The following text is an extract from the C&C Group’s 2017 Annual Report.
Board of Directors
Role
The Board is responsible for the oversight, leadership and control
of the Group and its long-term success. There is a formal schedule
of matters reserved to the Board for decision. This includes
approval of Group strategic plans, annual budgets, financial
statements, significant contracts and capital expenditure items,
major acquisitions and disposals, changes to capital structure,
circulars, Board appointments, and the review of the Group’s
corporate governance arrangements and system of internal
control, and approval of policies including corporate responsibility
and health and safety. The Board is also responsible for instilling
the appropriate culture, values and behaviour throughout the
Group. The Directors acknowledge that they are responsible for
the proper stewardship of the Group’s affairs, both on an individual
and collective basis. The matters and agenda reserved for Board
consideration reflect this responsibility.
The roles of the Chairman and the Group Chief Executive Officer
are separate with a clear division of responsibility between them,
which is set out in writing and which has been approved by the
Board. The Chairman has responsibility for the management
of the Board, the performance of Directors and their induction,
development and performance evaluation, ensuring there are
effective relations with shareholders and for the AGM. The Chief
Executive is responsible, within the authority limits delegated by
the Board, for business strategy and management, investment and
financing, risk management and controls, timely reporting, making
recommendations on remuneration policy and on the appointment
of executive directors, setting Group HR policies and leading the
communications programme with shareholders.
The Board delegates responsibility for the
management of the Group through the
Group Chief Executive Officer to executive
management. The Board also delegates
some of its responsibilities to Board
Committees, details of which are set out
below. The responsibilities of the Chairman
are covered in detail below.
The Chief Executive has full day-to-day
operational and profit responsibility for the
Group and is accountable to the Board
for all authority delegated to executive
management. His overall brief is to execute
agreed strategy, to co-ordinate and maintain
the continued profitability of the Group and
to oversee senior management responsible
for the day-to-day running of the business.
Non-executive Directors are expected to
constructively challenge management
proposals and to examine and review
management performance in meeting
agreed objectives and targets. In addition,
they are expected to draw on their own
specific experience and knowledge in
respect of any challenges facing the Group
and in relation to the development of
proposals on strategy.
Individual Directors may seek independent
professional advice at the Company’s
expense where they judge it necessary to
discharge their responsibilities as Directors.
The Group has a policy in place which
indemnifies the Directors in respect of
certain legal actions taken against them.
Board Composition, Membership and Renewal
The primary purpose of the Board is to
help create and maintain the conditions
which promote the long term success
of the business for the benefit of both
shareholders and the wider stakeholder
base. In order to do so effectively, the Board
requires members with a broad range of
skills and experience and the ability to
both support and challenge the executive
management.
The Board believes that the current
Directors bring the necessary range of
skills, knowledge and experience so as to
provide leadership, control and oversight
of management while contributing to the
development and implementation of the
Group’s strategy. The biographical details
of the current Directors are set out on
pages 52 and 53. The Board regards the
number of non-executive Directors currently
appointed to the Board as sufficient to
ensure effective oversight of the Group’s
management and to enable its Committees
to operate without undue reliance on
individual non-executive Directors.
While the Board’s current composition
includes a strong balance of skills and
experience, the Board recognises the
positive impact new appointments can
bring to the Group. As such, the Board is
committed to an ongoing programme for
Board refreshment and renewal, with a
particular focus on diversity and industry
experience. In pursuing its programme
for Board refreshment, the Nomination
Committee is cognisant that finding and
recruiting Directors with the skills and
experience needed to challenge the breadth
of the Group’s business can require a longer
lead time.
Consistent with that commitment to
Board refreshment and development, Jim
Clerkin was appointed as a non-executive
Director in April 2017. Jim brings a wealth
of experience and knowledge of the global
drinks industry to the Board. This follows
the appointment of Vincent Crowley
and Rory Macnamara as non-executive
Directors in 2016 and the retirement of John
Hogan and Anthony Smurfit in 2016 as
part of the ongoing programme of Board
refreshment. Our Board continues to include
an appropriate balance of longer serving
and more recently appointed Directors,
with diverse backgrounds and experience.
This serves to bring fresh thinking to the
Board yet preserves a proportion of the
membership with an in-depth understanding
of the challenges and opportunities facing
the business, all of which provides the
platform for fruitful discussions with the
management team.
Board Independence
In line with the UK Code, it is Board policy
that at least half the Board, excluding the
Chairman, shall consist of independent nonexecutive
Directors. The Board has reviewed
its composition and has determined that of
the Directors as at the date of this report,
Emer Finnan, Richard Holroyd, Breege
O’Donoghue, Stewart Gilliland, Jim Clerkin
and Vincent Crowley are independent.
The independence of Board members is
considered annually. In determining the
independence of non-executive Directors,
the Board considered the principles relating
to independence contained in the UK Code
and the guidance provided by a number
of shareholder voting agencies. Those
principles and guidance address a number
of factors that might appear to affect the
independence of Directors, including former
service as an executive of the Group,
extended service to the Board and crossdirectorships.
