Full Annual Report - Inchcape

Section Two
Two
Governance
Board balance and independence
All the Non-Executive Directors are considered to be independent
under the criteria set out in rule A.3.1 of the Combined Code.
Ken Hanna became Chairman after the AGM on 14 May 2009.
Ken was considered independent upon appointment under rule
A.3.1 of the Combined Code.
Will Samuel and Michael Wemms are both Non-Executive Directors
of Galiform PLC. Ken Hanna and Graham Pimlott are both Non-
Executive Directors of Tesco PLC or its subsidiaries. Having regard
to all the circumstances, including the independence they have
demonstrated as Non-Executive Directors of the Company and the
fact that there are no cross-shareholdings or business relationships
between either Galiform PLC or Tesco PLC and the Company, the
Board is satisfied and has determined that they are independent
in respect of these roles additionally.
It is important to the Company to maintain a strong skills base
across the Board in order to bring a depth of knowledge and
experience to the matters under discussion.Alison Cooper and
Nigel Northridge were both appointed during the year.They bring
considerable retail,operational and international experience adding
to and enhancing the balance of the Board. John McConnell
joined as Group Finance Director transferring from our business
in Australia. John’s in depth knowledge of our business as well as
technical knowledge gives him a particular insight into strategic
issues.All the Directors bring an individual judgement to bear on
issues of strategy,performance,resources and standards of conduct.
Further details on new appointments to the Board can be found
in the Nominations Committee report on page 65-66.
Information,training and development
Information supplied
Each Director receives information on the Group’s operating
businesses; regulatory and legislative environment; and
corporate governance.
Additional support
The Directors have access to external advisors for additional
information and/or training as appropriate.This ensures that the
Directors’ skills, knowledge and familiarity are kept up to date.
Board meetings
Using the information supplied the Directors are able to
participate in informed and valuable discussions during the
Board meetings.
Responsibility
The Group Company Secretary is responsible for the flow of
information to Non-Executive Directors.The receipt of quality,
timely and relevant information is important to the effective
decision making of the Board.
Induction programme for new Non-Executive Directors
In order to understand the Group’s operations both new Non-
Executive Directors participated in a detailed induction programme.
They met with the Chairmen of the Audit and Remuneration
Committees to acquire an understanding of the Board’s processes
and they visited UK retail centres with the Chief Executive Officer
of the UK retail business to provide an insight into the Group’s
operational business.They also spent time with members of the
Executive Committee, the Director of Corporate Affairs, Group Head
of Tax and the Group Financial Controller to gain further knowledge
of how the Company operates. Externally they met with the
Company’s brokers to enable them to gain an understanding
of the Group’s position within the market place.
The broad scope of the induction plan is designed to give the new
Non-Executive Directors an understanding of the business and the
arena in which it operates.
Performance evaluation
Process
Led by the Chairman and supported by the Group Company
Secretary, a performance evaluation questionnaire was used,
covering the effectiveness of the Board, each Committee’s
performance against objectives, preparation for and
performance at meetings and corporate governance matters.
An internal review was considered most appropriate in 2009 to
allow changes in composition and operation to bed down.
Focus
The change in Chairman and composition of the Board in
2009 provided an opportunity to review how the Board
processes supported the effective discharge by the Board
of its duties. In conjunction with this review, we have:
• re-issued the schedule of Board meetings, with six to eight
meetings per year held over two successive days;
• increased the number of scheduled Audit Committee
meetings.
Identification of actions
Following the evaluation, the Board members concluded
that appropriate actions have been identified to address
areas that could be improved and that, overall the Board
and Committees continued to perform effectively.
Performance evaluation
The Chairman evaluates the performance of the Non-Executive
Directors and met each of them individually to discuss
performance.The Non-Executive Directors met without the
presence of the Chairman to evaluate his performance.
Conclusion
Following the performance evaluation process, the Chairman
has confirmed that the Non-Executive Directors standing for
election at this year’s AGM continue to perform effectively and
demonstrate commitment to their roles.The Board will continue
to review performance annually. In addition to the annual
review process the Board receives regular updates on best
practice and will, as appropriate, adopt changes in practice
during the course of the year.
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