Role of the Board
Great importance is placed on a well-informed and decisive Board. Board meetings are held regularly throughout the year. In the 2016 financial year, eight scheduled Board meetings and ten Board Committee meetings were held. In addition, as it does each year, the Board convened and participated in a separate two-day session on the Group's strategy and three-year plan.
The Board has adopted a schedule of matters reserved for its consideration and those delegated to Board Committees. The Board’s responsibilities include setting the Group’s overall business and commercial strategy; setting and monitoring business objectives to achieve the strategy; setting and monitoring annual budgets and financial and capital plans; and considering Group policies and any major investments or organisational changes.
Agenda items scheduled for every Board meeting include strategy, business performance, operations, human resources, finance and governance. The agenda is reviewed and agreed by the Chairman to ensure that the Board addresses the right issues at the right times and that sufficient time is allowed for appropriate consideration and debate.
Following Board Committee meetings, the Board receives copies of the Committees’ minutes at the next Board meeting and can raise any queries or concerns with the Committee Chairmen.
Board meetings are scheduled in different Group offices to give the Board the opportunity to meet local management and employees, and to develop greater business knowledge and depth of awareness of business-specific opportunities and threats. All Directors receive papers sufficiently in advance of meetings to enable due consideration.
During the 2016 financial year, matters dealt with by the Board included:
- Review and monitoring of Group strategy and progress against business objectives
- Operational and financial performance of the Group
- Approval of Group budgets and three-year plan
- Approval of financial statements and dividend policy
- Risk management oversight; review of internal controls and monitoring of the Group's risk registers
- Board and senior management succession planning
- Approval of large contracts and bids
- Approval of large capital expenditure projects
- Consideration of Committee reports and recommendations
- Remuneration of Executive Directors and senior management
- Review of corporate governance reporting
- Board and Committee evaluation and progress of actions from the 2015 evaluation
- Review of the Group's product development roadmap and improvements to the R&D processes
- Monitoring the progress of the organisational structure and human capabilities strategic initiatives
- Consideration of the possible impacts of the result of the UK's EU referendum
- Monitoring progress of the customer excellence initiatives
Board performance and effectiveness
The Group's policy is for all new Directors to undertake a formal and comprehensive induction to the Group upon joining the Board. The induction process is undertaken by the Company Secretarial department. On acceptance of appointment all Directors are provided with an induction pack, which includes: their appointment letter and terms; latest accounts and constitutional documents; the business plan, investor presentations, protocol for conflicts of interest; Directors' duties; Group Model Code and Group policies; Board meeting procedures and matters reserved; Board minutes and papers from previous meetings; and meeting dates and contact details. Substantive induction to the Group's businesses is provided through meetings with senior management and site visits to the Group's operations. This process was followed during the year upon the external appointment of Michael Butler as an Independent Non-Executive Director in February 2016.
The Board carries out an annual self-assessment. This includes evaluation of the performance and effectiveness of the Board, of its Committees and of each Director. The process is led by the Chairman and involves detailed questionnaires and one-to-one reviews of the collective and individual performance of Directors. The results of the Board and Committee evaluations are the subject of a full, robust and open debate in a Board meeting and actions for improvements are agreed. Progress against these actions arising from performance evaluations are then monitored and reported on throughout the following year. The performance of the Chairman is reviewed in the Chairman's absence by the Board, led by the Senior Independent Director. Directors' individual performance and development objectives are set to support individual and business needs, as well as the action plan for the Board and Committees.
As part of the appraisal of each Director, the independence of all Non-Executive Board members is reviewed and evaluated annually. Peter Rae, Steve Coggins and Dennis Bate have served on the Board for 19, twelve and eleven years respectively and Michael Butler has served for one year. Each brings different and complementary high-level experience relevant to the current business and future development of the Group. During 2016, and at all times previously, each has addressed all issues facing the Board with a high level of candour, robustness and insight. Their in-depth knowledge of the Group and the electronic surveillance industry, gained from their tenure, combined with their different and complementary skills and knowledge developed from other directorships, provide valuable independent perspectives that contribute to the success of the Group and to the performance and effectiveness of the Board. For these reasons, each of these four Non-Executive Directors is considered by the Board to be independent.