However, they also make
clear that a Director may be considered
independent notwithstanding the presence
of one or more of these factors. This reflects
the Board’s view that independence is
determined by a Director’s character and
judgment. The Board considers that each
of the non-executive Directors brings
independent judgment to bear.
Given their length of service, the Board
conducted a particularly thorough review
of the continued independence of Richard
Holroyd and Breege O’Donoghue.
Subsequent to that assessment, the
Board is satisfied that neither Richard’s
nor Breege’s independence has been
compromised by their length of service.
As part of this assessment, the Board
considered their concurrent tenure with
the executive directors, as well as their
continuing performance in scrutinising
management decisions. The Board
also recognises that their professional
experience and long-term perspective on
the Group’s business is hugely valuable to
the work of the Board.
As set out in the table below, each has
served on the Board concurrently with the
Group’s Chief Executive Officer, the longest
serving executive Director, for 8.5 years. The
Board recognises the principles of the Code
and guidelines on tenure but is satisfied that
the objectivity, judgment and independence
of each of the Directors, and the Board
as a whole, is not compromised by any
individual’s tenure on the Board.
|
Independent/Non-Independent |
Tenure(Years) |
Concurrent Tenure* (Years) |
|---|
| Sir Brian Stewart |
Independent
(Chairman) |
7 |
7 |
| Jim Clerkin |
Independent |
0.1 |
0.1 |
| Vincent Crowley |
Independent |
1.5 |
1.5 |
| Joris Brams |
Non-Independent
(Executive) |
4.5 |
4.5 |
| Emer Finnan |
Independent |
3 |
3 |
| Stewart Gilliland |
Independent |
5 |
5 |
| Stephen Glancey |
Non-Independent
(Executive |
8.5 |
8.5 |
| Richard Holroyd |
Independent |
13 |
8.5 |
| Rory Macnamara |
Independent |
0.5 |
0.5 |
| Kenny Neison |
Non-Independent
(Executive) |
7.5 |
7.5 |
| Breege O’Donoghue |
Independent |
13 |
8.5 |
*Note: Concurrent tenure means tenure on the Board concurrently with the Group’s Chief Executive Officer, the longest
serving executive Director.
Chairman
Sir Brian Stewart has been Chairman of the
Group since August 2010. The Chairman
is responsible for the efficient and effective
working of the Board. He is responsible
for ensuring that the Board considers
the key strategic issues facing the Group
and that the Directors receive accurate,
timely, relevant and clear information.
He also ensures that there is effective
communication with shareholders and
that the Board is apprised of the views of
the Group’s shareholders. As part of this
process, the Chairman partakes annually
in a series of meetings, focused solely on
corporate governance, with a number of the
Group’s largest institutional shareholders.
Senior Independent Director
Richard Holroyd is the Group’s Senior
Independent Director. He is available to
shareholders who have concerns for which
contact through the normal channels of
Chairman, Group Chief Executive Officer
or Group Chief Financial Officer has failed
to resolve or for which such contact is
inappropriate. He is also available to meet
shareholders on request.
Audit Committee Financial Expert
The Audit Committee has determined
that Emer Finnan, who also chairs the
Committee, is the Audit Committee financial
expert. Emer is a qualified chartered
accountant and has recent and relevant
financial expertise.
Company Secretary
David Johnston is the Company Secretary.
All Directors have access to the Company
Secretary, who is responsible to the Board
for ensuring that Board procedures are
complied with. The appointment and
removal of the Company Secretary is a
matter for the Board.
Appointment, Retirement and Re-election
The non-executive Directors are engaged
under the terms of letters of appointment,
details of which are set out in the Report of
the Remuneration Committee on Directors’
Remuneration. Copies of the letters of
appointment are available on request from
the Company Secretary.
The Company’s Articles of Association
require that at least one-third of the
Directors subject to rotation shall retire by
rotation at the Annual General Meeting
in every year. Directors appointed by the
Board must also submit themselves for
election at the first annual general meeting
following their appointment. However, in
accordance with the recommendations of
the UK Code, the Directors have resolved
that they will all retire and submit themselves
for re-election by the shareholders at the
Annual General Meeting this year.
Induction and Development
A comprehensive tailored induction
programme is arranged for each new
Director. The aim of the programme is to
provide the Director with a detailed insight
into the Group. The programme involves
meeting with the Chairman, Group Chief
Executive Officer, Group Chief Financial
Officer, Company Secretary and key senior
executives. It covers areas such as strategy
and development, organisation structure,
succession planning, financing, corporate
responsibility and compliance, investor
relations and risk management. The Board
receives regular updates from its external
legal and other advisers in relation to
regulatory and accounting developments.
Throughout the year, Directors meet
with key executives and meet with local
management teams, and a site visit for
all Board Directors to one of the Group’s
operations facilities is normally scheduled
annually.
Newly-appointed members of the Audit
Committee will meet with the key members
of the external audit, internal audit and
finance teams. New members of the
Remuneration Committee will meet with
the Committee’s remuneration consultants
in the year of their appointment to the
Committee.
