The Board has ultimate responsibility for the management,
direction and performance of the Group, and leads and
controls the Group's business. The Board is also responsible
for ensuring appropriate resources are in place to achieve
its strategy and deliver sustainable performance. Through
authorities delegated to its Committees, the Board directs and
reviews the Group's operations within an agreed framework
of controls, allowing risk to be assessed and managed within
agreed parameters. The Board is collectively accountable to the
Company's shareholders for the proper conduct and success
of the business.
The Board's powers are set out in the Company's Articles of
Association, which are available to view on its website, and
may be amended by a special resolution of its members.
The Board may exercise all powers conferred on it by the
Articles, in accordance with the Companies Act 2006 and
other applicable legislation.
The Board has established a formal schedule of matters
reserved for its approval, and has delegated other specific
responsibilities to its principal committees: the Audit,
Remuneration and Nomination Committees. These are clearly
defined within the written terms of reference of the respective
committees. Information on the responsibilities and work of each of the Board's committees is set out in the Terms of Reference section.
During the year, as part of its annual review process, the matters
reserved for the Board were reviewed, and, where necessary
amended to reflect best practice. The schedule of matters
reserved for the Board includes the consideration and
- the Group's overall strategy, medium-term plans and
- financial statements and Group dividend policy including
recommendation of the final dividend;
- major acquisitions, disposals and capital expenditure;
- major changes to the capital structure including tax and
- major changes to accounting policies or practices;
- the Group's corporate governance and compliance
- the system of internal control and risk management policy;
- review of management development strategy.
Composition of the Board
The Board is made up of a non-executive Chairman, four
executive directors and six non-executive directors. The current
balance of the Board's skills, experience and knowledge,
together with regular briefings by executives below Board level,
ensures that views, perceptions and discussions are not
dominated by any one specific view. The composition of the
Board is continually reviewed to ensure it remains suitable for
the needs of the business, and this continues to be the primary
focus of the Nomination Committee.
There is an established, formal, rigorous and transparent procedure for the selection and appointment of new directors to the Board, and this is described in the Nomination Committee Terms of Reference. During the year, Kevin O'Byrne stepped
down as Group Finance Director to take up the role of CEO
B&Q and Koçtaş brands, and was replaced by Karen Witts,
who joined the Board on 1 October 2012. Euan Sutherland
and Philippe Tible were appointed to the Board as executive
directors on 1 October 2012. Mr Sutherland subsequently
stepped down from the Board on 31 January 2013 ahead of
leaving the Group in March 2013.
The Board conducts a review of its performance each year.
During the year under review, the Board evaluated its
effectiveness using an externally facilitated questionnaire and
a series of one-to-one interviews between each director and the
Chairman. The questionnaire was developed by reference to
the topics discussed and recommendations made during the
previous evaluation, and drafted following discussions between
the Chairman, the Company Secretary and the external facilitator,
Lintstock. Responses to the questionnaire were collated and the
output was used by the Chairman in his individual meetings
with directors as part of the evaluation process.
The areas considered during the evaluation were:
- Board composition;
- Board expertise;
- strategic oversight;
- risk management and internal control; and
- succession planning and human resource management.
The results of the evaluation were considered by the Board at its
meeting in January 2013. No significant issues were highlighted
and the review clearly indicated that the Board continued to
work efficiently and effectively, and that the contribution and
commitment of each director, and their interaction with each
other, was good, and that the non-executive directors offered
robust challenge where appropriate. As a result of the
evaluation, the Board agreed to undertake the following
activities during the 2013/14 financial year:
- review the forward business agenda to ensure that there is
sufficient time to focus on common key Group programmes
- maintain oversight of the Group's performance relative to its
competitors and customer trends; and
- increase its exposure to the Group's senior management
below the Board.
As part of the evaluation process, the Group Chief Executive
carried out a performance review of the executive directors.
In addition, the non-executive directors, led by the Senior
Independent Director, conducted the performance review
of the Chairman in respect of the financial year.
The Board has confirmed that the contribution of each of the
directors continues to be effective and that shareholders should
be supportive of their appointment or re-appointment to the
Board. Biographical details of each director are set out in the Management & committees section.
The Board will continue to review its procedures, effectiveness
and development in the year ahead, and the Chairman will use
the output of the most recent Board evaluation in his individual
meetings with directors during the year.
In accordance with Provision B.6.2 of the Code, which requires
Boards to undertake an externally facilitated evaluation at least
every three years, the Board intends to appoint a suitable
independent facilitator during the year to conduct the 2013/14
performance evaluation, and will report on the findings of that
evaluation within the 2013/14 annual report.
Induction, information and professional development
All new directors appointed to the Board receive an induction
pack as part of their comprehensive induction programme
tailored to their experience, background and particular areas
of focus. The induction programme is designed to develop
directors' knowledge and understanding of the Group's
operations and culture.
The induction programme includes:
- individual one-to-one meetings with the Chairman, the Group
Chief Executive, the Group Finance Director and other directors;
- site visits to the Group's stores and those of its competitors;
- meetings with management of the Group's Operating
Companies and other senior management; and
- if required, external training courses at the Group's expense.
In accordance with best practice, the Chairman considers and
addresses the development needs of the Board as a whole, if
any, and ensures that each director updates their individual
skills, knowledge and expertise.
Following the appointment of three new executive directors
during the year, the Company Secretary arranged for the Group's
corporate lawyers to provide a training session on their duties and
responsibilities as directors of a UK listed company. Amongst other
topics, the training covered Listing Rules compliance and the
control and release of inside information, and provided case
studies and practical situations for the directors to consider.
Subsequent training in specific aspects of the Group's
businesses is provided to directors, when requested, or regularly
as part of site visits. Directors are briefed on issues at Board and
Committee meetings and have full and timely access to relevant
information ahead of each meeting.
The Board also receives reports on circumstances where issues
and concerns have been raised by the Company's institutional
shareholders. This process allows directors to develop
necessary understanding of the views of these shareholders
and also enables the Board to judge whether investors have a
sufficient understanding of the Group's objectives.
In addition to planned development and briefings, directors are
expected to take responsibility for identifying their own individual
needs and to take necessary steps to ensure that they are
adequately informed about the Group and their responsibilities
as a director. The Board is confident that all its members have
the requisite knowledge, ability and experience to perform the
functions required of a director of a listed company. There
is also an agreed procedure whereby directors may take
independent professional advice at the Group's expense in
the furtherance of their duties.
Conflicts of interest
Each director has a duty under the Companies Act 2006 to
avoid a situation where he or she may have a direct or indirect
interest that conflicts with the interests of the Company. The
Company has robust procedures in place to identify, authorise
and manage such conflicts of interest, and these procedures
have operated effectively during the year.
A register of directors' situational and transactional conflicts is
maintained by the Company Secretary and reviewed by the
Board on a regular basis. The Board confirmed during the year
that there were no situations of which they were aware which
would, or potentially could, give rise to conflicts with the
interests of the Company, other than those that might arise from directors' other appointments, which are set out in the directors' biographies in the Management & committees section.