic History and Politics from the University of Glasgow.

Michael O'Brien - Non-executive Director

Cathleen Raffaeli - Non-executive Director

Appointed to the Board June 2022 Age 59 Nationality Irish Shares Nil Board committees: A RC

Appointed to the Board August 2018 Age 66 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 sector and background in the platforms sector, as well as international board experience. She brings these insights as non-executive chairman of the boards of Standard Life Savings Limited and Elevate Portfolio Services Limited. 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.

3. Corporate governance statement

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 2022, 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, with one minor exception as noted below¹. The statement also explains the relevant compliance with the FCA's Disclosure Guidance and Transparency Rules Sourcebook. The table on page 136 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.

(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 10 and 11. Pages 2 to 67 show how the development of the business model in 2022 supports the protection and generation of shareholder value over the long term, as well as underpinning our strategy for growth. A significant development in 2022 supporting these objectives was the diversification of the business model through sharpening the focus of the Investments vector, continued investment in the Adviser vector and the acquisition of ii. The Board's consideration of current and future risks to the success of the Group is set out on pages 64 to 67, complemented by the report of the Risk and Capital Committee on pages 95 to 98.

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 hold 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 42.

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 76 and 77 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 2022, we carried out an extensive programme of meetings with domestic and international investors, with greater face-to-face contacts as Covid restrictions were lifted. The wide range of issues discussed included progress on the integration of ii into the Group, the delivery of transformation to drive revenue growth and productivity, business strategy, financial performance and share price, capital allocation and strategy for returns to shareholders, the realisation of the value from stakes in HDFC Asset Management and HDFC Life, the relationship with Phoenix and the role of the share stake, the plans for refocusing the Investments vector, and corporate governance, including diversity, equity and inclusion. The Chairman, SID, CEO and CFO bring relevant feedback from this engagement to the attention of the Board.

1.  Jutta af Rosenborg and Martin Pike stood down from the Audit Committee and the Board on 18 May 2022. Mike O'Brien and Pam Kaur were appointed to the Committee on their appointment to the Board on 1 June 2022. Consequently, for the period 19 May to 31 May the Audit Committee consisted of two members, rather than three as required under Provision 24 of the Code. The Committee did not meet nor consider any matters during this period.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 180,000 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 90% 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. During 2023, we intend to publish regular online versions of our Shareholder News to give shareholders access to Company updates in an easily accessible format.

The 2022 Annual General Meeting (AGM) was held in Edinburgh on 18 May 2022. Shareholders were invited to submit questions in advance via the Company's website and arrangements were made for an 'enhanced webcast'. This allowed shareholders to view the meeting live, and to submit questions during the meeting via a 'chat box', many of which were then posed to the Chairman by a moderator. The Chairman and CEO presentations addressed the main themes of the questions which had been submitted prior to the meeting. 48% of the shares in issue were voted and all resolutions were passed by at least 80% of votes cast.

Our 2023 AGM will be held on 10 May in Edinburgh. The AGM Guide 2023 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 to support workforce engagement. The Board Employee Engagement (BEE) programme, led by Hannah, is designed to both ensure that views from employees are heard and understood by the Directors and help to inform their decision-making, and that employees understand the role of the Board. During 2022, the programme comprised four primary pillars: (i) Listening Sessions to engage employees across all levels of the organisation in informal gatherings - both virtual and in person - and gather feedback on matters including culture, strategy, engagement and business trends; (ii) 'Meet the NEDs' events for employees to meet with Board members and ask questions about everything from business to markets to career paths; (iii) Employee Resource Group/Network gatherings - focused on abrdn's six employee networks/affinity groups to garner feedback as well as to show appreciation for the role the networks play in abrdn's overall culture; and lastly (iv) floor walks and informal office visits to meet as many team members as possible. Based on this strategy, below is a summary of activity:

-  Ten 'Listening sessions' were held spanning all businesses and geographies. A major outcome of these sessions was to ramp up overall abrdn executive visibility and communications, particularly at a time of significant change both within abrdn as well as in the broader market.

-  Three 'Meet the NEDs' sessions were held: (i) with abrdn's 'Future Leaders' cohort - a new programme to help drive greater internal development and mobility and to help nurture top talent; (ii) with Finimize colleagues, who joined abrdn as a result of acquisition; and (iii) a panel Q&A for Edinburgh-based employees.

-  Meetings were held with all six Network Chairs individually to understand priorities, challenges and how the Board can better support diversity, equity and inclusion: a mid-year Network appreciation event was held; and lunch with Diversity, Equity and Inclusion Networks in Philadelphia.

-  Quarterly meetings with the Employee Forum leads to understand employee issues and provide another lens into sentiment.

-  Lastly, office visits and floor walks were carried out in Boston, Edinburgh, London, New York and Philadelphia.

Hannah provided regular updates on the BEE programme to the Board throughout the year, including on the issues that had been raised through the discussions, and the Board considered how abrdn's ELT were actioning the points raised. This included particular attention being paid to the process and outcomes from cost of living salary adjustments as well as the impacts of the Company's ongoing transformation on our colleagues.

The programme will continue to evolve in 2023 to take account of feedback received over the year. As well as continuing to do regular 'Listening sessions', Hannah plans to further increase NED visibility, for example with plans for her to visit local offices such as Tokyo and the ii office in Manchester, and provide more frequent updates on the programme to employees.

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 41 to 45.

- - -

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 Chairman 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 Vectors 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 Vectors 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 Chairman 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 on new ways of working. -  Engagement feedback is a key input to talent and development programmes and the design of reward philosophy.
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. -  CFO representation on the Phoenix board and the Virgin Money Unit Trust Managers Limited Board. -  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. -  Chairman/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.		-  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, Chairman 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.
			-  Results, AGM presentations and Q&A. -  Chairman, CEO and CFO meetings with investors. -  Chairman, Committee Chairs, Senior Independent Director and BEE NED round table with governance commentators. -  Remuneration Committee Chair meetings with institutional investors. -  Chairman/CEO direct shareholder correspondence.		-  Regular updates from the EDs/ Investor Relations Director/ Chairman/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. -  Publication of Shareholder News. -  Dedicated mailbox and shareholder call centre team.			-  In advance of recommending the remuneration policy to shareholders as part of the business at the 2023 AGM, the chair of the Remuneration Committee undertook direct consultation with our top 15 institutional shareholders and relevant proxy/ shareholder representatives to gather their views on the terms of the proposed 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 86.

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. At the moment, Stephen Bird and Stephanie Bruce have representative director roles, either on the board of one of our charity partners, on fund boards where abrdn is the appointed investment manager or on industry bodies such as the Investment Association. For part of 2022, Stephanie Bruce served as a director on one our joint venture boards (VMUTM) and, since July 2022, as a result of the strategic partnership agreement, she has been a shareholder representative director on the board of Phoenix Group Holdings plc.

Any proposed additional appointments of the non-executive Directors are firstly discussed with the Chairman 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 Chairman'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 70 to 73. These appointments form part of the Chairman's annual performance review of individual non-executive Directors' contribution and time commitment, and similarly that of the Senior Independent Director of the Chairman.

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 2022, the Board's key activities included approving, overseeing and challenging:
-  The updated strategy and the 2023 to 2025 business plan to implement the strategy. -  Capital adequacy and allocation decisions including the decision to sell stakes in Phoenix, HDFC Life and 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 including the acquisition of interactive investor. -  Succession planning, in particular in the Investments vector in relation to the appointment of a Chief Investment Officer. -  The quarterly performance of the Investments vector. -  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 Vector CEOs and business functional leaders.
Chairman -  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 Chairman, 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 Chairman, 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 Chairman.
								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.
Vectors Vector CEOs support the CEO to deliver growth across the business: -  Investments. -  Adviser. -  Personal.		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 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.

You can find the Board Charter on our website www.abrdn.com

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 28 February 2023, the Board comprises the Chairman, eight independent non-executive Directors and two executive Directors. The Board is made up of six men (55%) and five women (45%) (2021: men 50%, women 50%).

Cecilia Reyes stepped down from the Board on 30 September 2022. As announced, Brian McBride will retire on 10 May 2023 and will not offer himself for re-election.

The Chairman 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. Following this 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 2022. In this role, he is available to provide a sounding board to the Chairman and serve as an intermediary for the other Directors and the shareholders. He also led the process to review the Chairman's performance.

The roles of the Chairman and the CEO are separate and are summarised on page 79. 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.

You can find out more about our Directors in their biographies in Section 2.

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

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Nationality

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Diversity activities and progress to meet our targets are covered in the Our people section of the Strategic report on page 41. The ELT's diversity policy is covered in the Diversity, equity and inclusion section of the Directors' report on page 134.

Board changes during the period are covered above and in the Directors' report on page 133.

Ethnicity

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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 101.

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. During 2022, the Committee reviewed and supported the recommendation that Jonathan Asquith and John Devine's appointments be continued for a second and third term respectively. When considering John Devine's continued appointment in particular, the Committee discussed and agreed that the knowledge and experience he had gained from his time on the Board would be very beneficial to the newer board members, and there were no indications that his six years of service had impacted the independence of his views in any way. They also reviewed his other appointments and time commitments, and based on this, agreed that it was appropriate to recommend his continued appointment to the Board.

External search consultants may be used to support Board appointments. As disclosed in last year's report, MWM Consulting was engaged to support the appointments of Mike O'Brien and Pam Kaur. The Group has additionally used the services of MWM Consulting to support other 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. Having carefully reviewed each non-executive Director's contribution and capacity in 2022, the 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 2023 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 2023 AGM, all of the Directors will retire and stand for re-election. As announced, Brian McBride will stand down from the Board on 10 May 223. As well as in Section 2, the AGM Guide 2023 includes background information about the Directors, including the reasons why the Chairman, following the Directors' annual reviews, believes that their individual skills and contribution support their election or re-election.

Details of Directors' outside appointments can be found in their biographies in Section 2.

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 118, no independent professional advice was sought in 2022.

Board effectiveness

Review process

The Board commissions externally facilitated reviews regularly. Following two internally facilitated reviews in 2020 and 2021, Independent Board Evaluation (IBE) was appointed as the external facilitator and carried out the 2022 review. IBE has no other connection to the Group or the Directors.

To carry out the review, a senior representative of IBE was in attendance and observed a Board meeting and a meeting of each Board Committee in December 2022. They also had access to the papers for each of these meetings. In addition to this observation and analysis, they held individual meetings with each Board member, members of the ELT who are regular attendees at Board meetings and the key members of the Board and Committee support teams. Following this, IBE prepared a draft report for review and discussion. A representative of lBE presented the report and recommendations at a standalone session attended by a number of the Directors, ahead of it being reviewed and discussed at the Board.

The main report covered the Board and its Committees. The tone of the feedback received was positive overall, recognising the effective Board dynamics and Committee structure, and the knowledge and experience of recent appointments to the Board. The report noted the number of changes to the Board since the last external review, the current macroeconomic environment and the continued transformation and reshaping of the Group. In this context, the report highlighted the need to continue to evolve management information and reporting to support Board and Committee oversight as well as the effective delegation to Committees. This work is in train, with information flows supported by the appointment of abrdn plc directors to the boards of certain principal subsidiaries.

As part of its conclusions, the report noted the strong levels of Board engagement and participation, both in formal meetings and other Board initiatives, such as Board mentoring involving certain senior management and the BEE programme.

Chairman

The review of Sir Douglas's performance as Chairman was led by the SID, Jonathan Asquith, supported by IBE. It was based on feedback given in individual interviews between the external facilitator and each Director as well as focused discussions between the SID and the other non-executive Directors. The feedback was summarised into a report which was reviewed by the SID and distributed to all non-executive Directors, except Sir Douglas. The Directors, led by Jonathan Asquith and without Sir Douglas being present, met to consider the report. They concluded that the Chairman's industry experience, style and development of the Board continued to be of significant benefit to the Group. Jonathan Asquith met with Sir Douglas to pass feedback from the review directly to him.

Directors

As part of the review, IBE prepared an individual evaluation of each member of the Board to support the Chairman's annual round of feedback to Directors and to assist him in leading the Nomination and Governance Committee's ongoing succession planning. Sir Douglas discussed the individual results with each Director. These discussions also considered overall time commitment and capacity and individual training, development and engagement opportunities.

  Director induction and development

The Chairman, 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 Vectors, 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:

-  Enterprise Technology strategy.

-  Cyber resilience.

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

-  Operational resilience self-assessment.

(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 137. 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 64 to 67.

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 2022.

The review of abrdn's risk management and internal control systems was carried out drawing on inputs across the three lines of defence. The first line management conducted risk and control self-assessments (RCSAs) throughout 2022; Risk & Compliance undertook a review of the effectiveness of the ERM framework (including RCSAs) and how internal controls were operating within the first line; and internal audit produced a Control Environment Assessment using abrdn's risk taxonomy. Collectively these provide a view of the firm's control environment from each of the three lines of defence. Where the review identified weaknesses in the system of controls, the relevant root causes have been investigated and actions are in train to strengthen the relevant controls and to reinforce the application of the ERM framework.

2022 has seen the business continue to strengthen controls within its operating model through better definition of accountability and processes. Technology advances and regulatory developments such as IFPR, the Operational Resilience regulation and UK SoX continue to drive further change in the design of operational processes and internal controls.

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 136 and the Board's viability statement is on page 62.

(v) Remuneration

The Directors' remuneration report (DRR) on pages 103 to 130 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 114 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. An updated Remuneration Policy will be put to shareholders for their approval at the Company's Annual General Meeting on 10 May 2023.

