The Directors are committed to delivering high standards of corporate governance to the Group’s shareholders and other stakeholders including employees, suppliers and the wider community. The Company is not required to comply with the UK Corporate Governance Code or the Corporate Governance Code for Small and Mid-Sized Quoted Companies 2013, as published by the Quoted Companies Alliance.
However, the Directors recognise the importance of sound corporate governance and the Board intends, so far as is practicable for a company of its size, to implement certain corporate governance recommendations. The Board of Directors operates within the framework described below.
The Board Structure
The PLC Board contains a balance of Executive and Non-Executive Directors, including a Non-Executive Chairman and is responsible for dealing with the strategic direction and long term success of the Group. The Board will meet every two months or at any other time deemed necessary for the good management of the business and at a location agreed between the Board members.
The Operational Board comprises of the Group CEO and other Executive and Divisional Directors as deemed appropriate and is responsible for the running of the business. The Operational Board will meet monthly or at any other time deemed necessary for the good management of the business and at a location agreed between the Board members. The Operational Board reports to the PLC Board.
Strategic Aims & Governance
The PLC Board sets the Group’s strategic aims and ensures that necessary resources are in place in order for the Group to meet its objectives. All members of the PLC Board take collective responsibility for the performance of the Group and all decisions are taken in the interests of the Group. Whilst the PLC Board has delegated the normal operational management of the Group via the Operational Board to the Executive Directors and other senior management, there are detailed specific matters subject to decision by the PLC Board of Directors. These include acquisitions and disposals, joint ventures and investments, projects of a capital nature and all significant contracts. The Non-Executive Directors have a particular responsibility to challenge constructively the strategy proposed by the Executive Directors; to scrutinise and challenge performance; to ensure appropriate remuneration and that succession planning arrangements are in place in relation to Executive Directors and other senior members of the management team. The senior executives enjoy open access to the Non-Executive Directors.
The Chairman is responsible for leadership of the board and ensuring its effectiveness on all aspects of its role. The Chairman sets the Board’s agenda and ensures that adequate time is available for discussion of all agenda items, in particular strategic issues.
The Chairman promotes a culture of openness and debate by facilitating the effective contribution of Non-Executive Directors in particular and ensuring constructive relations between Executive and Non-Executive Directors. The Chairman is also responsible for ensuring that the directors receive accurate, timely and clear information. The Chairman ensures effective communication with shareholders.
All directors are able to allocate sufficient time to the Group to discharge their duties. There is a formal, rigorous and transparent procedure for the appointment of new directors to the PLC Board. The search for PLC Board candidates is conducted, and appointments made, on merit, against objective criteria and with due regard for the benefits of diversity on the Board.
The Board is responsible for ensuring that a sound system of internal control exists to safeguard shareholders’ interests and the Group’s assets. It is responsible for the regular review of the effectiveness of the systems of internal control. Internal controls are designed to manage rather than eliminate risk and therefore even the most effective system cannot provide assurance that each and every risk, present and future, has been addressed. The key features of the system that operated during the year are described below.
The Board has established the following committees to assist with oversight and governance:
The Audit Committee is chaired by James Sutcliffe, and also comprises Sir Malcolm Ross and Sir Tony Baldry. It is responsible for providing formal and transparent arrangements for considering how to apply suitable financial reporting and internal control principles having regard to good corporate governance and maintaining an appropriate relationship with the Group’s auditors.
The Remuneration Committee is chaired by Sir Malcolm Ross and also comprises Sir Tony Baldry and James Sutcliffe. The Remuneration Committee is responsible for establishing a formal and transparent procedure for developing policy on executive remuneration and to set the remuneration packages of individual Directors. This includes agreeing with the Board the framework for remuneration of the Chief Executive, all other executive Directors, the Company Secretary and such other members of the executive management of the Company as it is designated to consider. It is furthermore responsible for determining the total individual remuneration packages of each Director including, where appropriate, bonuses, incentive payments and share options.
The Risk Committee is chaired by James Sutcliffe and also comprises Sir Tony Baldry, Peter Fowler and Martin Boden. The Risk Committee is responsible for oversight and monitoring of the Company’s global risks exposure and to ensure the Company has adequate risk management policies, processes and procedures in place to address identified potential risks and such policies, processes and procedures are regularly reviewed.
The Nominations Committee is chaired by Sir Tony Baldry and also comprises Sir Malcolm Ross, James Sutcliffe and Peter Fowler. The Nominations Committee is responsible for review of the board size, structure and composition (both executive and non-executive) including any potential new applicants to ensure the board contains the right balance of skills, knowledge and experience to manage and grow the business. The Nominations Committee will make recommendations to the Chairman of the Board of any proposed or suggested changes to the Board with a view on the leadership needs of the business including succession planning.
The Disclosure Committee is chaired by Sir Tony Baldry and also comprises James Sutcliffe, Peter Fowler and Roger Worrall (secretary). The Disclosure Committee is responsible for oversight and monitoring of the Company’s disclosure obligations and to ensure compliance with Market Abuse Regulations (MAR) and London Stock Exchange rules.