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Corporate Governance

Compliance with the UK Corporate Governance Code

Throughout the year ended 25 March 2016 and to the date of this document, the Company complied with the provisions and applied the Main Principles of the UK Corporate Governance Code 2014 (the ‘Code’).

This Corporate Governance Report, together with the Audit Committee Report, the Nomination Committee Report and the Remuneration Report, describes how the Company has complied with the provisions of the Code.

The Role of the Board and its Committees

The Company is led and controlled by the Board of Directors (the ‘Board’) chaired by Stewart Gilliland.

The following Directors served on the Board during the year:

Name From: To:
Charles Wilson
28 March 2015 To date
Jonathan Prentis
28 March 2015 To date
Mark Aylwin
28 March 2015 1 April 2015
Guy Farrant
28 March 2015 To date
Bryn Satherley
28 March 2015 1 April 2016
Richard Rose
28 March 2015 8 July 2015
Stewart Gilliland
28 March 2015 To date
Lord Bilimoria
28 March 2015 To date
Helena Andreas
28 March 2015 To date
Andrew Cripps
28 March 2015 To date
Karen Jones
28 March 2015 To date
Gary Hughes
3 December 2015 To date

The Board currently consists of three Executive Directors and six Non-Executive Directors.

The following changes occurred during the year under review:

  • On 1 April 2015, Mark Aylwin resigned from the Board.
  • On 8 July 2015, Richard Rose, having served three terms of three years each as Chairman of Blueheath Holdings plc (‘Blueheath’) and then Booker Group plc, stepped down as Chairman and retired from the Board at the AGM on 8 July 2015. During his tenure, the Board was satisfied that Richard was independent.
  • On 8 July 2015, Stewart Gilliland became Non-Executive Chairman of the Board. The Board is satisfied that Stewart was independent on appointment.
  • On 3 December 2015, Gary Hughes joined the Board as a Non-Executive Director.
  • On 1 April 2016, Bryn Satherley resigned from the Board.

All the Non-Executive Directors are considered by the Board to be independent of management and free from any business or other relationship that could materially interfere with the exercise of their independent judgement in accordance with the Code. The independence of Non-Executive Directors is considered at least annually and is based on the criteria suggested in the Code. The Non-Executive Directors provide constructive challenge and bring independence to the Board and its decision making process.

The Board believes that it is appropriate to have a Senior Independent Non-Executive Director and Lord Bilimoria has fulfilled this role and will continue to do so until he retires from the Board at the AGM on 6 July 2016, when he will be succeeded by Karen Jones. Lord Bilimoria is available to shareholders where concerns have not been resolved through the normal channels and for when such contact would be inappropriate until the conclusion of the forthcoming AGM and thereafter Karen Jones will be available to shareholders to address such concerns. The role of the Senior Independent Non-Executive Director is set out in a written statement which forms part of Karen Jones’ appointment letter.

The Board believes that it has sufficient members to contain a balance of skills and experience, but it is not so large as to be unwieldy. The Board contains a balance of Executive and Non-Executive Directors such that no individual, or group of individuals can dominate the Board’s decision making. No one individual has unfettered powers to make decisions.

Details of the skills and experience of the Directors are contained in the Directors’ and Officers section of the Group’s website..

The Board meets regularly on at least twelve scheduled occasions during each year and more frequently, if necessary. There were fourteen Board meetings, nine Audit Committee meetings, six Nomination Committee meetings and eight Remuneration Committee meetings held in the year under review and the attendance by Directors at the meetings they were eligible to attend was as follows:

Board Audit Nomination Remuneration
Charles Wilson a b c
14/14 8/9 6/6 7/8
Jonathan Prentis a
13/14 9/9 1/1
Mark Aylwin f
Guy Farrant
Bryn Satherley h
Richard Rose c g
6/6   2/3 2/3
Lord Bilimoria d
13/14 9/9 6/6 8/8
Helena Andreas c d
14/14     1/1
Andrew Cripps
14/14 9/9 5/5 l 7/7 m
Stewart Gilliland c d
14/14 4/4 i 3/3 4/4
Gary Hughes d e
4/4 3/3 k   1/1 n
Karen Jones d
13/14 2/2 j 6/6 8/8

a Not a member of the Audit Committee but attended by invitation
b Not a member of the Nomination Committee but attended by invitation
c Not a member of the Remuneration Committee but attended by invitation
d Independent Non-Executive Director
e Appointed on 3 December 2015
f Resigned on 1 April 2015
g Resigned on 8 July 2015
h Resigned on 1 April 2016
i Member of the Audit Committee until 8 July 2015
j Member of the Audit Committee from 8 July 2015 until 3 December 2015
k Member of the Audit Committee from 3 December 2015
l Member of the Nomination Committee until 3 December 2015
m Member of the Remuneration Committee until 3 December 2015
n Member of the Remuneration Committee from 3 December 2015

