Corporate governance

The Board considers that good corporate governance is an essential element of achieving its overall objectives. The Group’s corporate governance policies and practices continue to be reviewed by the Board on a regular basis. This report, together with the audit committee report and the Board report on remuneration, sets out the governance structures adopted by the Board.

The Board
At 31 March 2011 the Board comprised the Executive Chairman, four other executive Directors, three Directors representing KKR and four non-executive Directors. During the year the Board reviewed the composition of the Board and the balance of skills, knowledge and experience its members bring, and concluded that the Board has the appropriate balance for the Company. During the year Andy Hornby resigned from the Board of the Company.

During the year, the Board formally evaluated its own performance and that of the Board committees. The evaluation was carried out by an independent consultant. This process was in the form of one-to-one meetings between the independent consultant and each member of the Board and the Company Secretary. Issues arising from the performance evaluation were presented to the Board by the Executive Chairman with an action plan to ensure continuous improvement in the operation of the Board and its committees and between the non-executive Directors and management.

Non-executive Directors are appointed for an initial term of three years which is then renewed and extended for not more than two further three year terms. Nick Land, Tony De Nunzio, Chris Britton and Etienne Jornod were all appointed to the Board in 2008. Following a review of their performance by the Executive Chairman, it was concluded that each continued to contribute effectively and with proper commitment, devoting adequate time to carry out their duties. The Board approved the recommendation that each of the non-executive Directors be re-elected for a further three year term.

The Board has a programme which enables it to discharge its responsibility to provide leadership to the Company within a framework of prudent and effective controls and to assess and manage risk. The Board has six regular meetings scheduled in the year, including one strategy meeting, with other meetings convened as required.

There is an approved schedule of matters reserved for decision by the Board with related delegated authorities. These matters cover strategy and business plans, share capital and dividends, Board committees, remuneration and employment benefits, corporate reporting, capital and revenue commitments, corporate governance, internal control and risk management, and corporate and social responsibilities.

For all Board meetings an agenda is established. For regular meetings this generally comprises reports on the financial performance of the Group and its Divisions, approval of major items of capital expenditure and acquisitions, and other significant policy issues. The Board receives reports from the committees of the Board to enable it to be informed of and supervise the matters within their remit. Appropriate papers are provided to the Directors in advance of each Board meeting. In addition the Board considers at least annually the strategic plans of the Group and its Divisions and, from time to time, Directors receive presentations from management concerning key areas of the Group’s operations. The Annual Report, which includes the consolidated financial statements, is reviewed by the audit committee and approved by the Board prior to publication.

In the furtherance of their duties, the Directors have full access to the services of the Company Secretary and may take independent professional advice at cost to the Company. In addition, each of the committees of the Board is entitled to take independent professional advice as appropriate. The Company maintains appropriate directors and officers insurance in respect of legal action against its Directors and has granted deeds of indemnity to each of the Directors and to the Company Secretary.

The Company provides a tailored induction programme for all Directors on appointment. The induction programme includes details of Board and Group policies and procedures, information and briefings by members of management on the Group’s businesses and operations, and visits to retail stores, distribution centres, manufacturing facilities and other operations on a selective basis.

The Board is regularly updated on developments relating to the Group’s activities, corporate governance and other matters of relevance, and non-executive Directors visit the Group’s operations periodically.