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The board is committed to the highest standard of governance and believes that good governance emanates from an effective board which provides strong leadership representing protection for its shareholders. The board remains committed to maintaining high standards of business ethics and integrity across the group, recognising these to be vital to the long-term performance of the company.
As at the date of this report, for financial years beginning on or after 29 June 2010, the principal governance rules applying to UK companies listed on the London Stock Exchange are contained in the Code which is published by the Financial Reporting Council and is available on its website at www.frc. gov.uk. The company’s governance report aims to provide shareholders with an understanding of how the company has applied the main principles and provisions of the Code. The board fully supports the Code and the direction in which it is taking the practice of good governance in the UK.
With the exception of the information in the following paragraph, the board considers that the company has, throughout the year ended 31 December 2011, complied with the relevant main principles and detailed provisions set out in sections A to E of the Code.
With reference to the Code principle B.1.1 the chairman, John McAdam, is not considered to be independent as a result of his participation in a one-off incentive arrangement approved by shareholders in 2008 in connection with the recruitment at that time of a new leadership team for the business.
We have a strong board which works hard to provide effective governance over the company. The board currently comprises the chairman, six independent non-executive directors and three executive directors. There have been no changes in the composition of the board during the year, with the last appointment being that of Jeremy Townsend as chief financial officer in August 2010.
The balance of the board both in terms of executive and non- executive roles and in respect of skills is a critical requirement. The board’s experience ranges across the UK, European and international services sector as well as in multi-national business leadership and the development and execution of strategy. The board collectively has a high level of experience of international finance, risk control, governance and market development. Information on the individual skills and experience of directors together with information on their board committee participation is set out in the Board of Directors.
The board is keen to retain the current spread of talents at the present time but has initiated a process to address gender diversity at board level. On 24 February 2012 the appointment was announced of Angela Seymour-Jackson as a non-executive director from 5 March 2012.
The board is organised both in depth of experience and skills to discharge its primary duty to promote the success of the company while exercising independent judgement, care and diligence. The board is responsible for the group’s risk management approach including evaluating and reviewing the overall level of risk that is inherent in its strategy and for the execution of that strategy. The board held nine meetings in 2011 and in addition held a two-day meeting to review and update the group’s strategic plan.
The principal matters specifically reserved for the board’s approval are:
At its meetings during the year the board discharged its responsibilities as listed above and a wide range of topics were reviewed by the board including:
In addition, the board also visited the Textiles & Hygiene business in the Netherlands to review both the turnaround of the performance of the Benelux businesses as well as other operational priorities for the division, as part of an ongoing programme through which the board visits operations in the UK and overseas.
The chairman, supported by the company secretary, ensures that the board is kept properly informed and that matters are given appropriate attention. Board papers and other information and resources are provided in sufficient time to allow directors to be properly briefed in advance of meetings.
Prerequisites of an effective board are to have the correct mix of skills and experience in non-executive directors which are appropriate to the needs of the business to ensure that the performance of executive management is appropriately challenged and to ensure that there are adequate controls and risk management processes in place.
A performance review is carried out annually which covers the effectiveness of the board, its committees and its individual members. A full external review was conducted in 2010 and in 2011 a more targeted review was conducted that was also externally facilitated. The review concluded that the board is operating very effectively with its members providing the skills and experience the company requires. There was seen to be a high level of openness and support as well as rigorous challenge. A summary of the process is set out in the Board performance evaluation.