The relatively compact scale of the Group’s operations, combined with its flat management structure, facilitates excellent communication between the non-executive Board and the Executive Leadership Team. This sets the tone for a robust and open governance culture that is ingrained in the business.
The Board understands that the strength of its governance relies on having the right mix of skills and experience around the Boardroom table and ensuring there is continuity in Board membership. The Board conducts a rigorous evaluation of its performance each year and the evaluation is externally facilitated every three years.
The Board is committed to an open dialogue with all stakeholders and considers their views on relevant matters.
Board communication with employees
Dariusz Kucz was appointed at the end of the year as the Group’s designated Non-Executive Director to represent the employee voice and engagement. He will work with the Group Human Resources Director, drawing insights and actions from our employee communications channels and reporting to the Board as appropriate.
It is anticipated that he will visit our Nigeria, Indonesia, UK and Beauty businesses annually and at least one other business unit every two years. Visits will include interaction with leaders and employees at all levels on pre-determined topics and will feature town hall and Q&A sessions.
|The Board has ultimate responsibility for the long-term success and sustainability of the business. It approves the Group’s long-term objectives and commercial strategy, provides oversight of the Group’s operations to ensure competent and prudent management, sound planning, an adequate system of internal control, adequate accounting and compliance with statutory and regulatory obligations.|
|The Board delegates certain matters to its principal committees, which are responsible for:|
|Audit & Risk Committee||Remuneration Committee||Nomination Committee|
|Reviewing the Group’s accounting and financial policies, its disclosure practices, internal controls, Internal audit and risk management and for overseeing all matters associated with the appointment, terms, remuneration and performance of the external Auditor.||Reviewing and recommending the framework and policy for remuneration of the Executive Directors and senior executives.||Ensuring that the structure, size and composition of the Board and the senior leadership team are best suited to deliver the Company’s strategy and meet current and future needs.|
|The Executive Leadership team|
|The Executive Leadership Team (ELT) comprises the Executive Directors, Regional Managing Directors and global heads of key enabling functions. It is responsible for the delivery of the Group strategy and the day-to-day operational performance of the business.|
The Board is responsible for the long-term success and sustainability of the business. The responsibility of the members of the Board is set out below. The Board reserves certain matters for its consideration and these are set out in the schedule of reserved matters.
The Chair of the Board
The Chair is responsible for ensuring overall board and individual director effectiveness and for creating and embedding the right governance framework within the Board. Specifically it is the responsibility of the Chair to:
- ensure the effective running of the Board including setting the Board’s agenda and ensuring that the Board plays a full and constructive part in the approval of the Group’s strategy and overall commercial objectives;
- ensure that the members of the Board receive accurate, timely and clear information, in particular in relation to monitoring the Group’s performance and delivery of its strategy, in order to enable the Board to make sound decisions and promote the long term success of the Group;
- ensure there is effective communication with the Group’s shareholders and other stakeholders (with particular focus on the Board’s obligations under s.172 of the Companies Act 2006) and that members of the Board develop an understanding of the views of major investors;
- ensure that the performance of the Board as a whole, its committees, and individual directors is formally evaluated at least once a year and at least once every three years is independently evaluated by an external facilitator;
- regularly meet with the non executive directors without management present;
- ensure, with the assistance of the Nominations Committee, an appropriate balance is maintained between executive and non executive directors with the skills, experience and expertise to provide guidance, challenge and oversight to the Board and executive management;
- evaluate and assess, with the assistance of the Nominations Committee where relevant, the performance of the CEO;
- ensure that there is appropriate delegation of authority from the Board to executive management in order to enable the efficient running of the Group; and
- Promote high standards of integrity and corporate governance throughout the Group, particularly at Board level.
Chief Executive Officer
The CEO is accountable to the Chair and the Board for providing timely, accurate and clear information in relation to the Group’s performance and delivery of its strategy and overall commercial objectives. In addition the CEO is responsible for:
- developing the Group’s objectives and strategy for approval by the Board, and with regard for the Group’s shareholders, customers, employees and other stakeholders;
- the successful achievement of objectives and execution of the Group’s strategy;
- managing the Group’s risk profile in line with the risk appetite endorsed by the Board;
- ensuring effective communications with shareholders;
- ensuring, with the Board, that effective internal controls are in place;
- ensuring the effective implementation of Board decisions;
- executive management matters affecting the Group and leading the executive leadership team;
- promoting and conducting the affairs of the Group with standards of integrity and corporate governance that align to the Group’s integrity and purpose;
- advising and making recommendations in respect of management succession planning and to make recommendations on the terms of employment and remuneration of the executive leadership team;
- ensuring open, honest and transparent dialogue between the Board and the executive leadership team;
- ensuring, with the support of the Company Secretary, that the executive leadership team comply with their delegated authority and the matters reserved for the Board;
- leading and overseeing the development and implementation of good governance policies relating to whistleblowing, insider dealing, disclosure, anti-corruption, safety and sustainability;
- promoting an entrepreneurial and ethical culture which welcomes and supports a diverse workforce; and
- Championing the Group’s values and behaviours.
