At the date of this report, the Board of Directors comprised of six members, namely the Non-Executive Chair, three other Non-Executive Directors and two Executive Directors. The composition of the Board is set out in the Directors' Report, and the biographies of each Director, including any other business commitments, are available in the Board of Directors. The Board believes it has an appropriate balance of Executive and independent Non-Executive Directors, having regard to the size and nature of the business. The Board is responsible for the long-term success of the Company and is committed to ensuring that it provides leadership to the business as a whole, having regard to the interests and views of its shareholders and other stakeholders. It is also responsible for setting the Group's strategy, values and standards. Details of the Group's business model and strategy can be found on Group at a Glance.
Executive Directors 2
Non-Executive Directors 3
In 2020 David Adams reached nine years tenure, and in accordance with the 2018 UK Corporate Governance Code (the "Code") and best practice, David was due to step down from the Board. Whilst a search for a new Non-Executive Director to replace David commenced at the start of 2020, the search was delayed due to the COVID-19 global pandemic. Given the difficulties created by this, it was announced in the 2020 Annual Report that the Nomination Committee had agreed to extend David's term of appointment until December 2020 and that a new Non-Executive Director would be appointed later in 2020. On 13 August 2020 it was announced that Tom Singer had been appointed as a Non-Executive Director with effect from 16 September 2020 to replace David as Chair of the Audit Committee, allowing for an orderly handover before David left at the end of 2020.
David stepped down as Senior Independent Director at the conclusion of the AGM on Tuesday 15 September 2020 and Helen Jones was appointed in his place.
The Non-Executive Directors bring wide and varied experience to the Board and its Committees. The Code recommends that at least half of the Board of Directors, excluding the Chair, should comprise Non-Executive Directors, who are determined by the Board to be independent and are free from relationships or circumstances which may affect or could appear to affect the Non-Executive Director's judgement. Following a review, the Board considers Helen Jones, Jill Caseberry and Tom Singer to be independent in character and judgement.
The Chair, Keith Williams was considered independent upon his appointment.
Re-election and Election
In compliance with the Code and the Company's Articles of Association, as at 16 June 2021, the following Directors will seek re-election at the 2021 Annual General Meeting ("AGM"): Keith Williams, Helen Jones, Jill Caseberry, Graham Stapleton and Loraine Woodhouse.
Tom Singer will, for the first time at the 2021 AGM, seek election having been appointed on 16 September 2020.
Board Key Responsibilities
The Board is responsible for the long-term success of the Company and is committed to ensuring that it provides leadership to the business as a whole, having regard to the interests and views of its shareholders and other stakeholders. It is also responsible for setting the Group's strategy, values and standards. Details of the Group's business model and strategy can be found on Group at a Glance.
The Board – Key Responsibilities
The Board is collectively responsible for the long-term success of the Company, with due regard to the views of shareholders and other stakeholders. It provides leadership and direction on the Company's culture, values and purpose; sets the strategic direction; agrees the risk framework and ensures these are managed effectively. The Board is accountable to shareholders for the financial and operational performance of the Group.
A complete list of Matters Reserved for the Board is available on the Company's website www.halfordscompany.com/governance/matters-reserved-for-the-board
Division of Responsibilities
The roles of Chair and Chief Executive Officer are separate and clearly defined, with the division of responsibilities set out in writing and agreed by the Board.
The Chair is responsible for effective leadership, operation and governance of the Board and its Committees. He ensures effective communication with shareholders, facilitates the contribution of the Non-Executive Directors and ensures constructive relations between Executive and Non-Executive Directors.
The Chief Executive Officer is responsible for the management of the Group's business and for implementing the Group's strategy.
The Directors, together, act in the best interests of the Company via the Board and its Committees, devoting sufficient time and consideration as necessary to fulfil their duties. Each Director brings different skills, experience and knowledge to the Company, with the Non-Executive Directors additionally bringing independent thought and judgement. This combination seeks to ensure that no individual or group unduly restricts or controls decision-making.
A formal schedule of matters reserved for the Board is in place and is annually reviewed as referred to above.
To discharge these responsibilities effectively, the Board has a system of delegated authorities, which enables the effective day-to-day operation of the business and ensures that significant matters are brought to the attention of management and the Board as appropriate. It is through this system that the Board is able to provide oversight and direction to the Executive Directors, the Executive Team and the wider business.
Matters specifically reserved for the Board include: strategy and management; corporate structure and capital; investor relations; audit, financial reporting and controls; nominations to the Board; Executive remuneration and certain material contracts.
Director Tenure and Board Succession
Succession planning for the Board is monitored regularly and in particular is considered in detail during the annual evaluation of the Board performance as described Composition, Succession and Evaluation. Details of the tenure for all Board members are as follows:
The Board's principal Committees are the Audit Committee, the Nomination Committee, the Remuneration Committee and the Environmental, Social and Governance ("ESG") Committee. Each Committee has its own Terms of Reference which are approved and regularly reviewed by the Board.
On the following pages each Committee Chair reports how the Committee they chair discharged its responsibilities in FY21 and the material matters that were considered.
Following a Committee meeting, the relevant Committee Chair provides a report to the Board. Whilst not entitled to attend, professional advisors and members of senior management attend when invited to do so, as do those Directors who are not formally a member of the relevant Committee. The external Auditor attends Audit Committee meetings by invitation. No person is present at Nomination Committee or Remuneration Committee meetings during discussions pertinent to them. The Company Secretary acts as the secretary to the principal Committees.
