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Looking forward to 2008 and beyond

It's an important task for financial services companies such as ours to educate people about the importance of savings and to build confidence in our industry. This means working with governments, regulators, and commentators to build trust and knowledge about pensions and long-term savings. We all should have a common interest in making pensions popular and understandable and giving people both choice and the ability to make informed decisions. It goes without saying that if the industry doesn't treat customers fairly, people won't trust us with their money. Equally, because of the complexity of the industry, governments are ill-advised to make rushed decisions without consulting fully about the consequences, not all of which can be easily foreseen. It should be an obligation upon the industry to respond to such consultations with openness and integrity and for governments to listen and be prepared to modify their plans where it is common sense to do so.

Standard Life has always been very fortunate in the quality and commitment of its people. We work actively to focus on individual strengths and to develop talent. People won't join and stay with Standard Life unless we understand their career aspirations and respond to them. I'm pleased that our internal culture is trusting and strong. But we have to build on that foundation of loyalty and commitment to ensure that Standard Life has the dynamism to operate in some of the world's most competitive markets. Setting stretching objectives, top quality performance measurement and appropriate incentivisation will support this direction. Our people are very important to us and we have to ensure that we both listen and communicate.

Corporate responsibility (CR) will remain high on our agenda. It has to be an integral part of how we do business. Climate change is said to be the greatest environmental challenge facing the world today and we are reducing our environmental impact and particularly our greenhouse gas emissions by consuming less, recycling more and disposing sensitively of what remains. And we are encouraging our people and other stakeholders to do their bit too. You can read more about our CR work in Corporate responsibility.

A strong, independent Board

This is my first year as your Chairman and I have been greatly helped by the strength and commitment of your Board. We have spirited debates but a shared view of how we see the future for Standard Life. Alison Mitchell and John Hylands both retired from the Board in 2007 and I would like to thank them for their great service to your Company. Sir Brian Stewart stepped down as Chairman and we will always be in his debt for having steered us through demutualisation and the IPO with such determination and gusto.

We were joined by Baroness McDonagh and Crawford Gillies who are already making an important contribution to our discussions. Our achievements in 2007 were led by a forward-looking Board and I'd like to thank everyone for their contribution.

Since the beginning of this year, after helping us to achieve an immense amount for our business, Trevor Matthews has decided to move on. At the AGM we'll also be saying goodbye to Hugh Stevenson who is retiring after nine years. Colin Buchan has become the new Chairman of Standard Life Investments, where he'll put his financial services expertise to good use. He has also joined the Board.

It's an important responsibility to make sure your Company is in good hands going forward. We have attached a lot of importance to proper succession planning and will continue to do so. Standard Life Investments is a leader in corporate governance and you wouldn't expect us to operate to any lower standards than we would expect from the companies in which we invest.

The future

Standard Life is doing business in markets that are changing fast, and it's important that we continue to adapt and to give our customers the long-term savings and retirement solutions that they require. For us, one of the most important trends is that people are living longer - and taking greater financial responsibility for their own retirement and health. With this comes the demand for more control over their assets. Our strategy going forward is to pursue excellence in everything that we do, to build our customer base appropriately, to provide low-cost and efficient processing for savings and pensions, to become more efficient in our use of capital, and to continue to generate strong investment returns. We have to be tireless in the pursuit of shareholder value and customer service, and these will continue to be our main priorities in the year ahead.

Gerry Grimstone
Chairman