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Governance overview
Dear Shareholder
I am delighted to present the Company’s Corporate Governance Report for the financial year ended July 31, 2020, my first after succeeding Gareth Davis as the Chairman of Ferguson on November 21, 2019.
The Board recognizes the value and importance of good corporate governance and the role it plays in supporting Ferguson’s long-term success and sustainability. Further information on how the Board has maintained its governance focus is detailed on page 65. I believe that Ferguson has a strong governance framework that allows the tone set by the Board to cascade throughout the business and supports our outstanding management team in providing entrepreneurial leadership. It is important that we continue to make progress in ensuring that our strategy, values and culture are all aligned and supportive of the fulfillment of the Group’s purpose to “act as a trusted supplier and partner to our customers, providing innovative products and solutions to make their projects better”. An important part of this is engaging effectively with our stakeholders, which is central to how we do business and the effective delivery of our strategy. Ferguson has approximately 6,900 registered shareholders, 34,000 associates, 39,000 suppliers and more than a million customers who we serve through a network of 2,194 branches and 15 distribution centers. The individuals, businesses and communities that form our stakeholder groups are all integral to our business and further information on how the Board has engaged with them during the year is included on page 66. Additional information on how we have had regard to the provisions of section 172 of the UK Companies Act 2006 is available in the Strategic report, on pages 24 and 25. I believe that for boards to be really effective it is important that they spend time in the business. During the year, the Board visited Ferguson’s US headquarters in Newport News, Virginia where we were fortunate to be able to spend time with some of the US business’ associates and customers, enhancing our understanding of the residential trade strategy and the culture of the business. I was hugely impressed by the passion and innovation of our associates, which shone through in conversations and presentations we received during our visit. The Board had also been scheduled to visit the USA for our July meetings but were, unfortunately, unable to as a result of the COVID-19 pandemic. We hope to be able to do so as soon as circumstances allow. However, it is only right that we respect the ongoing restrictions on non-essential travel in order to protect the health and wellbeing of our associates and all our other stakeholders. I am immensely proud of the actions of our business in helping to combat the impact of the pandemic and especially of the outstanding efforts our associates have made to ensure that our customers can keep on carrying out the essential work they undertake in communities across the USA, Canada and the UK. Further examples of how we have supported our associates, customers, suppliers and communities as they tackle the pandemic can be found throughout the Strategic report. For the financial year ended July 31, 2020, we are reporting against the 2018 version of the UK Corporate Governance Code (the “Code”) and confirm full compliance with its provisions. A copy of the Code can be found on the Financial Reporting Council website www.frc.org.uk. This section, together with the reports from the Nominations, Audit and Remuneration Committees provide a description of how the Company has applied the main principles and complied with the relevant provisions of the Code. In this report we have used its core principles as the framework to explain our governance practices and the signposts below direct you to further detail.
Finally, I would like to take this opportunity to thank you for your continuing support, particularly in these unprecedented times. I hope that you find the report informative.
Geoff Drabble
Chairman
