The Composition of the Board
The Directors possess an appropriate combination of skills, experience, independence and knowledge of the Company to collectively act in the best interests of the Company via the Board and its Committees, without responsibilities or decision-making being dominated by any one individual or small group. Each Director commits sufficient time and attention as is necessary to discharge their duties.
Skills*
* Includes David Wild who resigned on 18 July 2012, Matt Davies who was appointed on 4 October 2012 and Paul McClenaghan who resigned on 12 April 2013.
* Shows the percentage of Directors considered independent in character and judgement throughout the period.
All the Non-Executive Directors are considered by the Board to be independent in character and judgement. As at 17 May 2013, both Keith Harris and Bill Ronald will have served as Non-Executive Directors of the Company for nine years. The Board acknowledges that under the UK Corporate Governance Code it should determine whether service of more than nine years from the date of first election of each individual affects their independence. The Board considers that both Keith Harris and Bill Ronald continue to be independent in character and judgement. Nevertheless a process has commenced to recruit two new Non-Executive Directors to replace both Bill Ronald and Keith Harris in the year ahead and thus both Keith Harris and Bill Ronald will offer themselves for re-election.
Diversity
The Terms of Reference of the Nomination Committee state that potential candidates should be considered "on merit and against objective criteria, and with due regard for the benefits of diversity on the Board, including gender". The Board, which includes one female member, considers the background and experience brought to the Board by each individual to contribute to its diversity. In any recruitment, the Board prefers to select the best-qualified candidate to provide the Board with the support and expertise required to implement its long-term strategy, rather than to fulfil any fixed quota.
In recommending new appointments to the Board, the Nomination Committee considers the existing balance of skills, knowledge and experience on the Board, the capabilities of the nominees and the time they have available to commit to the Company when making recommendations to the Board.
Appointments to the Board
During the period, Matt Davies was recruited as Chief Executive. Egon Zehnder International ("EZI") were engaged by the Company to conduct the search for suitable candidates and short-listed several candidates who met individually with members of the Board. Feedback from these one-to-one meetings was fed back to the Chairman. The Nomination Committee subsequently met to discuss the potential appointment and to recommend the appointment of Matt Davies to the Board, which met on 3 October 2012 to formally approve the appointment.
* Shows situation as maintained throughout the period to 29 March 2013. On 12 April 2013, Paul McClenaghan resigned and so the Company now has two Executive Directors and six male members of the Board.
Experience*
* Includes David Wild who resigned on 18 July 2012, Matt Davies who was appointed on 4 October 2012 and Paul McClenaghan who resigned on 12 April 2013.
Development and Support
An induction programme is maintained for new Directors, which is tailored to include briefings on the activities of the Group and visits to operational sites. The Chairman, with the assistance of the Company Secretary, prepared a comprehensive induction programme for Matt Davies when he joined the Company. This included: extensive store and distribution centre visits and on-site discussions with store and distribution centre colleagues; one-to-one meetings with the senior management teams; and the provision of induction materials covering the operational and organisational structure of the business, as well as the strategic aims and key initiatives of the Company.
Ongoing resources available to the Directors to maintain and develop their knowledge are:
- membership of the Deloitte Academy, a training and guidance resource for boards and directors;
- a programme of head office and store visits through the period;
- regular reviews with the Chairman to identify any training and development needs;
- advice and the services of the Company Secretary on governance, relevant legislative changes affecting the business or their duties as directors; and
- access to independent professional advice at the Company's expense.
Knowledge of the Company*
* Includes David Wild who resigned on 18 July 2012, Matt Davies who was appointed on 4 October 2012 and Paul McClenaghan who resigned on 12 April 2013.
Evaluation
Egon Zehnder International ("EZI") conducted a Board Effectiveness Review (the "EZI report") during May 2012. The process comprised:
- circulation of a pre-discussion guide
- meetings of c.2 hours between EZI and each Board member and the Company Secretary
- review of the EZI report with the Chairman
- circulation of the EZI report to the Board
- discussion of the EZI report at the Board meeting in June 2012 with EZI consultants in attendance
- individual feedback to the Chairman from EZI and the Senior Independent Director
- individual feedback to the other Directors from the Chairman
The overall conclusion of EZI was that the levels of engagement and openness throughout the process were very high and EZI were encouraged that the Board were so keen to enhance Board effectiveness. The Board remains mindful of the conclusions of the EZI report and continues to look for ways to improve.
Re-election
In compliance with the Code and the Company's Articles of Association, all Directors on the Board as at 29 March 2013, except for Paul McClenaghan, will seek re-election at the Company's AGM. Matt Davies who was appointed to the Board on 4 October 2012 will offer himself for election at the AGM.
Board Committees
The Board discharges some of its responsibilities via Nomination, Audit and Remuneration Committees, and more detail about these follows this section. The Company Secretary also acts as the secretary to each Committee. Whilst not entitled to attend, other Directors, professional advisors and senior management attend when invited to. The Auditor attends certain Audit Committee meetings by invitation. No member is present at Nomination and Remuneration Committee discussions pertinent to them.
Senior members of the finance and treasury teams manage the day-to-day treasury needs of the Group via a Treasury Committee chaired by the Finance Director.
Final market announcements are approved prior to release via a Disclosure Committee made up of a minimum of two Directors.
Other ad hoc committees may be set up by the Board to consider specific issues.
Directors and their Other Interests
Each Director has notified the Company of any situation in which he or she has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the Company (a situational conflict). These interests were considered and approved by the Board in accordance with the Company's Articles of Association and each Director was informed of the authorisation and the terms on which it was given. All Directors are aware of the need to consult with the Company Secretary regarding any further possible situational conflict that may arise so that prior consideration can be given by the Board as to whether or not such conflict will be approved.
Details of the Directors' service contracts, emoluments, the interests of the Directors and their immediate families in the share capital of the Company and options to subscribe for shares in the Company are shown in the Directors' Remuneration Report.
Nomination Committee
Chairman
Dennis Millard
Other Members
Matt Davies
David Adams
Keith Harris
Bill Ronald
Claudia Arney
"The Nomination Committee is encouraged to see the impact that Matt Davies' appointment, and those of other senior executives recently appointed, is having on colleagues and the generation of refreshing ideas within the business. Egon Zehnder International have worked well alongside the Nomination Committee throughout the year both in relation to Matt's appointment, and the external board evaluation."
The Nomination Committee is chaired by Dennis Millard and, with the exception of Matt Davies (formerly David Wild), all members of the Committee are considered independent. The Code states that the test of independence is not appropriate in relation to the Chairman after his appointment and the Board feels it is appropriate that as all Non-Executive Directors sit on the Committee, the Chairman of the Group should chair the Committee. Senior members of management and advisors are invited to attend meetings as appropriate.
Annual Activity
The Committee has responsibility for:
- considering the size, structure and composition of the Board of the Company;
- reviewing senior management succession plans, retirements and appointments of additional and replacement Directors; and
- making appropriate recommendations so as to maintain an appropriate balance of skills and experience on the Board.
| Standing Items | One-Off Considerations |
|---|
July 2012 | |
Executive management
succession plans | Update on CEO recruitment |
Non-Executive Director
succession plans | |
| Committee evaluation | |
September 2012 | |
| Update on CEO recruitment and recommendation of the appointment of Matt Davies |
March 2013 | |
| Review size, structure and composition of the Board | |
| Terms of Reference | |
Confirm Directors standing for
re-election at AGM | |
| Approve Committee memberships | |
| Confirm Committee Chairman attendance at AGM | |