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 Chairman 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 2022. An additional Board meeting was called in 2022 in relation to Board decisions regarding the recommendation to acquire the interactive investor business.

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 Chairman or to the Company Secretary. If necessary, they can follow up with the Chairman 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 2022.

The Chairman 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 2022 and records the number of meetings and members' attendance.

	Board	Group Audit Committee	Nomination and Governance Committee	Remuneration Committee	Risk and Capital Committee
Chairman
Sir Douglas Flint	10/10	--	4/4	-	-
Executive Directors
Stephanie Bruce	10/10	-	-	-	-
Stephen Bird	10/10	-	-	-	-
Non-executive Directors
Jonathan Asquith	10/10	-	4/4	8/8	-
Brian McBride	10/10	-	-	7/8	-
John Devine	9/10	6/7	4/4	-	8/8
Hannah Grove1	10/10	-	4/4	3/3	-
Pam Kaur2	6/6	4/4	-	-	4/4
Cathleen Raffaeli	10/10	-	-	8/8	8/8
Catherine Bradley3	10/10	7/7	2/2	-	2/2
Mike O'Brien4	6/6	4/4	-	-	4/4
Former members
Jutta af Rosenborg (stood down on 18 May 2022)	4/4	3/3	-	3/3	-
Martin Pike (stood down on 18 May 2022)	4/4	3/3	2/2	-	4/4
Cecilia Reyes (stood down on 30 September 2022)	7/8	-	-	5/5	6/6

1.  Hannah Grove was appointed to the Remuneration Committee on 1 October 2022.

2.  Pam Kaur was appointed to the Board and the Audit and Risk and Capital Committees on 1 June 2022.

3.  Catherine Bradley was appointed to the Nomination and Governance Committee on 18 May 2022 and the Risk and Capital Committee on 1 October 2022. The Board appointed Catherine Bradley as Chair of the Audit Committee, effective from 18 May 2022.

4.  Mike O'Brien was appointed to the Board and the Audit and Risk and Capital Committees on 1 June 2022.

Tenure as at February 2023  

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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.

These terms of reference are published within the Board Charter on our website at www.abrdn.com

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 118, no such expense was incurred during 2022.

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 in Section 3.4.

The Committee Chairs are happy to engage with you on their reports. Please contact them via [e-mail]

3.1 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 first report as Audit Committee (the Committee) Chair, having taken on the role from John Devine in May 2022. John remains a member of the Audit Committee and has taken on the role of Chair of the Risk and Capital Committee, of which I am also a member. This ensures a high degree of connectivity between the Audit and Risk responsibilities of the Board.

During the year and up to the date of issuing the annual report, the Committee:

-  Discussed and reviewed the impact on financial reporting of the ii acquisition, having assessed the financial information required to be included in the related Class 1 Circular.

-  Considered the impact on the internal audit function of Chief Internal Auditor changes.

-  Reviewed the plans for sustainability and ESG reporting.

-  Reviewed reporting on financial crime and anti-money laundering controls. (Duty now transferred to the RCC).

-  Received reports on compliance with the FCA Client Assets Sourcebook (CASS) rules in the Company's CASS permissioned regulated legal entities.

The Committee also continued to focus on the quality of financial reporting. In July 2022 we received a letter from the FRC informing us that they had carried out a review of our Annual report and accounts 2021. I am pleased to report that the FRC letter noted there were no questions or queries they wished to raise with us at this stage, and did not require a substantive response to their letter. The FRC asked us to make clear the inherent limitations of their review, which we have set out in the financial reporting section of this report.

The report is structured in four parts:

1.  Governance

2.  Report on the year

3.  Internal audit

4.  External audit

Catherine Bradley

Chair, Audit Committee

3.1.1 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 2022, please see the table on page 84.

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 on a regular basis to the Chairman, the Chief Executive Officer, the Chief Financial Officer, the Group Financial Controller, the Chief Internal Audit Officer and the Group Chief Risk Officer.

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.

-  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 effectiveness review was conducted externally by IBE.

The review included observation of a meeting, access to papers and interviews with Committee members. A representative of IBE provided feedback on the performance of the Committee directly to the Chair and the report and recommendations were discussed by the Committee. Details of the 2022 review are on page 81 and reflect the themes raised across the Board and its Committees. 

3.1.2 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 2021. -  Strategic report and financial highlights 2021. -  Discussed the financial information required to be included in the Class 1 Circular in relation to the proposed acquisition of ii. -  Financial reporting judgements. -  Liaison with the Remuneration Committee on any financial reporting matters related to the achievement of targets and measures. -  External auditors' review of Full year results. -  CASS reporting update. -  Financial crime and whistleblowing.
Apr - Jun	-  Internal audit findings. -  Regulatory reporting including Pillar 3. -  Initial financial reporting matters for Half year 2022. -  Financial crime and whistleblowing. -  External auditors' management letter, and audit strategy including fees.
Jul - Sep	-  Half year results 2022. -  External auditors' review of Half year results. -  External auditors' independence. -  Internal audit findings. -  Sustainability and ESG reporting. -  Whistleblowing.
Oct - Dec	-  Initial financial reporting matters for Full year 2022, 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. -  Effectiveness of the internal audit function. -  Whistleblowing. -  Sustainability and ESG reporting. -  Risk management and internal control system annual review and future plans. -  CASS reporting 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 2022 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 2022 Group financial statements. This year there were no new accounting standards which had a significant impact on the Group accounting policies.

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 2022, the Committee reviewed the Annual report and accounts 2021 and the Half year results 2022. For both periods it received written and/or oral reports from the 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.

In July 2022 we received a letter from the FRC informing us that they had carried out a full scope review of our Annual report and accounts 2021 and there were no questions or queries they wished to raise with us at this stage. The FRC asked us to note that their letter provides no assurance that our report and accounts are correct in all material respects, and that the FRC's role is not to verify the information provided but to consider compliance with reporting requirements. The FRC noted that their review is based on our report and accounts and does not benefit from detailed knowledge of our business or an understanding of the underlying transactions entered into.

The Committee recognises the importance of sustainability and ESG reporting. During 2022 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 2022, 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.

Accounting estimates and judgements

The Audit Committee considered all estimates and judgements that Directors understood could be material to the 2022 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 2022	How the Audit Committee addressed these significant accounting estimates and assumptions
Acquisition of interactive investor (ii)
On 27 May 2022 abrdn completed the acquisition of ii. The identification and valuation of intangible assets arising from the acquisition and determination of the related useful lives is a key area of judgement.	The Committee spent time discussing the acquisition and the related purchase price allocation at two meetings. The most significant area of judgement related to the valuation of the customer relationships intangible asset relating to ii's customer base at the date of acquisition. The Committee challenged the underlying assumptions, including those related to revenue per customer growth, and market interest rate assumptions which impact ii's expected treasury income. The Committee agreed that the assumptions were within a reasonable range and supported the disclosure of these assumptions. See Notes 1 and 13 for further details.
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 2022 impairments of goodwill were recognised in relation to the asset management group of CGUs in the Investments segment (impairment of £299m) and in relation to the Finimize CGU in the Investments segment (impairment of £41m) 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 reflect lower projected revenues as a result of the lower markets, macroeconomic conditions and 2022 results being below previous expectations. For Investments, the key impairment drivers also include the expected reduction in Phoenix revenue from asset strategy and related pricing changes, and further work being required to reduce costs given the level of revenue and to grow to a net inflow position. The recoverable amount for the asset management group of CGUs was determined based on FVLCD, with the primary approach being a discounted cash flow approach. 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 required to be tested for impairment following the acquisition during 2022 and the recoverable amount, based on FVLCD, indicated that no impairment was required. Goodwill relating to the abrdn financial planning business CGU was also tested with no impairment arising, but with no headroom in relation to future downside sensitivities.	The Committee spent time reviewing and challenging recoverable amount assumptions at three meetings. For asset management the Committee considered a number of different valuation approaches and discussed that the key assumptions related to the FVLCD discounted cash flow approach were future earnings forecasts and the discount rate. The Committee considered that these assumptions and the resulting goodwill impairment were within the range of reasonable outcomes. The Committee noted that the asset management VIU was significantly reduced by the IFRS requirement to exclude cost savings related to future restructuring, and therefore that the VIU was less than the FVLCD. 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 interactive investor and the abrdn financial planning CGUs 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.

Significant accounting estimates, judgements and assumptions for the year ended 31 December 2022	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 2022 management noted that the Company's net assets attributable to shareholders of £4.9bn (post impairments) were higher than the Company's market capitalisation of £3.8bn. This, together with lower projected future asset management earnings, was considered to be an indicator of impairment of the Company's investment in its asset management subsidiaries, abrdn Holdings Limited (formerly named Aberdeen Asset Management PLC ) and abrdn Investment Holdings Limited (aIHL). All other material investment in subsidiaries (with the exception of abrdn Financial Planning Limited) were supported by financial assets or other relevant analysis. Impairments were recognised in 2022 in relation to the Company's investment in its subsidiaries abrdn Holdings Limited (impairment of £847m), aIHL (impairment of £51m) and abrdn Financial Planning Limited (impairment of £25m).	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 £3.2bn following the 2022 impairments which continued to provide support for the dividend policy. Further details on the impairment assessment of investments in subsidiaries are set out in Note A of the Company financial statements in Section 8.
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 mortality assumptions should not be updated for COVID-19 at this point as the impact on long-term mortality rates for pension scheme members was not clear. 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 2022 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 37 for further details.

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 profitability, particularly in relation to the Investments vector.

-  The balance of reporting relating to financial and strategic performance across the group.

-  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 2022 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 2022, 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

In H1 2022 abrdn published 2021 Pillar 3 reporting under CRD IV. The Committee reviewed the Pillar 3 report and papers which set out the control and verification processes followed in the compilation of the report.

The Committee also considered disclosures relating to IFPR (Investment Firm 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 reporting will continue to be monitored closely.

In early 2023, the Committee discussed the implications of a significant process execution event. The Committee were satisfied that this was appropriately reflected in 2022 financial reporting. See Note 34 of the financial statements for further details.

Financial crime and whistleblowing

After May 2022, oversight of anti-Financial Crime compliance moved to the Risk and Capital Committee. Until this point the Committee received regular updates from the Head of Anti-Financial Crime who reports on compliance with the Group's Anti-Financial Crime and Anti-Bribery policy, and any other activities associated with financial crime, including fraud risk.

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.

3.1.3 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 annually, but 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.

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. 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). Two areas for improvement were identified against the Standards (skillset and resourcing and scope of quality assurance) and actions are underway to address them. The Committee met specifically to review the results of the external report and to agree the proposed actions of the internal audit team to take forward the recommendations.

Regular reporting is provided to the Committee to illustrate plan progress, and the status of implementation of recommendations. The Committee's own review of the function in 2022 was positive and supports the continuous evolution and enhancement of the function.

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

3.1.4 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 2023 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 for the financial year ended 31 December 2017. The audit for the year ended 31 December 2022 is therefore KPMG's 6th year as auditor. The Senior Statutory Auditor is Richard Faulkner who succeeded Jonathan Mills, as the lead audit partner for the year ended 31 December 2022.

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 2022 was £6.2m (2021: KPMG £5.1m). In addition, £2.3m (2021: £2.0m) 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 £1.3m (2021: £2.1m), of which £1.0m (2021: £1.2m) related to other assurance services and £0.3m (2021: £0.9m) related to other non-audit fee services. Other assurance services in 2022 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. Other non-audit fee services fees in 2022 all related to residual Reporting Accountant work on the interactive investor Class 1 Circular as discussed in the prior year report. 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 15% (2021: 30%). The total of audit related assurance fees (£2.3m) and non-audit fees (£1.3m) is £3.6m, and the ratio of these audit related assurance fees and non-audit fees to audit fees is 58% (2021: 80%). 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 and requested a formal report from KPMG of the applicability of the findings to abrdn both in respect of generally identified failings and failings specific to individual 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 £14m (2021: £19m) 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 (2021: £0.95m). The aggregated net difference between the reported pre-tax profit and the auditor's judgement of pre-tax profit was less than £9m 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.

Audit reform

The Committee reviewed the Government's response to the consultation on strengthening the UK's audit, corporate reporting and corporate governance systems, published in May 2022, and the intended establishment of the Audit, Reporting and Governance Authority (ARGA) and associated frameworks. The Committee will remain engaged in the audit reform discussion during 2023.

3.2 Risk and Capital Committee report

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

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 clients, shareholders and regulators.

During 2022 the Committee placed particular focus on two areas: (i) the financial and strategic implications of the challenging market and economic environment, amplified by the impact of the Russia-Ukraine war; and (ii) prudential matters, with the first year of operation of the UK's Investment Firms Prudential Regime (IFPR).

Throughout 2022 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.

-  Key components of the Group's ICARA and the Group's capital and liquidity.

-  Conduct risks across our three vectors and implementation of the FCA's new Consumer Duty.

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

-  The framework for anti-financial crime and anti-money laundering activity across the Group.

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

-  The expansion of the direct to customer proposition through the acquisition of interactive investor (ii).

-  The Group's exposure to emerging risks, including climate change.

Furthermore, the Committee has closely monitored developments from our regulators across the world as they have progressed their regulatory agendas, including the areas of ESG, operational resilience and liquidity.

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

On behalf of the Board I wish to record our gratitude to Martin Pike, my predecessor as Chair of the Risk and Capital Committee, who stood down in May 2022.