External non-executive directorships
The Board recognises that there can be
benefit if executive Directors accept a nonexecutive
directorship with other companies
to broaden their skills, knowledge and
experience. Joris Brams is currently a nonexecutive
director at Democo NV, a Belgian
construction company.
Apart from him, currently none of
the executive Directors has such an
appointment. The Remuneration Committee
determines whether Directors should be
permitted to retain any fees paid in respect
of such appointments. The Remuneration
Committee has determined that Joris
Brams is permitted to retain fees from his
appointment.
Meetings
During the period under review there were
seven scheduled meetings of the Board and
a further two short notice meetings. Details
of Directors’ attendance at these meetings
are set out in the table on page 67. Several
ad hoc meetings without notice were held
during the year for share allotment and
other administrative matters in accordance
with the Board’s procedures. In addition,
the members of the Board met without the
executive Directors present to provide an
opportunity for non-executive Directors and
the Chairman to assess their performance,
and a further meeting of the non-executive
Directors led by the Senior Independent
Director was held without the Chairman
being present to assess the Chairman’s
performance.
The Chairman sets the agenda for each
meeting in consultation with the Group
Chief Executive Officer and the Company
Secretary. The agenda and Board papers,
which provide the Directors with relevant
information to enable them to fully consider
the agenda items in advance, are circulated
prior to each meeting. Directors are
encouraged to participate in debate and
constructive challenge. While Directors are
expected to attend all scheduled meetings,
in the event a Director is unable to attend a
meeting, his or her view on all agenda items
is sought and conveyed to the Chairman
in advance of the meeting. In addition,
following the meeting, matters discussed
and decisions made at the meeting are
conveyed to the Director.
Performance evaluation
The Board recognises the importance
of a formal and rigorous evaluation of
the performance of the Board and its
Committees. The Chairman conducts an
annual review of corporate governance
and the operation and performance of
the Board and its Committees. In the year
under review the Chairman has reviewed
the performance of individual Directors
and, within the remit of the Nomination
Committee, succession planning, identifying
in this process the experience and qualities
required by the Group for the future
implementation of its strategy.
The Chairman conducts one to one
discussions each year with each Director to
assess his or her individual performance.
Performance is assessed against a number
of criteria, including his or her contribution
to Board and Committee meetings; time
commitments; contribution to strategic
developments; and relationships with other
Directors and management.
The Senior Independent Director and the
other non-executive Directors review the
Chairman’s performance and the Board’s
performance each year, the results being
reported back to the Chairman with any
recommendations.
In 2015, the Board also engaged an external
advisor to complete an independent
evaluation of the performance and
effectiveness of the Board and each of
the Committees. This evaluation is in line
with the recommendations of the UK Code
which requires an external Board evaluation
to be conducted at least once every three
years. The company engaged to perform
the evaluation has no business connection
or relationship with the Group, its directors
or senior management.
Accountability
The Board is committed to providing a fair,
balanced and understandable assessment
of the Company’s position and prospects.
Responsibility for reviewing the Group’s
internal financial control, financial risk
management systems and risk evaluation
procedures and monitoring the integrity
of the Group’s financial statements has
been delegated by the Board to the
Audit Committee. Details of how these
responsibilities were discharged is set out
in the Audit Committee Report on pages 63
to 66.
The Board receives regular updates from
the Chair of the Audit Committee.
Remuneration
Details of remuneration paid to Directors
(executive and non-executive) are set out in
the Report of the Remuneration Committee
on Directors’ Remuneration on pages 70 to
89.
Non-executive Directors are remunerated by
way of a Director’s fee. Additional fees are
also payable to the Chairman of the Audit
Committee, Chairman of the Remuneration
Committee and to the Senior Independent
Director. Non-executive Directors’ fees
and additional fees payable to Committee
Chairmen and the Senior Independent
Director have not been increased since
2008.
It is Board policy that non-executive Director
remuneration does not comprise any
performance-related element and, therefore,
non-executive Directors are not eligible to
participate in the Group’s bonus schemes,
option plans or share award schemes.
Non-executive Directors’ fees are not
pensionable and non-executive Directors
are not eligible to join any Group pension
plans. Executive Directors’ remuneration is
inclusive of any Director’s fee.
The current limit under the Articles on
Directors’ ordinary remuneration (i.e.
directors’ fees, not including executive
remuneration) is €1,000,000, pursuant to
a resolution passed at the 2013 Annual
General Meeting.
The report of the Remuneration Committee
will be presented to shareholders for the
purposes of a non-binding advisory vote
at the Annual General Meeting on 6 July
2017. While there is no legal obligation for
the Group to put such a resolution to a
vote of shareholders at the Annual General
Meeting, the Board recognises that such
resolutions are now considered good
governance practice.
Share ownership and dealing
The Company has share ownership
guidelines for the executive Directors to
ensure the interests of executive Directors
are aligned with those of shareholders. In
summary, the guidelines are that the current
market value of shares in the Company
held by the relevant Director should be at
least two times salary for the Group Chief
Executive Officer and one times salary for
other executive Directors. If share ownership
guidelines are not met, then individuals must
retain up to 50% of vested share awards
(net of tax). Further information including
details of Directors’ shareholdings is set out
on page 77.
