UK Corporate Governance Code

The UK 2018 UK Corporate Governance Code published by the Financial Reporting Council (the ‘2018 Code’) sets out standards of good practice in relation to: board leadership and company purpose; division of responsibilities; composition, succession and evaluation; audit, risk and internal control; and remuneration.

Throughout 2019 and to the date of this report, the Company has complied with the Provisions of the Code, with the exception of the following:

Provision 5 – Engagement with the workforce

Daniel J. Phelan was appointed as the designated Non-Executive Director for workforce engagement in May 2019. The Company was therefore not compliant with Provision 5 between January and May 2019. Further information regarding the Board’s engagement with the workforce can be found on page 60 of the 2019 Annual Report.

Provision 20 – Appointment of Non-Executive Directors

An external search consultancy was not used to identify a shortlist of candidates in respect of the appointment of Peter Bains. Further information regarding the appointment process used to appoint Peter Bains can be found on page 71 of the 2019 Annual Report.

Provision 24 – Audit Committee composition

Chris Schade and Lizabeth Zlatkus stepped down from the Board and Audit Committee on July 31, 2019 and August 31, 2019 respectively. Both Chris and Lizabeth were the designated Audit Committee members with recent and relevant financial experience. An external search process was undertaken to identify an individual with recent and relevant financial experience and competence in auditing and accounting. Graham Hetherington, whose skills meet this criteria, was appointed to the Board, Audit and Remuneration Committees on November 1, 2019. The Company was therefore not compliant with Provision 24 of the 2018 Code between September 1 and October 31, 2019; one scheduled and one ad hoc meeting took place during this period. Further information regarding the composition of the Audit Committee and changes during the year can be found on page 62 of the 2019 Annual Report.

Provision 38 – Pensions

During the year, the Remuneration Committee considered the pension arrangements in place for the Executive Directors and how these compare to the wider workforce and determined that these arrangements are broadly aligned. The Committee has agreed that any new Executive Director hire will have pension benefits in line with wider workforce and will review the approach for incumbent Executive Directors as part of the review of the Remuneration Policy (which will be submitted to shareholders for approval at the 2021 AGM). Further information can be found in the Annual remuneration statement on page 77 of the 2019 Annual Report.