CORPORATE GOVERNANCE OVERVIEW LORD BLACKWELL CHAIRMAN Dear - PDF document

INTERSERVE ANNUAL REPORT 2013 GOVERNANCE CORPORATE GOVERNANCE 65 GOVERNANCE CORPORATE GOVERNANCE OVERVIEW LORD BLACKWELL CHAIRMAN Dear Shareholder STRATEGIC REPORT Our role as a Board is to provide entrepreneurial leadership within an appropriate governance framework, set the standards of behaviour, values and ethics by which the business is expected to operate and to call to account those who do not abide by those principles. Our continued success depends upon delivering outstanding service and better solutions to our customers in order for us to pursue our robust strategy and deliver continued growth and shareholder value. The Board is confjdent of this strategy and is continually testing our current and proposed activities against this framework. We aim to set stretching fjnancial objectives while maintaining our prudent risk appetite. We also recognise that our continued “licence to operate” relies as much on maintaining the trust and confjdence of our wider stakeholder base as it does on managing the fjnancial risks. During the year we launched Sustain Abilities , our vision for creating a sustainable business, re-visited and revised our values and provided considerable amounts of training to and communication with our employees in these areas. GOVERNANCE To perform our role effectively we believe we need a strong and diverse Board, with an open culture of debate and challenge, with all directors appointed on merit, for the experience and insights they can bring to the Board and their commitment to our values. Our succession planning has seen a number of changes to the Board composition and roles during the period under review. We believe that our particular mix of executive and non-executive directors works well for the business, ensuring we have knowledge and accountability around the Board table as well as a range of external experiences. I continue to be satisfjed through my observations of the manner in which the Board functions that the strength and independence of our non- executives and our open style of debate ensures the continuance of an effective governance check within the Board. In making new appointments to the Board we seek to embrace diversity in all its forms, taking into account the additional range of insights and perspectives that new and diverse candidates can contribute to an effective, cohesive and challenging mix of individuals around the Board table. I was therefore delighted when in January we appointed Anne Fahy to our Board, bringing with her a wide range of international experience in a major industrial company. FINANCIAL STATEMENTS We will continue to monitor our success in developing the diversity of the Board as part of the annual evaluation of Board effectiveness. As was the case last year, all directors wishing to remain in offjce will seek re-election at the AGM. Lord Blackwell Chairman

66 INTERSERVE ANNUAL REPORT 2013 GOVERNANCE CORPORATE GOVERNANCE GOVERNANCE CORPORATE GOVERNANCE CONTINUED COMPLIANCE WITH THE CODE • reviewing the promotion of the Company’s brand; The Financial Conduct Authority requires the Company • setting the Group’s annual budget and plan; to disclose how it has applied the principles of the UK Corporate Governance Code published in September 2012 • approval of the annual and half-year report; (the “Code”) and whether there has been compliance with its provisions throughout the fjnancial year. In the case of • declaration of the interim and recommendation of non-compliance, the Company must specify those provisions the fjnal dividend; with which it has not complied and give reasons for this. • ensuring the maintenance of a sound system of internal The Code may be found on the Financial Reporting Council’s controls and an effective risk management and assurance website ( www.frc.org.uk ). strategy; The directors consider that the Company has complied fully • monitoring the effectiveness of the Group’s Health and with the provisions of the Code applicable to it throughout Safety Policy; the accounting period ended 31 December 2013 with the following exception: • control over major contracts (including joint ventures) and capital expenditure; and • Provision B.1.2 of the Code requires at least half the board, excluding the Chairman, to comprise non-executive • monitoring progress with the Group’s Sustain Abilities Plan. directors determined by the board to be independent. As at year end, the Board comprised fjve executive and four Board composition non-executive directors plus the Chairman. The Board The role of the Group Chairman and Chief Executive are believes that the diversity of skills and experience which split and clearly defjned in written terms of reference. the executive directors bring to the Board (particularly in relation to their own operating divisions) is more valuable The role of the Chairman than maintaining parity between the number of executive The Group Chairman is responsible for the leadership of and non-executive directors. Furthermore, the Board the Board and creating the conditions for overall Board and considers its non-executive directors to be suffjciently individual director effectiveness, both inside and outside independent and of such calibre and number that their the boardroom. The Group Chairman regularly considers views may be expected to be of suffjcient weight that succession planning and the Board’s composition with the no individual or small group can dominate the Board’s Nomination Committee and ensures effective communication decision-making processes. with shareholders and other stakeholders. THE BOARD The Group Chairman, assisted by the Company Secretary, sets the agenda for Board meetings and ensures that Board Operation of the Board members receive timely information and are briefed on The Board has a formal schedule of matters reserved for issues arising at Board meetings to assist them in making its decision, whilst day-to-day operational decisions are an effective contribution. managed by the Executive Board, as referred to on page 68. The role of the Chief Executive In order to facilitate the effjcient use of its time the Board The Chief Executive bears primary responsibility for the has delegated certain of its powers to Board committees, management of the Group and in leading the formulation details of which are set out later in this report. From time to of and, once set by the Board, implementing strategy. time the Board also establishes certain other committees to The Chief Executive chairs the Executive Board and Risk deal with a specifjc issue which the Board has approved. Committee, leads the executive management team and investor communications and is responsible for social and Key matters dealt with by the Board during the course of the ethical matters within the Group. year, in addition to ongoing monitoring of the operational and fjnancial performance of the Group, were: The role of the Company Secretary • setting the health, safety and environmental targets for The Company Secretary is responsible for distributing Board the Group; papers and other information suffjciently far in advance of each meeting for the directors to be properly briefed, presenting • reviewing the Group’s strategic direction, governance, certain papers to the Board and its committees, advising on ethics, values and reputation risk management; Board procedures and ensuring the Board follows them. • reviewing IT in the Support Services business and its use The Board papers include information from management on more generally to obtain competitive advantage; fjnancial, business and corporate issues. Matters requiring Board and committee approval are generally the subject of a • the assessment of a number of potential acquisitions written proposal and circulated as part of the Board papers. including the proposed acquisition of the facilities The Company Secretary plays a key role in the good governance services business of Rentokil Initial plc;