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 2022, please see the table on page 84.

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, the Group General Counsel and the Chief Internal Auditor, as well as the External auditors.

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

Key responsibilities

The Company's purpose results in opportunities and exposures 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 impacts 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 and product developments, as well as other corporate transactions.

-  Regulatory compliance across the Group.

Further detail on the work performed in each of these areas is set out in the report below.

In addition, in January 2022 the Committee also took on responsibility to act as the board risk committee for the Group's two main UK investment companies, abrdn Investment Management Limited (aIML) and abrdn Investments Limited (aIL).

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 2022

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 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 a holistic assessment from the Chief Risk Officer of the key risks and uncertainties faced by the Group's businesses and the actions being taken to manage them.

-  Ongoing activity to enhance and develop abrdn's ERM framework, for example the Risk Appetite and Policy frameworks.

-  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 both 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 2022. This included consideration of:

Jan - Mar	-  Advice provided to the Remuneration Committee regarding the delivery of performance in 2021 relative to risk appetites -  2021 findings from the abrdn Investment Management vector Internal Controls Report -  2022 deliverables from the ICARA process -  Emerging risks to the Group -  Operational resilience programme activity -  Review of abrdn's principal risks and risk disclosures for the annual report and accounts
Apr - Jun	-  Conduct risks for the Personal vector -  Conduct risks for the Adviser vector -  Corporate and reputational risks for the Group -  Anti-financial crime-related activity -  Contingency planning process in the event of the failure of a critical third-party supplier
Jul - Sep	-  Investment risk and related reporting -  Proposed changes to the risk appetite framework -  Finance strategy for the Group -  Cyber risks, including the Group's resilience maturity against the NIST framework
Oct - Dec	-  The Group ICARA documents -  Management of IT obsolescence -  The remit of the Risk & Compliance function -  Implementation of the new Consumer Duty -  The Senior Managers and Certification Regime -  abrdn wind-down plan and triggers -  Data privacy management -  2023 combined second- and third-line 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 reviewed and proposed updates to the risk appetite framework to ensure that the risk appetites and limits reflected changes to the risk profile in view of the external environment and ongoing transformation of the business. Notable changes to the risk appetite framework in 2022 include new appetites on operational resilience; and revised appetites relating to anti-financial crime risks.

Through reviewing the 'Views on Risk' reporting the Committee supports the Board by monitoring risks relative to applicable risk appetites 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.

-  Enhancements to components of the Group's risk appetite framework.

-  The delivery of the abrdn ICARA document.

-  Improvements to anti-financial crime processes.

-  The strengthening of the conduct risk framework.

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

Stress testing and scenario analysis has also supported the Committee in understanding, monitoring and managing the capital and liquidity risk profile of the business under stressed conditions. This has 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 information 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.

Reverse stress testing analysis - i.e. considering extreme but plausible events that have the potential to cause the business to become unviable - has also been provided to the Committee to allow it to consider the ability of the Group to prevent and mitigate the risk of business failure. This year's reverse stress testing explored the possible economic conditions that could lead to non-viability, augmenting previous reverse stress testing which explored operational, conduct and reputational risks.

The Committee reviewed the results of the stress testing exercise and noted that the possible economic conditions that could lead to non-viability were extremely remote.

Based on the stress testing and scenario analysis results and the reverse stress testing exercise, the Committee concluded there was no requirement for the business to reduce its risk exposures. The business was resilient to extreme events given the robust controls, monitoring and triggers in place to identify events quickly and the range of management actions available to help mitigate their effects.

Enterprise Risk Management (ERM) framework

To ensure the consistent focus on the delivery of client outcomes, during 2022, 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 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 the 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.

In relation to the significant process execution event mentioned earlier, the RCC has thoroughly considered how the ERMF operated and what remedial actions need to be taken.

Regulatory developments and compliance

The Committee reviews and assesses regulatory compliance plans which detail 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 their operational implications, notably in relation to sanctions and anti-financial crime. 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 effectiveness review was conducted externally by IBE.

The review included observation of a meeting, access to papers and interviews with Committee members. A representative of IBE provided feedback on the performance of the Committee directly to the Chair and the report and recommendations were discussed by the Committee. Details of the 2022 review are on page 81 and reflect the themes raised across the Board and its Committees. 

3.3 Nomination and Governance Committee report

I am pleased to present the Nomination and Governance Committee (the Committee) report for the year ended 31 December 2022.

The Committee's key priorities this year were to support the succession planning for the Board and the executive, maintain effective board governance processes and continue to oversee initiatives supporting the development of talent, leadership and diversity, equity and inclusion. Also, during the year, the remit of the Committee was expanded to include oversight of culture, recognising this as an important enabler of the Company's transformation. The Committee and the Board held deep-dives on engagement survey results, action plans and the development of the Company's cultural commitments. Further detail on this can be found on pages 41to 42.

Governance Framework

We have continued to review our governance framework against the Code principles and provisions. The framework in place effectively supported the review, completion and integration of the ii acquisition and no material changes were proposed to its operation during 2022.

Board evaluation

Having conducted internally-facilitated reviews in 2020 and 2021 our 2022 Board review was facilitated externally and more information about what the process involved and its outcomes can be found on page 81.

Culture, Diversity, Equity and Inclusion

Continuing to build on transformation activity across our businesses, the Committee has received regular updates on the work being done to implement the Group's culture, diversity, equity and inclusion programmes and considered the ELT's initiatives to implement these throughout the organisation. Diversity, Equity and Inclusion remains a key focus and commitment of the Board, especially in areas such as fund management, which, as an industry, is typically underrepresented. There is more detail about this below and on pages 41 and 42. The Committee wants to use this opportunity to pay tribute to Lynne Connolly who headed our Diversity, Equity and Inclusion (DEI) programmes for six years and sadly passed away in early 2023 after living with incurable cancer for many years. The Group plans to establish an award scheme in Lynne Connolly's name to recognise the foundations for DEI that Lynne created and the inspiration she represented to all of our colleagues.

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 particularly pleasing that following the launch of a new future leaders programme this has already led to the role expansion/promotion of 20% of the introductory cohort. Enterprise-wide, significant improvements in the diversity of early talent, senior leaders and in our talent pipelines as well as reduction in our UK gender pay and bonus gaps for the fifth consecutive year continue to demonstrate the success of our programmes.

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 skills, experience, diversity and capacity. These factors are important to the Board in reviewing overall composition and during the year were reviewed by the Committee, covered in my 1:1 discussions with Directors, and considered by the external Board effectiveness review. 

As I have covered already in my Chairman's statement, I was pleased to welcome Catherine Bradley, Pam Kaur and Mike O'Brien to the Board during 2022. We said farewell to Cecilia Reyes during 2022 and I want to record here our gratitude for her strong contribution during her three years on the Board. The Board's practice of succession planning over time was reflected in Committee appointments and movements during the year, with Catherine Bradley assuming the Chair of the Audit Committee on appointment and John Devine, moving from Audit to take on the Chair of the Risk and Capital Committee.

Brian McBride has advised that he will not seek re-election at the Company's Annual General Meeting on 10 May 2023 and will stand down from that date. I and all my colleagues will miss Brian's insights and guidance and I would like to thank Brian for his contribution to the Board and to the subsidiary boards he served on.

The Board believes strongly in the importance of strong governance to successful value creation and I look forward to demonstrating this in future reports.

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 2022, please see the table on page 84.

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 2022

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 2021 ARA. -  Reviewed the results of the Committee Effectiveness Review and reviewed the Board Charter and Committees' terms of reference. -  Reviewed progress on Talent and Leadership development activities. -  Recommended the appointments of Mike O'Brien and Pam Kaur. -  Reviewed approach to ESG external reporting, and reviewed TCFD report and Sustainability report.
Apr - Jun	-  Reviewed the recommendations to shareholders to re/elect Directors at the AGM. -  Reviewed and recommended the continued appointment of John Devine and Jonathan Asquith at the end of their three-year terms. -  Reviewed the group's Culture and Talent Strategy plan. -  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 - Sep	-  Reviewed executive succession plan and talent pipeline. -  Approved proposed executive leadership changes. -  Received an update on abrdn's cultural commitments. -  Received an update on Diversity, Equity and Inclusion progress and action plans. -  Reviewed the process to oversee Board skills analysis and considered Board succession planning.
Oct - Dec	-  Received an update on 2023 plans to further embed cultural commitments. -  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:

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

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.

In light of the Committee's review of the Board composition and skills analysis carried out in 2021, and following the process as outlined above to identify and consider potential candidates, the Committee was pleased to recommend Mike O'Brien and Pam Kaur be appointed to the Board, each as a member of the Audit and Risk and Capital Committees. Both Mike and Pam were appointed as Non-executive Directors and members of the Audit and Risk and Capital Committees with effect from June 2022.

The Committee also recommended the appointments of John Devine as Chair of the Risk and Capital Committee and Catherine Bradley as Chair of the Audit Committee, which took effect, following Board approval, from conclusion of the AGM on 18 May 2022.

The Committee believes that, as well as strengthening the collective skills and experience of the Board, these appointments build resilience into the membership of the Board Committees, aid succession planning for Committee Chair roles, and support our commitment to Board diversity.

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. John Devine and Jonathan Asquith's continued appointments were reviewed during the year and the Committee agreed that they continued to meet all independence and time commitment expectations and recommended to the Board that they should continue their appointments for further terms.

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 2022, 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 2022 looking at the strategic priorities of the talent team to:

-  Bring the best possible people into the organisation.

-  Enable people to be the best they can.

-  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, this will continue in 2023.

During the year, the Committee reviewed and approved a number of proposed changes to the Group's ELT. Following the acquisition of ii, the Group took the opportunity to consolidate its personal wealth propositions under a single vector and leadership team. Given the scale and importance of ii to the Group strategy, the Committee approved the appointment of Richard Wilson to the position of CEO, Personal from August 2022. Following an assessment of the Group's strategic requirements, the role of Chief Enterprise Technology Officer was created. David Scott (formerly Chief Security and Resilience Officer) was promoted to the role, effective from August 2022, and took on responsibility for building and maintaining a technology infrastructure which is commensurate to the Group's growth plans. The Committee also approved the appointment of Sarah Moody to Chief Corporate Affairs and Investor Relations Director, effective January 2023.

Board evaluation

The Committee has a key role in supporting the Board evaluation process. Details of the 2022 review are on page 81.

Culture, Diversity, Equity and inclusion

In recognition of the oversight activities already undertaken by the Committee relating to the Group's culture, in January 2022 the Committee determined that it should have oversight of the metrics in place to help to assess and monitor culture across the Group.

The Committee and the Board spent time with both the CEO and the Chief People Officer understanding their plans to strengthen meaningful measurement and reporting of culture across the Group. The Board and the ELT have defined a set of commitments which define the Group's culture - Client First, Empowered, Ambitious and Transparent. Details of the cultural commitments and the behaviours that underpin them can be found on page 42. We have a comprehensive plan in place to embed our commitments across the colleague experience and track progress in 2023. We measure overall progress against our cultural ambitions through our listening strategy and our employee engagement online platform.

The Committee also received the annual update from the Chairman and the CEO of the abrdn Financial Fairness Trust and discussed how grants were made and how these were contributing to informing public policy choices.

The Board's diversity statement is on page 80. The Committee has a key role in supporting publication of this statement through its oversight of DEI activities. The DEI Team attends 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 and inclusion part of our purpose.

-  Maintaining inclusive ways of working.

-  Attracting and developing diverse talent.

-  Ensuring colleagues feel included and valued every day.

ESG reporting

During the year, the Committee supported the Group's ESG external reporting by reviewing the various reports in advance of their publication. The ESG reports issued were:

-  UK Stewardship report - this shows how the Group has applied the UK Stewardship Code as an investor. The Group is a signatory to the Stewardship Code.

-  TCFD report - this includes a summary of the Group's approach to climate change, including our approach to scenario analysis, refreshed net zero goals and case studies.

-  Sustainability report - this is an annual report with ESG data, activity and achievements across the Group's operations and vectors, to bring to life our brand values and our ESG priorities.

The Committee members considered these reports in terms of their quality, consistency and alignment with other relevant information.

Committee effectiveness

The effectiveness review was conducted externally by IBE.

The review included observation of a meeting, access to papers and interviews with Committee members. A representative of IBE provided feedback on the performance of the Committee directly to the Chair and the report and recommendations were discussed by the Committee. Details of the 2022 review are on page 81 and reflect the themes raised across the Board and its Committees. 

3.4 Directors' remuneration report

Remuneration Committee Chair's statement

This report sets out what the Directors of abrdn were paid in 2022 together with an explanation of how the Remuneration Committee reached its recommendations.

Also set out are the proposed updates to our Directors' Remuneration Policy ('Policy') and its implementation from 2023. 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 - 2022 remuneration outcomes	106
At a glance - 2023 proposed Policy summary and implementation in 2023	107
2022 annual remuneration report	108
Shareholdings and outstanding share awards	110
Executive Directors' remuneration in context	113
Remuneration for non-executives	116
The Remuneration Committee The proposed Directors' Remuneration Policy	118 120

Approval

The Directors' Remuneration Report was approved by the Board and signed on its behalf by:

Jonathan Asquith

Chair of the Remuneration Committee

28 February 2023

Dear shareholder

On behalf of the Board I am pleased to present the Directors' Remuneration Report for the year ended 31 December 2022 and the proposed updated Policy to commence in 2023.