Matters which require Board approval between scheduled Board meetings can be approved by a Board Committee, which consists of a minimum of two Directors.
The final wording of market announcements is approved prior to release by a Disclosure Committee which is made up of a minimum of two Directors.
There were two Board Committee meetings and eleven Disclosure Committee meetings during the period.
At Executive level, the day-to-day investment decisions of the Group are approved by an Investment Committee, chaired by the Chief Financial Officer. Similarly, the treasury needs of the Group are managed by the Treasury Committee, chaired by the Chief Financial Officer; the other members of these Executive committees are senior members of the Finance and Treasury teams.
The Board may establish other ad hoc committees of the Board to consider specific issues from time to time. No such committees were formed during the year.
Halfords Group plc Board of Directors
To ensure that the Board has the balanced skills, knowledge and experience to be effective in discharging its responsibilities and to have oversight of all governance matters.
Making appropriate recommendations to maintain the balance of skills and experience of the Board by:
- considering the size, structure and composition of the Board;
- considering Senior Management succession plans; and
- identifying and making recommendations to the Board on potential Board candidates.
To provide effective governance over the Group's financial reporting processes. This includes the internal audit function and external Auditor. The Committee maintains oversight of the Group's systems of internal controls and risk management activities.
- making recommendations to the Board on the appointment/removal of the external Auditor, and their terms of engagement and fees;
- reviewing and monitoring the integrity of the Company's financial statements, including its annual and interim reports and preliminary results announcements and any other formal announcement relating to its financial performance, and recommending the same to the Board;
- assisting the Board in achieving its obligations under the Code in areas of risk management and internal control; and
- focusing on compliance with legal requirements, whistleblowing, accounting standards and the Listing Rules.
To ensure that a Board policy exists for the remuneration of the Chief Executive Officer, the Chair, Non-Executive Directors, other Executive Directors and members of the executive management.
- recommending to the Board the total individual remuneration package of Executive Directors and members of the executive management;
- approving senior executive remuneration and oversight of remuneration matters generally;
- recommending the design of the Company's share incentive plans to the Board, approving any awards to Executive Directors and other executive managers under those plans and defining any performance conditions attached to those awards;
- determining the Chair's fee, following a proposal from the Chief Executive Officer; and
- maintaining an active dialogue with institutional investors and shareholder representatives.
To ensure that the Company has an ESG strategy which is aligned with the Company's strategy.
- development of an ESG strategy including the setting of appropriate targets; and
- monitoring progress against key targets and initiatives.
Chief Executive Officer
- responsible for the day-to-day management of the Company;
- develops the Group's objectives and strategy for Board approval;
- creates and recommends to the Board an annual budget and financial plan;
- delivers the annual budget and plan and executes the agreed Group strategy and other objectives;
- identifies and executes new business opportunities and potential acquisitions or disposals;
- keeps the Chair informed on all important matters; and
- manages the Group's risks in line with the Board-approved risk profile.
- oversees the creation of customer and commercial strategy, approves marketing and digital creative, monitors performance against the implementation of the commercial plan, and approves investment against strategy;
- acts as the senior steering group for the Transformation Programme, approving and monitoring significant programme spend and monitoring programme risk;
- oversees the Group's risk management framework, providing assurance over risk mitigation and scanning the horizon for emerging risk; and
- approves all Group financial investment.
- manages and provides leadership to the Board;
- builds an effective and complementary Board of Directors;
- sets the agenda, style and tone of Board discussions;
- facilitates and encourages active engagement in meetings, promoting effective relationships and open communication;
- ensures effective communication with shareholders and other stakeholders;
- ensures that the performance of individuals and of the Board as a whole and of its Committees is evaluated at least once a year, and the results are acted upon;
- acts as an advisor to the Chief Executive Officer;
- meets with the Non-Executive Directors without Executive Directors being present;
- facilitates the effective contribution of Non-Executive Directors; and
- ensures constructive relations between Executive Directors and Non-Executive Directors.
Senior Independent Director
- provides a sounding board for the Chair;
- holds meetings with the other Non-Executive Directors without the Chair at least once a year to appraise the Chair's performance;
- acts as an intermediary for the other Directors;
- attends meetings with a range of major shareholders and financial analysts to listen to and understand their views and concerns; and
- is available to other Directors and shareholders in order to address concerns that cannot be raised through the normal channels.
- evaluate and appraise the performance of Executive Directors and Senior Management against agreed targets;
- participate in the development of the Group's strategy;
- monitor the financial information, risk management and controls processes of the Group to make sure that they are sufficiently robust;
- meet regularly with senior management;
- periodically visit Group sites, stores and Distribution Centres;
- meet together without the Executive Directors present;
- participate in a training programme, including store visits and updates from management; and
- formulate Executive Director remuneration and succession planning.
Employee Voice Director
- ensures colleague feedback is brought to the attention of the Board to help shape and influence some of the decisions that are taken.
- works closely with the Chair, Group Chief Executive Officer and Board Committee Chairs in setting the rolling calendar of agenda items for the meetings of the Board and its Committees;
- ensures accurate, timely and appropriate information flows within the Board, the Committees and between the Directors and Senior Management; and
- provides advice on Board matters, legal and regulatory issues, corporate governance, Listing Rules compliance and best practice.