The Group has a policy on dealing in
shares that applies to all Directors. Under
this policy, Directors are required to obtain
clearance from the Chairman (or in the case
of the Chairman himself, from the Senior
Independent Director) before dealing.
Directors are prohibited from dealing in the
Company’s shares during closed periods
and at any other time when the individual is
in possession of inside information.
Committees
The Board has established three permanent
committees to assist in the execution of
its responsibilities. These are the Audit
Committee, the Nomination Committee and
the Remuneration Committee. The current
membership of each committee is set out
on page 52. Attendance at meetings held is
set out in the table on page 67.
Each of the permanent Board Committees
has terms of reference under which
authority is delegated to them by the
Board. These terms of reference are
available on the Company’s website
www.candcgroupplc.com. Minutes of all
Committee meetings are circulated to the
entire Board.
The Chairman of each Committee attends
the Annual General Meeting and is available
to answer questions from shareholders.
The Board has also established a Disclosure
Committee comprising the Chairman, the
Group Chief Executive Officer, the Group
Chief Financial Officer and the Company
Secretary. The Head of Investor Relations
may also participate where required. The
main responsibilities of the Disclosure
Committee include:
- determining whether information
constitutes inside information;
- determining if information requires
immediate disclosure or if disclosure can
be legitimately delayed;
- determining a consistent approach and
policy to disclosure;
- reviewing and approving material
announcements;
- monitoring leaks, rumours, speculation
and market expectations, and taking
appropriate action;
- monitoring the materiality of any variance
between the Group’s performance and its
own forecasts.
Ad hoc committees are formed from time to
time to deal with other specific matters.
Audit Committee
Composition and Meetings
The constitution of the Audit Committee requires that its
membership shall consist only of independent, non-executive
Directors. The members are Emer Finnan (Chairman), Richard
Holroyd and Vincent Crowley. As set out on page 60, the Audit
Committee has determined that Emer Finnan, who also chairs the
Committee, is the Audit Committee financial expert.
The Committee meets a minimum of four times a year. During the
period under review it met eight times. Attendance at meetings held
is set out in the table on page 67.
The Group Chief Financial Officer attends Audit Committee
meetings as appropriate, while the internal auditor and the external
auditor attend as required and have direct access to the Audit
Committee Chairman. The Group Head of Finance is the secretary
of the Audit Committee.
Constitution and terms of reference
The role, responsibilities, authority and duties of the Audit
Committee are set out in written terms of reference. The current
terms of reference are available under the Board Committees
section of the Group’s website at www.candcgroupplc.com.
The Audit Committee’s responsibilities include:
- monitoring the integrity, truth and fairness of the financial
statements of the Group, including the Annual Report, interim
report, interim management statements, preliminary results and
other formal announcements relating to the Group’s financial
performance, and reviewing significant financial reporting
judgements contained in them;
- ensuring that the information presented in the financial
statements of the Group and other announcements is fair,
balanced and understandable and provides the information
necessary for the Company’s shareholders to assess the Group’s
performance, business model and strategy and advising the
Board accordingly;
- monitoring the statutory audit of the annual and consolidated
accounts;
- reviewing the adequacy and effectiveness of the Group’s internal
financial controls and risk management systems;
- reviewing the effectiveness of the Group’s internal audit function;
- reviewing the adequacy and security of the Group’s
arrangements for its employees raising concerns, its procedures
for detecting fraud, the Group’s systems and controls for
the prevention of bribery, and the Group’s whistleblowing
arrangements;
- making recommendations to the Board in
relation to the appointment and removal
of the Group’s external auditor, their
remuneration and terms of engagement;
- evaluating the performance of the external
auditor including their independence and
objectivity;
- reviewing the annual internal and
external audit plans and reviewing the
effectiveness and findings of the external
audit with the external auditor;
- ensuring compliance with the Group’s
policy on the provision of non-audit
services by the external auditor;
- reporting to the Board on how it has
discharged its responsibilities; and
- reviewing the annual financial statements
of the pension funds where not reviewed
by the Board as a whole.
Internal control and risk management systems
The Group’s system of internal control and
risk management is described below.
The terms of reference of the Audit
Committee require it to conduct an annual
assessment of internal financial controls and
financial risk management systems. The
risks facing the Group are reviewed regularly
by the Audit Committee with executive
management. Specific annual reviews
of the risks and fundamental controls of
Directors’ Statement of Corporate Governance
each business unit are undertaken. The
results and recommendations are reported
to and analysed by the Audit Committee
and a programme for action agreed
with the business units. In carrying out
these responsibilities during the year, the
Committee reviewed reports issued by both
the internal audit function and the external
auditor and held regular discussions
with the Head of Internal Audit and
representatives of the external auditor. The
Committee also reviewed the outcome of an
assessment of the Group’s internal financial
controls which had been coordinated by the
internal audit function.
Internal Audit
The Committee is responsible for
monitoring and reviewing the operation and
effectiveness of the internal audit function
including its focus, plans, activities and
resources.