The Board is responsible to shareholders for ensuring that the Group is appropriately managed and that it achieves its objectives. The Board has adopted a formal schedule of matters specifically reserved for decision by it, thus ensuring that it exercises control over appropriate strategic, financial, operational and regulatory issues. At its meetings, the Board reviews trading performance, ensures adequate financing, monitors strategy, examines investment and acquisition opportunities and discusses reports to shareholders. Matters not specifically reserved for the Board and its Committees under its schedule of matters and the Committees’ terms of reference, or for shareholders in general meeting, are delegated to members of the Executive Committee.

It is the Company’s policy that the roles of the Chairman and Chief Executive are separate, with their roles and responsibilities clearly divided and set out in writing. The Chairman’s main responsibility is the leadership and management of the Board and its governance. The Chairman’s commitment to the Company is usually two days per month. His other significant commitments are disclosed in his biography. The Board considers that these commitments do not hinder his ability to discharge his responsibilities to the Company effectively.

The Chief Executive is responsible for the leadership and day-to-day management of the Group. This includes formulating and recommending the Group’s strategy for Board approval in addition to executing the approved strategy.

Recommendations for appointments to the Board are made by the Nomination Committee. The Committee follows Board approved procedures (available on our website) which provide a framework for the different types of Board appointments on which the Committee may be expected to make recommendations. Appointments are made on merit and against objective criteria with due regard to diversity (including skills, experience and gender). Non-Executive appointees are also required to demonstrate that they have sufficient time to devote to the role.

Information and professional development

Directors are continually updated on the Group’s businesses, the markets in which they operate and changes to the competitive and regulatory environment through briefings to the Board and meetings with senior executives. Board visits to Group business locations enable the Directors to meet with local management and employees and to update and maintain their knowledge and familiarity with the Group’s operations.

Non-Executive Directors are also encouraged to visit Group operations throughout their tenure to increase their exposure to the business.

The Chairman is responsible for ensuring that Directors receive accurate, timely and clear information. The provision of information to the Board was reviewed during the year as part of the performance evaluation exercise referred to below. To ensure that adequate time is available for Board discussion and to enable informed decision making, briefing papers are prepared and circulated to Directors in the week prior to scheduled Board meetings. All Non-Executive Directors are encouraged to make further enquiries as they feel appropriate of the Executive Directors and executives. In addition, Board Committees are provided with sufficient resources and the power to co-opt such additional support as they may require from time to time, to undertake their duties.

All Directors are entitled to receive independent professional advice at the Company’s expense and have access to the services of a professionally qualified and experienced Company Secretary, who is responsible for information flows to the Board and advising the Board on corporate governance matters. This ensures compliance with Board procedures and applicable laws and regulation. The Board has responsibility for the appointment and removal of the Company Secretary.

On appointment, individual Directors undergo an induction programme covering, amongst other matters:

  • the business of the Group;
  • their legal and regulatory responsibilities as Directors of the Company;
  • briefings and presentations from Executive Directors and senior executives; and
  • opportunities to visit business operations.

Performance evaluation

The Board undertook an externally facilitated evaluation in 2016. This evaluation was led by the Chairman and was externally facilitated by Prism Communications & Management Ltd (‘Prism’), which is part of Equiniti Group plc. Prism had no other connection with the Company and was not subject to any conflict of interest, however, the Group receives share administration services from Equiniti Limited, also a subsidiary of Equiniti Group plc.

The methodology of the evaluation was via a detailed questionnaire. The review covered the following main areas, which were determined by the Chairman and Prism to be of most importance or value to the Board:

  • key Board issues;
  • strategy and corporate principles;
  • internal controls and risk management;
  • performance management;
  • shareholders and stakeholders; and
  • performance in the boardroom.

