Henry Boot PLC complies with the vast majority of the provisions of the September 2014 edition of the UK Corporate Governance Code. The Chairman is responsible for the leadership of the Board and ensuring that it operates in an effective maner. The Board has agreed clearly defined roles for the Chairman and the Chief Executive Officer, and the Non-executive Directors challenge management and contribute to strategy.
The Board, its Committees and individual Directors are subject to annual performance evaluation and all Directors are subject to re-election by shareholders at AGM. Appointments to the Board will always be made on merit against objective criteria and the Board strongly supports the principle of boardroom diversity.
The Board supports and remains committed to achieving and maintaining a high standard of corporate governance. However, it believes that such governance must reflect the unique nature of the Company, the composition of its shareholders, many of whom have strong family ties to the Company, as well as other stakeholders’ interests and, above all, must assist in the effective attainment of corporate objectives.
The Company, as a premium listed company, is subject to the September 2014 edition of the UK Corporate Governance Code issued by the Financial Reporting Council (FRC).
The Directors take comfort in the fact that the Code recognises that not all of the provisions are necessarily relevant to smaller listed companies and the Code states that departures from its provisions should not be automatically treated as breaches.
In applying the Principles of Good Governance, including both the Main Principles and the Supporting Principles, the policies adopted by the Board follow the Code’s guidelines insofar that they assist the overall wellbeing of the Company and its shareholders’ interests.
Pragmatism also constitutes a very important element in the Board’s approach and adoption of all the supporting principles of the Code is not an objective as such. Further explanations of how the Main Principles and the Supporting Principles have been applied are set out below.
The Company is led and controlled by a Board of Directors which is collectively responsible for the continued success of the Company and our key objective is to maximise long-term shareholder value.
Currently the Board consists of seven Directors, two of the Directors are executive and the remaining five, including the Chairman, are non-executive.
The Board’s role is to provide entrepreneurial leadership of the Company within a framework of prudent and effective controls that enables risk to be assessed and managed. It sets the Company’s statement of purpose, business model and strategic aims, reviews managementperformance and ensures that the necessary financial and human resources are in place, and will continue to be in place for the Company to meet its objectives, recognising the importance of safety, environmental and social factors. The Board also ensures that its obligations to its shareholders and others are understood and met. Day-to-day management of the Company's subsidiaries sits with each respective board of directors, led by a Managing Director. The Executive Directors of the Company are also directors of each subsidiary.
An Operations Board established in January 2016 focuses on Group working, inter company co-operation and risk. This board consists of the Chief Executive Officer, Group Finance Director, and Head of PLC Operations, GC & Company Secretary together with the four prime subsidiary company Managing Directors and the Managing Director of Stonebridge Projects Limited, our jointly owned house builder.
The Board retains a Schedule of Reserved Matters which is reviewed annually to ensure that strategy and key elements that might affect the implementation of corporate goals are adhered to. The Board is responsible for:
- strategy and objective setting;
- promoting the long-term success of the Group;
- capital structure and ensuring funding adequacy; and
- effective internal controls.
At its regular Board meetings there is a series of matters that are dealt with, including a health and safety review, a finance review, including pensions, operational reviews on all the main trading subsidiaries and a secretarial review encompassing corporate governance, risk, shareholder matters, legal, insurance and IT. HR reports are also provided to the Board for review and comment. The Board also reviews strategy, budgets and matters relating to internal controls as appropriate. The subsidiary board meetings are attended by the two main Board Executives, as directors of those subsidiaries, accompanied by the Head of PLC Operations, GC & Company Secretary. Operational decisions affecting each subsidiary are taken by the individual boards at these meetings.
All Directors have access to the Head of PLC Operations, GC & Company Secretary and there is in place a written procedure for all Directors to take independent professional advice.
Head of PLC Operations, GC & Company Secretary is responsible for information flows between the Board, its Committees and the boards of subsidiary companies. Formal inductions for new directors have been developed, along with continued professional development training. The Head of PLC Operations, GC & Company Secretary also ensures procedures, regulations and law are followed and advises the Board on governance issues. The question of conflicts of interest is raised at every Board meeting of the Company and its subsidiaries.
The roles of the Chairman, Jamie Boot, and the Chief Executive Officer, John Sutcliffe, are clearly defined and they act in accordance with the main and supporting principles of the Code.
The Chairman is responsible for leadership of the Board and ensuring it operates in an effective manner. It is considered that the Directors possess an appropriate balance of skills, experience, independence and knowledge of the Company to enable them to discharge their respective duties and responsibilities so as to be effective.
The division of responsibilities of the Board of Directors is summarised in the Responsibilities table.
The Chairman is in regular contact with the Chief Executive Officer to discuss current matters and has visted Group operations outside scheduled Board meetings to meet subsidiary directors, managers and stakeholders.
Subsidiary Managing Directors attend Operational Board meetings to present their operational business plans and strategy to the Executive Directors.