The Group’s internal audit function reports
to the Audit Committee and the Audit
Committee has approved its terms of
reference. The Group’s internal auditor is
engaged on a programme of work, which
includes, inter alia, maintaining the Group’s
risk register and examining the fundamental
controls of the Group. During the year, the
Committee reviewed and approved the
internal audit plan for the year.
The Committee received regular reports
from the Head of Internal Audit summarising
findings of the team’s work and the
responses from management to deal with
the findings. The Committee monitors
progress on the implementation of the
action plans on significant findings to ensure
these are completed satisfactorily.
External Auditor
The Committee manages the relationship
with the Group’s external auditors on behalf
of the Board. The Committee carries out
an annual assessment of the external
auditor including a review of the external
auditor’s internal policies and procedures for
maintaining independence and objectivity
and consideration of their approach to audit
quality. The external auditor is professionally
required to rotate the audit partner
responsible for the Group audit every five
years and this rotation took place in FY2017
with a new partner being appointed to the
Group.
External audit process
The Committee also reviewed and approved
the external audit plan as presented
by the external auditor and assessed
the qualifications and expertise of their
resources. The Committee also reviewed
the external auditor’s engagement letter and
recommended the level of remuneration
of the external auditor to the Board having
reviewed the scope and nature of the work
to be performed. The Committee assessed
the effectiveness of the external audit
process by monitoring performance against
the agreed audit plan and noting the results
of post-audit interviews with management
and the Audit Committee Chairman.
Length of service of auditors
KPMG has been the external auditor of
the Company and the Group since the
Company’s formation and flotation in 2004.
In line with guidance within the UK Code
and the recent EU Directive 2014/56/EU
of the European Parliament and Council
passed by the European Parliament and
transposed into Irish Law in 2016 in respect
of audit reforms and audit tendering, the
Group conducted a formal tender process
in FY2017. As a result of the transition
rules under the EU Directive, KPMG’s
length of tenure prevented them from
acting as auditors beyond the year ended
28 February 2017. The Board following
a recommendation from the Committee,
decided to appoint a new audit firm to
complete the Group audit for the financial
year ended 28 February 2018. The tender
process concluded with a recommendation
by the Committee to the Board to appoint
EY as the Group’s external auditor from
FY2018 onwards. This recommendation
was accepted by the Board. A resolution
proposing the appointment of EY will be
presented to shareholders at the Group’s
AGM in July 2017. The tender process
undertaken to appoint a new auditor was
rigorous and involved written submissions
and presentations from each of the invited
firms.
Hiring of former employees of auditor
In order to ensure the independence and
objectivity of the external auditor, the prior
approval of the Audit Committee is required
before any individual is appointed to a
senior managerial position in the Group,
if such individual has within three years
prior to such proposed appointment been
employed by the external auditor.
Non-Audit Services by auditor
The Group has a policy in place governing
the provision of non-audit services by
the external auditor in order to ensure
that the external auditor’s objectivity and
independence is safeguarded.
Under this policy the auditor is prohibited
from providing non-audit services if the
auditor:
- may, as a result, be required to audit its
own firm’s work;
- would participate in activities that would
normally be undertaken by management;
- would be remunerated through a
“success fee” structure or have some
other mutual financial interest with the
Group;
- would be acting in an advocacy role for
the Group.
Other than above, the Company does not
impose an automatic ban on the external
auditor providing non-audit services.
However, the external auditor is only
permitted to provide non-audit services
that are not, or are not perceived to be,
in conflict with auditor independence and
objectivity, if it has the skill, competence
and integrity to carry out the work and
it is considered by the Audit Committee
to be the most appropriate to undertake
such work in the best interests of the
Group. The engagement of the external
auditor to provide non-audit services must
be approved in advance by the Audit
Committee or entered into pursuant to
pre-approved policies and procedures
established by the Audit Committee and
approved by the Board.
The nature, extent and scope of nonaudit
services provided to the Group by
the external auditor and the economic
importance of the Group to the external
auditor are also monitored to ensure
that the external auditor’s independence
and objectivity is not impaired. The Audit
Committee has adopted a policy that,
except in exceptional circumstances with
the prior approval of the Audit Committee,
non-audit fees paid to the Group’s auditor
should not exceed 100% of audit fees in any
one financial year.
During the year, KPMG provided nonaudit
advisory services, being advice on
taxation and other related matters. In
approving KPMG to provide these services
the Committee was of the opinion that
KPMG’s knowledge of the Group was an
important factor. The Committee was also
satisfied that the fees paid to KPMG for
non-audit work did not compromise their
independence or integrity. Details of the
amounts paid to KPMG during the year for
audit and other services are set out in note
2 to the financial statements.
Whistle-blowing procedures
In line with best practice, the Group
supports an independent and confidential
whistle-blowing service which allows all
employees to raise any concerns about
business practice in a confidential manner.
The Nomination Committee
Composition and Meetings
The Nomination Committee is chaired by
the Group Chairman and its constitution
requires it to consist of a majority of
independent, non-executive Directors. The
members during the year were Sir Brian
Stewart (Chairman), Breege O’Donoghue
and Richard Holroyd.
