Chair’s introduction to governance continued
Effectiveness As Chair, I am responsible for providing leadership to ensure that the Board operates effectively. I have been supported in this by all the Directors, in particular Chris Batterham, our Senior Independent Director. The annual reviews of Board effectiveness help the Board to consider how it operates and how its operations can be improved. This year, the review was undertaken internally and the findings of this review have provided us with ideas to further improve the manner in which the Board operates, and build on previous evaluations. The results were very useful and insightful and have been incorporated into our plans for the coming year. In particular, Board succession planning remains a priority, particularly as we look to ensure the Board and Executive Committee have the right set of skills and experience to support the Group as the business evolves. I have been very impressed about how effectively the business as a whole, and indeed the Board, has transitioned to remote working during the Covid-19 pandemic. Although I feel that longer meetings are best done face to face, we have continued to hold all of our scheduled Board and Committee meetings as planned and also our strategy day in March, which all attendees agreed was our best strategy session to date. While being mindful of the impact of Covid-19 on the wider world and us as a business, our approach as a Board has been one of “business as usual” and we continue to focus on important longer-term strategic and governance issues facing the Group, while supporting management on more short-term tactical decisions. Despite most colleagues working from home, we managed to successfully purchase Iron Mountain’s Intellectual Property Management (IPM) business which will now form part of our Global Software Resilience division. The acquisition meant that we held a number of additional Board meetings throughout the year, and I was very grateful for the flexibility demonstrated by my colleagues to make sure that they were available for this process. As lockdown eases, the Board is very much looking forward to holding some in-person meetings and reconnecting with our colleagues as part of office and site visits. Our investors We are in regular contact with our large investors through a regular scheduled programme of meetings attended by either our CEO or CFO or both of them. Chris Batterham, our Senior Independent Director, and I are also available to meet with investors should the need arise. I met with our larger investors in February/March 2021 and fed back my findings to Board colleagues at the next Board meeting. In addition, our brokers undertook an investor survey on the back of our half year results in January and the results of this were presented and discussed at a Board meeting. Our aim is to engage with our shareholders in an open and meaningful way. Ensuring that the Directors’ remuneration packages align the Directors’ and senior managers’ interests with the long-term interests of NCC Group and its shareholders is always a key area of interest for investors. Our Directors’ Remuneration Policy was last approved by shareholders at the 2020 AGM and at the 2021 AGM we will be asking shareholders to approve a new Remuneration Policy.
The 2020 Directors’ Remuneration Policy received 81.44% of votes in favour at the 2020 AGM. Our 2018 and 2019 Directors’ Remuneration Reports received over 99% of votes in favour, recognising the continued support of our shareholders for our approach to executive remuneration, so naturally we were very disappointed with the voting outcome of the 2020 AGM of only 51.53% votes in favour. Jonathan Brooks, as our Remuneration Committee Chair, consulted with our shareholders who voted against the Remuneration Report following this significant vote against and we published our response on 2 February 2021 which can be read here, https://www.nccgroupplc.com/media/zfhhxutu/ voting-results-of-2020-annual-general-meeting.pdf. The UK Corporate Governance Code 2018 has increased the role and remit of the Remuneration Committee and this is reported on within the Remuneration Report. As part of our new Remuneration Policy, we will be aligning our Executive Directors’ pensions with our wider colleague population, and introducing post-employment shareholding rules. Statement of compliance with the UK Corporate Governance Code The Company measures itself against the requirements of the UK Corporate Governance Code 2018 (the ‘Code’), which is available on the Financial Reporting Council website (www.frc.org.uk). From 1 June 2020 to 31 May 2021, the Company complied with the Code in full with the exceptions that our CEO and CFO pensions were not in alignment with our general colleague population, and we do not have post-employment shareholding guidelines. Both of these areas of non-compliance will be attended to post our 2021 AGM and subject to shareholder approval of our new Directors’ Remuneration Policy. Also between 1 June 2020 and 31 May 2021, the Company did not engage with the workforce to explain how executive remuneration aligns with the wider Company pay policy as required by the Code. However, the Remuneration Committee compares information on general pay levels and policies across the Group when setting Executive Director pay. Jennifer Duvalier undertakes regular colleague engagement sessions where colleagues are able to ask about Executive Director pay. During the year no questions or concerns on executive pay were raised to Jennifer. Thank you We are immensely proud of our colleagues for their extraordinary efforts during the pandemic, recognising that many were working from home in far from ideal circumstances, acting in the best interests of our customers and our stakeholders. I would like to thank all our colleagues for their incredible contribution in stepping up and meeting the unprecedented challenges of the Covid-19 pandemic.
Chris Stone Non-Executive Chair 14 September 2021
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NCC Group plc — Annual report and accounts for the year ended 31 May 2021
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