The Board is mindful that non executive director tenure that exceeds nine years is listed by the Code as a circumstance that might impair, or appear to impair a non executive director’s independence. Tessa Bamford was first appointed to the Board in March 2011 and, while her tenure now exceeds nine years, the Board continues to regard Tessa as independent. Tessa’s independence was subject to a thorough review by the Nominations Committee prior to its recommendation to the Board that she be reappointed for a further term as a Non Executive Director. During this review the Nominations Committee discussed a wide range of factors, noting that Tessa continues to demonstrate objective judgment and independence of thought and provides constructive challenge to management where required. The Nominations Committee also noted that, following recent changes to the executive leadership team, Tessa had not served concurrently with any current Executive Director for longer than three years and was satisfied that Tessa continued to demonstrate the high level of independence expected of a Non Executive Director. The Board considered that the reappointment of Tessa for a further one-year term to be in the best interests of the Company and the Group as her skillset and in-depth knowledge of significant and ongoing Group projects continues to be vital to the balance of the Board and that Tessa’s continued presence on the Board provides continuity and stability during a period of significant change. The Code indicates that a chairman should not remain in post beyond nine years from the date of their first appointment to the board. It also allows that this period can be extended for a limited time, particularly in those cases where the chairman was an existing non executive director on appointment, in order to facilitate effective succession planning and the development of a diverse board.
External appointments during the year As announced on June 26, 2020, Nadia Shouraboura joined Mobile TeleSystems Public Joint Stock Company as a non executive director on June 24, 2020. The Board considered and approved in advance Nadia’s appointment having been satisfied that the time commitment for the role would not affect her ability to devote sufficient time to her duties as a Director of the Company. On June 17, 2020, it was announced that Geoff Drabble had been appointed as a non executive director and chairman designate of DS Smith Plc with effect from September 1, 2020 and then as Chairman from January 3, 2021. Geoff’s appointment was approved in advance by the Board. The Board took into account the likely time commitment of the role and was satisfied that it would leave sufficient time for him to discharge his duties as Chairman of the Company. The Board also agreed that the Company and Group would benefit from Geoff’s experience at another internationally publicly quoted company and as its chairman. Induction Upon appointment, all new Directors are provided with a comprehensive induction program designed to ensure they develop an understanding and awareness of our businesses, people and processes, and of their roles and responsibilities as a Director of a public company. The program is structured to reflect best practice and includes the provision of current and historical information about the Company, visits to operations around the Group, induction briefings from function leaders and meetings with Directors, senior executives, the Group Company Secretary and the Company’s advisers. We aim to limit the amount of information provided as reading material during an induction process. All new Directors are provided with access to our electronic Board paper system which provides easy and immediate access to a number of key documents. During the year, Geoff Drabble undertook an induction process following his appointment as Non Executive Director and Chairman designate. During his induction he met with a number of senior executives, the Company’s advisers and operationally focused associates in the business. Development of the Board All Directors are provided opportunities for further development and training and, during the year, each Director has the opportunity to discuss development with the Chairman. The Board receives regular updates on governance, legal and regulatory matters relevant to the Group’s operating environment and receives detailed briefings from advisers on a variety of topics that are relevant to the Group and its strategy.
Other information
The Code indicates several factors that should be considered when determining their independence, including length of tenure. Each Non Executive Director has served for six years or less with the exception of Tessa Bamford, Alan Murray and Jacky Simmonds. As required by the Code, Tessa and Jacky’s reappointments for a further term in March 2020 were subject to a particularly rigorous review that carefully considered the need for progressive refreshing of the Board. The tenure terms of Non Executive Directors are transitioning towards one-year terms to reflect the current vote for re-election at the AGM. Over time it is expected that the terms will be co-ordinated with the timing of the AGM. During the year Tessa Bamford, Jacky Simmonds and Nadia Shouraboura’s terms were extended by one year.
Financials
Independence of Non Executive Directors Each of the Non Executive Directors and the Chairman are considered by the Board to be independent and free of any relationship which could materially interfere with the exercise of their independent judgment and that each Non Executive Director continues to demonstrate independence of thought and expertise in meetings, and to support the senior management in an objective manner and offer appropriate levels of challenge.
Governance
As at the date of this report, the Board comprises nine Directors: the Chairman, the Group Chief Executive, the Group Chief Financial Officer and six independent Non Executive Directors. Forty four per cent of the Directors are female. The biographies of the Directors (set out on pages 62 and 63) demonstrate that the Board possesses strong and diverse experience that is relevant to the sector in which the Company operates and aligned with its strategy.
The Code came into effect in relation to the Company on August 1, 2019 and the Board had prior to this undertaken a succession process for the role of Chairman to ensure that the Company continued to comply with the Code. The succession process for the role of Chairman was led by the Senior Independent Director. In accordance with the Code, the Senior Independent Director chaired the Nomination Committee meetings when Chairman succession was discussed. Gareth Davis stepped down from the Board after 16 years of service, nine of which as Chairman. As announced on May 22, 2019, Geoff Drabble was appointed to the Board as Chairmandesignate with Gareth remaining as Chairman for a short period before handing over the role to Geoff at the 2019 AGM. This facilitated an orderly succession process and transition of responsibilities and enabled Geoff to receive an appropriate induction and have time to familiarize himself with the business and the Board before taking over Chairmanship.
Strategic report
Composition
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Ferguson plc Annual Report and Accounts 2020
Composition, succession and evaluation
