Corporate Governance

The Board of Directors
The Board of Directors is responsible for ensuring that the Group is appropriately governed and to holding the Executive to account in their delivery of the formulated business strategy. This includes oversight of relevant control mechanisms within the business together with values and behaviours to ensure the business performance is sustainable within its sector. At 31 December 2016 the Board comprised six members: a Non-executive chairman; three further independent Non-executive Directors, including John Grant as the Senior Independent Director; and two executive Directors being the Chief Executive Officer and the Group Finance Director. The Chairman has responsibility for the overall leadership, effectiveness and governance of the Board. The Chief Executive Officer is responsible for the effective leadership and development of the executive management and strategic and operational running of the Group. The Senior Independent Director supports the Chairman and leads the Non-executive Directors in reviewing the performance of the Chairman. The Non-executive Directors have been appointed to the Board for their specific areas of knowledge and expertise, are considered to be independent of management and exercise their duties in good faith based on judgements informed by their professional and personal experience to provide rigour to Board decisions.

The composition and effectiveness of the Board and its committees are regularly reviewed to reflect skills and resources needed to assist the Group in delivering its strategic plan. Appropriate training, briefings and inductions are available to all Directors on appointment and subsequently where necessary, taking into account the existing qualifications and experience of each individual Director. All Directors have access to the Group Company Secretary, who is responsible for ensuring that Board procedures are followed and that the Group complies with all applicable rules, regulations and obligations governing its operations. The Directors also have access to the advice and services of the Group’s company secretarial partner, Addleshaw Goddard LLP. In addition, any Director may take independent professional advice, where necessary, at the Company’s expense.  The Board meets formally at least eight times a year and additional meetings are held where  necessary to review and approve specific matters where a decision is required more urgently.

Each Director is provided with sufficient timely information in the form of Board papers, to enable full consideration of matters in advance of meetings in order to properly discharge their duties. There is a formal schedule of matters reserved for the Board which includes strategy and management, structure and capital, financial reporting and controls, internal controls, contracts, communication, Board membership and other appointments, remuneration, delegation of authority, corporate governance matters, and policies. Under the Company’s articles of association, one third of all Directors is required to retire from office at each Annual General meeting and may stand for re-appointment by shareholders. In addition, each Director is required to retire in the third calendar year following his last appointment and may stand for re-election. Any Director appointed to the Board during the year is subject to election by shareholders at the following Annual General Meeting.

In line with the Companies Act 2006 and the Company’s Articles of Association, approved at the 2008 AGM, the Company has strict procedures in place to capture the disclosure and subsequent consideration and potential authorisation of any Director’s interest which may conflict with those of the Company.

Risk Management and Control
The Board has overall responsibility for the Group’s systems of risk management and internal control and for reviewing their effectiveness, while the role of management, through the Management Board, is to implement Board policies on risk management and control. The day-to-day activities of the Group are managed by the Chief Executive Officer through the Management Board, whose membership includes the Chief Executive, Group Finance Director, Group Operating Officer, the Directors of each of the Group’s operating business units and an Engineering Director and Corporate Stewardship Director. The Management Board meets to formally review performance and risk once each month and maintains regular dialogue between these meetings.

The Management Board regularly reviews the control environment of the Group and is responsible for managing and mitigating commercial, operational, safety, compliance and financial risks. This system is designed to provide reasonable but not absolute assurance against material misstatement or loss.

The Group operates a series of controls to meet its needs. Key features of the control system include the following:

  • maintenance of an operational risk register, covering the key health and safety, regulatory and operating risks faced by the Group;
  • maintenance of a register of the major financial risks faced by the Group;
  • monthly reviews of business risks affecting the Group, identifying procedures and action required to manage and mitigate those risks;
  • reports provided to the Board at every meeting setting out the key risks and their management;
  • a clearly defined organisational structure with terms of reference for Board committees and responsibilities and authorisation limits for executive and senior management;
  • regular visits by the executive Directors and senior management to operating locations to meet with local management and staff and to review business performance;
  • regular visits by the Group’s technical team to all sites to identify risks and propose improvements to be implemented by senior management. This includes powers to stop activities if they are deemed to represent a danger, or are inappropriate in the context of proper compliance;
  • a range of compliance management systems at the Group’s sites are subject to external review, including certification to ISO 9001:2008; 14001:2004; 18001:2007 and the Publicly Available Specification of common management system requirements PAS 99:2006;
  • an annual strategic planning and budgeting process;
  • reviews by senior management, the Management Board and the Board of monthly financial and operating information, including comparisons with budgets and forecasts. The Group uses balanced scorecard reports, containing key performance indicator targets, as a mechanism for monitoring and managing the monthly performance of key operations;
  • maintenance of a comprehensive insurance programme, agreed with insurers following a detailed annual review of the risks faced by the Group’s businesses.

To provide an overview of the risks faced by the Group, the Audit Committee undertakes a six-monthly review of the corporate risk register, which considers a broad range of risk items. This takes account of the entire control environment and may lead to recommendations which are implemented through the Management Board.

Annual General Meeting
The AGM takes place in June each year in London. All shareholders are invited to attend and vote at the meeting. The meeting notice and voting forms are sent to shareholders in advance.

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