Independent advice All Directors have access to the advice and services of the Company Secretary and Directors are entitled to take independent professional advice if necessary, at the expense of the Company. Conflicts of interest The Companies Act 2006 requires Directors to avoid situations where they have, or could have, a direct or indirect interest that conflicts or potentially conflicts with the interests of the Company. The Company’s Articles of Association require any Director with a conflict or potential conflict to declare this to the Board. That Director will not then be involved in the discussions relating to the proposal, transaction, contract or arrangement in which they have an interest, unless agreed otherwise by the Directors of the Company in the limited circumstance specified in the Articles of Association, nor will they be counted in the quorum or be permitted to vote on any issue in which they have an interest. Directors are required to inform the Board without delay should they be aware of any actual or potential conflicts of interest and a check on conflicts is undertaken each year with a report to the Board. Board independence As required by the Code, at least 50% of the Board, excluding the Chair, are independent Non-Executive Directors. The Board comprises two Executive Directors, four independent Non-Executive Directors, and the Non-Executive Chair. The Board has debated and considers that all of the current Non-Executive Directors are independent, and in so doing considered the profile of all of the individuals, concluding that none of them: • Has ever been a colleague of the Group • Has ever had a material business relationship with the Group or receives any remuneration other than their salary or fees • Has close family ties with the advisers, other Directors or senior management of the Group that could reasonably be expected to cause a conflict • Holds cross-directorships or has significant links with other Directors through involvement with other companies or bodies • Represents a significant shareholder • Has at the point of this report served on the Board for more than nine years from the date of their first election The Non-Executive Directors provide a strong independent element on the Board and are well placed to constructively challenge and help develop proposals on strategy and succession planning. Between them they bring an extensive and broad range of experience to the Group. Details of the Directors’ respective experience are set out in their biographical profiles on pages 74 and 75. The terms and conditions of appointment of Non-Executive Directors are available for inspection at the Company’s registered office during normal business hours. Diversity The principle of Board diversity (and indeed diversity across the Group) is strongly supported by the Board. It is the Board’s policy that appointments to the Board will always be based on merit so that the
Board has the right balance of individuals in place. The Board recognises that diversity of thought, approach and experience is an important consideration and is therefore one of the selection criteria used to assess candidates prior to any Board appointments. Read more about diversity in the Nomination Committee Report on pages 95 to 97. The Company’s policy is to find, develop and maintain a diverse workforce at all levels with an initial focus on developing a culture where women can achieve and retain senior positions. Annual re-election In accordance with the Code, any Directors appointed in the financial year are subject to election by shareholders at the AGM and, in line with best practice, all the other Directors are subject to re-election annually. Director induction, training and development No new members of the Board were appointed during the year. New Directors are provided with an induction on appointment, which would include visits to the Group’s operations and meetings with operational and executive management. Each Director’s induction is tailored to their experience and background with the aim of enhancing their understanding of the Group’s strategy, business, operating divisions, colleagues, customers, suppliers and advisers and the role of the Board in setting the tone of our culture and governance standards. The Company acknowledges the importance of developing the skills of the Directors to run an effective Board. To assist in this, Directors are given the opportunity to attend relevant courses and seminars to acquire additional skills and experience to enhance their contribution to the ongoing progress of the Group. All of the Directors attend sessions which are aimed at updating the Board on trends and developments in corporate governance. Board and Committee effectiveness review The performance of the Board and its Committees is appraised annually and an internal effectiveness review was completed for 31 May 2021. The overall rating was very positive meaning that the Board and its Committees continue to function well. The results were presented to the May 2021 Board meeting and the Chair also held one-to-one calls with Board colleagues for “deeper dives” into any areas they wished to discuss in more detail and with the CEO to discuss areas highlighted by the evaluation process. We have also scheduled in a progress check in September 2021 to ascertain how we are doing against our proposed improvements and whether we need to do anything different in the second half of the financial year. The evaluation identified changes which would improve the working of the Board, including:
• An increased focus on diversity • Assessing and monitoring culture
• A continued focus on strategy and strategic discussion • An increased focus on succession planning and ensuring that these plans are reviewed on a regular basis • An increased focus on CSR/ESG Although all of the above were considered important, it was agreed that the key area to focus on would be succession planning.
NCC Group plc — Annual report and accounts for the year ended 31 May 2021
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