Board & Committees

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Board members

Justin Dowley, Non-executive Chairman
Peter Dilnot, Chief Executive Officer
Matthew Gregory, Chief Financial Officer
David Lis, Senior Independent Director
Heather Lawrence, Non-executive Director
Charlotte Twyning, Non-executive Director
Gillian Elcock, Non-executive Director

The Board is 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 stakeholders. 

As part of this approach, the Board has applied the principles and complied with the provisions of corporate governance contained in the UK Corporate Governance Code (the “Code”) issued by the Financial Reporting Council (the “FRC”) and available to view on the FRC’s website.

In support of this commitment, the Board carried out a number of key governance activities during 2022 designed to ensure that Melrose remains compliant with the provisions of the Code and to enable continuous improvement in line with best practice corporate governance guidelines.

Succession planning

Succession planning is coordinated via the Nomination Committee in conjunction with the Board and includes all Directors and senior management.

Succession planning arrangements for the Board as a whole were reviewed in 2022. This included reviewing the skills set, tenure, diversity and independence of those already on the Board in order to ensure that the right balance of skills, experience and diversity were reflected and being developed. Diversity and inclusion continues to be a very important part of succession planning, and is a key consideration of the Nomination Committee in its discussions. 

Further details with respect to this review and succession planning more generally are set out in the Nomination Committee Report on pages 116 to 118 of the 2022 Annual Report.

Remuneration

The 2022 Directors’ Remuneration Report is set out on pages 119 to 144 of the 2022 Annual Report.

As further detailed in the Directors’ Remuneration report, the Directors’ Remuneration Policy and the Melrose long-term incentive plan have had significant continuity from Melrose’s establishment in 2003, and have been at the heart of Melrose’s long-term success since. The 2023 Directors’ Remuneration Policy is on broadly consistent terms as those previously approved, save for a proposed increase to the maximum opportunity under the annual bonus plan.

Melrose’s remuneration philosophy remains unchanged in order to align senior management with shareholders: executive remuneration should be simple, transparent, support the delivery of the Melrose value creation strategy and pay only for performance.

Sustainability

The Board is mindful of its responsibilities regarding climate change and sustainability more broadly, which are central to implementing the Company’s purpose and strategy. In particular, the Board assesses the basis on which the Company generates and preserves value over the long-term, including reviewing opportunities and risks, and the sustainability of the Company’s business model.

It has carefully considered how it can strategically address matters relating to sustainability in the most efficient and appropriate way, in light of both Melrose’s decentralised model and the industries in which its businesses operate. The Board oversees and retains ultimate responsibility for Melrose’s initiatives, disclosure and reporting in respect of improving the sustainability performance of its businesses. The Board receives regular training at least annually and quarterly updates on key sustainability and climate-related issues that impact the sectors in which the Group’s businesses operate, and on the specific measures that are required to be implemented to drive improved sustainability performance over the longer-term, for the benefit of all stakeholders.

Sustainability has been historically considered by the Remuneration Committee as part of executive remuneration within the strategic element of the annual bonus plan. For the 2023 Directors’ Remuneration Policy the Remuneration Committee is proposing to include within the annual bonus plan a standalone ESG element of 10% of the total award, in addition to the current financial and strategic elements, further highlighting the importance of sustainability to the long-term performance of the Company.

Find out more about our Sustainability strategy.

Risk management and internal control

Melrose has implemented a uniform Enterprise Risk Management programme across all of its business units, with complementary processes and procedures. During 2022, the Audit Committee continued to keep under review the Company’s internal financial controls systems that identify, assess, manage and monitor financial risks and other internal control and risk management systems, and the effectiveness of the Group’s risk management system, through regular updates from management. This included a review of the key findings presented by the external and internal auditors having agreed the scope, mandate and review schedule in advance.

During the year, the Melrose senior management team, with support from external consultants, continued to utilise the online interactive dashboard that had been developed to consolidate bottom-up reporting to the Company. Since the rollout of the dashboard, the Group’s risk management processes, together with reporting and data collection have continued to be enhanced. The dashboard includes data from the risk registers prepared by the risk and legal leads from GKN Aerospace, as well as objective trend analysis based on that data and independent insight from external consultants. This helped to guide the Audit Committee on relevant updates to the Group risks (including assessing, for discussion with the Board, whether there were any new and/or emerging principal Group risks).

Ethics and compliance

The Melrose Code of Ethics reinforces our values and provides guidance for all employees, contractors and business associates so that they are fully aware of what is expected of them, their responsibilities and the consequences of non-compliance. GKN Aerospace is required to ensure that the Code of Ethics is communicated and embedded into their operations. GKN Aerospace is also required to ensure there is a mechanism in place for anyone to whom the Code of Ethics applies to seek guidance on interpreting its principles, where required. This is supported by a compliance framework comprising policies covering best practice with respect to anti-bribery and corruption, anti-money laundering, anti-facilitation of tax evasion, competition, conflict minerals, trade compliance, data privacy, whistleblowing, treasury and financial controls, anti-slavery and human trafficking, document retention, joint ventures, diversity and inclusion, environmental, and human rights.

Engagement with stakeholders

In 2022, the Company continued to run engagement initiatives with key shareholders and governance bodies on key topics including diversity, sustainability and remuneration. Full details of how the Board engages with all of its stakeholders and considers them in its decision-making is set out in our Section 172 Statement on pages 50 to 54 of the 2022 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.
  • Oversee the effective operations of the Workforce Advisory Panel in ensuring the views of the Group’s workforces are considered in its discussions and decision-making.
  • Report to shareholders and give consideration to all 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 compliance 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 GKN Aerospace.
  • 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.
  • Oversee and retain ultimate responsibility for Melrose’s enhanced sustainability and climate-related initiatives, disclosure and reporting in respect of improving the sustainability performance of its businesses.

Chairman, Executive Vice-Chairman and Chief Executive

The roles of each of the Chairman, the Executive Vice-Chairman and the Chief Executive of the Company are, and will remain, separate in accordance with the Code and Board policy.

The Chairman, with the assistance of the Executive Vice-Chairman, 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, the Executive Vice-Chairman and the three 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.

Audit Committee

Remuneration Committee

Nomination Committee

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.