Governance report

I am pleased to introduce the Group’s corporate governance report on behalf of our board of directors (the ‘board’).

The Group is committed to business integrity, high ethical values and professionalism in all of its activities and this report explains how we manage the Group and comply with the provisions of the UK Corporate Governance Code (the ‘Code’).

We continue to evolve the board to ensure that it has the right balance of knowledge, experience and outside in perspective. I handed over chairship of the nominations committee to Alun Griffiths this year, and he oversaw a process for recruiting a new chair with a specification which ensured that we retained the right mix of skills around the board table.

During the year, we developed and implemented a board improvement plan, further details of which are set out in the governance report.

The board has confirmed that this annual report is fair, balanced and understandable. The audit committee, supported by management, has adopted a process to enable the board to take this view.

You can find an explanation of the process we have used to make this determination in the audit committee report.

The board delegates certain of its responsibilities to the board committees to enable it to carry out its functions effectively. A diagram of the board governance structure is set out here.

Our executive director remuneration arrangements are intended to support the achievement of the Group’s objectives and strategy. With the support of the remuneration committee’s oversight, we continue to believe that the current remuneration packages help to appropriately incentivise management to sustain long-term value for shareholders.

Last year, we made a number of changes to our remuneration policy as part of the normal three-yearly cycle, and these were supported overwhelmingly at last year’s AGM. Following that vote, Alun Griffiths was able to step down as Chair of the remuneration committee and is ably succeeded by Louise Hardy.

A summary of our new remuneration policy, a summary of how we intend to operate that policy in 2025, and a review of the remuneration committee’s activities, together with bonus and PSP performance in 2024, can be found in the remuneration report.

The board is mindful of diversity and we are committed to building a supportive, diverse, and inclusive working environment where all colleagues feel they belong.

The board is represented by a range of industry experience and personal strengths and consists of one female and seven male directors. Further details of their skills and experience can be found here.

The board is committed to ensuring it, and our wide employee base, remains diverse and the Group has an equal opportunities and diversity policy to support this.

As an equal opportunities employer, we are committed to encouraging diversity and eliminating discrimination in both our role as an employer and as a provider of services, and to achieving and maintaining a workforce that broadly reflects the communities in which we operate.

During the year, we continued to monitor the gender pay gap and our gender balance across all tiers of management. We are confident that our gender pay gap does not stem from paying men and women differently for the same or equivalent work.

We are mindful though, that the sector in which we operate is male dominated and we are now monitoring diversity in our recruitment and to seek to attract a more diverse workforce over time.

The board and I recognise the responsibility we have to a range of stakeholders, including customers, employees, subcontractors and suppliers and the environment and communities in which we operate.

The board recognises the importance of capital returns to shareholders and, given the strong financial performance of the Group, considered a share buyback to be in the interests of stakeholders. We have an open and effective dialogue with shareholders, with regular meetings being held with institutional shareholders.

The AGM will be held on 30 July 2024 and I encourage all shareholders to submit any questions in advance and to vote via proxy for the resolutions.