Nomination Committee Report
I am pleased to present the Nomination Committee (‘the Committee’) report covering the work of the Committee during the 2020 financial year. This has been a busy year for the Committee with a keen focus on Board and Committee composition. From 1 March 2019, the new UK Corporate Governance Code (‘the Code’) came into effect for C&C, which has several material implications for Nomination Committees. The review and adoption of principles of the new Code also formed part of the Committee’s activity during the year.
The primary role of the Committee is to monitor and maintain an appropriate balance of skills, experience, independence and diversity on the Board while regularly reviewing its structure, size and composition. It is also responsible for ensuring there is a formal, rigorous and transparent process for the appointment of new Directors to the Board.
Succession planning is a fundamental aspect of the Committee’s work and encompasses a number of factors:
- contingency planning – for sudden and unforeseen departures;
- medium-term planning – the orderly replacement of current Board members and senior executives; and
- long-term planning – the relationship between the delivery of the Company strategy and objectives to the skills needed on the Board and the profile of senior management now and in the future.
During the year, the Committee oversaw a number of changes to the Board and Committee composition:
- March 2019 – Helen Pitcher succeeded Vincent Crowley as Chairman of the Remuneration Committee and Jim Thompson joined the Board as a Non-Executive Director;
- May 2019 – Richard Holroyd resigned as Senior Independent Director and Non-Executive Director and Geoffrey Hemphill resigned as a non-executive Director;
- June 2019 – Vincent Crowley was appointed Senior Independent Director and a member of the Committee;
- October 2019 – Helen Pitcher was appointed as a member of the Nomination Committee and Jim Clerkin replaced Vincent Crowley as a member of the Remuneration Committee;
- January 2020 – Stephen Glancey announced that he wished to retire as Group Chief Executive Officer (‘CEO’). Stewart Gilliland was appointed interim Executive Chairman.
As noted above, on 16 January 2020, we announced that Stephen Glancey had informed the Board that he would retire and would stand down as CEO and from the Board. Pending the appointment of his successor, I agreed to take on the role of interim Executive Chairman to ensure continuity of executive leadership and an orderly process of succession. I would like to thank Stephen for his significant contribution to the Company over many years. The Company is well positioned to continue to implement its established strategy to deliver value for shareholders. We wish him the very best in his retirement. As detailed later in this report, the process to appoint his successor is ongoing and we have identified a number of excellent potential candidates.
In the year ahead, the Committee will place a priority on supporting the orderly succession of a new Group CEO and ensuring the actions developed as part of the external evaluation are carried out.
I would like to thank my colleagues for their contribution and counsel over the past 12 months. For the 2020 Annual General Meeting, your attention is drawn to details set out in the notice of meeting. Given government and health authority guidance on COVID-19 is still evolving, shareholders are encouraged to monitor the Company’s website and regulatory news for updates in relation to the AGM.
On behalf of the Board
Chairman of the Nomination Committee
3 June 2020
Roles and Responsibilities of the Committee
Role of the Committee
The Committee is responsible for Board recruitment and conducts a continuous and proactive process of planning and assessment, taking into account the Board’s composition against the Company’s strategic priorities and the main trends and factors affecting the long-term success and future viability of the Company. The Committee’s key objective is to ensure that the Board comprises individuals with the necessary skills, knowledge, experience and diversity to ensure that the Board is effective in discharging its responsibilities. The Committee has defined Terms of Reference which can be found in the Investor Centre section of the Group’s website at www.candcgroupplc.com.
Membership and Meeting Attendance
The following Non-Executive Directors served on the Committee during the year.
Number of Meetings Attended
Maximum Possible Meetings
% of Meetings Attended
Stewart Gilliland (Chairman)
24 October 2017
1 June 2019
(Retired 31 May 2019)
28 October 2013
5 July 2018
23 October 2019
Except for the interim Executive Chairman, all members of the Committee are and were, throughout the year under review, considered by the Board to be independent. Given that the Chairman is carrying out an executive function on an interim basis, it was determined that he should remain on the Committee. This is particularly important as he plays a leading role in ensuring an orderly transition to a new Group CEO.
No member of the Committee nor any other Director participates in discussions concerning or votes on his or her own re-election or evaluation of his own performance. Details of the skills and experience of the Directors are contained in the Directors’ biographies on pages 50 and 51. Their remuneration is set out in the Remuneration Report.
The quorum necessary for the transaction of business by the Committee is two, each of whom must be a non-executive Director. Only members of the Committee have the right to attend Committee meetings, however, during the year, Stephen Glancey (Group CEO) and the Group Director of Human Resources were invited to attend meetings.
The Company Secretary is Secretary to the Committee.
Meeting Frequency and Main Activities during the year
The Committee met on five occasions during the year ended 29 February 2020. All members of the Committee attended each meeting.
During the year ended 29 February 2020, the Committee:
- recommended revisions to the Board to the Committee’s Terms of Reference;
- approved the Board Diversity Policy;
- recommended to the Board that Vincent Crowley be appointed as the Senior Independent Director and a member of the Committee from 1 June 2019;
- recommended to the Board that Helen Pitcher be appointed as a member of the Committee from 23 October 2019;
- commenced the search, for a candidate to succeed Stephen Glancey as Group CEO;
- recommended to the Board that workforce engagement best be undertaken through the appointment of a Non-Executive Director to specific business areas; and
- reviewed the size, structure and composition of the Board.