The Committee meets a minimum of twice
a year and met twice in the year ended 28
February 2017. Attendance at meetings
held is set out in the table on page 67. In
addition, several ad hoc meetings were held
to progress initiatives.
Constitution and terms of reference
The Nomination Committee’s current
terms of reference are available under the
Board Committees section of the Group’s
website at www.candcgroupplc.com. The
Nomination Committee’s responsibilities
include:
- reviewing the structure, size and
composition of the Board (including
the balance of skills, experience,
independence, knowledge and
diversity (including gender)) and making
recommendations regarding any
changes;
- overseeing succession planning for the
Board and senior management and the
leadership needs of the organisation;
- responsibility for the identification of
suitable candidates for appointment to
the Board;
- making recommendations to the Board
on membership of Board Committees.
Diversity
The Nomination Committee and the Board
recognise the importance of ensuring
diversity (including gender) and the key role
that a diversified Board plays in ensuring
effectiveness. Suitable candidates are
selected on the basis of their relevant
experience, employment background, skills,
knowledge and insight, having due regard
for the benefits of diversity to the Board.
The Committee and the Board further
realise that diversity extends beyond the
Board and in this regard seeks to ensure
that all recruitment decisions are fair and
non-discriminatory.
Independent consultants
The Nomination Committee is empowered
to use the services of independent
consultants to facilitate the search for
suitable candidates for appointment as nonexecutive
Directors.
During the year, Spencer Stuart, an
independent executive search firm, assisted
in the search process for non-executive
Director candidates with relevant experience
and skills and provided assistance in relation
to the appointment of Jim Clerkin. Spencer
Stuart has no other connection with the
Group.
The Remuneration Committee
The Remuneration Committee comprises
solely of independent, non-executive
Directors. The Chairman was Breege
O’Donoghue, and the other members were
Richard Holroyd and Stewart Gilliland.
The Remuneration Committee meets at
least twice a year. During the period under
review the Remuneration Committee met
four times. Attendance at meetings held is
set out in the table on page 67.
The Remuneration Committee’s terms of
reference, which are available on the C&C
website www.candcgroupplc.com, include:
- determining and agreeing with the Board
the framework or broad policy for the
remuneration packages of the Chairman,
Group Chief Executive Officer and
other executive Directors, the Company
Secretary and any other designated
members of the executive management.
- within the terms of the agreed policy
and in consultation with the Chairman
and/or Group Chief Executive Officer,
as appropriate, determining the total
individual remuneration package of each
of the above persons, including bonuses,
incentive payments and share options or
other share awards;
- reviewing and having regard to the
remuneration trends across the Group;
- approving the design of, and determining
targets for, any performance related pay
schemes and the total annual payments
made under such schemes;
- reviewing the design of all share incentive
plans and the performance targets to be
used;
- ensuring that contractual terms on
termination, and any payments made,
are fair, that failure is not rewarded and
that the duty to mitigate loss is fully
recognised;
- overseeing any major changes in
employee benefits structures throughout
the Group.
Communications with shareholders
The Group attaches considerable
importance to shareholder communications
and has an established investor relations
programme.
There is regular dialogue with institutional
investors with presentations given to
investors at the time of the release of the
Group’s first half and full year financial
results and when other significant
announcements are made. A trading update
was issued in July 2016 and a trading
statement was issued in March 2017. The
Group also hosted a Capital Markets Day
for investors in March 2016. The Board
is briefed regularly on the views and
concerns of institutional shareholders. The
Chairman has recently completed a series
of meetings, focused solely on corporate
governance, with a number of the Group’s
largest institutional shareholders.
The Group’s website, www.candcgroupplc.
com, provides the full text of the Annual
Report and financial statements, the Interim
Report and other releases. News releases
are also made available immediately
after release to the Stock Exchange.
Presentations given to investors and at
conferences are also made available on the
Company’s website.
General Meetings
The Companies Act, 2014 provides for two
types of shareholder meetings: the Annual
General Meeting (‘AGM’) with all other
meetings being called extraordinary general
meetings (‘EGM’).
The Company must hold a general meeting
in each year as its AGM in addition to any
other general meetings held in that year.
Not more than 15 months may elapse
between the date of one AGM and the
next. An AGM was held on 7 July 2016,
and this year’s AGM will be held on 6 July
2017. The Directors may at any time call an
EGM. EGMs may also be convened on the
requisition of members holding not less than
five per cent of the voting share capital of
the Company.
No business shall be transacted at any
general meeting unless a quorum is present
at the time when the meeting proceeds to
business. Three members present in person
or by proxy and entitled to vote shall be a
quorum.
Only those shareholders registered on the
Company’s register of members at the
prescribed record date, being a date not
more than 48 hours before the general
meeting to which it relates, are entitled to
attend and vote at a general meeting.
Resolutions of the general meeting must
be passed by the majority of votes cast
(ordinary resolution) unless the Companies
Act, 2014 or the Company’s Articles of
Association provide for 75% majority
of votes cast (special resolution). The
Company’s Articles of Association provide
that the Chairman has a casting vote in the
event of a tie.