Introduction

Our Directors' Remuneration Report for 2021 received a 96% vote in favour at the 2022 AGM. I would like to thank our shareholders for their continued strong support of our approach to remuneration matters and their ongoing dialogue on these issues. I would also like to thank Cecilia

Reyes for her contributions to the Committee's work over the last three years and welcome Hannah Grove who joined in October.

As you will no doubt be aware, our Policy is due for renewal at the 2023 AGM. This has given the Committee a chance to reflect on the current Policy and how it has been operating. We concluded collectively that the Policy has worked well and continues to support an appropriate level of alignment between the interests of shareholders, executive management and other stakeholders in the Group.

In this context, we do not propose any material changes to the structure or the quantum of incentives. Within that unchanged envelope we are, however, proposing a limited change of emphasis in our annual bonus measures. This change comprises an increase in the maximum weighting allocated to non-financial measures from 25% to 35% to allow the Board greater flexibility to target the delivery of strategic change in the business, the results of which may not be immediately reflected in its financial results. The majority, at least 65%, will remain weighted towards financial measures. More detail can be found in the section titled Key features of our new Policy on page 105.

In what has been one the toughest investment markets for many years, we have continued to drive our Remuneration Philosophy. Our end-of-year processes incorporated careful consideration of financial and non-financial performance, reflecting the growing resilience of our diversified model, the strides achieved in addressing sustainability issues and our continued focus on our people, culture and customers in a challenging market environment.

How our Policy was applied in 2022

Significant advances at a strategic level in the year, including the acquisition of ii, were balanced by shortfalls in the Group's financial performance in a hostile market environment. With 40% of the annual bonus and 100% of the LTIP driven directly by profit and total shareholder return measures, the reduction in executive Director rewards mirrored subdued returns for shareholders and other stakeholders.

Annual bonus (detail on pages 108 to 109)

Financial performance (75%)

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 weak investment markets and significant macro and geopolitical headwinds, financial performance was necessarily held back.

Investment performance: Our longer term equities performance remains robust, while over a three-year time period we have consistently delivered strong performance in alternatives as well as fixed income. Real asset valuations have weakened, given the higher interest rate backdrop, although long-term sector conviction remains strong. The overall outcome was between threshold and target.

Net flows: Negative market sentiment had an adverse impact on flows, with significant number of withdrawals experienced from equity funds across the industry. The impacts were largely felt across public markets in the Investments vector, with real assets and our other two vectors Personal and Adviser proving to be much more resilient. Aggregate performance on net flows nonetheless fell below the threshold required to qualify for payouts under the annual bonus plan.

Adjusted operating profit before tax: This was 19% lower than the prior year, at £263m (£196m excluding ii). Performance in the Personal and Adviser vectors was strong, contributing over 50% of adjusted operating profit in the year, with the aggregate decline concentrated in the Investments vector. Overall, performance did not meet the threshold required.

The outcomes for the financial element of the 2022 annual bonus are summarised below.

Financial performance measure	Weighting (% of total scorecard)	2022 outcome (% of total scorecard)
Investment performance	20%	8.25%
Net flows	15%	0%
Adjusted operating profit before tax	40%	0%

This resulted in an overall assessment of 8.25% out of a maximum of 75% on financial measures.

Non-financial performance (25%)

In 2022 we assessed non-financial performance against two baskets of measures, ESG (comprising Environment and Social categories) and Customer.

Environment: There have been material advances in the delivery of our global climate solutions, where we have identified our clients with net zero goals and have a Climate product strategy group shaping our net zero offering. We are building the tools to track carbon intensity and we have a clear stance on our climate priorities as investors. For our own operational net zero, we are firmly on track to meet our long term net zero carbon emission target of 50% less than our 2018 baseline by 2025. Full details of our progress on these matters are disclosed in our Sustainability and TCFD report, available on our website. The Committee took into account more than 10 qualitative and quantitative performance indicators in assessing that performance in this area was strong with the outcome being agreed as 5% out of 5%.

Social: Despite the challenges posed by enacting a major change agenda against the backdrop of difficult markets, engagement levels at the end of 2022 held up at 50% (2021: 51%). Whilst we are not where we need to be, we have clear plans in place and are committed to continued efforts to build engagement through 2023. 2022 has been a year of transformation on culture coupled with meaningful achievement across our DEI levers of change. Our culture change programme has been designed and rolled out, engaging over 600 of our global leaders. There has been an increase in female representation in senior leadership roles and succession plans as well as an increase in ethnic minorities in early career roles. Taking into account more than 20 qualitative and quantitative performance indicators, the Committee determined the final outcome of 6% out of 8%.

Customer: In the Investments vector, independent client survey feedback covering global clients across all asset classes rated abrdn favourably on a number of areas across the various client experience steps. Overall client service and trust were amongst the areas of noteworthy recognition. The Committee also noted improved RFP hit rate conversions and more importantly, no increase in redemptions. In the Adviser vector, the Net Promoter Score was particularly high relative to other leading technology household names and came with improved Customer Satisfaction scores over the year. The Committee also noted the external accolades received by the abrdn Wrap platform. For the Personal vector, the Committee reviewed the total customer numbers, noting an increase in the active and engaged customer segment. There were also positive customer survey outcomes on satisfaction with relationship managers and the wider team. The Committee concluded the appropriate outcome for the Customer category was 11% out of 12%.

Considering all components together, t his resulted in an overall assessment of 22% out of a maximum of 25% on non-financial measures.

Remuneration Committee assessment

To assess whether the awards generated by the scorecard were fair in the broader performance and risk context, the 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. Details on the Committee's considerations are set out on page 109. T he Committee concluded that the outcomes of the scorecard were fair and balanced and no adjustment to them was needed or made.

The overall outcome recognises the hard work to deliver the critical milestones that were achieved in 2022 against the backdrop of a challenging external environment. This was evidenced in our assessment of performance against non-financial measures including the recognition of progress in delivering a more diversified, more resilient, organisation that should be equipped to weather challenging conditions and rebound when cycles turn.

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

Executive Director	Final outcome (% of max)	2022 total bonus (£000s)
Stephen Bird	30.25%	662
Stephanie Bruce	30.25%	244

Long-term incentives (detail on pages 109 to 112)

Vesting of the 2020 LTIP granted to the current executive Directors is based on performance over the three-year period ending on 31 December 2022. After reviewing the relevant metrics the Committee concluded that the performance had not met the stretching targets set and therefore the award will not vest.

As already disclosed in an RNS announcement on 11 August 2022, following an assessment of performance against its specific performance conditions relating to efficiency targets, the final tranche of the one-off deferred award made to Stephanie Bruce was determined to vest at 100% of maximum.

Finally, the 2019 EIP award was granted to Stephanie Bruce and certain former executive Directors. Performance was measured against the underpin hurdles for the period ending 31 December 2022. Final vesting was assessed at 25% of the maximum award. Full details of the vesting outcome can be found on page 111.

Forward looking LTIP awards were made to Stephen Bird and Stephanie Bruce in April 2021 and 2022, as disclosed in the 2020 and 2021 Annual reports and accounts. The performance conditions attached to these awards will be measured over three-year periods finishing on 31 December 2023 and 2024 respectively.

Key features of our new Policy

The Committee is comfortable that the current Policy supports the strategic direction of the Company, and the Policy therefore remains fit for purpose. However the Committee proposes to make a limited change in emphasis in the annual bonus plan, adjusting the minimum weighting of financial components to 65% (from 75%). This ensures that financial elements still maintain an overall majority but gives scope to increase non-financial metrics to 35% of the overall award.

The Committee acknowledges the view of some shareholders that non-financial metrics can prove harder to quantify for performance assessment purposes. However, there are a wide range of strategic actions in progress which are crucial to the long-term success of the Group and the Committee strongly believes that it is in shareholders' interests for management to be held accountable for delivery of these actions . Accordingly, the Committee intends that the additional 10% weighting in the non-financial segment should be targeted against specific strategic Group and vector priorities which have quantifiable and reportable success metrics.

No change is proposed to the design of the LTIP or the structure of performance metrics for the 2023 award. Performance metrics for awards under future LTIP awards will continue to be reviewed on an annual basis and set within the parameters of the Policy .

Policy implementation in 2023

Following a review no change has been made to salaries for the executive Directors or fees for the non-executives for 2023.  

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 2023 annual bonus is detailed on page 107 and the targets, which are commercially sensitive, will be disclosed at the end of this performance year in the 2023 Annual report and accounts. The scorecard retains the structure of focusing a 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 ESG and Customer objectives and progress on strategic initiatives. The Committee has agreed a basket of key indicators in each of these areas which will allow a rounded assessment of performance to be made. Details on these metrics, including how the Committee assessed performance against them, will be disclosed retrospectively.

The 2023 LTIP will again consist of two equally weighted targets, Adjusted Diluted Capital Generation per share CAGR and Relative TSR. The three-year Adjusted Diluted Capital Generation per share target range has been maintained at 5%-15% Compound Annual Growth Rate (CAGR), which remains aligned with the business plan agreed with the Board. The Committee also reviewed the TSR peer group for the Relative TSR metric. In line with its policy of adjusting the peer group to match the changing composition of the Group's business, the peer group will be adjusted for the 2023 grant to exclude M&G, Franklin Resources, Affiliated Managers, Invesco and SEI Investments. AJ Bell, IntegraFin Holdings, Rathbones Group and Liontrust Asset Management will be added to the peer group. Details of the 2023 LTIP grant can be found on page 107.

Wider workforce

The effective date of the salary review was brought forward to October 2022 (compared to April 2023) for around 40% of our global population. To support the colleagues who are most at risk during the cost of living challenges, this review focused on those who earned less than £75k (or local country equivalent). The review resulted in an average increase of 6% for those individuals. In addition to this, annual reviews have been completed in early 2023 as part of the normal remuneration review cadence.

To help you navigate the report effectively, I would like to draw your attention to the sections on pages 106 to 107 which summarise both the outcomes for 2022 and also how the remuneration policy will be implemented in 2023. Further detailed information is then set out in the rear section of the report for your reference as required. The Policy report, which will be subject to a binding shareholder vote at the 2023 AGM is set out on pages 120 to 130.

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

At a glance - 2022 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 2020-2022 Long-Term Incentive Plan (LTIP). Further detail on the assessment of the performance conditions can be found on pages 108 to 109.

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

2022 annual bonus scorecard outcome

The following table sets out the final outcome for the 2022 annual bonus. A detailed breakdown of performance can be found on pages 108 to 109.

	Bonus Scorecard Outcome			Total Bonus Outcome
	Financial metrics (maximum 75%)	Non-financial metrics (maximum 25%)	Board approved outcome (% of maximum)		Annual salary (£000s)	Maximum opportunity (% of salary)	Total award (% of salary)	Total award (£000s)
Stephen Bird	8.25%	22 %	30.25%		875	250%	75.6%	662
Stephanie Bruce					538	150%	45.4%	244

2020-2022 LTIP outcome

The performance period for the 2020-2022 LTIP concluded on 31 December 2022. Performance was assessed against two measures: Capital Generation per share (CAGR) and Relative TSR performance. Performance against both measures was assessed to be below the threshold required and therefore the award will not vest. Detail of the performance assessment for the 2020-2022 LTIP can be found on page 109.

Total remuneration outcomes in 2022

The chart below shows the remuneration outcomes for each executive Director in 2022 based on performance compared to the maximum opportunity.

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

At a glance - 2023 remuneration policy implementation

This section sets out how we propose to implement our remuneration policy in 2023. The full remuneration policy can be found on pages 120 to 130.

Element of remuneration	Key features of operation	2023 implementation
Salary Core reward for undertaking the role	Normally reviewed annually, taking into account a range of internal and external factors.	No change to quantum Stephen Bird: £875,000 Stephanie Bruce: £538,125
Pension Competitive retirement benefit	Aligned to the current maximum employer contribution available to the UK wider workforce (18% of salary).	No change to quantum Stephen Bird: 18% of salary Stephanie Bruce: 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 quantum
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 Stephanie Bruce: 150% of salary See below for 2023 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.	No change to quantum Stephen Bird: 350% of salary Stephanie Bruce: 200% of salary 2023 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.	No change to quantum Stephen Bird: 350% of salary Stephanie Bruce: 300% of salary

Performance conditions for 2023 annual bonus

Financial (65% weighting)	Investment performance (15%), Adjusted operating profit (35%), Net flows excluding liquidity (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 key strategic initiatives (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 2023 Long-term incentive plan

	Target range1
Adjusted Diluted Capital Generation per share (50% weighting)	5% - 15% CAGR
Relative TSR2 (50% weighting)	Equal to median - equal to upper quartile
1.  Straight line vesting occurs between threshold and maximum. 25% vesting for threshold performance. 2.  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, Man Group, Ninety One, Quilter, Rathbones Group, St James's Place, Schroders.

Directors' remuneration in 2022

This section reports remuneration awarded and paid at the end of 2022 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 2022:

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 £000s	2019 EIP £000s	Total  for the year £000s	Total fixed £000s	Total variable £000s
Stephen Bird	2022	875	1	158	331	331	-	-	1,696	1,034	662
	2021	875	1	158	880.5	880.5	-	-	2,795	1,034	1,761
Stephanie Bruce3	2022	538	1	97	122	122	791	(139)	1,532	636	896
	2021	538	1	97	321	321	-	-	1,278	636	642

1.  This includes the taxable value of all benefits paid in respect of the relevant year. Included for 2022 are medical premiums at a cost to the group of £606 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 final outcome of Stephanie Bruce's one off award is included in the column titled 'LTIP with period ending in the year', for the three tranches which vested in 2020, 2021 and 2022. This figure includes dividends awarded over the performance period and is calculated on the basis of the share price on date of exercise as previously disclosed in RNS announcements. Stephanie Bruce is the only current Director who participated in the 2019 Executive Incentive Plan (EIP). The vesting outcome was determined to be 25% (details can be found on page 111). The final outcome was therefore calculated as £46k (and so £139k lower than stated in the 2019 Annual report and accounts). This adjustment is reflected in the table above. 

