Premier Foods

The Best in British Food

Governance Framework

Below we set out our approach to corporate governance and our commitment to work towards best practice recognising our position as one of the largest manufacturers in the UK food industry.

Corporate governance continues to evolve and we will continue to monitor our procedures to respond to new issues and strive for best practice. We believe in transparency in governance and in maintaining the highest ethical standards in all our business dealings.

Code of conduct
In October 2012 we launched a code of conduct for employees underlying our commitment to act with integrity in all our dealing with customers, suppliers, employees and other stakeholders. Further details of the code of conduct can be found by clicking here.

Full details of our approach to Governance can be found in the Corporate Governance Report in the 2013 Annual Report

 <http://annualreport2013.premierfoods.co.uk/governance>

 

The Board

The Board has an agreed schedule of matters reserved which include:

• Setting long-term strategic and commercial objectives;
• Approving annual operating and capital budgets;
• Reviewing business performance;
• Overseeing the Group's internal control systems; and
• Ensuring appropriate resources are in place to enable the Group to meet its objectives.

The Board delegates to the Group Executive responsibility for overseeing the implementation of the Group's policies and strategy.

The Chairman

The Chairman's responsibilities are primarily the leadership of the Board and ensuring its effectiveness. This is achieved by:

• Chairing Board meetings; setting the agendas in consultation with the CEO and General Counsel & Company Secretary; and encouraging directors' active participation in Board discussions;
• Leading the performance evaluation of the Board, its committees and individual directors;
• Promoting the highest standards of corporate governance including compliance with the UK Corporate Governance Code wherever possible;
• Ensuring timely and accurate distribution of information to the directors and effective communication with shareholders;
• Establishing an effective working relationship with the CEO by providing support and advice whilst respecting executive responsibility; and
• Periodically holding meetings with the non-executive directors without the executive directors present.

 The Chief Executive Officer

The CEO is responsible for:


• The executive management of the Group; and
• Ensuring the implementation of Board strategy and policy within the approved budgets and timescales.

The CEO is assisted in meeting his responsibilities by the CFO and the Group Executive (who head up the Group's principal operations and functions).

The Senior Independent Director (SID)

The SID is responsible for:


• Supporting the Chairman and leading the non-executive directors in the oversight of the Chairman and CEO.

The SID's specific responsibility is to be available to shareholders if they have concerns which the normal channels have failed to resolve or where such contact is inappropriate.

Non-Executive Directors

The independence, external experience and challenge non-executive directors bring to the Board is essential to its effective operation. The current non-executive directors bring extensive and broad ranging experience as highlighted in their biographies.

Board Committees

The Board has established an effective Committee structure to assist in the discharge of its responsibilities. The terms of reference of these Committees comply with the provision of the UK Corporate Governance Code (the 'Code').

Audit Committee

The Committee has responsibility for reviewing the effectiveness of the Group’s financial reporting system and the internal control policies and procedures for the identification, assessment and reporting of risk. The Committee also keeps under review the relationship with the auditors, including the terms of their engagement and fees, their independence and expertise, resources and qualification and the effectiveness of the audit process.


The Committee’s terms of reference are available below.

Audit Committee Terms of Reference 2013.pdf

Committee Member

Position 

Comments 

Ian KriegerChairmanIndependent (NED)
Jennifer LaingMemberIndependent (NED)
Pam PowellMemberIndependent (NED)            
David WildMemberSenior Independent Director (SID)

Ian Krieger has recent and relevant financial experience as Deputy Chairman of Deloitte until his retirement in 2012. David Beever was until June 2012 also a member of the Committee, however, following his appointment as Chairman it is no longer considered appropriate for him to be a member, although he will still attend meetings by invitation.

The Audit Committee is scheduled to meet at least four times a year and meets with the internal and external auditors at least twice a year without the executive directors present.

The Committee has been delegated authority by the Board to monitor financial reporting including the annual and interim reports, preliminary results announcements and formal announcements relating to financial performance and reporting. The Committee ensures the effectiveness of the Company’s internal controls and risk management systems and review and update the whistle-blowing arrangements.

