Directors' responsibilities

The board is committed to regular review of succession planning, including the merits of establishing a nominations committee. The board keeps under review the skills and experience required for the board to successfully formulate and execute Group strategy, the current skills and experience of board members as well as feedback from the board evaluation process. Professional consultants may be engaged to assist in identifying appropriate candidates. The chairman maintains a strong individual relationship with all the directors and any changes to the board are managed collaboratively with minimal disruption to the Group. It is considered that the board would be robust to any unplanned retirements and be able to recruit suitable well-qualified candidates within a reasonable period of time.

The board has decided that the most appropriate structure is for there to be a chairman who acts in an executive capacity, together with a chief executive. From 1 August 2021 until the appointment of a new chief executive on 1 January 2022, the chairman also assumed the responsibilities of chief executive. The chairman is primarily responsible for setting the Group’s strategy in conjunction with the board, and for ensuring the effective operation of the board. The chief executive is primarily responsible for implementing the Group’s strategy. Given the current structure and composition of the board, the role that the chairman performs, the size of the Group, the size of the shareholdings which directors hold in the Company and the active dialogue with institutional shareholders that takes place throughout the year, the board considers that a non-executive chairman would not provide any further benefit to the Company. The board acknowledges that the chairman is not independent. To mitigate concerns around the executive function of the chair, one of the independent non-executive directors takes the role of senior independent non-executive director.

The board attaches great importance to communications with both institutional and private shareholders. The executive directors regularly meet major shareholders, either in person or through digital means, to update them on the progress of the Group and discuss any areas of concern that they may have. Any issues raised by major shareholders are discussed by the board as a whole. Smaller shareholders also have access to the Board. The chairman aims personally to respond to communications received from individuals, and the annual general meeting provides an opportunity for smaller shareholders to meet executive and non-executive members of the board, to raise any issues and discuss the development of the business with them. Many of the Group’s smaller shareholders have become personally known to the directors through their many years of regular attendance at the Company’s AGMs. The AGM held in 2023 was well attended by shareholders and was simultaneously broadcast online with a recording made available via the Group’s website. The board uses the Group’s website to make available:

• details of AGM arrangements and shareholder meetings
• the results of the votes cast at those meetings
• reports and presentations given at meetings with investors
• announcements made by the Company and other regulatory information
• information explaining how it conducts its operations

Since 2021 the board has made use of the Investor Meet Company platform specifically in order to widen its engagement with smaller shareholders. This enables the board to make free-to-view presentations to investors, potential investors and other stakeholders who are also able to use the platform to pose questions to the board.

The board measures the success of its shareholder engagement strategy by the consistent support received for resolutions proposed by the Company in general meetings over at least the last decade with only one, special, resolution narrowly rejected during that period. In addition, the board notes that many of the Company’s shareholders, both institutional and private, are longstanding, and that in normal times it consistently records high numbers attending at its AGMs.

The board places due weight on stakeholder awareness and engagement. It assesses stakeholders according to the definition of stakeholders set out in the Global Reporting Initiative (Standard 101 paragraph 1.1) as organisations or individuals who have a reasonable expectation of being significantly affected by the Group’s activities or products, or who are able to prevent the Group from achieving its objectives. The board reviewed the Group’s stakeholders in June 2023 and has identified and approved a strategy for engaging with these groups as follows:

Following continuing stakeholder engagement, the Group has increased the amount of detailed sustainability information that it publishes, including providing analysis of carbon emissions in line with the guidance of the Taskforce on Climate-related Financial Disclosures.

The board undertakes an annual review of the effectiveness of the Group systems of internal financial control. The board of directors has overall responsibility for the Group’s systems of internal controls, including financial, operational and compliance, which are designed to provide reasonable, but not absolute, assurance against material misstatement or loss. The controls are used in identifying, evaluating and managing significant risks of the Group on an ongoing basis.

The board believes that the annual report and financial statements play an important part in presenting all shareholders with an assessment of the Group’s position and prospects. This is achieved in the annual report by the chairman’s statement and the strategic report, which contain a detailed consideration of the Group’s financial position and prospects.
Company law requires the directors to prepare financial statements for each financial period which give a true and fair view of the state of affairs of the Group and of the Company and of the profit or loss of the Group for that period. In preparing those financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the accounts;
• prepare the financial statements on the going-concern basis unless it is inappropriate to presume that the Group will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Company’s transactions and disclose, with reasonable accuracy at any time, the financial position of the Group and of the Company and enable them to ensure that the financial statements and the directors’ remuneration report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the Company’s website.