Any shareholder who is entitled to attend,
speak and vote at a general meeting is
entitled to appoint a proxy to attend, speak
and vote on his or her behalf. A proxy need
not be a member of the Company.
At meetings, unless a poll is demanded,
all resolutions are determined on a show
of hands, with every shareholder who is
present in person or by proxy having one
vote. On a poll every shareholder who is
present in person or by proxy shall have one
vote for each share of which he/she is the
holder. A shareholder need not cast all votes
in the same way. At the meeting, after each
resolution has been dealt with, details are
given of the level of proxy votes lodged for
and against that resolution and also the level
of votes withheld on that resolution.
The Company’s AGM gives shareholders
the opportunity to question the Directors.
The Company must answer any question a
member asks relating to the business being
dealt with at the meeting unless answering
the question would interfere unduly with the
preparation for the general meeting or the
confidentiality and business interests of the
Company, or the answer has already been
given on a website in the form of an answer
to a question, or it appears to the Chairman
of the meeting that it is undesirable in the
interests of good order of the meeting that
the question be answered.
The business of the Company is managed
by the Directors who may exercise all the
powers of the Company unless they are
required to be exercised by the Company
in general meeting. Matters reserved to
shareholders in general meeting include
the election of Directors; the payment of
dividends; the appointment of the external
auditor; amendments to the Articles of
Association; measures to increase or reduce
the share capital; and the authority to issue
shares.
Internal control
The Board has overall responsibility for
the Group’s system of internal control,
for reviewing its effectiveness and for
confirming that there is a process for
identifying, evaluating and managing the
significant risks affecting the achievement
of the Group’s strategic objectives. The
process which has been in place for the
entire period and up to the date the financial
statements were approved accords with
the FRC Guidance published in September
2014 and involves the Board considering the
following:
- the nature and extent of the key risks
facing the Group;
- the likelihood of these risks occurring;
- the impact on the Group should these
risks occur;
- the actions being taken to manage these
risks to the desired level.
The key elements of the internal control
system in operation are as follows:
- clearly defined organisation structures
and lines of authority;
- corporate policies for financial reporting,
treasury and financial risk management,
information technology and security,
project appraisal and corporate
governance;
- annual budgets for all business units,
identifying key risks and opportunities;
- monitoring of performance against
budgets on a weekly basis and reporting
thereon to the Board on a periodic basis;
- an internal audit function which reviews
key business processes and controls; and
- an audit committee which approves plans
and deals with significant control issues
raised by internal or external audit.
This system of internal control can only
provide reasonable, and not absolute,
assurance against material misstatement
or loss. The terms of reference of the
Audit Committee require it to monitor the
effectiveness of the Group’s internal financial
controls and risk management systems and at
least annually carry out a review of the
effectiveness of these systems. The risks
facing the Group are reviewed regularly by
the Audit Committee with the executive
management team. Specific annual reviews
of the risks and fundamental controls
of each business unit are undertaken
on an ongoing basis, the results and
recommendations of which are reported
to and analysed by the Audit Committee
with a programme for action agreed by the
business units.
The preparation and issue of financial
reports, including consolidated annual
financial statements is managed by the
Group Finance function with oversight from
the Audit Committee. The key features of
the Group’s internal control procedures with
regard to the preparation of consolidated
financial statements are as follows:
- the review of each operating division’s
period end reporting package by the
Group Finance function;
- the challenge and review of the financial
results of each operating division with the
management of that division by the Group
Chief Financial Officer;
- the review of any internal control
weaknesses highlighted by the external
auditor by the Group Chief Financial
Officer, Head of Internal Audit and the
Audit Committee; and the follow up of
any critical weaknesses to ensure issues
highlighted are addressed.
The Directors confirm that, in addition to
the monitoring carried out by the Audit
Committee under its terms of reference,
they have reviewed the effectiveness of
the Group’s risk management and internal
control systems up to and including the
date of approval of the financial statements.
This review had regard to all material
controls, including financial, operational and
compliance controls that could affect the
Group’s business. The Directors considered
the outcome of this review and found the
systems satisfactory.
The Directors also confirm that they have
carried out a robust assessment of the
principal risks facing the company, including
those that would threaten its business
model, future performance, solvency or
liquidity. As description of the Principal Risks
and Uncertainties faced by the Group and
how these risks are being managed and
mitigated is set out on pages 19 to 21.
Corporate Responsibility
As part of its overall remit of ensuring that
effective risk management policies and
systems are in place, the Board examines
the significance of environmental, social
and governance (ESG) matters to the
Group’s business and it has ensured that
the Group has in place effective systems for
managing and mitigating ESG risks. It also
examines the impact that such risks may
have on the Group’s short and long term
value, as well as the opportunities that ESG
issues present to enhance value. The Board
receives the necessary information to make
this assessment in regular reports from the
executive management.
Corporate responsibility is embedded
throughout the Group. Group policies and
activities are summarised on pages 42 to
50 and the Group’s corporate responsibility
report is available on the Group’s website
www.candcgroupplc.com.
