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Annual Report and Accounts 2014
Role of the Directors
The role of the Board is:
• to promote the success of the Company;
• be guardians of stakeholders’ interests;
• to set/monitor leadership behaviour and culture;
• to select and appoint the executive management team;
• to provide supportive challenge to the executive management team;
• to approve business plans and strategy;
• to oversee governance, risk and the control environment; and
• to monitor and oversee the businesses and management.
The Board provides leadership, direction and governance for the Company and
oversees business and management performance. The Board has adopted a
corporate governance framework which defines Board roles and includes the list
of matters reserved to it and written delegations of authority for its committees
and the executive management. Board reserved matters include strategy and
key areas of policy, major operational and strategic risks, significant investment
decisions and material changes in the organisation of the Group.
In the IMI Corporate Governance Framework the Board has clearly defined in
writing those matters which are reserved to it and the respective delegated
authorities of its committees and it has also set written limits of authority for
the Chief Executive. The Group has a clear organisational structure and well-
established reporting and control disciplines. Managers of operating units
assume responsibility for and exercise a high degree of autonomy in running
day-to-day trading activities. They do this within a framework of clear rules,
policies and delegated authorities regarding business conduct, approval of
proposals for investment and material changes in operations and are subject
to regular senior management reviews of performance.
The Group has a clear organisational structure and well-established reporting
and control disciplines. Managers of operating units assume responsibility for and
exercise a high degree of autonomy in running day-to-day trading activities. They do
this within a framework of clear rules, policies and delegated authorities regarding
business conduct, approval of proposals for investment and material changes in
operations and are subject to regular senior management reviews of performance.
Division of responsibilities amongst Directors
Chairman:
• building a well-balanced Board
• chairing meetings, setting the agenda and ensuring the best use of time
• ensuring effectiveness of the Board including the quality of debate and decisions
• promoting the right environment and relations for effective engagement and
challenge around the boardroom table
• setting the tone and high standards of governance practice
• getting the right executive leadership and succession plans in place
There is a clear division of responsibility between the Chairman and Chief
Executive, which is reflected in the written corporate governance framework
approved by the Board. In summary, the Chairman is responsible for the
leadership and effectiveness of the Board but does not have any executive
powers or responsibilities. The Chief Executive leads the executive management
team in running the businesses and implementing operational and strategic plans
under authority delegated by the Board.
The Chairman is responsible for ensuring that the Board meetings operate to
an appropriate agenda, and that adequate information is provided sufficiently
in advance of meetings to allow proper consideration. He is supported by the
Company Secretary, who also assists in ensuring that the Board operates in
accordance with good corporate governance under the Code and relevant
regulatory requirements. The Company Secretary acts as secretary to all of the
standing committees of the Board. The Board has a recognised procedure for
any director to obtain independent professional advice at the Company’s expense
and all directors have access to the Company Secretary who is a solicitor.
Chief Executive:
• leadership of the executive management team
• formulating strategy, business plans and budgets
• ensuring the highest compliance and internal control standards are maintained
• developing organisation structure
• resourcing, talent development and succession plans
Directors’ powers
The powers of the directors are determined by UK legislation and the articles
of association of the Company in force from time to time. The directors were
authorised to allot and issue ordinary shares and to make market purchases
of the Company’s ordinary shares by resolutions of the Company passed at its
general meeting held on 13 February 2014. These authorities were replaced
at the Annual General Meeting held on 8 May 2014 by the passing of new
resolutions, in respect of the new ordinary shares of 28 4/7p each. The current
authorities will expire at the conclusion of the next Annual General Meeting to
be held on 7 May 2015, at which new authorities will be sought.
Further details of authorities the Company is seeking for the allotment, issue and
purchase of its ordinary shares are set out in the separate Notice of the Annual
General Meeting.
Directors’ interests
The interests of the persons (including the interests of any connected persons)
who were directors at the end of the year, in the share capital of the Company,
and their interests under share option and incentive schemes, are shown on
pages 73 to 79.
Management of conflicts of interest
The Company’s articles of association include certain provisions relevant to the
activity of the Board and its committees and can be viewed on the IMI website.
These provisions include requirements for disclosure and approval by the Board
of potential conflicts of interest. These procedures apply, inter alia, to external
directorships and it is the Board’s view that they operated effectively during 2014.
Each director has a duty under the Companies Act 2006 to avoid a situation in
which they have or may have a direct or indirect interest that conflicts or possibly
may conflict with the interests of the Company. This duty is in addition to the
duty that they owe to the Company to disclose to the Board any interest in any
transaction or arrangement under consideration by the Company. If any director
becomes aware of any situation which may give rise to a conflict of interest, that
director informs the rest of the Board and the Board is then permitted under the
articles of association to decide to authorise such conflict. The information is
recorded in the Company’s register of conflicts and a conflicts authorisation
letter is issued to the relevant director.
Change of control
The Company and its subsidiaries are party to a number of agreements that may
allow the counterparties to alter or terminate the arrangements on a change of
control of the Company following a takeover bid, such as commercial contracts
and employee share plans. Other than as referred to in the next paragraph, none
of these is considered by the Company to be significant in terms of its likely
impact on the Group as a whole.
In the event of a change of control of the Company, the Group’s main funding
agreements allow the lenders to renegotiate terms or give notice of repayment
for all outstanding amounts under the relevant facilities.
The Company does not have agreements with any director or employee that
would provide compensation for loss of office or employment specifically
resulting from a takeover, although the provisions of the Company’s share
schemes include a discretion to allow awards granted to directors and
employees under such schemes to vest in those circumstances.
