Punch Taverns plc 2011 Annual Report

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Punch Taverns plc
Annual Report and Financial Statements 2011
Corporate governance statement continued
Non-executive Directors
As part of their role as members of a unitary board,
Non-executive Directors constructively challenge and
help develop proposals on strategy.
In addition to their attendance at Board and Committee
meetings, the Chairman and the Non-executive Directors
met without the Executive Directors to discuss the operational
performance of the Group as a whole. During the period,
the Non-executive Directors have also had the opportunity
to meet without the Chairman to review his performance in
line with the Company’s objectives.
The Company actively encourages its Non-executive Directors to:
• challenge constructively the strategy proposed by the
Chief Executive Officer and Executive Directors;
• scrutinise the performance of management in meeting agreed
goals and objectives;
• monitor the reporting of performance;
• satisfy themselves on the integrity of financial information
and that financial controls and systems of risk management
are robust and defensible; and
• ensure that appropriate remuneration and succession planning
arrangements are in place in relation to the Executive Directors
and other senior members of the management team.
If not satisfied with the outcome, the Non-executive Directors
can record their concerns in the Company’s Board minutes until
action is taken to remedy their concern.
Until the demerger of the Spirit business from the Punch Group
(the ‘demerger’) on 1 August 2011, Tony Rice was the Senior
Independent Non-executive Director and was responsible for:
• supporting the Chairman;
• leading the other Non-executive Directors in the review of
the Chairman;
• monitoring the division of responsibilities between Chairman
and Chief Executive Officer; and
• being available to shareholders to express any concerns
which the Executive Directors have failed to resolve in a
satisfactorily manner.
At the demerger, Tony Rice stepped down from the
Board and Mark Pain became the Senior Independent
Non-executive Director.
The composition of the Board
The Board and its committees have the appropriate
balance of skills, experience, independence and knowledge
of the Company to enable them to discharge their
respective duties and responsibilities effectively.
The Board includes an appropriate combination of Executive
and Non-executive Directors so no individual or small group of
individuals can dominate the Board’s decision-making. The Board
has reduced in size during the period following the departure
of Ian Wilson in January 2011 and the resignations of Mike Tye,
Tony Rice and Walker Boyd at demerger on 1 August 2011.
Giles Thorley resigned as Chief Executive Officer in September 2010
and Phil Dutton resigned as Finance Director; they were replaced
by Ian Dyson and Steve Dando respectively. At demerger,
Ian Dyson stepped down as Chief Executive Officer but remains
on the Board as a Non-executive Director.
On 15 September 2011 subsequent to the year end, Stephen
Billingham was appointed as Chairman of the Board following
the retirement of Peter Cawdron.
It is considered that the Board is of sufficient size that the balance
of skills and experience is appropriate to the size of the business.
When deciding chairmanship and membership of committees
the Board takes into account that undue reliance is not placed
on particular individuals.
No one other than the committee chairman and members
is entitled to be present at a meeting of the Nomination and
Governance, Audit and Risk or Remuneration Committees,
but others may attend at the invitation of the committee.
The Board has assessed the independence of its Non-executive
Directors against the provisions of the Code and has concluded
that, under the definitions used, Ian Fraser and Mark Pain
are independent in character and judgement and have no
relationships that are likely to affect, or could appear to affect,
their judgement as Directors of the Company. Stephen Billingham
was also considered independent upon his appointment as
Chairman. Ian Dyson, due to his previous appointment as
Chief Executive Officer of the Company until his resignation
from the role at demerger on 1 August 2011, is not considered
to be independent.
During the period, following the resignations of three
Non-executive Directors, at least half of the remaining Board,
excluding the Chairman, comprised two Non-executive
Directors who are determined by the Board to be independent.
Appointments to the Board
There is a formal, rigorous and transparent procedure
for the appointment of new Directors to the Board.
During the period, Ian Wilson resigned as Chairman of the
Nomination and Governance Committee and Peter Cawdron
was appointed in his place. Mark Pain was appointed as the
third member of the Committee. At demerger, on 1 August 2011,
Tony Rice resigned from the Nomination and Governance
Committee and was replaced by Ian Dyson. The Committee’s
terms of reference can be found on the Company’s website
www.punchtaverns.com.
During the period the Nomination and Governance Committee
held four scheduled Nomination and Governance Committee
meetings, the attendance of which is shown in the table
on page 27.
Senior management, including the Chief Executive Officer and
the Company Secretary, may be invited to attend for part or all
of each meeting.
The main purpose of the Nomination and Governance
Committee is to review the structure, size and composition
(including the skills, knowledge and experience) of the
Board, lead the process for Board appointments and make
recommendations to the Board with regard to any adjustments
that are deemed necessary.