The Committee monitors and reviews the effectiveness of the Company’s internal audit function, including the approval of any appointment or removal of the head of the internal audit function. The Committee is also responsible for considering and making recommendations to the Board on the appointment, reappointment and removal of external auditors including the setting of their remuneration. The Committee keeps under review the external auditors’ independence which includes reviewing the impact of any non-audit services provided by the Group’s external auditors to the Board.

Annually the Committee reviews the relationship the Company has with its auditors to consider whether the relationship is working well and the auditors are continuing to be effective. The external auditors are required to rotate the audit partners responsible for the Group and subsidiary audits every five years, the last rotation occurred in 2012. There are no contractual obligations restricting the Company’s choice of external auditors.

Remuneration Committee

The Committee has responsibility for determining and agreeing the overall remuneration strategy for executive directors and senior managers, determining the individual remuneration packages for the Chairman, executive directors, General Counsel & Company Secretary and senior management and approving the design of all share incentive plans.

The Committee’s terms of reference are available below.

Remuneration Committee Terms of Reference 2013.pdf

 Committee Member

 Position  

 Comments  

 David Wild Chairman Senior Independent Director (SID)
 Ian Krieger Member Independent (NED)
 Jennifer Laing Member  Independent (NED)
 Pam Powell Member Independent (NED)
 David Beever  Member Chairman (NED)

Mr Wild was appointed Chairman of the Remuneration Committee in August 2012. Following his appointment as Chairman in June 2012, David Beever will remain as a member of the Remuneration Committee but is no longer considered independent under the terms of the Code.

The Remuneration Committee is scheduled to meet at least twice a year.

The Committee is committed to principles of accountability and transparency to ensure that remuneration arrangements demonstrate a clear link between reward and performance. In its work, the Committee considers fully the relevant legal and regulatory requirements, provisions and recommendations of the Code and associated guidance.

The Committee has been delegated authority by the Board to determine and agree the remuneration strategy for executive directors and senior managers — it is vital to our business that we retain individuals and reward performance and contributions towards the success of the Company. In addition the Committee reviews and approves the remuneration packages for the Chairman, executive directors, General Counsel & Company Secretary and senior managers.

The Committee, on behalf of the Board, determines the terms of employment including recruitment and termination terms of executive directors, ensuring any payments on departure are fair to the individual and the Company, whilst avoiding payment for failure and recognising the departing individual’s duty to mitigate loss.

Nomination Committee

The Committee is responsible for considering the size, structure and composition of the Board, retirement and appointment of additional and replacement directors and making appropriate recommendations so as to maintain an appropriate balance of skills and experience on the Board.

The Committee’s terms of reference are available below.

Nomination Committee Terms of Reference 2013.pdf

 Committee Member  Position   Comments

 David Beever

 Chairman Chairman (NED) 
 Ian Krieger Member Independent (NED)
 Jennifer Laing Member Independent (NED)
 Charles Miller Smith Member Shareholder appointed (NED)
 Pam Powell Member Independent (NED)
 David Wild Member Senior Independent Director (SID)

The Nomination Committee is scheduled to meet at least twice a year.  

The Committee has been delegated authority by the Board to lead the formal, rigorous and transparent process for Board appointments including a review of the skills, experience and knowledge of the existing directors to ensure any potential shortlisted candidates will benefit the balance of the Board. The Committee also gives full consideration to succession planning taking into account the challenges and opportunities facing the Company and what skills and expertise would benefit the Board in the future.

The Committee regularly reviews the structure, size and composition of the Board and make recommendations to the Board regarding changes.

Group Executive and other key management Committees

Group Executive — Responsible under the leadership of the CEO for the day-to-day management of the business, setting performance targets and implementing the Group's strategy and direction as determined by the Board. Members of the Committee include the CEO, CFO and the heads of the Groups main functions.

Sustainability Steering Group — Responsible for providing direction to, and oversight of, the implementation of the Group's sustainability programme which is built around the five core themes, these being; Buying Responsibly, Sustainable Manufacturing, Nutrition & Quality, Our People and Giving . Its objective is to identify and mitigate, both environmental and social risks in order to protect and enhance the Group's reputation and build trust amongst its many stakeholders. The Sustainability Steering Group is made up of members of the Group Executive, and senior operational management.

Treasury Risk Management Committee — Responsible for the oversight of designated material foreign currency and commodity exposures and agreeing with senior management appropriate mitigating actions. Members of the committee include members of the Group Executive and senior operational management.