Base Salary (audited)

There was no change to the base salaries of executive Directors in 2022.

Pension (audited)

Under the Directors' Remuneration Policy approved at the 2020 AGM, and consistent with the proposed policy for 2023, the executive Directors received a cash allowance in lieu of pension contributions 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 2022 to 31 December 2022 against each of the elements of the executive Director bonus scorecard.

Financial performance metrics - 75% of total scorecard outcome

	Weighting (% of overall scorecard)	Threshold (25% of maximum)	Target (50% of maximum)	Stretch (100% of maximum)	Actual	Result (% of overall outcome)
Investment performance - % AUM above benchmark average of three-year and five-year for all asset classes	20%	55%	65%	70%	61.5%	8.25%
Net flows1, 2 (£bn)	15%	(3.2)	7.2	28	(12)	0%
Adjusted operating profit before tax2 (£m)	40%	323	336	363	196	0%

1.  Excluding LBG tranche exits and cash/liquidity.

2.  Excludes ii as financial targets were set prior to acquisition.

Non-financial performance metrics - 25% of total scorecard outcome

Category	Highlights from assessment	Result (% of overall outcome)
Environment (5%): Improvement on decarbonisation and progress on Operational Net Zero	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 Committee considered more than ten quantitative and qualitative measures. O ur Sustainability and TCFD report, available on our website, contains detail on our performance in this area. Key factors in the determination were: -  The range of climate solutions developed across the asset classes globally, noting the Climate product strategy group which shapes our climate and net zero offering. -  We are building the tools to track carbon intensity and we have a clear stance on our climate priorities as investors. There has been proactive engagement with clients and companies we invest in, including a stated policy on voting action. -  Reduction in the carbon footprint for 2022, significantly less than the 2018 baseline. The Committee noted the ongoing trends that point to abrdn meeting our published target of 50% less than the 2018 baseline by 2025.	5%

Category	Highlights from assessment	Result (% of overall outcome)
Social/people (8%): Improvements from baseline on People engagement, 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 Committee considered 10 quantitative and additional qualitative measures, including data points relating to gender representation across the workforce, employee engagement, ethnicity data and new hire statistics. -  Increased female representation in senior leadership roles (to 39% from 36% in 2021) and ELT succession plans (up 50% on 2021). -  Our Gender Pay Gap has been reduced for the fifth consecutive year. -  35% of early career roles were filled by ethnic minorities (which is above the 2025 target), helping to improve the diversity of our talent pipeline. -  Improved CEO and ELT visibility across the organisation, with clarity on strategy and improved two-way communication via new channels. -  30 Culture Champions across the business and over 600 leaders have been engaged with the local roll out of our Commitments, helping to embed this culture throughout the organisation and the colleague lifecycle. -  Despite the challenges posed by enacting a major change agenda, engagement levels at the end of 2022 held up at 50% (2021: 51%). Whilst we are not where we need to be, we have clear plans in place to build engagement through 2023. 76% of employees rated abrdn as an Inclusive organisation (up from 70% in 2021).	6%
Customer (12%): Measured across the Adviser, Personal and Investments vectors	Our three vector model gives us an extremely diverse customer base, from institutional to adviser to retail. We therefore measure our success in delivering for our customers with reference to vector specific quantitative and qualitative metrics that holistically capture the experience of our different client groups. The Committee considered more than 25 quantitative and qualitative measures from internal and external sources. Key factors in the determination were: -  For the Investments vector positive feedback was noted via the Voice of the Client survey, covering global clients across all asset classes, rating abrdn favourably on a number of areas across the various client experience steps. Overall client service and trust where amongst the areas of noteworthy recognition. There was also a strong RFP hit rate relative to prior year and no increase in redemptions in spite of the toughest investment year in half a century. -  Net promoter score (NPS) for the Adviser vector of 57% (which compared favourably relative to other leading companies) and was significantly up on the baseline from 2021. Significant improvement in customer satisfaction scores for the Adviser vector as well as improved survey responses to the question indicating intent for "more business" and external accolades received by the abrdn Wrap platform. -  Within the Personal vector, ii reported a 4% increase from the prior year in their Active and Engaged customer segment as well as attracting numerous market awards including Which? Recommended SIPP Provider 2022 and a Trust Pilot score of 4.7.	11%

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. They also considered factors including the shareholder experience and pay for the wider workforce. In light of these, and noting the maintenance of our dividend pay out policy, a final determination was made that no adjustment should be made to the bonus outcomes set out above.

2020-2022 Long-term Incentive Plan (LTIP) outcome

The following table details the targets and assessment of outcomes for the 2020-2022 LTIP award. The performance period for this award concluded on 31 December 2022. The Committee concluded that the award had not met the required threshold performance and the shares will therefore lapse.

	Threshold	Maximum	Actual outcome	% vesting
Capital Generation per share (CAGR)	11%	23 %	(4%)	0%
Relative TSR	Median	Upper quartile	Below median	0%

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. No payments to past directors or payments for loss of office were made during the year.

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 107. The Directors' Remuneration 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 2022	Shares acquired during the period 1 January 2022 and 31 December 2022	Total shares owned as at 31 December 20221	Options exercised during the period 1 January 2022 and 31 December 2022	Vested but unexercised share options	Subject to performance conditions2	Not subject to performance conditions3	Shares lapsed
Stephen Bird4	700,000	82,355	782,355	32,355	-	3,426,584	475,399	-
Stephanie Bruce5	360,000	246,633	606,633	139,924	-	1,462,891	194,265	-

3.  There were no changes to the number of shares held by executive Directors between 31 December 2022 and 27 February 2023.

4.  Includes: the 2020 LTIP and 2021 LTIP awards and the 2022 LTIP awards granted in 2022 disclosed below (awards subject to performance targets over the three-year period ending 31 December 2024), excluding, in each case, shares to be awarded in lieu of dividend equivalents.

5.  This comprises deferred bonus awards. It does not include shares to be awarded in lieu of dividend equivalents.

6.  On 11 April Stephen Bird exercised the first tranche of the deferred portion of his 2020 annual bonus award. The share price used for exercise was 205.70 pence. This resulted in a gain of £66,554.

7.  On 9 August Stephanie Bruce exercised the final tranche of her one-off award and the first tranche of the deferred portion of her 2020 annual bonus award. The share price used for exercise was 161.15 pence. This resulted in a gain of £225,488.

The following table shows the number of qualifying awards included in assessing achievement towards the shareholding requirement, as at 31 December 2022. The total Qualifying holding includes shares held outright (which derive from vested and exercised awards plus any purchased shares) as well as Qualifying unvested 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 30 December 2022. Qualifying unvested 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 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 held from table above and 50% of Qualifying unvested 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 2022 as a % of salary	Shareholding requirement met?
Stephen Bird	475,399	-	1,020,055	2,216,023	350%	£875,000	253%	In progress
Stephanie Bruce	194,265	-	703,766	£1,139,485	300%	£538,125	259%	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 £515k.

2.  The closing market price at 30 December 2022 used to determine the value of non-purchased shares was 189.25 pence.

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 Stephanie Bruce, who were appointed during 2020 and 2019 respectively, have not yet met the shareholding requirement, however the Committee is satisfied with the progress they have made towards their respective requirements given their tenure.

Vesting of the CFO Deferred Award

The third anniversary of the award was 3 June 2022 and vesting of the final tranche was determined based on performance up to that date. The award had a maximum value at grant of £750,000, and tranches one and two of the award vested at 100% in 2020 and 2021 respectively.

As previously disclosed, the vesting level of the third tranche was considered based on the final achievement against the efficiency targets. The outcome would be adjusted by the Remuneration Committee to ensure that the overall vesting of the award is commensurate with the final achievement against the efficiency targets.

The Remuneration Committee reviewed the outcome against the £175m (baseline target) and £230m (maximum target) in June 2022. As at 31 December 2021, actions had been taken which delivered £400m of annualised synergies, benefiting 2021 operating expenses by £320m (2020: £287m) (as published on page 50 of our 2021 ARA). Group Internal Audit reviewed and verified the data in relation to these efficiency targets for the period of the CFO's tenure, and the Remuneration Committee concluded that the final outcome was in excess of the stretch target of £230m required for maximum vesting. Performance was further assessed by the Committee taking into account the CFO's personal performance and conduct. Following checks with the Audit Committee and the Risk and Capital Committee to ensure there were no other matters which the Committee should take into account when determining this outcome, the Remuneration Committee approved the vesting level of the final tranche of the Award at 100% and the award vested on 3 June 2022. Ms Bruce exercised these shares on 9 August 2022 and they remain subject to Clawback terms for a period of up to five years from the date of award, as set out in the Remuneration Policy.

Executive Incentive Plan (EIP) outcome (audited)

Awards granted under the 2019 EIP to Stephanie Bruce and former executive Directors, set out in full on page 87 of the Annual report and accounts 2019, and summarised below, completed their performance period on 31 December 2022. The Remuneration Committee reviewed the outcomes and concluded that three of the four elements had failed the performance hurdle and therefore lapsed.

Measure	Performance underpin hurdle	Actual performance	Outcome (as % of maximum opportunity)
Investment performance	At least 55% AUM by value to be outperforming the benchmark	65%	25%
Flows	Gross new business flows underpin of £235bn 1 Net new business flows underpin of £30bn 2	£175bn (£8bn)	0%
Return on adjusted equity	At least 17%	12%	0%
Cost/Income ratio	73% 3	82%	0%

1.  Flows exclude investment in cash & liquidity funds and total Lloyds.

2.  Flows exclude investment in cash & liquidity funds and strategic insurance partners.

3.  The Cost/Income ratio was restated from 65% to 73% to remove the impact of JVs & Associates from the 2022 target and outcome following the change to how these are accounted for in 2021.

The following amounts had been previously disclosed in respect of each Director and an adjustment is set out below for each in light of the performance assessment. Note the figure for Stephanie Bruce is disclosed as part of the single total figure of remuneration on page 108.

Participant	Total EIP value deferred (£000s)	EIP value following  performance outcome (£000s)	Original single total  figure disclosure for 2019 (£000s)	Adjusted single total  figure disclosure for 2019 (£000s)
Martin Gilbert	374	93.5	1,219	938.5
Keith Skeoch	563	141	1,472	1,050
Rod Paris	462	115.5	1,158	811.5
Bill Rattray	97	24	352	279

Awards granted in 2022 (audited)

The table below shows the key details of the LTIP and deferred awards granted in 2022:

Participant	Type of award	Basis of award	% of salary	Face value at grant1	Number of shares awarded	% payable for threshold performance	Details on performance conditions
Stephen Bird	Nil-cost option	LTIP	350%	£3,062,500	1,447,169	25%	Awards are subject to performance against targets measured over three years as set out on page 104 of the Annual report and accounts 2021
Stephanie Bruce	Nil-cost option	LTIP	200%	£1,076,250	508,576
Stephen Bird	Nil-cost option	Deferred Bonus	Not applicable	£880,466	416,060	Not applicable	Not applicable
Stephanie Bruce	Nil-cost option			£320,856	151,619

1.  The share price used to calculate the number of shares for the awards was 211.62 pence (the five day average price from 31 March 2022).

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 2022, the Company's standing against these dilution limits was 0.22% where the guideline is no more than 5% in any 10 years under all discretionary share plans in which the executive Directors participate and 0.71% 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 2022 the trusts held 65,858,129 shares acquired to satisfy these awards. Of these shares, 10,716,059 are committed to satisfying vested but unexercised awards. The percentage of share capital held by the employee trusts is 3.29% 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 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 2022, 1,552 individuals in the UK and Ireland were actively making monthly contributions averaging £72. At 31 December 2022, 1,694 individuals were abrdn plc shareholders through participation in the Plan.

-  The Sharesave Plan which was offered in 2022 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 2022, 1,861 individuals were saving towards one or more of the Sharesave offers.

Executive Directors' external appointments

Subject to the Board's approval, executive Directors are able to accept a limited number of external appointments to the boards of other organisations and can retain any fees paid for these services. Both Stephen Bird and Stephanie Bruce held representative directorships on behalf of the Group during the year for which they received no fees. Significant external positions held during the year are set out below.

Executive Director	Role and Organisation	2022 Fees
Stephen Bird	Member of the Financial Services Growth & Development Board1 Board member at the Investment Association2	£nil £nil

1.  Appointed on 11 May 2022.

2.  Appointed on 27 April 2022.

Executive Directors' remuneration in context

Pay compared to performance

The graph shows the difference in the total shareholder return at
31 December 2022 if, on 1 January 2013, £100 had been invested in abrdn plc and in the FTSE 100 respectively. It is assumed dividends are reinvested in both. The FTSE 100 has been chosen as abrdn plc is a member of this FTSE index.

