Justin Dowley, Non-executive Chairman
Christopher Miller, Executive Vice-Chairman
David Roper, Executive Vice-Chairman
Simon Peckham, Chief Executive
Geoffrey Martin, Group Finance Director
Peter Dilnot, Chief Operating Officer
Liz Hewitt, Senior Independent Director
David Lis, Non-executive Director
Archie G. Kane, Non-executive Director
Charlotte Twyning, Non-executive Director
Funmi Adegoke, 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.
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.
Whilst succession planning arrangements for the Board as a whole were reviewed in 2019, the Nomination Committee and the Board gave particular focus in 2019 to reviewing and developing the succession planning arrangements in place for the roles of Chief Executive and Group Finance Director. This included reviewing the tenure of those already on the Board, and reviewing the Melrose senior management team including the career planning and talent management programmes in operation for them, to ensure that the right balance of skills, experience and diversity were reflected and being developed.
The Nomination Committee has also reviewed the role of Mr Justin Dowley as Melrose’s inaugural Non-executive Chairman. Although only recently taking up the role of Chairman, Mr Dowley first joined the Board as a Non-executive Director in September 2011, meaning he will have served for nine years in September 2020.
Further details with respect to this review and succession planning more generally are set out in the Nomination Committee Report on pages 88 to 89 of the Annual Report.
The 2019 Directors’ Remuneration Report is set out on pages 90 to 112 of the 2019 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. The 2017 Incentive Plan is due to crystalise on 31 May 2020. 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 stakeholders
The Company continues its programme of engagement with shareholders and other stakeholders. Further details on the Company’s engagement with stakeholders is contained in the Section 172 statement on pages 56 to 57 of the 2019 Annual Report and in the ESG Report on pages 58 to 69 of the 2019 Annual Report.
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.
- Define the Group’s purpose, determine and review Group strategy and policy to deliver that purpose, and provide strategic leadership to the Group.
- Set the Group’s values and behaviours that shape its culture and the way it conducts business.
- Consider acquisitions, disposals and requests for major capital expenditure.
- Review financial and trading performance in line with the Group’s strategic objectives.
- Ensure that adequate funding and personnel are in place.
- Engage with stakeholders and key shareholders on issues that are most important to the long-term success of the Company.
- Consider the views of the Group’s workforce as provided in the feedback from the Workforce Advisory Panel, in its discussions and decision making.
- 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.
- Oversee the Group’s risk management and internal control systems.
- Determine the nature and extent of the risks the Group is willing to take.
- Agree the Group’s governance framework and approve Group governance policies.
- Monitor, assess and review cyber security and fraud risk for the Group.
- Delegate and oversee responsibility for entrepreneurial leadership and strategic management of the Group to the Group senior executives.
- Challenge, review and exercise robust managerial oversight across key decisions, actions and processes performed by the Group’s business units.
- Promote the success of the Company over the long-term for the benefit of shareholders as a whole, having regard to a range of other key stakeholders and interests, including environmental, social and governance matters.
Chairman, Vice-Chairmen and Chief Executive
The roles of each of the Chairman, the Vice-Chairmen and the Chief Executive of the Company are, and will remain, separate in accordance with the UK Code and Board policy. The Chairman, with the assistance of the Vice-Chairmen, is responsible for leadership of the Board. The Chairman sets the Board agenda and ensures that adequate time is given to the discussion of issues in order to facilitate constructive discussions with effective contributions from the Non-executive Directors, particularly on those issues of a strategic nature.
The Chairman with the support of the Company Secretary also facilitates constructive board relations by providing accurate and clear information in a timely manner. Responsibility for ensuring effective communications are made to shareholders rests with the Chairman, Vice-Chairmen and the two other executive Directors.
The Chief Executive is responsible for strategic direction and decisions involving the day-to-day management of the Company.
Senior Independent Director
The Senior Independent Director’s role is to provide a sounding board for the Chairman, to act as an intermediary for the other non-executive directors where required, and to ensure that any key issues that are not being addressed by the Chairman or the executive management are addressed.
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 the Committees consist of a mix of 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.