All Directors are required to be re-elected at the AGM and newly appointed Directors are subject to election at the AGM following their appointment.
Training and development
The Board receives appropriate training and updates on various matters as part of the regular Board meetings. All Directors are offered the opportunity and are encouraged to continue their professional development and update their commercial and Company knowledge as required.
Board balance and independence
Gerald Jennings, Joanne Lake (Deputy Chairman) and Peter Mawson are the independent Non-executive Directors and, with the Company being a ‘smaller company’ as defined by the Code, they fulfil the requirement for having at least two such Directors. Peter Mawson is the senior independent Non-executiveDirector of the Company. James Sykes was appointed to represent the substantial shareholdings of the Reis family interests and is not regarded as an independent Non-executive Director. Jamie Boot, as Non-exectuive Chairman, is also not regarded as an independent Non-executive Director.
A key principle of the Group's Equality and Diversity Policy is that the Nomination Committee of the Board will always appoint on merit.
The Board recognises the benefits of diversity and it is considered that diversity includes (but is not limited to) personal attributes, gender, ethnicity, age, disability and religious beliefs. Our aim is to promote equality, respect and understanding, and to avoid discrimination.
Conflicts of interest
Under the Companies Act 2006 a director must avoid a situation where they have, or could have, a direct or indirect interest that conflicts, or possibily may conflict, with the Company's interests.The Act allows directors of public companies to authorise conflicts and potential conflicts, where appropriate, where the articles of association contain a provision to this effect. The Company's Articles of Association enable the Board to authorise Directors, conflicts of interest. In order to address this issue, conflicts of interest are reported by Directors to the Group General Counsel & Company Secretary and in turn through the Board meeting processes.
The Board considers a register of interests and potential conflicts of Directors and gives, when appropriate, any necessary approvals.
The Executive Directors’ performance is reviewed annually by the Remuneration Committee to ensure that they continue to contribute effectively to the Company’s overall objectives. The Non-executive Directors’ performance and commitment is kept under review by the Executive Directors. The Non-executive Directors meet without the Chairman to discuss the performance of the Chairman at least twice a year.
The Board Committees
The Board has formally constituted Audit, Remuneration and Nomination Committees. The terms of reference for these Committees fully incorporate the Code’s provisions in relation to their roles and responsibilities and are available for inspection at the Company’s registered office.
Those serving as members of the Audit Committee are James Sykes (Committee Chairman), Jamie Boot, Joanne Lake, Gerald Jennings and Peter Mawson.
The Committee meets a minimum of twice a year, with the Company’s auditors in attendance for part of each meeting. The Committee’s responsibilities include, amongst other matters, the following:
- to monitor the integrity of the Financial Statements of the Company and any formal announcements relating to the Company’s financial performance;
- to review and make recommendations to the Board in relation to the half-yearly and annual financial reports;
- to review and consider the scope and effectiveness of the Company’s financial controls, Company internal control and risk management systems;
- to consider the appointment/re-appointment of external auditors;
- to oversee the selection process with regard to external auditors and make appropriate recommendations through the Board to the shareholders to consider at the AGM;
- to review the annual report of the auditors, the level of fees charged by the auditors for non-audit services, the independence and objectivity of the auditors and the proposed nature and scope of their work before the audit commences. The level of these fees and the services provided are reviewed by the Committee to ensure that they do not threaten auditor objectivity and independence. The Committee reviews the independence and objectivity of the external auditors. Regulation, professional requirements and ethical standards are taken into account, together with consideration of all relationships between the Company and the external auditors and their staff. Relations with the external auditors are managed through a series of meetings and regular discussions and we ensure a high quality audit by challenging the key areas of the external auditor’s work;
- to review and consider the scope and effectiness of the Company's financial controls, Company internal control and risk management systems;
- to review the Company’s procedures for handling reports from ‘whistleblowers’; and
- to review annually the Company’s Anti-Bribery and Corruption policy.
Those serving as members of the Remuneration Committee are Joanne Lake (Committee Chairman), Jamie Boot, Gerald Jennings, Peter Mawson and James Sykes. John Sutcliffe, Chief Executive Officer, attends in an advisory and supportive role upon request from the Chairman of the Committee.
Details of the work of the Remuneration Committee are set out in the Annual Report and Financial Statements.
Those serving as members of the Nomination Committee are Peter Mawson (Committee Chairman), Jamie Boot, Gerald Jennings, Joanne Lake and James Sykes.
Nomination Committee matters are also discussed at each Board Meeting.
The principal responsibility of the Committee is to consider succession planning and appropriate appointments to the Board and to senior management, so as to maintain an appropriate balance of skills, knowledge and experience within the Company, and its duties include:
- overseeing the identification, selection and appointment of Directors;
- reviewing the structure, size, composition and leadership needs of the Board;
- other commitments of Directors relative to the time required for them to fulfil their duties; and
- periodic evaluation of the effectiveness of the Board.
The Committee has access to external professional advisers where required to fulfil its responsibilities.