Total shareholder return of abrdn plc compared to the FTSE 100 index

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 (%)
2022	Stephen Bird	1,696	30	0
2021	Stephen Bird	2,795	80.5	-
2020	Stephen Bird	1,044	48	-
	Keith Skeoch	1,075	48	-
20191	Keith Skeoch	1,050	9	-
2018 1,2	Keith Skeoch	814	10	-
	Martin Gilbert	814	10	-
2017 2	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
2013	David Nish	4,206	75	64

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:

	2022	% change	2021
Remuneration payable to all Group employees (£m)1	549	-9%	604
Dividends paid in respect of financial year (£m)	295	-4%	308
Share buybacks and return of capital (£m)	302	637%	41
Adjusted profit before tax (£m)	253	-22%	323

1.  In addition, staff costs and other employee related costs of £88m (2021: £97m) and £11m (2021: £53m) 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 UK-based Group employee. The Remuneration Committee considers this the most appropriate comparison given the location of the executive Directors and that the Group does not operate a harmonised salary and benefits structure across its global operations. 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
		2022	2021	2020	2022	2021	2020	2022	2021	2020
Executive Directors	Stephen Bird2	-	100%	-	-62%	234%	-	-	-	-
	Stephanie Bruce	-	-	74%	-62%	69%	54%	-	-	100%
Non-executive Directors3,4	Sir Douglas Flint	-	-	-	-	-	-	-	-	-
	Jonathan Asquith	-	-	202%	-	-	-	-	-	-
	Catherine Bradley	-	-	-	-	-	-	-	-	-
	John Devine	6%	-3%	-2%	-	-	-	-100%	-	-100%
	Hannah Grove	334%	-	-	-	-	-	-	-	-
	Pam Kaur	-	-	-	-	-	-	-	-	-
	Brian McBride	-13%	59%	-	-	-	-	-	-	-
	Michael O'Brien	-	-	-	-	-	-	-	-	-
	Martin Pike	-60%	-	-3%	-	-	-	-	-	-100%
	Cathleen Raffaeli	10%	-	-	-	-	-	-	-	-100%
	Jutta af Rosenborg	-55%	-	-	-	-	-	-	-	-
	Cecilia Reyes	-14%	-	292%	-	-	-	-100%	-	-
	UK-based employees⁵	-	-	2.5%	-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.  Stephen Bird was appointed 1 July 2020.

3.  Remuneration for non-executive Directors and the Chairman is disclosed on page 116.

4.  Martin Pike and Jutta af Rosenborg stepped down from the Board with effect 18 May 2022. Cecilia Reyes stepped down from the Board with effect 30 September. Catherine Bradley, Pam Kaur and Michael O'Brien were all appointed to the Board in 2022 and therefore no year on year comparison can be made on their fees.

5.  Disclosure is made on the basis of a 1 April 2021 to 1 April 2022 comparison and so does not include the increases made in 2022 with effect from 1 October 2022 (as referred to in the section below).

How pay was set across the wider workforce in 2022

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 2022, a Group-wide decision was made not to carry out a salary review and, as disclosed in the Annual report and accounts 2021, the same approach was applied to executive Directors for 2022 where no increases were applied.

Over the course of 2022 global inflationary pressures impacted our colleagues and in response the Company decided to bring forward the 2023 salary review to have an effective date of 1 October 2022 (rather than 1 April 2023) for individuals who earned less than £75,000 per annum (or local country equivalent) on a full time equivalent basis and who had not had a material increase in the previous 18 months. This captured approximately 40% of our population. The average increase for those eligible employees was 6%, with the highest percentage increases typically at the most junior job levels.

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. Some colleagues at more junior levels are not eligible to participate in the bonus plan, with their package instead consisting of only fixed pay, including a higher salary and therefore higher salary linked benefits (such as pension), ensuring certainty of outcome for these individuals compared to peers who are eligible to participate in the bonus plan.

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 vector 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 engaged with its employees in 2022 through the annual Viewpoints full company survey. The survey included an opportunity for employees to provide feedback to the Board on pay and benefit matters. Additionally, the Board Employee Engagement (BEE) programme continued with a variety of ways to connect with and gather feedback from employees globally including listening sessions, network engagement and 'meet the NEDs' sessions. These provide opportunities to have direct communication between employees and NEDs on a wide range of topics, including remuneration. The representative NED is able to provide updates and insights at each Board meeting ensuring that employee views are understood and can be taken into account. The representative NED also shares updates with employees via the BEE programme sessions.

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 2022), 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 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 25^th percentile and the 50^th percentile had since left the business, therefore the next identified individuals were selected. The individual identified at the 75^th percentile had been promoted in the year, therefore the next identified individual was selected. Benefits figures were based on the medical premium paid by the Company on behalf of employees.

The ratio has decreased from 2021, which reflects the fact that the CEO has a greater level of remuneration at risk which is dependent on Company performance; based on performance in 2022, the bonus for the CEO paid out at 30.25% of maximum, compared to 80.5% of maximum in 2021. Consistent with that, the trend for bonus payments across all employees has also reduced, but not as materially as is the case for the CEO. The 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	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	1,696
25th percentile employee	40	48
50th percentile employee	55	69
75th percentile employee	82	107

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 2022. 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	2022	475	-	475
	2021	475	-	475
Jonathan Asquith	2022	139	-	139
	2021	139	-	139
Catherine Bradley2	2022	109	-	109
John Devine	2022	131	-	131
	2021	124	2	126
Hannah Grove2	2022	126	-	126
	2021	29	-	29
Pam Kaur3	2022	63	-	63
Brian McBride4	2022	105	-	105
	2021	121	-	121
Michael O'Brien3	2022	63	-	63
Martin Pike5	2022	50	-	50
	2021	124	-	124
Cathleen Raffaeli6	2022	164	-	164
	2021	149	-	149
Jutta af Rosenborg5	2022	42	-	42
	2021	94	-	94
Cecilia Reyes7	2022	81	-	81
	2021	94	9	103

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

2.  Appointed to the Board with effect from 4 January 2022.

3.  Appointed to the Board with effect from 1 June 2022.

4.  Total fees include subsidiary Board fees of £30,000 p.a. as a member of the Standard Life Savings Limited and Elevate Portfolio Services Limited Boards.

5.  Stepped down from the Board with effect from 18 May 2022.

6.  Total fees include subsidiary Board fees of £55,000 p.a. as Chair of the Standard Life Savings Limited and Elevate Portfolio Services Limited Boards.

7.  Stepped down from the Board with effect from 30 September 2022.

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 remuneration policy, and can be found on page 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 (details of which can be found on page 296) and at the 2023 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 2023

The following table sets out abrdn non-executive Director fees to be paid in 2023. Fees for 2023 remain at the current level.

Role	2023 fees1	2022 fees
Chairman's fees2	£475,000	£475,000
Non-executive Director fee3	£73,500	£73,500
Additional fees:
Senior Independent Director	£25,000	£25,000
Chairman of the Audit Committee	£30,000	£30,000
Chairman of the Risk and Capital Committee	£30,000	£30,000
Chairman 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 core fee of £73,500 paid to each non-executive Director (including the Chairman) is expected to total £662k for 2023 (2022: £735k). This is within the maximum £1,500,000 permitted under Article 87 of abrdn's articles of association. Total fees including additional duties are expected to amount to £1,408k for 2023 (2022: £1,407k).

2.  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.

3.  For non-executive Directors, individual fees are constructed by taking the core fee and adding extra fees for being the Senior Independent Director, chairman 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 2022 or date of appointment if later	Shares acquired during the period 1 January 2022 to 31 December 2022	Total number of shares owned at 31 December 2022 or date of cessation if earlier5
Sir Douglas Flint	179,617	20,383	200,000
Jonathan Asquith	102,849	50,865	153,714
Catherine Bradley1	10,000	2,181	12,181
John Devine	28,399	-	28,399
Hannah Grove	33,000	-	33,000
Pam Kaur2	-	-	-
Brian McBride	-	-	-
Michael O'Brien2	-	-	-
Martin Pike3	69,476	-	69,476
Cathleen Raffaeli	9,315	-	9,315
Jutta af Rosenborg3	8,981	-	8,981
Cecilia Reyes4	-	-	-

1.  Appointed to the Board with effect from 4 January 2022.

2.  Appointed to the Board with effect 1 June 2022.

3.  Stepped down from the Board with effect 18 May 2022.

4.  Stepped down from the Board with effect 30 September 2022.

5.  There were no changes to the number of shares held by the reportable Directors noted above between 31 December 2022 and 27 February 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. As set out in the above table, during 2022 he purchased 20,383 abrdn plc shares. The total investment cost of Sir Douglas Flint's shareholding was £495k, equivalent to 104% of his annual fee. Based on the share price at 31 December 2022 (189.85 pence), his shareholding is valued at 80% of his annual fee.

The Remuneration Committee

Membership

During 2022 the Remuneration Committee was made up of independent non-executive Directors. For their names, the number of meetings and committee member attendance during 2022, please see the table on page 84.

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 2022

Jan - Mar	-  2021 Directors' remuneration report. -  Approve performance for the 2021 bonus targets, 2019 LTIP targets and 2018 EIP underpins. -  Set 2022 annual bonus scorecard targets and 2022 LTIP targets. -  Updates from the Risk and Audit Committees on relevant matters for the Committee's consideration when determining pay outcomes. -  Review remuneration outcomes for executive Directors and the Material Risk Taker population.
Apr - Jun	-  Conduct retender process for external advisors to the Remuneration Committee. -  Review Remuneration disclosures required by regulations. -  Review Material Risk Taker identification principles with regard to the relevant regulations. -  Review and approve changes to the Share Plan rules to ensure all plans meet best practice.
Jul - Sep	-  Agree outcome of the final tranche of the CFO's one-off award. -  Review and update the Group Remuneration Policy to reflect regulatory changes. -  Review the Directors Remuneration Policy in light of the Company's strategy and market best practice. -  Mid-year review of performance against target for annual bonus for the executive Directors. -  Review gender pay gap data. -  Update the Remuneration Committee and Compensation Committee's Terms of Reference.
Oct - Dec	-  Refine the Directors Remuneration Policy, including consultation with largest shareholders. -  Finalise bonus pool allocation principles. -  Review 2023 remuneration proposals relating to all-employee remuneration.

At various points throughout the year the 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 specific 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 Deloitte LLP (a member of the Remuneration Consultants Group (RCG)) who were appointed by the Remuneration Committee in 2017. Given the length of their tenure, and to ensure the Committee is receiving the best quality advice and value for money, a retender process was conducted at the start of the year. Following this review, PwC were appointed as external advisers to the Remuneration Committee, effective June 2022. PwC, who are also a member of the RCG, demonstrated detailed knowledge of our sector throughout the process and set out a competitive fee structure which ensures value for money. The Remuneration Committee is satisfied that the advice given from both advisers during the year was objective and independent.

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 Chairman seeks advice on remuneration matters on an ongoing basis. As well as advising the Remuneration Committee, Deloitte LLP also provided tax, accounting support, risk management and consultancy services to the Company during the year. Deloitte Total Rewards and Benefits is an investment adviser to the trustees of the abrdn (SLSPS) Pension Scheme. Fees paid to Deloitte LLP during 2022 for professional advice to the Remuneration Committee were £89,850.

As well as advising the Remuneration Committee, PwC also provided tax, risk management and consultancy services to the Company during the year. Fees paid to PwC during 2022 for professional advice to the Remuneration Committee were £100,000.

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 Committee reviews its remit and effectiveness each year. The effectiveness review was conducted externally by IBE.

The review included observation of a meeting, access to papers and interviews with Committee members. A representative of IBE provided feedback on the performance of the Committee directly to the Chair and the report and recommendations were discussed by the Committee. Details of the 2022 review are on page 81 and reflect the themes raised across the Board and its Committees. 

Shareholder voting

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

The remuneration policy was last subject to a vote at the 2020 AGM on 12 May 2020 and the following table sets out the outcome.

Policy 2020 AGM	For	Against	Withheld
% of total votes	91.66%	8.34%
No. of votes cast	1,003,905,073	91,323,405	10,346,991

The Directors' remuneration report was subject to a vote at the 2022 AGM on 18 May 2022 and the following table sets out the outcome.

2021 Directors' remuneration report	For	Against	Withheld
% of total votes	96.23%	3.77%
No. of votes cast	1,009,839,204	39,512,722	8,058,523

Future remuneration policy

This section sets out the remuneration policy for executive Directors and non-executive Directors, which is subject to a binding vote of shareholders and will, if approved, take effect from the date of the 2023 AGM.

The Remuneration Committee agreed the following core principles designed to support our strategy, culture and values which guided the design of the remuneration framework going forward:

-  Simple and easy to understand for participants and wider stakeholders alike.

-  Aligns executive remuneration with the overall performance of the Company.

-  Rewards executives for the delivery of both short-term plans and long-term returns to shareholders.

-  Takes into consideration the external landscape relating to executive reward.

-  Is market competitive to ensure that the Company is able to attract and retain the right talent to deliver the Company's strategic ambitions.

In determining the new remuneration policy, the Committee followed a robust process which included detailed discussions on the content of the policy at multiple Committee meetings. The Committee considered input from management (although decisions were taken by the Committee alone to avoid conflicts of interest), shareholders and its independent advisers.

