Section 172 statement, cross reference to Governance and Sustainability reports, restructuring example

Travis Perkins plc – Annual report – 31 December 2020

Industry: distribution

Section 172 statement

Engaging with stakeholders

Building positive relationships through strong engagement, collaboration and dialogue with stakeholders that share our values is important to us, and working together towards shared goals assists us in delivering long-term sustainable success.

Our Group comprises a number of business units, all of which have extensive engagement with their own unique stakeholders as well as other businesses in the Group. The governance framework delegates authority for local decision-making at business unit level up to defined levels of cost and impact, which allows the individual businesses to take account of the needs of their own stakeholders in their decision-making.

The leadership teams of each business make decisions with a long-term view in mind and with the highest standards of conduct in line with Group policies. In order to fulfil their duties, the Directors of each business and the Group itself take care to have regard to the likely consequences on all stakeholders of the decisions and actions which they take. Where possible, decisions are carefully discussed with affected groups and are therefore fully understood and supported when taken.

The Board is well informed about the views of stakeholders. Reports are regularly made to the Board by the business units about the strategy, performance and key decisions taken which provides the Board with assurance that proper consideration is given to stakeholder interests in decision-making and it uses this information to assess the impact of decisions on each stakeholder group as part of its own decision-making process. In response to the Covid-19 pandemic, the cadence of reporting on stakeholder views to the Board was accelerated during 2020 enabling the Board to react quickly and develop the right strategies. Details of the Group’s key stakeholders and how we engage with them are set out below.

Shareholders

As owners of our Group we rely on the support of shareholders and their opinions are important to us. We want to enable them to have an in-depth understanding of our strategy and our operational and financial performance, so they can accurately assess the value of our shares.

We have an open dialogue with our shareholders through one-to-one meetings, group meetings, webcasts and the Annual General Meeting. Discussions with shareholders cover a wide range of topics including financial performance, strategy, outlook, governance and ethical practices. Shareholder feedback along with details of movements in our shareholder base are regularly reported to and discussed by the Board and their views are considered as part of decision-making.

Due to Covid-19 restrictions we regrettably had to hold a closed Annual General Meeting at our head office in Northampton. A live audio stream of the meeting and a facility for shareholders to submit questions was provided. Further details of how we conducted our AGM can be found in the governance section on page 79.

Colleagues

Our people are key to our success and we want them to be successful individually and as a team. We aim to build a trusting, respectful and inclusive environment where everyone feels safe, welcome, valued for their contribution and able to perform at their best.

We work hard to engage with and listen to our colleagues in a number of different ways including engagement surveys, forums, listening groups, briefings, internal communities, newsletters and through our anonymous “Speak Up” hotline. Key areas of focus include safety, health and well-being, diversity and inclusion, development opportunities and pay and benefits. In his role as the Colleague Voice Representative, Pete Redfern regularly reports what is important to our colleagues to the Board and ensures consideration is given to colleague needs. Further information on the ways in which the Group engages with colleagues can be found in the people section on pages 66 to 67.

In response to the Covid-19 pandemic, new Group-wide information channels were launched with all colleagues receiving regular updates. A weekly “pulse” survey was introduced for all working and furloughed colleagues to help better understand how colleagues were feeling, enabling us to react quickly and develop the right support strategies. During 2020 we completed 21 weekly surveys, with 35,000 responses from colleagues. Weekly response rates varied from 5% – 28% of colleagues, with over 50% of the responses being from furloughed colleagues in the first four weeks of the survey.

Customers

Working for our customers is one of our cornerstones and it drives us to nurture mutually beneficial relationships that deliver joint value. Our ambition is to deliver best-in-class, tailored service to customers.

We build strong lasting relationships with our trade customers and spend considerable time with them to understand their needs and views and listen to how we can improve our offer and service for them. We use this knowledge to inform our decision-making, for example to tailor our proposition to suit customer demands, with fixed range/fixed price models for small trade customers, and more flexible access to a wider product range with volume-related discounting in the Merchant businesses. Our most significant customers are monitored closely as they are imperative to our continued success. During the year, credit management was a particular focus to ensure our customers are supported and enabled.

Suppliers

Our suppliers are experts in the wide range of products we source from them. We aim to build strong relationships with our suppliers to develop mutually beneficial and lasting partnerships. Engagement with suppliers is primarily through a series of interactions and formal reviews and we also host regular conferences to bring suppliers and customers together to discuss shared goals and build relationships. Key areas of focus include innovation, product development, health and safety and sustainability. The Board recognises that relationships with suppliers are important to the Group’s long-term success and is briefed on supplier feedback and issues on a regular basis. We have maintained regular contact with our suppliers safely throughout the Covid-19 pandemic.

Communities and the environment

Investing in sustainable growth means supporting and empowering the communities in which we operate. By ensuring we make a positive contribution, we can help build thriving communities and strengthen our business.

We engage with the communities in which we operate to build trust and understand the local issues. Key areas of focus include how we can support local causes and issues, create opportunities to recruit and develop local people and help to look after the environment. We partner with local charities and organisations at a site level to raise awareness and funds. The key issues and themes across local communities are reported back to the Board.

The Group’s impact on the environment is a key focus for the Board. During 2020 carbon targets were established to support the Group’s leading ambitions on ESG matters. Further information on the sustainability overview on pages 52 to 70.

Government and regulators

The regulatory environment significantly impacts the success of our business. We believe it is important that those who can influence policy, law and regulation understand our views. We also want to share information and perspectives on areas that impact our businesses.

We engage with the government and regulators through a range of industry consultations, forums, meetings and conferences to communicate our views to policy makers relevant to our business. Key areas of focus are compliance with laws and regulations, health and safety and product safety. The Board is updated on legal and regulatory developments and takes these into account when considering future actions.

Decision-making in practice

One of the major decisions made by the Group this year was to restructure the branch network and above-branch support functions to reflect market fluctuations and new ways of working as a result of the Covid-19 pandemic. In making this decision the Board considered the interests of and the impact on all stakeholders. To provide insight into the approach taken by the Board, a summary of stakeholder views and conclusions is set out below.