Annual report and accounts 2023 - Flipbook - Page 85
Strategic Report
The Board believes that building a diverse and inclusive
culture is integral to the success of the Company.
Diversity includes aspects such as diversity of skills,
perspectives, industry experience, educational and
professional background, gender, ethnicity and age.
The Company’s Board and Executive Committee
Diversity Policy (“Diversity Policy”) provides that these
aspects will be considered in determining the optimum
composition of the Board and Executive Committee,
with the aim of achieving an appropriate balance. All
appointments to the Board and Executive Committee
are made on merit, against objective criteria, and with
due regard for the benefits of diversity and inclusion.
The Company remains committed to the principle of
diversity and aims to achieve at least 40% female
representation on the Board and Executive Committee
and at least one director from an ethnic minority
background on the Board. The Nomination Committee
is responsible for overseeing the implementation of the
Diversity Policy. The Nomination Committee reviews
the Diversity Policy at least annually to ensure its
effectiveness, with any amendments recommended
to the Board for approval. Prior to the resignation of
J.R. Nicolson as a non-executive director on 31 March
2022, 20% of the Board were female. Following the
resignation of J.R. Nicolson, 22% of the Board were
female. As at the date of this report, 33% of the
Executive Committee are female and 44% of the
Executive Committee’s direct reports are female.
The disclosure relating to gender diversity within
the Company is included in the Strategic Report
on page 37.
Treasury and Commodity Committee
The Treasury and Commodity Committee consists
of R.A. White, S. Lorimer and senior members of
the finance, legal and procurement departments.
The Treasury and Commodity Committee’s terms
of reference are reviewed and approved annually
by the Audit and Risk Committee. The Treasury
and Commodity Committee reviews purchase
requirements in foreign currencies and implements
strategies, including the use of foreign exchange
hedges, in order to reduce the risk of foreign exchange
exposure and provide certainty over the value of
non-domestic purchases in the short to medium term.
The Treasury and Commodity Committee’s remit
includes the ability to utilise certain financial
instruments in order to hedge the Group’s exposure to
interest rate fluctuations. The Treasury and Commodity
Committee also monitors the Group’s short and
medium term funding requirements, provides oversight
of hedge accounting and adherence to hedge
accounting standards, monitors the ongoing
requirements of the Company’s various employee
share schemes, monitors cash flow and any capital
restructure programmes, oversees the Group’s dividend
policy and proposals for the payment of dividends
and annually reviews the Company’s Statement of
Delegated Authorities.
Internal control
The Board has overall responsibility for the Group’s
internal control systems and annually reviews their
effectiveness, including a review of financial,
operational, compliance and risk management
controls. The implementation and maintenance of
the risk management and internal control systems are
the responsibility of the executive directors and other
senior management. The systems are designed to
manage rather than eliminate the risk of failure to
achieve business objectives and to provide reasonable,
but not absolute, assurance against material
misstatement or loss.
The Board has reviewed the effectiveness of the
Group’s risk management and internal control systems,
including financial, operational and compliance
controls, in accordance with the Code for the period
from 31 January 2022 to the date of approval of this
annual report. No significant failings or weaknesses
were identified from this review during the year.
Had any failings or weaknesses been identified then
the Board would have taken the action required to
remedy them.
The Board confirms that there is an ongoing process,
embedded in the Group’s integrated internal control
systems, allowing for the identification, evaluation
and management of significant risks, as well as a
reporting process to the Board. This risk management
process has been in place throughout the year ended
Corporate Governance
Accounts
29 January 2023 and up to the date of the approval of
this annual report. The Board has carried out a robust,
systematic assessment of the principal and emerging
risks facing the Group during the period, including
those which would threaten its business model, future
performance, solvency or liquidity. Information on the
Group’s risk management framework, including the
operation of the Group’s Risk Committee, is set out in
the Strategic Report on pages 62 to 69.
The three main elements of the Group’s internal control
system are as follows:
The Board
The Board has overall responsibility for the Group’s
internal control systems and exercises this through an
organisational structure with clearly defined levels of
responsibility and authority as well as appropriate
reporting procedures.
The Board has a schedule of matters that are brought
to it, or its duly authorised committees, for decision,
aimed at maintaining effective control over strategic,
financial, operational and compliance issues.
This structure includes the Audit and Risk Committee
which, with the Finance Director, reviews the
effectiveness of the internal financial and operating
control environment.
Financial reporting
There is a comprehensive strategic planning, budgeting
and forecasting system with an annual operating plan
approved by the Board. Monthly financial information,
including trading results, cash flow statement,
statement of financial position and indebtedness,
is reported.
The Board and the Executive Committee review the
business and financial performance against the prior
year and against annual plans approved by the Board.
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