This section sets out our governance framework and the work of the Board and its committees. As a Board we are responsible for ensuring there is an effective governance framework in place. This includes setting the Company’s strategic objectives, ensuring the right leadership and resources are in place to achieve these objectives, monitoring performance and finally reporting on it to shareholders. An effective governance framework is also designed to ensure accountability, fairness and transparency in the Company’s relationships with all of its stakeholders whether customers, suppliers, employees, government or the wider community. We believe that good corporate governance is essential for building a successful and sustainable business.
Key areas of focus in the year
The Board spent a considerable amount of time focussing on the Group’s three year business plan and growth strategies. This included an initial detailed review of plans for each strategic business unit in November 2015 and then further reviews of challenging stretch plans designed to accelerate the Group’s growth strategy. The Board also reviewed management’s capabilities and the resources available to deliver these plans, together with an assessment of potential risks.
Also, as detailed in my Chairman’s Statement on pages 4 and 5 of the annual report, the Board devoted significant time to carefully consider if the indicative offers from McCormick & Company, Inc. were in the best interest of our shareholders and other stakeholders. We also considered the potential benefits of entering into a co-operation agreement with Nissin Foods Holdings Co., Ltd. (‘Nissin’), further details are provided in the CEO review on pages 6 and 7 of the annual report.
Succession plans for the executive directors and Executive Leadership Team (ELT) were reviewed by the Nomination Committee to ensure we have robust plans in place over the medium-term. An audit tender exercise was successfully concluded in the year and, following a recommendation from the Audit Committee, we appointed KPMG LLP ('KPMG') as the Company’s auditor.
Finally, as part of our risk management exercise we have prepared our first viability statement, details of which can be found on page 29 of the annual report.
Board balance and experience
Following the retirement of Charles Miller Smith in June 2015 there were no further changes to the Board in the period. I am confident we have the right balance of skills, experience and independence required to bring constructive challenge to bear on the Company’s management. The Board considers that all the non-executive directors are independent in character and judgement. Richard Hodgson, who joined as a new non-executive director in January 2015, has extensive experience in food retailing, gained through senior roles with Asda, Waitrose and Morrisons. This retail experience, ranging from the value to premium ends of UK grocery retailing, is clearly of great benefit to Board discussions by providing a customer viewpoint in the Boardroom.
Over the year the Company has significantly increased the level of new products being launched to market and also the level of consumer marketing to support this. Jennifer Laing and Pam Powell have extensive marketing and brand building experience having developed some of the world’s leading consumer brands. This is a valuable resource as the Company looks to build its brands in new channels and markets. Jennifer also provides experience in overseeing executive remuneration, gained in a listed global company, in her role as Chairman of the Remuneration Committee.
I am keenly aware of the benefits of a robust risk management system to help protect the reputation of both the Company and its brands. Ian Krieger has a wealth of risk management and accounting expertise built up during his career in the accountancy and finance industry. He brings detailed knowledge and robust challenge in his capacity as Audit Committee Chairman and in addition, as Senior Independent Director, Ian also provides me with a sounding board on the key strategic risks facing the Company. Both Ian and Jennifer are also involved in meetings and consultations with major shareholders.
In March 2016, Nissin became our largest shareholder following their purchase of just under 20% of the Company’s shares and on 22 April 2016 we signed a Relationship agreement with them under which they are entitled to appoint a non-executive director to the Board.
Nissin have nominated Mr Tsunao Kijima, their Managing Director, to be appointed as a non-executive director with effect from 21 July 2016. I look forward to Mr Kijima joining the Board and to his contributions to our strategic discussions, and in particular how we will develop growth opportunities between our two companies.
Compliance with the UK Governance Code 2014
As described in more detail by Ian Krieger in the Audit Committee Report on page 48 of the annual report we have deferred the annual review of external auditor effectiveness until the 2016/17 financial year as KPMG are new to the role. Otherwise, I am pleased to confirm that over the course of the year we complied with all the provisions of the Code.
Our AGM will again be held at the offices of Gowling WLG (UK) LLP (formerly Wragge Lawrence Graham & Co LLP), 4 More London Riverside, London, SE1 2AU on Thursday 21 July 2016 at 11.00 am and I look forward to seeing you then.
16 May 2016
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