Role of the Board

 

The Board’s primary responsibility is to promote the long-term success of the Company and deliver sustainable shareholder value. The Board has ultimate responsibility for the management, direction and performance of the Company, and leads and controls the Company’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 Kingfisher’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 our website, and may be amended by a special resolution of its members.

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 matters reserved schedule and written terms of reference of the respective committees, which are available on the Company’s website, and are regularly reviewed. The structure of the Board and executive committees and sub-committees are summarised in the graphic on page 44. Information on the responsibilities and work of each of the Board’s committees is set out on pages 46 to 75.

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 approval of:

  • the Company’s overall strategy, medium-term plans and annual budgets;
  • financial statements and Company dividend policy, including recommendation of the final dividend;
  • major acquisitions, disposals and capital expenditure;
  • major changes to the capital structure including tax and treasury management;
  • major changes to accounting policies or practices;
  • the Company’s corporate governance and compliance arrangements;
  • the system of internal control and risk management policy;
  • the Company’s risk appetite statements;
  • review of management development strategy; and
  • the appointment or removal of the Company Secretary.

Composition of the Board

During the year, the Board was made up of the Chairman, executive directors and a majority of non-executive directors. The structure, size and composition of the Board is regularly reviewed to ensure it remains suitable for the needs of the business. The current balance of the Board’s skills, experience, independence 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.

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 report on page 50. At the Annual General Meeting (AGM) to be held on 15 June 2016, shareholders will be asked to approve the appointment of Rakhi Goss- Custard and the re-appointment of all other directors.

Board evaluation

Each year the Board conducts a review of its performance and effectiveness, and that of its committees and individual directors. The evaluation was conducted in December 2015 by way of an externally facilitated questionnaire followed by a series of one-to-one interviews between each director and the Chairman. The Board questionnaire was developed with reference to the topics discussed and recommendations made during the previous year’s 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 main areas considered during the evaluation were:

  • Board composition and expertise;
  • Board dynamics;
  • time management;
  • Board support;
  • development of recent strategy work;
  • risk management and internal control;
  • succession planning and human resource management; and
  • priorities for change.

The results of the evaluation were considered by the Board at its meeting in January 2016. No significant issues were highlighted and the review indicated that the Board, its committees, the Chairman and each of the directors continued to work efficiently and effectively. The contribution and commitment of each director, and their interaction with each other, remained good, and the challenge offered by the non-executive directors was robust and appropriate. The non-executive directors, led by the SID, also conducted a performance review of the Chairman, taking into account the views of the executive directors.

The Board has confirmed that the contribution of each of the directors continues to be effective and that shareholders should be supportive of their re-appointment to the Board.

Also during the evaluation, in considering composition and expertise, Board members noted the further enhancement of the Board’s digital retail experience through the appointment of Rakhi Goss-Custard as a non-executive director.

During the year, the Board also participated in a separate Board Meeting Management and Information Review. The review included one to one meetings between the Company Secretary and each director. The aim of the review was to better understand the views of Board members and other stakeholders in respect of the type, quality, quantity and frequency of information the Board receives to carry out their duties, and to consider the time allocation and prioritisation of agenda items.

As a result of both the evaluation and the management and information review, the Board agreed to undertake the following activities during the 2016/17 financial year:

  • re-prioritise and keep the forward business agenda under review to ensure that there is sufficient time to focus on key programmes and initiatives, in particular the delivery of, and risks to, the transformation programme and the five year plan;
  • keep under review the reporting of the key performance indicators of the transformation plan to ensure the Board has good visibility of data and information to oversee execution of the plan; and
  • renew focus on succession planning and talent management, with the support of the Chief People Officer.

The Board will continue to review its procedures, effectiveness and development in the year ahead, and the Chairman will use the output of the Board evaluation in his individual meetings with the directors during the year.

Induction, information and professional development

The Kingfisher directors’ induction programme is designed to develop a director’s knowledge and understanding of the Company’s operations and culture. The comprehensive tailored programme to meet each director’s specific requirements is phased to allow feedback and further customisation of the meetings and development activities.

The induction programme created for Rakhi Goss-Custard includes:

  • individual one-to-one meetings with the Chairman, the Chief Executive Officer, the Chief Financial Officer and all other directors;
  • meetings with management of the Operating Companies and other key senior managers across the Company;
  • site visits to the Company’s stores;
  • briefing sessions on the activities of the committees to which she has been appointed;
  • an online resource site of key reference materials to support the above.

If required, external training courses will be provided at the Company’s expense.

Subsequent training in specific aspects of the Company’s businesses is provided to directors when requested and regularly as part of site visits. Directors are briefed on issues at Board and committee meetings, for example receiving briefings on cyber risks, and relevant commercial, legal and regulatory developments. All directors have full and timely access to relevant information ahead of each meeting.

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.

The Board also receives regular reports and feedback from discussions with the Company’s institutional shareholders and is informed of any issues or concerns raised by them. 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 Company’s objectives. In addition to planned development and briefings, each director is expected to take responsibility for identifying their own individual needs and to take necessary steps to ensure that they are adequately informed about the Company 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 the directors of a listed company. There is also an agreed procedure whereby directors may take independent professional advice at the Company’s expense in the furtherance of their duties.

Conflicts of interest

The Company has robust procedures in place to identify, authorise and manage potential or actual conflicts of interest, and these procedures have operated effectively during the year. Following review of the register of directors’ situational and transactional conflicts, the Board confirmed 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.