Justin Dowley, Chairman
Christopher Miller, Executive Vice-Chairman
David Roper, Executive Vice-Chairman
Simon Peckham, Chief Executive
Geoffrey Martin, Group Finance Director
Liz Hewitt, Senior Independent Director
David Lis, Non-executive Director
Archie G. Kane, Non-executive Director
Charlotte Twyning, Non-executive Director
The Board remains committed to maintaining the high standards of corporate governance required to ensure that the Company can continue to deliver on its strategic goals and to achieve long-term success for the benefit of its shareholders.
As part of this approach, the Board supports, applies and complies with the main principles, the supporting principles and the respective related provisions of corporate governance contained in the UK Corporate Governance Code (the “UK Code”) issued and as updated by the Financial Reporting Council (the “FRC”) and available to view on the FRC’s website at: https://www.frc.org.uk/Our-Work/Codes-Standards/Corporate-governance.aspx.
With the exception of the grant of awards under the 2012 Incentive Plan, which were awarded in one block in 2017, rather than phased, all other aspects of the Executive Directors' remuneration fully comply with the UK Code. Grants under the 2017 Incentive Plan will be phased, rather than awarded in one block.
In support of this commitment, the Board carries out a number of key governance activities designed to enable continuous improvement in line with best practice corporate governance guidelines.
We recognise that succession planning is an ongoing process and is critical to maintaining an effective and high-quality board. John Grant retired at the conclusion of the 2017 Annual General Meeting (AGM), and was replaced as senior non-executive Director by Justin Dowley, who will also continue to hold the position of Chairman of the Remuneration Committee. John's position as Chairman of the Audit Committee will be taken up by Liz Hewitt, who will step down as Chairman of the Nomination Committee, to be replaced by David Lis. Archie Kane was appointed as an independent non-executive Director on 5 July 2017. Mr Kane has also been appointed as a member of the Audit Committee, the Remuneration Committee and the Nomination Committee.
The Nomination Committee has determined that the number of non-executive Directors serving on the Board will be increased to five so that there are a majority of independents serving on the Board, and a search and selection specialist has been engaged to support the recruitment process.
The Directors’ Remuneration Report is set out on pages 80 to 90 of the 2017 Annual Report.
The Company’s previous long-term incentive plan, the 2012 Incentive Plan, crystallised on 31 May 2017 and, following approval by shareholders at the 2017 AGM, was replaced by a new scheme, the 2017 Incentive Plan, on equivalent economic terms. Our remuneration philosophy remains unchanged; executive remuneration should be simple, transparent, support the delivery of the Melrose value creation strategy and only pay for performance.
Risk management and compliance
The objectives of the Directors and senior management are to safeguard and increase the value of the businesses and assets of the Group. Achievement of these objectives requires the development of policies and appropriate internal control frameworks to ensure the Group’s resources are managed properly and any key risks are identified and mitigated, where possible.
The Board recognises that it is ultimately responsible for determining the nature and extent of the principal risks it is willing to take to achieve its strategic objectives. It also recognises the need to define a risk appetite for the Group, to maintain sound risk management and internal control systems and to monitor its risk exposures and mitigations to ensure that the nature and extent of risks taken by the Group are consistent and aligned with its strategic objectives.
The Board confirms that there is an ongoing process for identifying, evaluating and managing the principal risks faced by the Company and that these systems, which are subject to regular monitoring and review, have been in place for the year under review and up to the date of approval of the Annual Report and financial statements.
Melrose’s reputation for acting responsibly plays a critical role in its success as a business and its ability to generate shareholder value. We maintain high standards of ethical conduct and take a zero tolerance approach to bribery, corruption and other unethical or illegal practices. Supporting our compliance policies are a comprehensive online training platform and an industry-leading whistleblowing reporting facility. The integrity of the compliance framework is further reinforced by the use of independent assurance and compliance audits.
Engagement with shareholders
The Company continues its programme of engagement with major investors and the governance bodies in respect of our remuneration policy and incentive arrangements. The Board is pleased with the support and constructive feedback throughout these discussions and it is our intention to continue this programme for the foreseeable future.
Main responsibilities of the Board
The main responsibilities of the Board are to:
- effectively manage and control the Company via a formal schedule of matters reserved for its decision;
- determine and review Company strategy and policy;
- consider acquisitions, disposals and requests for major capital expenditure;
- review trading performance;
- ensure that adequate funding and personnel are in place;
- maintain sound internal control systems;
- report to shareholders and give consideration to all other significant financial matters;
- agree Board succession plans and consider the evaluation of the Board’s performance over the preceding year;
- determine the nature and extent of the risks the Group is willing to take; and review the Group’s risk management and internal control systems;
- agree the Group’s governance framework and approve the Group governance policies.
Committees of the Board
In accordance with the provisions of the UK Code, the Board has three standing Committees: the Audit, Remuneration and Nomination Committees. Each of these includes the four independent non-executive Directors. The duties of the Committees are set out in formal terms of reference. These are available from the Company Secretary and on this website. The Company Secretary acts as Secretary to each of the Committees.
Inspection of service agreements and letters of appointment
Copies of the executive Directors' service agreements with the Company or any of its subsidiaries and copies of the letters of appointment of the non-executive Directors of the Company are available for inspection at the Company’s registered office. Please contact the Company Secretary to arrange inspection.
Visits can be arranged during normal business hours 09.00 to 17.00 (UK) (Saturdays, Sundays and public holidays excepted). The documents are also available for inspection at our Annual General Meeting each year for 15 minutes prior to and during the meeting.