Feedback was provided by a comprehensive written report to the Chairman and a report to the Board meeting in May 2016. At that meeting the Board discussed the evaluation process and the findings. The areas specifically focused upon included the structure of the Board (including the role of the Senior Independent Non-Executive Director), participation of executive management in Board meetings, the number/frequency of Board meetings, risk and strategic analysis and on-going training requirements, all of which were considered in the context of the Company's growth in recent years and the opportunities and challenges facing it. The evaluation process provided assurance that each Director continued to contribute effectively and demonstrated commitment to the role. The evaluation process has led to the Terms of Reference of the various Board committees being updated in light of the wording of the latest version of the Code, a written statement being completed of the Senior Independent Non-Executive Director's role and a programme of regular training sessions being formalised for Directors.

No other actions or changes to Board or Board committee practice were considered necessary in the immediate term following the evaluation but the effectiveness of the Board and its Committees will be kept under review in accordance with corporate governance best practice.

During the year, the Chairman and the Non-Executive Directors met without the Executive Directors being present. There was also one meeting of the Non-Executive Directors chaired by the Senior Independent Non-Executive Director at which the Chairman was not present in order to appraise the Chairman’s performance. The Senior Independent Director provided feedback to the Chairman of this review.

Board Committees

The Board has established an Audit Committee, a Nomination Committee and a Remuneration Committee to oversee and debate issues of policy outside main Board meetings. Throughout the year, the Chairman of each Committee provided the Board with a summary of key issues considered at the committee meetings. Board committees are authorised to engage the services of external advisers as they deem necessary in the furtherance of their duties at the Company’s expense.

Re-election of Directors

All Directors are required by the Company’s Articles of Association to submit themselves to shareholders for re-election at the first Annual General Meeting after their appointment and thereafter by rotation at least once every three years. In accordance with the Code all Directors will, however, stand for re-election annually.

Relations with shareholders

In fulfilling their responsibilities, the Directors believe that they govern the Group in the best interests of shareholders, whilst having due regard to the interests of other stakeholders in the Group including customers, employees and suppliers.

The Code encourages a dialogue with institutional shareholders based on the mutual understanding of objectives. The Executive Directors have regular and ongoing communication with major shareholders throughout the year, by participating in investor roadshows and presentations to shareholders. Feedback from these visits is reported to the Board. The Executive Directors also have regular contact with analysts and brokers. The Chairman, Senior Independent Non-Executive Director and other Non-Executive Directors receive feedback on matters raised at the meetings with shareholders and are offered the opportunity to attend meetings with major shareholders. As a result of these procedures, the Non-Executive Directors believe that they are aware of shareholders’ views. In addition, Lord Bilimoria, the Senior Independent Non-Executive Director, is available to meet with major shareholders and, following his retirement at the forthcoming Annual General Meeting, his successor, Karen Jones, will be similarly accessible to shareholders.

Arrangements can also be made through the Company Secretary for major shareholders to meet with newly appointed Directors.

The Code encourages boards to use the Annual General Meeting to communicate with investors and to encourage their participation. In compliance with the Code, the Board welcomes as many shareholders as possible to attend the Annual General Meeting to discuss any interest or concern, including performance, governance or strategy, with the Directors.

All Directors are expected to attend the Annual General Meeting. The Chairs of the Audit, Nomination and Remuneration Committees are available at the Annual General Meeting to answer shareholder questions, through the Chairman of the Board, on the responsibilities and activities of their Committees. Shareholders also have the opportunity to meet with the Directors following the conclusion of the formal part of the meeting.

In compliance with the Code, at the Annual General Meeting, the Chairman will announce the level of proxies lodged on each resolution, the balance for and against and abstentions, and such details will be placed on the Group’s website following the meeting. A separate resolution will be proposed at the Annual General Meeting in respect of each substantially separate issue.

Directors’ conflicts of interest

In accordance with the Company’s Articles of Association and section 175 of the Companies Act 2006, formal procedures for the notification and authorisation of potential and actual conflicts of interest have been approved by the Board.

These procedures, which enable the Directors to impose limits or conditions when giving or reviewing authorisation, ensure that only Directors who have no interest in the matter being considered can authorise conflicts, and require the Board to review the register of Directors’ conflicts annually and on an ad-hoc basis when necessary. Any potential conflicts of interest in relation to newly appointed Directors are considered by the Board prior to appointment. These procedures have operated effectively throughout the current financial period.

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