Corporate Governance Report
There are also two Provisions within the UK Code that we have chosen not to comply with in accordance with the FRC’s long-standing ‘comply or explain’ approach. This is on the basis that the arrangements we have in place are better suited to Anchor’s particular circumstances, and which we believe, nevertheless, continue to support good governance and comply with the Principles of the UK Code. Provision 18 All directors should be subject to annual re-election Explanation for non-compliance: The practice of annual re-elections is one that has emerged through the AGMs of public listed companies over time. In accordance with our constitution, Anchor is not required to hold an AGM. Also, in line with common practice across the sector, the members (equivalent to shareholders or owners) of Anchor who would be responsible for agreeing any re-election are the non- executive directors. The members of any Community Benefit Society have very limited powers. The Board has formal and rigorous procedures in place for the appointment and annual evaluation of all Board directors. Our non-executive directors are appointed for a provisional term of three years, which may be extended by two additional terms of three years (to a maximum term of nine years), if approved by the Board. This cycle ensures Board membership is regularly reviewed and refreshed. The annual Board performance review, which is externally facilitated every three years, ensures that the overall composition and effectiveness of the Board is kept under close review. Provision 38 The pension contribution rates for executives should be aligned with those available to the workforce Explanation for non-compliance: In May 2020, the Remuneration Committee determined that, for any new appointments made to the Executive Committee (on or after 21 May 2020), contractual pension entitlements would be aligned to the pension contributions available elsewhere within the workforce; being a maximum of 10% employer contribution. Five new appointments have been made to the Executive Committee since this date and the pension arrangements with each of those individuals have been contracted on this basis. On appointment as CEO, the pension arrangements of Sarah Jones were also aligned. The Remuneration Committee did however determine that it would be inappropriate to change the terms of existing contracts, whereby the pre-existing contractual entitlements of Executive Committee members appointed before May 2020 provide for employer contributions of up to 15%. We therefore continue to ‘explain’ our non-compliance against Provision 38 for the current year. Anchor will be fully compliant in the next financial year as there will be no executive directors with this contractual position after financial year 2024.
Corporate Governance at Anchor Anchor is a registered provider of social housing and an exempt charity, regulated by the Regulator of Social Housing (RSH) and the Care Quality Commission (CQC). Our Governance Framework is designed to support the delivery of our strategy, ensuring decisions are made in accordance with our values and ambitions. In November 2023, the RSH undertook its regular stability check, and we retained a G1 rating for governance and a V1 rating for viability. These are the highest possible regulatory ratings which means that the RSH is satisfied that Anchor has effective governance arrangements and manages resources to ensure ongoing financial viability. The CQC inspects all registered care services in accordance with the national standards and details of Anchor’s ratings are included in KPIs monitored by the Board. As at 1 April 2024, 84.09% (2023: 85.19%) of our care homes, were rated Good or Outstanding. The CQC has four ratings – Outstanding, Good, Requires Improvement and Inadequate. The CQC inspected 14 of Anchor’s care homes during the year to 31 March 2024 (2023: 34). None of Anchor’s care homes have an Anchor’s Board has adopted the Financial Reporting Council (FRC) UK Corporate Governance Code 2018 (UK Code) which sets high standards in relation to Board leadership and effectiveness. The Board has noted that the 2024 version of the Code will apply to next year’s financial statements and is confident of being able to demonstrate compliance with the new requirements. In the period ending 31 March 2024, Anchor was compliant with all the Principles of the UK Code. While the references in Principle A (relating to the generation of shareholder value) are not directly relevant to us as a Community Benefit Society, we do put significant focus on the generation of value for, and engagement with, all our key stakeholders, including our residents, colleagues and local and central government. We therefore consider ourselves wholly compliant with these Principles. There are a number of Provisions with the UK Code that are designed specifically for application to companies with an equity listing and therefore are not applicable to Anchor: Provision Regarding 3 Engagement with major shareholders 4 AGM voting and subsequent shareholder engagement/announcements 36 Director shareholdings and share awards inadequate judgement. Code of Governance
30 Anchor Hanover Group Annual Report & Financial Statements 2024
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