Viability Statement
For the purposes of assessing the future
prospects of the Group, the Directors
have selected a three year timeframe
and have carried out a forward looking
assessment of the Group’s viability based
on this timeframe. The assessment has
been made with reference to the Group’s
current position and prospects, the Group’s
strategy, the Board’s risk appetite and the
Group’s Principal Risks and Uncertainties
and how these are identified, managed and
mitigated.
This assessment is based on a number of
cautious assumptions concerning macro
growth and stability in our key markets
particularly in the context of forecasted
volume growth and margins. It will be
reviewed regularly by the Board through
presentations from senior management
on the performance of the respective
business units, the assessment of market
opportunities and the consideration by
the Board of its ability to fund its strategic
ambitions.
In making this assessment, the Directors
have considered the resilience of the Group,
taking account of its current position and the
Group’s Principal Risks and Uncertainties
and the Group’s ability to manage those
risks. The risks have been identified using
a top down and bottom up approach, and
their potential impact was assessed having
regard to the effectiveness of controls in
place to manage each risk. The Directors
also noted that borrowings under the five
year syndicated revolving loan facility will fall
due for repayment in December 2019 and
that, as part of standard practice, the Board
will consider refinancing options in advance
of this date.
Based on this assessment the Directors
have a reasonable expectation that the
Group will be able to continue in operation
and meet its liabilities as they fall due over
the three year period of their assessment.
Going Concern
The financial position of the Group, its
cash flows, liquidity position and borrowing
facilities are set out in the Group Chief
Financial Officer’s Review on pages 37
to 41. A description of the business of
the Group is set out in the Group Chief
Executive Officer’s Review on page 22 to
36. The principal risks and uncertainties
facing the Group are set out in this report on
pages 19 to 21.
An explanation of the basis on which the
Group generates and preserves value over
the longer term (the business model) and
the strategy for delivering its objectives
are set out in the Group Chief Executive
Officer’s review on pages 22 to 36. A
statement of the Group’s strategy is set
out on pages 16 and 17. The Group’s
long-term strategy is to build a sustainable
cider-led multi-beverage business through
a combination of organic growth and
selective acquisitions. The Group’s business
model seeks growth through brand/market
combination combining brand investment
with a focus on local markets.
The Group has significant revenues, a large
number of customers and suppliers across
different geographies, and considerable
financial resources. For these reasons, the
Directors have a reasonable expectation
that the Company, and the Group as a
whole, have adequate resources to continue
in operational existence for the foreseeable
future, being twelve months from the date
of approval of the financial statements.
Consequently they continue to adopt
the going concern basis in preparing the
financial statements.
Compliance Statement
C&C Group plc is incorporated and resident in Ireland and is
subject to Irish company law. It has a primary listing on the
Irish Stock Exchange (‘ISE’) and a listing in the Premium Listing
segment of the Official List of the United Kingdom Listing Authority
(‘UKLA’) and its shares are quoted on the ISE and the London
Stock Exchange (‘LSE’). C&C Group plc also has a Level 1
American Depository Receipt (ADR) programme.
The Directors are committed to maintaining high standards of
corporate governance and to reviewing governance best-practice
on a continuing basis to ensure that we adapt and evolve in what is
an environment of constant change.
The Group has complied with the provisions of the UK Code and
Irish Annex throughout the period under review. This Corporate
Governance statement describes the Group’s policy on corporate
governance during the financial year ended 28 February 2017.
Attendance At Meetings Of the Board And Its Committees
Attendance at Board meetings and Board
committee meetings during the year was as
set out in the table below.
In the attendance table below the numerator
in each fraction represents the number
of meetings actually attended by each
Director in respect of the Board and each
Board committee of which he or she was a
member, whilst the denominator represents
the number of such meetings that the
Director was scheduled to attend.
In addition, the non-executive Directors
including the Chairman met to evaluate the
performance of the executive Directors,
and the non-executive Directors, led by
the Senior Independent Director, without
the Chairman present, met to evaluate the
performance of the Chairman. Several ad
hoc meetings were held during the year for
administrative matters in accordance with
the Board’s procedures.
|
Scheduled Board Meetings |
Short Notice Board Meeetings |
Audit Committee Meetings |
Nomination Committee Meetings |
Remuneration Committee Meetings |
|---|
| Sir Brian Stewart |
7/7 |
4/4 |
|
2/2 |
|
| Joris Brams |
7/7 |
4/4 |
|
|
|
| Vincent Crowley |
1/1 |
|
|
|
|
| Emer Finnan |
7/7 |
4/4 |
5/5 |
|
|
| Stewart Gilliland |
6/7 |
4/4 |
|
|
4/5 |
| Stephen Glancey |
7/7 |
4/4 |
|
|
|
| John Hogan |
7/7 |
3/4 |
4/5 |
|
|
| Richard Holroyd |
7/7 |
3/4 |
5/5 |
2/2 |
5/5 |
| Rory Macnamara |
1/1 |
|
|
|
|
| Kenny Neison |
7/7 |
4/4 |
|
|
|
| Breege O’Donoghue |
7/7 |
3/4 |
|
2/2 |
5/5 |
| Anthony Smurfit |
7/7 |
2/4 |
4/5 |
|
|