Remuneration policy for executive Directors

Base salary - there is no change in the operation of this element of pay compared to the previous policy
Purpose and link to strategy To provide a core reward for undertaking the role, commensurate with the individual's role, responsibilities and experience.	Maximum opportunity Salaries for executive Directors are set at an appropriate level to attract and retain individuals of the right calibre and with the experience required. Whilst no maximum is set, when considering annual incremental increases the Remuneration Committee is guided by the general increase for the broader employee population. The Remuneration Committee may determine larger increases in certain circumstances, such as: development in role; change in responsibility; where a new or promoted employee's salary has been set lower than the market level for such a role and larger increases are justified as the individual becomes established in the role.
Operation Normally reviewed annually, taking into account a range of factors including: (i) the individual's skills, performance and experience; (ii) increases for the broader employee population; (iii) external market data and other relevant external factors; (iv) the size and responsibility of the role; and (v) the complexity of the business and geographical scope.	Performance metrics Not applicable.
Pension - there is no change in the operation of this element of pay compared to the previous policy
Purpose and link to strategy To provide a competitive, flexible retirement benefit in a way that does not create an unacceptable level of financial risk or cost to the Company.	Maximum opportunity Maximum employer contribution aligned to the maximum employer contribution available to the wider workforce in the relevant jurisdiction. The current maximum employer contribution available to the UK wider workforce is 18% of salary.
Operation Employee contributions are made to the Company's defined contribution pension arrangement, or equivalent cash allowances are paid. The level of contribution/cash equivalent is reviewed periodically taking into account the pension opportunity offered to other employees within the Company.	Performance metrics Not applicable.

Benefits - there is no change to the operation of this element of pay compared to our previous policy
Purpose and link to strategy To provide market competitive and cost effective benefits.	Maximum opportunity There is no maximum value of the core benefit package. The costs associated with benefits provision are monitored and controlled by the Remuneration Committee. Maximum contributions under 'all-employee' share plans will be set in line with other employees and within the limits set by the relevant tax authority.
Operation In line with other employees, executive Directors are provided with a package of core benefits, which include (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. Executive Directors are also eligible to participate in the Company's flexible benefits programme. Executive Directors are provided with a health screening assessment. Specific benefit provision may be subject to change from time to time. Additional benefits may be provided on recruitment or to support relocation with the Remuneration Committee's agreement.	Performance metrics Not applicable.
Annual Bonus - financial performance measures account for a minimum of 65% of the maximum opportunity (previously 75%). The optionality to include personal performance measures has been removed.
Purpose and link to strategy To reward the delivery of the Company's business plan in a range of financial and non-financial areas and to align executives' interests to those of shareholders and our customers and clients.	Maximum opportunity The maximum award opportunity in respect of any financial year is based on role and is up to 300% of salary.
Operation An annual incentive programme in respect of which the performance measures, and their respective weightings and targets, are normally set annually by the Remuneration Committee. Normally 50% of the award will be paid in cash. No less than 50% will be deferred into shares vesting in equal tranches over a three-year period. A retention period may be applied, as required by relevant regulations. Where required for regulatory purposes, deferred awards may be made in a combination of share awards and notional fund awards (which are conditional rights to receive a cash sum based on the value of a notional investment in a range of abrdn funds). Deferred awards may include the right to receive (in cash or shares) the value of the dividends that would have accrued during the vesting period. Awards are subject to malus and clawback. The Remuneration Committee may adjust and amend awards in accordance with the rules.	Performance metrics Performance is assessed against a range of key financial and non-financial measures. At least 65% will be based on financial performance measures. For threshold performance, the award opportunity is 25%, with 100% of the award payable for maximum performance. Payouts between threshold and maximum (100%) are determined on an annual basis. Details of the payout schedule will be disclosed in the relevant DRR. The Remuneration Committee exercises its judgement to determine awards at the end of the performance period, which in normal circumstances will be one financial year, and will use its discretion to amend them if material change is required to ensure that the outcome is fair in the context of overall Company and individual performance and conduct. The Risk and Capital Committee and the Audit Committee advise the Remuneration Committee as part of this process to ensure that the performance outcomes have not been achieved by assuming inappropriate levels of risk.
Long-Term Incentive Plan - there is no change to the operation of this element of pay compared to our previous policy
Purpose and link to strategy To align with our shareholders and promote sustainability of our performance by rewarding the delivery of long-term growth in shareholder value.	Maximum opportunity The maximum award opportunity in respect of any financial year is based on role and is up to 500% of salary. However, when combined with the annual bonus, the total incentive opportunity may not exceed 700% of salary. This means that in financial years where the annual bonus opportunity is set at the maximum (300% of salary), the maximum LTIP award would be 400% of salary. Up to 25% of the award vests for threshold performance.
Operation An annual award of performance shares, normally subject to a three-year performance period, with a subsequent two-year holding period. Performance targets are normally set annually for each three-year cycle by the Remuneration Committee. Awards are subject to review by the Remuneration Committee at the end of the three-year performance period to confirm that vesting of the award is appropriate in the context of overall performance of the Company and the individual. The Committee may take advice from the Risk and Capital Committee and the Audit Committee to determine appropriate vesting. Awards may include the right to receive (in cash or shares) the value of the dividends that would have accrued over the performance and holding period. The Remuneration Committee may adjust and amend awards in accordance with the LTIP rules. Awards are subject to malus and clawback.	Performance metrics Performance metrics are set by the Remuneration Committee and are linked to the achievement of the Company's long-term strategic priorities and the creation of long-term shareholder value. LTIP awards are subject to at least two performance metrics, with at least one being absolute in nature (e.g. an earnings based metric) and one being a relative metric (e.g. a shareholder return based metric, relative to the market or competitors). Subject to these restrictions, the Committee retains the discretion to introduce other or additional performance metrics for future awards. Were the Committee to intend to introduce any such alternative or additional metric(s) for future awards, it would expect to consult with the Company's largest institutional shareholders in advance. For 2023, the LTIP award will be based on the following metrics: -  Growth in Adjusted Diluted Capital Generation per share (50%). -  Relative total shareholder return measured against a bespoke competitor peer group (50%) (the peer group to be used for the 2023 LTIP is set out on page 107). The Remuneration Committee retains the discretion to amend the final vesting level of awards if material change is required to ensure that they reflect fairly the performance of individuals or the Company .

Other features

Malus and clawback

Malus and clawback provisions apply to annual bonus and LTIP awards.

Under the malus and clawback provisions, the Remuneration Committee has the ability to reduce awards that have not yet vested (malus) and can require repayment of an award (clawback) for a period of up to five years from the date of award.

The circumstances in which malus or clawback would apply include but are not limited to:

-  A material misstatement of the Group's audited financial statements prior to the end of the Recovery Period.

-  Any failure of risk management, fraud or other material financial irregularity.

-  Material corporate failure.

-  An error in the information or assumptions on which the award was granted, vests or is released, as a result of erroneous or misleading data or otherwise.

-  Serious misconduct by a participant.

-  Failure by a participant to meet or maintain appropriate standards of fitness and propriety.

-  Any deliberate or severely negligent act or omission by a participant which has resulted in significant losses or material reputational damage to the Company (or any member of the Company's group).

-  A material downturn in the financial performance of the Company, the Company's group, or any member or business unit of the Company for which the relevant participant works or has responsibility or accountability.

-  Misbehaviour or material error by a participant.

Share ownership

Executive Directors are required to build up a substantial interest in Company shares.

The shareholding requirement for executive Directors remains at 350% of salary for the CEO and 300% of salary for other executive Directors. The Committee retains the discretion to reduce this requirement for new joiners to align it with the higher of their maximum LTIP opportunity or 200% of salary.

The post cessation of employment 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.

Shares received as a result of employment must be accumulated (including dividend shares) until the shareholding requirements are met.

Vested and unvested shares which are not subject to performance conditions will count towards the total at 50% (on a notional net of tax basis). Shares received/exercised will count towards the total of shareholding requirements at 100%.

Voluntary purchases of shares will count towards the shareholding requirement and will be only released for sale in exceptional circumstances at the discretion of the Company Chairman and the Chair of the Remuneration Committee.

Voluntary purchases of shares will count towards totals at the higher of cost and market. However, voluntary purchases of shares will not be subject to post-employment retention rules.

How our proposed remuneration structure supports our long-term strategy and strategic drivers

Our remuneration policy is designed to support our long-term strategy of delivering shareholder value, by aligning the interests of our executive Directors with our stakeholders - including our customers, our shareholders and our people. The performance goals that are set for the short-term element of variable remuneration reward the delivery of the Company's business plan, while the long-term element promotes sustainability and alignment by rewarding the delivery of long-term growth in shareholder value. A significant proportion of variable remuneration is delivered in the form of shares and deferred over a period of time, ensuring our Directors are further aligned to the shareholder experience.

Our overall strategy is to deliver diversified client-led growth. Our remuneration policy supports this objective by including investment performance as part of the financial measures, incentivising best in class impact and growth and incorporating customer and client metrics for satisfaction as part of the annual bonus non-financial assessment. The four strategic priorities are specifically supported by the remuneration policy as follows:

Our priorities	How our remuneration structure supports our priorities
Asia A key market for our Investments vector and an area where we are well-positioned to drive growth.	-  By ensuring our performance metrics are focused on Company performance and KPIs, individuals are incentivised to deliver strong performance across all Company activity globally. -  Investment performance and net flows are measured as part of the annual bonus assessment, incentivising best in class impact and growth. -  The achievement of strategic milestones will be recognised within the annual bonus assessment.
Sustainability Consideration of ESG factors is essential to more constructive engagement and better-informed investment decisions.	-  ESG factors are included as part of the annual bonus non-financial assessment, incorporating objectives against Environmental (via sustainability and decarbonisation metrics) and Social (via employee engagement and diversity metrics). -  Our remuneration structure is weighted to long-term success, ensuring that executive Directors are incentivised to focus on sustainable outcomes.
Alternatives The growing trends for urbanisation, digitisation and decarbonisation create significant investment opportunities in real assets. Our Alternatives business also offers clients access to major areas of European private credit, as well as compelling opportunities in the hedge fund sector.	-  Investment performance and net flows are measured as part of the annual bonus assessment, incentivising best in class impact and growth. -  By ensuring our performance metrics are focused on Company performance and KPIs, individuals are incentivised to deliver strong performance across all Company activity globally. -  The achievement of strategic milestones will be recognised within the annual bonus assessment. -  The focus on long-term outcomes via the LTIP incentivises and rewards future sustainable success and the creation of shareholder value.
UK savings and wealth As financial responsibility continues to move more towards individuals, we have successfully re-positioned our business towards an increasingly attractive and growing UK savings and wealth market.	-  By ensuring our performance metrics are focused on Company performance and KPIs, individuals are incentivised to deliver strong performance across all Company activity globally. -  The achievement of strategic milestones will be recognised within the annual bonus assessment. -  The focus on long-term outcomes via the LTIP incentivises and rewards future sustainable success and the creation of shareholder value.

The remuneration framework appropriately addresses the following principles as set out in the 2018 Corporate Governance Code.

Code provision	abrdn approach
Clarity	Incentive arrangements are based on clearly defined financial and non-financial metrics which are aligned with the Company's strategy for sustainable long-term growth. The Policy is materially unchanged, providing further clarity to participants through using a consistent approach.
Simplicity	Remuneration arrangements are simple, while still complying with regulatory requirements. They comprise the following key elements: -  Fixed element: comprises base salary, benefits and pension, which are aligned to those offered to the majority of the workforce. -  Short-term incentive: annual bonus which incentivises the delivery of financial and non-financial performance metrics aligned to the Plan for the year agreed with the Board. Half of the bonus is paid in cash with the balance deferred over a period of three years. -  Long-term incentive: LTIP which incentivises financial performance over a three-year period, promoting long-term sustainable value creation for shareholders tied to established and transparent shareholder value metrics. Awards are subject to a two-year holding period post vesting.
Risk	In line with regulatory requirements, remuneration arrangements across the Company are designed to ensure that they do not encourage excessive risk taking. Performance targets for incentive arrangements are set to reward delivery of the Company's business plan which is set in line with the Company's risk appetite statement. Variable remuneration of the executive Directors is delivered predominantly via shares. The executive Directors are subject to the shareholding requirements, including a post-cessation requirement (as set out in the shareholding requirement section on page 123), ensuring they remain exposed to and aligned with the risk profile of the Company. The Remuneration Committee retains the flexibility to review and amend formulaic outcomes to ensure that they are appropriate in the context of overall performance of the Company, including adherence to risk appetite limits. The Remuneration Committee takes advice from the Risk and Capital Committee and Audit Committee as part of this review.
Predictability	The Remuneration scenario charts, set out on page 129, provide estimates on the potential future reward opportunity in a range of scenarios, including below threshold, target and maximum performance (including share price appreciation). Conditions around vesting are clear and understandable.
Proportionality	Variable remuneration is directly aligned to the Company's strategic priorities (through the selection of key financial and non-financial performance metrics), with targets calibrated to ensure that payments are only made where strong performance is delivered. As noted above, the Remuneration Committee retains the flexibility to review formulaic outcomes to ensure that they are appropriate in the context of overall performance of the Company.
Alignment with culture	The remuneration policy at abrdn has been set to be appropriate for the nature, size and complexity of the Company, recognising variances in markets and geographies. It has been designed to support the delivery of the Company's key strategic priorities and is in the best interests of the Company and its stakeholders, as set out on page 124. A shared culture and values by employees of the Company is critical to delivery of the Company's strategic priorities. This is recognised through alignment of the remuneration policy with the wider workforce whenever possible.

Notes to the policy table

Performance measures and approach to target setting

Performance targets for the Company's incentive arrangements are set on an annual basis by the Remuneration Committee. The Committee takes into account a range of factors including business forecasts, prior year performance, degree of stretch against the performance targets in the business plan, the economic environment, market conditions and expectations.

