Page 27 - Hardide-Annual-Report-2021
P. 27

 Business Reviews
At its regular monthly meetings, the Board reviews
both the financial and non-financial performance of the Group. Financial information for the Group and its subsidiaries includes detailed profit & loss accounts, cash flow statements and balance sheets; together with analyses of movements in cash, trade debtors, trade creditors, and fixed assets. Close attention is also paid to the development of sales by sector and by customer; as well as progress with initiatives to develop major new applications, sectors and customers. Directors may call for further analysis of a particular matter, and frequently do.
Non-financial information is reviewed at least monthly by the Board. It includes reports from each executive director and key performance indicators such as plant performance, delivery performance, research
& development, sales activity and health, safety & environmental performance. Progress on strategic projects is also reviewed monthly.
The Board has a formal policy designed to ensure Board leadership of health & safety matters and institute a board-level review of progress against objectives and KPIs. An important feature of this is normally a joint presentation made at least yearly by the CEO and VP of Operations.
Independence of directors
Each of the directors (except Mr Hallam) directly owns ordinary shares in Hardide plc. Mr Boyce represents a large percentage of shares by virtue of his directorship of companies that own Hardide shares. Each of Mr Kirkham, Mr Hallam, Dr Zhuk and Mr Goddard has options on ordinary shares of Hardide plc; all as declared in the Annual Report and on the Regulatory News Service (RNS) at the time of grant.
Normally, the Board reviews Mr Goddard’s activities outside of Hardide. However, there has been no change in Mr Goddard’s since the previous year. Accordingly no formal acceptance by the Board of his outside interests has been needed. The Board remains satisfied that none of these activities conflict with Mr Goddard’s role as Chairman of Hardide. The same applies to the other non-executive directors.
The ‘independence’ of each non-executive director has been assessed in FY21 by four, single purpose ad hoc committees of directors. Excluded in turn from these meetings was the non-executive director in question. As in previous years, the main criteria for independence were:
i Based on the observed conduct of the director at and outside Board and Committee meetings, has that director acted clearly and consistently in the best interests of the Group?
ii Has there been any matter affecting the Group that might have given rise or might give rise in the future to any conflict of interest?
iii Is the director’s direct or indirect holding of shares or other financial instruments of the Group substantial enough to cause an external observer to believe the director in question might possibly have a potential conflict of interest? In this case, ‘substantial’ has been taken to mean 10% or more of the total issued share capital.
Mr Boyce was not considered to be an independent director because he did not satisfy the third of these tests. However, it should be noted that Mr Boyce is party to a Relationship Agreement with the Group. Each of the other two non-executive directors is considered by all the other Board directors to be ‘independent’.
Number of directors
In the past year there has been a total of six directors and three of these are non-executive. Tim Rice remains the senior independent director (‘SID’). In addition, and in compliance with the Code, Tim Rice is the chairman of the Remuneration & Nomination Committee. The chairman of the Audit Committee is Robert Goddard.
Culture of the Board and its capability to meet new challenges
Non-executive directors are actively and regularly consulted by the Chairman on a one-to-one basis and more formally during meetings of the non-executive directors alone. With the knowledge of the Chief Executive, from time to time the Chairman seeks directly the views of the two other executive directors. Also, the Chairman has contact with major shareholders and they are encouraged to contact him outside those meetings. The Chairman or the SID relays shareholder opinion to the non-executive directors or the full Board, as appropriate.
Open exchange and mutual challenge among Board members and staff is a well-established part of the culture of the Group. The Chairman is made aware promptly of matters of substance and style that merit his attention. In addition, each director is free to speak in confidence to the Chairman or the SID; as is any member of staff.
An open exchange of views takes place not only
up and down the management pyramid, but also ‘sideways’ between disciplines. This is vital for a high- tech company that is continually developing new substances and methods. Maintenance of this and other aspects of Group culture is explicitly one of the CEO’s important tasks and, implicitly, of each member of staff. Any concerns about corporate culture are raised initially by the CEO with the Chairman.
The CEO and Chairman have an off-site or video meeting every month. At this meeting they discuss
the upcoming Board meeting, the latest performance indicators and particular challenges facing the Group; together with high-level ‘people issues’.
This year has seen the start of the process of face- to-face, one-to-one confidential meetings dealing with the performance of Chairman and each of the non-executive directors. In these meetings the two participants give their views of the other's performance and identifies if there are aspects meriting attention.
Corporate Governance Statement 27

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