Chairman's statement on corporate governance

The board recognises the importance of a sound system of corporate governance and internal control. In some respects, the Group’s corporate governance is more developed than required under the QCA Code, the Group’s recognised corporate governance code.

The board is made up of three executive directors and four non-executives. This structure is designed to ensure that there is a clear balance of responsibilities between the executive and the non-executive functions. As chairman I am primarily responsible for setting the Group’s strategy in conjunction with the board, and for ensuring the effective operation of the board. This includes making sure the board continues to develop its corporate governance in response to changes in official standards and public expectations through full and timely discussion at board meetings. Board evaluation and a review of corporate governance takes place at least every two years, although the corporate governance information on our website is reviewed annually and was last updated on 15 May 2020 following a review.

A good system of corporate governance is of no use without a board whose members continue to develop their skills and capabilities. Our board members have extensive experience and remain professionally active and motivated to broaden their knowledge. All directors have the opportunity to attend seminars and formal training courses; they keep in touch with relevant developments through discussion amongst their business and professional contacts; and they read relevant trade and other professional publications. This activity is recorded by the Group’s company secretary, who advises directors of appropriate seminars and training opportunities.

The board first conducted a formal evaluation of itself during the first quarter of 2019. This was conducted internally, led by me and supported by the company secretary. Its design drew on an independent framework and recommended questions assessing the nature and performance of the board and its committees. The board conducted a second evaluation of itself at the end of 2020 using the same framework to enable a comparison of the findings. A consolidated report of these assessments was considered by the board and actions in response to it were agreed, as referred to in more detail in the corporate governance report.

Effective risk management and acknowledging the role that stakeholders play in our Group’s operations, are central to our success. We believe compliance with the QCA Code provides a valuable support in strengthening our ability to grow and so deliver returns to our shareholders that also benefits our wider stakeholders. The Group sees ethical behaviour as a competitive advantage to building trust with suppliers and attracting and retaining high-performing staff. This too is emphasised in the QCA Code. Finally, the Group operates in a sector where timelines are long and hence where there is a premium on boards in which shareholders can place their long-term trust.

In October 2020, the board reviewed and strengthened the processes the Group has in place to identify and record operational and regional risk. There have been no other significant changes to the Group’s corporate governance framework during the year other than formally designating certain risk functions to the audit committee to reflect work which it had already been carrying out, as well as to give the audit committee oversight over the Group’s updated whistleblowing policy.

Peter Hadsley-Chaplin
Chairman

23 March 2021