Dunelm Group plc – Annual report – 30 June 2018
Corporate Governance Report (extract)
s172 Companies Act 2006
As a Board we have always taken decisions for the long term, and collectively and individually our aim is always to uphold the highest standards of conduct. We expect all of our colleagues, at every level of the business, to do the same. Similarly, we understand that our business can only grow and prosper over the long term if we understand and respect the views and needs of our customers, colleagues and the communities in which we operate, as well as our suppliers and the shareholders to whom we are accountable. This is reflected in our “Business Principles”, and our Sustainability report sets out more detail on how we manage our relationships with them.
The Company Secretary sets out the text of s172 Companies Act 2006 on every Board agenda, and as we receive presentations and make decisions, we ensure that the impact on any of these groups is considered. At our meeting in April, we spent time examining how we engage with them. A summary of this is set out below. We will formally review this at least once a year to consider whether there are ways that the Board’s engagement can be improved to help us operate more effectively.
How the Board engages with its stakeholders
Engaging with our colleagues
Dunelm is a very open business and our colleagues are seldom reluctant to share their views with us! Members of the Board and our leadership team are expected to spend time in store and at other Group locations, and actively seek their opinions on how we can improve. We have an “always on” colleague feedback system, and management review this and respond. We also have a twice yearly engagement survey, the results of which are fed back to managers, the Executive Board, and the People Director covers this as part of her regular presentations to the Board. We have Regional and National Colleague Councils, and this year we have designated Marion Sears as our “Designated Non-Executive Director” for colleague purposes. Marion attended the National Colleague Council meetings in April and September and fed back to the Board afterwards. National Colleague Council members will be meeting with the Board in November.
Investor relations and understanding shareholder views
The table above summarises how we communicate with our shareholders. The Chief Executive Officer and the Chief Financial Officer report back to the Board after the investor roadshows. The Group’s brokers and financial PR advisers also provide a written feedback report after the full and half year results announcements and investor roadshows to inform the Board about investor views, and in addition Non-Executive Directors attend a selection of investor meetings.
In January 2018, we held one of our regular Corporate Governance meetings, attended by Will Adderley, the Non-Executive Directors, the Company Secretary and myself, to which our major institutional shareholders were invited. This gives the corporate governance representatives of our shareholders an opportunity to discuss with us a range of governance topics. Matters discussed included Board composition, the work of the Audit and Risk Committee, remuneration, risk, cyber security, human rights and the environment. We are planning to hold another meeting in January 2019.
Our corporate website contains useful shareholder information, copies of presentations and policies in relation to governance and sustainability. Please see www.dunelm.com.
All Directors will be available at the Annual General Meeting to meet with shareholders and answer their questions.
Culture and the Board
Dunelm has an open and straightforward culture, with a strong moral compass, reflecting the values instilled by the Adderley family. The Board has always been cognisant of the need to retain this culture as the business grows and becomes more complex. “Culture” is one of our “principal risks”, which are monitored formally by the Executive Board and the Board twice a year. The Board has defined the Group’s “purpose”, namely “to help everyone create a home they love – the “Home of Homes”. This is supported by five business goals, underpinned by our business principles, which define how we will act towards others. Further details of this are set out in the Strategic Report. Members of the Board and the leadership team are expected to act as role models for our business principles, and all colleagues are appraised against them.
Board members monitor adherence to the culture in a number of ways, including by visiting Group locations and interacting with colleagues and advisors to the Group as part of their Board duties. The Board also reviews a number of “culture” indicators, such as colleague and customer satisfaction scores, accident statistics, internal audit reports, whistleblowing data, and regulatory enforcement. During the year, a “culture scorecard” has been developed, bringing this data together, and was formally reviewed by the Board in September. This will be repeated at least once a year going forward.