The following table sets out details on why the performance measures for the purpose of the annual incentive plan were chosen. These metrics and the balance between them may vary over time, but financial metrics will be weighted no less than 65% of the total.

Financial metrics (overall at least 65% of the maximum opportunity)

Non-financial metrics (overall no more than 35% of the maximum opportunity)

Measures to support the delivery of performance in each area are set as part of the Company 's annual business plan. For reasons of commercial confidentiality detailed measures will be disclosed annually in arrears as part of the remuneration policy implementation report. 2023 measures and their weighting are set out below: -  Adjusted profit before tax (35%). -  Investment performance (15%). -  Net flows (15%). These measures were chosen to ensure a strong alignment with shareholders (via profitability measure) and a direct link to future financial performance as set out in the business plan (investment performance and net flows).

Non-financial metrics chosen to focus management on the delivery of the business strategic priorities for the financial year. Metrics may be linked to factors including, but are not limited to: -  ESG (15%) Performance against Environmental objectives (including sustainability commitments and carbon reduction programmes) and Social objectives (including gender and ethnicity targets) may be used to focus management on developing organisational capability and meeting our publicly stated commitments. -  Customer (10%) Customer objectives (including customer feedback and satisfaction scores, NPS rankings and net new business scores) may be used to measure our success in ensuring that customers remain at the forefront of our sustainable strategy. -  Strategic Initiatives (10%) Key strategic objectives will be used to focus executives on specific strategic priorities for the Company which they can deliver in order to drive improved performance in future years.

The following table sets out details on why the performance measures for the purpose of the Long-term Incentive Plan (LTIP) were chosen for the 2023 awards.

Growth in Adjusted diluted capital generation per share

Relative total shareholder return

Captures a broad measure of the rate of increase in the company's ability to generate capital to sustain investment and dividend flows. Adjusted Capital Generation is closely aligned to the measurement of management's performance in generating sustainable increases in shareholder value from its growth vectors and strategic relationships, while excluding one-off items and mark-to-market changes in the fair value of significant listed investments, which are beyond management's direct control.

Aligns executive reward with the creation of shareholder value and provides an external assessment of Company performance against relevant peers which is less influenced by market effects.

Remuneration Committee discretion in relation to existing commitments

The Remuneration Committee reserves the right to make any remuneration payments and payments for loss of office, notwithstanding that they are not in line with the policy set out above where the terms of the payment were agreed: (i) before the policy set out above, or (ii) at a time when a previous policy, approved by shareholders, was in place provided the payment is in line with the terms of that policy, or (iii) at a time when the relevant individual was not a Director of the Company and the payment was not in consideration for the individual becoming a Director of the Company. For these purposes, payments include the Remuneration Committee satisfying awards of variable remuneration. This means making payment in line with the terms that were agreed at the time the award was granted.

All awards are subject to malus and clawback provisions.

Remuneration Committee discretion in relation to future operation of the remuneration policy

The Committee will operate variable remuneration plans according to the respective rules of the plans. The Committee will retain flexibility in a number of areas regarding the operation and administration of these plans, including (but not limited to): change of control, changes in regulatory requirements, variation of share capital, demerger, special dividend, fund merger, winding up or similar events.

The Committee also retains the discretion within the remuneration policy to adjust targets and/or set different measures and weightings if events happen that cause it to determine that the original targets or conditions are no longer appropriate and that amendment is required so that the targets or conditions achieve their original purpose. Revised targets/measures will be, in the opinion of the Committee, no less difficult to satisfy than the original conditions.

Share awards, under the Company's share plans, may be granted as conditional share awards, nil cost options or forfeitable shares at the discretion of the Committee. Awards may at the Committee's discretion be settled in cash (for example, where required for local legal/regulatory purposes).

The Committee may accelerate the vesting and/or the release of awards if an executive Director moves jurisdictions following grant and there would be greater tax or regulatory burdens on the award in the new jurisdiction.

Remuneration policy for new executive Director appointments

Area	Policy
Principles	In determining remuneration arrangements for new executive appointments to the Board (including internal promotions), the Committee applies the following principles: -  The Committee takes into consideration all relevant factors, including the calibre of the individual, local market practice and existing arrangements for other executive Directors, adhering to the underlying principle that any arrangements should reflect the best interests of the Company and its shareholders. -  Remuneration arrangements for new appointments will typically align with the remuneration policy. -  In the case of internal promotions, the Committee will honour existing commitments entered into before promotion.
Components and approach	The remuneration package offered to new appointments may include any element of remuneration included in the remuneration policy set out in this report, or any other element which the Committee considers is appropriate given the particular circumstances but not exceeding the maximum level of variable remuneration set out below. In considering which elements to include, and in determining the approach for all relevant elements, the Committee will take into account a number of different factors, including (but not limited to) typical market practice and existing arrangements for other executive Directors and internal relativities. The maximum level of variable remuneration which may be awarded to a new executive Director, at or shortly following recruitment, shall be limited to 700% of salary. This limit excludes buyout awards which are in line with the policy as set out below.
Buyouts	To facilitate recruitment, the Committee may make an award to buy out remuneration terms forfeited on leaving a previous employer. In doing so, the Committee will adhere to regulatory guidance in relation to the practice of buyout awards to new recruits. In considering buyout levels and conditions, the Committee will take into account to the best of their ability the type of award, performance measures and the likelihood of performance conditions being met in setting the quantum of the buyout. The buyout award will reflect the foregone award in amount and terms (including any deferral or retention period) as closely as possible. Where appropriate, the Committee retains the discretion to utilise Listing Rule 9.4.2 for the purpose of making an award to buy out remuneration terms forfeited on leaving a previous employer or to utilise any other incentive plan operated by the Company.

Service Contracts and loss of office policy for executive Directors

Within executive service contracts, the Committee aims to strike the right balance between the Company's interests and those of the executive Directors, whilst ensuring that the contracts comply with best practice, legislation and the agreed remuneration principles. Contracts are not for a fixed term, but set out notice periods in line with the executive Director's role.

Area	Policy
Notice period	Our standard notice policy is: -  Six months by the executive Director to the employer. -  Up to 12 months by the employer to the executive Director. Executive Directors may be required to work during the notice period or take a period of 'garden leave' or may be provided with pay in lieu of notice if not required to work the full notice period.
Termination payments	Any payment in lieu of notice will be made up of up to 12 months' salary, pension contributions and the value of other contractual benefits. The payment may be made in phased instalments (this will be standard policy for notice periods of over six months). A duty to mitigate applies.
Non-compete clauses	Apply during the contract and for up to 12 months after leaving, at the Company's choice.
Treatment of incentive awards	For the purpose of awards under the annual bonus, long-term incentive plan and Executive Incentive Plan, approved leavers are defined as those whose office or employment comes to an end because of death, ill-health, injury or disability, redundancy, or retirement with the agreement of the employing company; the sale of the individual's employing company or business out of the Group or any other reasons at the discretion of the Committee. Annual bonus plan Leavers during the award year For approved leavers, rights to awards under the annual bonus will typically be pro-rated as a proportion of the performance period, and will be paid at the normal time in the normal manner (i.e. in cash/ deferred awards as appropriate and subject to performance ), unless the Committee determines that payments should be accelerated (e.g. on death). F or other leavers, rights to awards under the annual bonus will be forfeit. Leavers during the deferral period For approved leavers, outstanding deferred awards under the annual bonus will typically vest and be released at the scheduled vesting date. The Committee retains the discretion to apply time pro-rating (over the deferral period) for approved leavers and to accelerate the vesting and/or release of awards if it considers it appropriate. For other leavers, rights to deferred awards will be forfeited. Awards under the Long-Term Incentive Plan Leavers during the performance period For approved leavers, outstanding awards under the LTIP will typically be pro-rated as a proportion of the performance period and will be released at the scheduled vesting date subject to performance. Subsequent holding periods will apply. The Committee retains the discretion to dis-apply time pro-rating for approved leavers. For other leavers, rights to outstanding awards will be forfeited. Leavers during the holding period Vested awards subject only to a holding period will be retained and released at the scheduled date. Legacy awards under the Executive Incentive Plan Leavers during the deferral period Outstanding deferred awards under the EIP will typically be paid at the normal time, subject to performance against the Underpin performance conditions. The Committee retains the discretion to apply time pro-rating (over the deferral period) for approved leavers and to accelerate the vesting and/or release of awards if it considers it appropriate. For other leavers, rights to deferred awards will be forfeited.
Other payments	The Committee reserves the right to make any other payments (including appropriate legal fees) in connection with an executive Director's cessation of office or employment where the payments are made in good faith in discharge of an existing legal obligation (or by way of damages for breach of such an obligation) or by way of settlement of any claim arising in connection with the cessation of that executive Director's office or employment.
Change of control	Outstanding awards will be treated in line with the terms of the respective plans.

Scenario charts

The following chart illustrates how much the current executive Directors could receive under a range of different scenarios along with a comparison to our current policy:

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

Outcomes for the 2023 scenario chart are based on the following:

-  Minimum - fixed pay, consisting of salary and pension effective 1 April 2023 (18% of salary), and benefits (the value of taxable benefits are as shown in the Single Total Figure of Remuneration table for 2022 on page 108).

-  Target - fixed pay, 50% of the maximum bonus award, 50% of LTIP vesting.

-  Maximum - fixed pay, 100% of maximum bonus award, 100% of LTIP vesting plus share price growth.

Maximum + share price growth assumes share price growth of 50% for the LTIP element (calculated by applying a 50% uplift to the face value at grant of the LTIP shares).

Remuneration arrangements throughout the Company

When setting the policy for executive Directors' remuneration, the Committee takes into account the pay and employment conditions elsewhere in the Company, recognising international variance and jurisdictional differences, where appropriate. The Committee is informed about the approach to salary increases, Company-wide benefits offerings including pensions, the structure of incentive arrangements and distribution of outcomes throughout the wider organisation, as well as the take-up of all-employee share plans, employee engagement survey results and employee morale, although it does not directly consult employees in the Company on the remuneration policy for executive Directors.

The Company applies a consistent remuneration philosophy for employees. In particular all employees receive a base salary and are eligible to receive benefits and pensions. The annual bonus cascades throughout the organisation with quantum and measures set appropriately for each individual's role. The LTIP, as set out above, is only received by the executive Directors. However there are different long-term incentives in use throughout the business that are relevant and in line with regulatory requirements for each business area. The remuneration philosophy is reviewed at least annually by the Remuneration Committee and may be updated to ensure that this remains aligned to business strategy and regulatory requirements as well as being appropriately structured to attract, retain and incentivise our employees.

Consideration of stakeholder views

The Remuneration Committee values the opportunity to engage in meaningful dialogue with its investors.

Prior to the 2023 AGM, as detailed in the Committee Chairman's cover letter, the Committee consulted with key institutional shareholders on the proposed policy and the changes that were being made. The proposed policy reflects the discussions with shareholders during the consultation process.

The Company does not explicitly consult with employees when making decisions pertaining to executive remuneration given the complex nature of these roles and the global nature of the business. However, via the Board Employee Engagement programme, employees have the opportunity for direct communication with the NEDs on a wide range of topics, including remuneration. The representative NED is able to provide updates and insights at each Board meeting ensuring that employee views are understood and can be taken into account.

Remuneration policy for non-executive Directors

No changes are being proposed to the remuneration policy for the Chairman and non-executive Directors. The policy remains as follows:

Area	Policy
Approach to fees	-  Fees for the Chairman and non-executive Directors are set at an appropriate level to reflect the time commitment, responsibility and duties of the position and the contribution that is expected from non-executive Directors. -  Board membership fees are subject to a maximum cap which is stated in the Company's articles of association. Any changes to the cap would be subject to shareholder approval.
Operation	-  The remuneration policy for non-executive Directors is to pay: (i) Board membership fees; and (ii) further fees for additional Board duties such as chairmanship or membership of a committee, the Senior Independent Director, and service on subsidiary boards, in each case to take into account the additional responsibilities and time commitments of the roles. Additional fees may be paid in the exceptional event that non-executive Directors are required to commit substantial additional time above that normally expected for the role. -  The Chairman receives an aggregate fee, which includes the chairmanship of any appropriate Board committee(s). -  The Board annually sets the fees for the non-executive Directors, other than the fee for the Chairman of the Company which is set by the Committee. -  Fees are set at a market rate with reference to the level of fees paid to other non-executive Directors of FTSE100/FTSE250 financial services companies. -  The Board retains discretion to remunerate the non-executive Directors in shares rather than cash where appropriate.
Other items	-  The Chairman and non-executive Directors are not eligible to participate in any incentive arrangements. -  Additional fees or benefits may be provided at the discretion of the Committee in the case of the Chairman, and the Board in the case of the other non-executive Directors, to reflect, for example, life assurance, housing, office, transport and other business-related expenses incurred in carrying out their role.

Non-executive Directors, including the Chairman, have letters of appointment that set out their responsibilities. The key terms are:

-  Period of appointment: a three-year term, which can be extended by mutual consent and is subject to re-election by shareholders in line with the Company's articles of association and the UK Corporate Governance Code.

-  Notice periods: six months for the Chairman. No notice period for other non-executive Directors.

-  Termination payment: there is no provision for compensation payments for loss of office for non-executive Directors.

If a new Chairman or non-executive Director is appointed, the remuneration arrangements will normally be in line with those detailed in the remuneration policy for non-executive Directors above.

 

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