Senior Independent Director
The SID is responsible for:
- acting as a sounding board for the Chair and serving as intermediary for the other directors when necessary;
- being available for confidential discussions with other non executive directors;
- leading the annual evaluation of the Chair’s performance ensuring that each of the non executive directors’ and executive directors’ views are taken into account;
- chairing meetings of the non executive directors or other meetings where appropriate;
- at least once every three years ensuring that an independent evaluation of the performance of the Chair is completed by an external evaluator;
- being available to shareholders if they have concerns which contact through the normal channels has failed to resolve or for which such contact is inappropriate; and
Non Executive Directors
The Non Executive directors are responsible for:
- contributing to the development of the Group’s strategy;
- promoting and supporting the Group’s values and commitment to high standards of corporate governance; and
- review, oversight and constructive challenge to the executive leadership team on the delivery of the Company’s objectives and strategy.
The Board has established a number of standing committees to which various matters are delegated according to defined terms of reference.
The Nomination Committee is responsible for regularly reviewing the structure, size and composition of the Board, identifying and recommending appropriate candidates for membership of the Board when vacancies arise and ensuring that effective succession planning procedures are in place for senior roles.
Details of the Committee members, its responsibilities and principal activities and priorities during the year are set out in this year’s Annual Report.
The Remuneration Committee is responsible for reviewing and recommending the framework and policy for remuneration of the Executive Directors and senior executives, which the Board as a whole is responsible for approving. It is responsible for evaluating the performance and determining specific remuneration packages for each Executive Director, the Chairman and the Company Secretary. With the exception of the Non-executive Chairman, the fees of the Non-executive Directors are determined by the Executive Directors.
Further details of the Committee members, its responsibilities and activities during the year and of Directors’ remuneration are set out in this year’s annual report.
Audit & Risk Committee
The Audit & Risk Committee is responsible for reviewing, on behalf of the Board, the Group’s accounting and financial policies, its disclosure practices, internal controls, internal audit and risk management. It is responsible for overseeing all matters associated with the appointment, terms, remuneration and performance of the external Auditor and for reviewing the scope and results of the audit and its cost-effectiveness.
Further details of the Committee’s members, responsibilities and activities during the year are set out in this year’s annual report.
Our Approach to Risk Management
The Group continues to use the enhanced risk management process and strengthened common risk framework which were introduced last year to ensure we capture and mitigate risks as our new strategy is deployed. The risk management process covers initial risk identification, including emerging risks, assessment of the gravity of the risk and the extent to which it can be reduced and planning for and implementing effective risk mitigation activities. We have developed a well-defined and understood timetable which ensures we routinely monitor and report the Group risk profile to the Board, which has ultimate responsibility for ensuring effective risk management across the business. The Board has considered and approved the risk management policy and the risk appetite for the Group; a review of risk appetite is currently in progress, to ensure that it fully reflects the new strategy for the Group. The Board periodically reviews the top risks identified in the risk register and has delegated the ongoing review of risk management effectiveness to the Audit & Risk Committee.
The Audit & Risk Committee assesses and reviews the effectiveness of the Group’s risk management framework by routinely receiving from the Executive Leadership Team analysis and assessment of the principal risks facing the Group, to ensure, where possible, that appropriate action is being taken to manage and mitigate those risks. This includes periodic presentations from those within the business who are responsible for first line activities.
The Group operates both top-down and bottom-up approaches to ensure that significant strategic and operational risks are identified. The Executive Leadership Team performs an assessment of all principal risks facing the Group including consideration of any internal or external risk trends which may give rise to new or emerging risks. In addition, “deep-dive” reviews of specific principal risks are performed to ensure that the controls are adequately resourced and are effective to maintain exposure within the defined risk appetite parameters. Each principal risk is owned by an Executive Leadership Team member.
The process and timetable are replicated at regional business level and the regional teams report the outcome of their risk management process to the Executive Leadership Team. In this way, the Executive Leadership Team can satisfy itself that risks are being properly managed; the process also ensures that risks which may have a potential Group-wide impact or dimension are captured and that best practice in respect of risk mitigation is shared across the business. Again, at a regional level each risk which is identified is owned by a designated senior member of local management who has responsibility for mitigating actions.
Group internal audit provides independent assurance to both the Executive Leadership Team and the Audit & Risk Committee on the effectiveness of the Group’s risk management framework and that sound internal control systems operate to mitigate these risks.
Our Group risk management processes are designed to manage rather than eliminate the risk of failure to achieve our strategic objectives and can provide only reasonable but not absolute assurance against material misstatement or loss.
Reports & presentations
Annual Report 2020
We have a portfolio of leading brands in mature and emerging markets that have potential for future growth. Read more in PZ Cussons latest annual report.