Chairman's statement on corporate governance

The board continues to pay high regard to corporate governance and internal control in all aspects of the organisation. It adopted the QCA Code in 2018 and understands and applies the clear principles set out in the QCA Code, recognising the importance of having a strong framework within which to develop ever better corporate governance practice, often beyond the requirements of the QCA 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 ensuring 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 and the development and communication within the organisation of appropriate policies. A flexible timetable has been implemented to ensure regular review by the board of its corporate governance compliance, structures and tools. Board evaluation is now being conducted annually. Where possible individual policies and frameworks, such as terms of reference for board committees, risk identification and policies on whistleblowing and modern slavery are also being reviewed annually to ensure that they remain appropriate. The corporate governance information on our website is updated annually and was last reviewed in September 2021.

Shareholders will be aware that 2021 saw changes to the executive team with the resignation of Tristan Price as chief executive after 15 years of excellent service to the Group. The board, led by me with support from its advisors and the company secretary, took time to consider board composition, linking this to its own discussions around the Group’s strategy that had taken place during the year. Given the Group’s continued focus on its Indonesian oil-palm estates and the production of sustainable CPO, the board strongly supported the appointment of its long-serving and industry-leading head of operations in Indonesia, K Chandra Sekaran, as an executive director, bringing first class operational knowledge to the board as well as strengthening the link between the board and the Group’s workforce in Indonesia. The board agreed that in Matthew Coulson, Group finance director from February 2017 until 31 December 2021 and with a track record since joining the Group in 2016 of consistently rising to challenges with reassuring measure and formidable skill, it had a natural successor for the role of chief executive, a role he took on from the start of 2022. This followed a period since the end of July 2021, in which the chief executive’s responsibilities were carried out jointly by Matthew and myself.

A good system of corporate governance is of no use without a board whose members continue to develop their skills and capabilities. Between them, our board members have extensive experience in the key areas pertinent to execution of the Group’s strategy, and remain professionally active, motivated, and willing to broaden and deepen their knowledge. All directors have the opportunity to attend seminars and formal training courses in person or on-line; they keep in touch with relevant developments through discussion amongst their business and professional peers; and they read relevant trade and other professional publications as well as relevant media articles to understand public sentiment. This activity is recorded by the Group’s company secretary, who advises directors of appropriate seminars and training opportunities. During the year the board received training on the AIM regulatory regime and on antibribery and corruption (this training was mandatory throughout the organisation to all members of staff at supervisor level and above). They also received briefing notes on topics including s172 obligations and succession planning. Some members attended in-house sustainability training sessions led by the Group’s head of sustainability in Indonesia. The focus for training in the year ahead will be around climate change. It is essential the board remains up to date on the emerging regulatory framework in response to investor concerns around climate change and understands the risks and opportunities this presents to the business.

The board started its programme of self-evaluation in 2019. The first two evaluations were facilitated via a professional online platform using suites of recommended questions for the board and its committees. This provided a valuable start. For the self-assessment exercise at the end of 2021, board members were invited to provide non-prescriptive feedback on a range of suggested topics. As hoped, this yielded more detailed insights, highlighting areas the board felt most strongly about. Further details can be found 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. In February 2021, following the strengthening of its internal risk identification process in 2020, and also in response to feedback from the 2020 board evaluation the board dedicated a meeting to risk reporting.

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 benefit 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. 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.

My colleagues on the board and I are committed to ensuring that the Group’s corporate governance structures are robust and are keeping these under frequent review. There have been no significant changes to the Group’s corporate governance framework during the year.

Peter Hadsley-Chaplin
Chairman

22 March 2022