Since 29 February 2020, the Committee met on six occasions to:
- recommend to the Board that all of the Directors who have indicated their willingness to stand for re-election be proposed for re-election as Directors at the forthcoming AGM;
- review the Committee’s report within the 2020 Annual Report and Accounts and recommend its approval to the Board; and
- Review the interviews the Committee members had held with potential appointees to the role of Group CEO.
Board Composition/Succession Planning
The Board plans for its own succession, with the support of the Committee. The Committee remains focused, on behalf of the Board, on Board succession planning for both Executive and Non-Executive Directors.
The Committee aims to ensure that:
- the succession pipeline for senior executive and business critical roles in the organisation is strong and diverse;
- processes are in place to identify potential successors and manage succession actively;
- there is a structured approach to developing and preparing possible successors; and
- processes are in place to identify “at risk” posts.
On at least an annual basis each Director’s intentions are discussed with regard to continued service on the Board and their succession is considered in the context of the composition of the overall Board and the corporate governance guidance on non-executive tenure. This transparency allows for an open discussion about succession for each individual, both for short term emergency absences as well as longer terms plans.
As in previous years, we conducted an analysis of the balance of experience, skills, gender and diversity on the Board as a whole, taking account of the future needs of the business in the light of the business strategy, the Board changes set out above, and the knowledge, experience, length of service and performance of the Directors, including their ability to continue to contribute effectively to the Board. In accordance with our policy, we also had regard to the requirement to achieve a diversity of characters, backgrounds, experience and gender amongst Board members.
The Committee appointed Spencer Stuart to conduct a search for candidates for the role of the new Group CEO. Spencer Stuart did not and does not have any connection to the Company other than in respect of provision of these services.
The Company did not use open advertising to search for suitable candidates for the role as we believe that the optimal way of recruiting for this position is to use targeted recruitment based on the skills and experience required.
As an initial step, the Committee agreed a role profile with Spencer Stuart, which referred to the following key characteristics and experience:
- Previous experience of the public company environment;
- Experience of operating within the beverage industry;
- A reputation for delivering shareholder value; and
- A positive match with the culture of the Group and the members of the Board.
The search from Spencer Stuart was rigorous and international in its scope. The Committee considered in all instances a list of potential candidates, both internally and externally, with the skills, knowledge and experience. The candidates included in the initial list for the Committee were of diverse backgrounds in its widest sense (gender, nationality, age, experience, ethnicity and social backgrounds). The process for appointing a successor is ongoing. We are committed to ensuring the appointment of a candidate as early as practicable; however, the Committee is keenly aware of balancing this imperative with ensuring the process is as comprehensive as possible. While the Committee has progressed the interviewing of candidates remotely, the recruitment process has been slowed by travel restrictions associated with COVID-19.
In relation to workforce engagement, the Board has opted to follow an approach that it considers best aligns with the Group’s business model and will be most effective in ensuring the ‘employee voice’ plays a key role in Board decision-making. Having reviewed how best to align the workforce engagement framework with that of the Group’s operations, during the year the Committee recommended that a Non-Executive Director be appointed with specific responsibility for a different segment of the business.
A Non-Executive was appointed with responsibility for workforce engagement at each of the eight different business areas/segments. Each Non-Executive Director will provide updates to the Board on a twice-yearly basis. Details of the role and the non-executive Directors’ activities are set out on page 61. The Board and Committee are satisfied that the Group’s approach meets the underlying principle of the revised provision, which is ensuring the employee voice is heard and considered by the Board when making decisions.
Skills Balance and Directors’ Performance Evaluation
During the year, the Committee also considered the composition of the Board and each of its Committees. The Committee continues to actively review the long term succession planning process for Directors to ensure the structure, size and composition (including the balance of skills, experience, independence, knowledge and diversity (including gender, ethnic and social backgrounds)) of the Board and its Committees continues to be effective, promoting the Company’s ability to deliver its strategy.
As part of its review, the Committee considered the performance and independence of Stewart Gilliland, Jill Caseberry, Jim Clerkin, Vincent Crowley, Emer Finnan, Helen Pitcher and Jim Thompson, each of them having confirmed their willingness to stand for re-election at the forthcoming AGM.
Having undertaken a performance evaluation of both the Board and individual Directors, the Committee considered that the independence of each of the non-executive Directors, being Jill Caseberry, Jim Clerkin, Vincent Crowley, Emer Finnan, Helen Pitcher and Jim Thompson. In assessing their independence, the Committee has had due regard to various matters which might affect, or appear to affect, the independence of certain of the directors. The Committee was fully satisfied that each remained fully independent in both character and judgement.
In determining the independence of Helen Pitcher, the Committee had particular regard to her position as a Chair of Advanced Boardroom Excellence Ltd, which provided services to the Company during FY2019. Likewise the Company had regard to the products sold to Tesco plc, of which Stewart Gilliland is a Non-Executive Director, and the products purchased from St Austell Brewery Company Limited, of which Jill Caseberry is a Non-Executive Director. Note 27 to the Accounts on page 188 sets out further details and the Committee remains fully satisfied these relationships have in no way impaired their independence.
The Committee had also undertaken a review of each of the Non-Executive Directors’ other interests, external time commitments and tenure, such review being particularly rigorous in the case of Emer Finnan and Stewart Gilliland as they had served six and eight years respectively on the Board, and has concluded that each of them is independent in character and judgement and that there are no relationships or circumstances likely to affect (or which appear to affect) his or her judgement. The Committee is also satisfied that each of them continues to be able to devote sufficient time to their role.
No Director participated in the evaluation of his/her own performance, independence or time commitments.
The Committee was satisfied that the Board has the appropriate balance of relevant skills, experience, independence and knowledge of the Company to enable it to discharge its duties to lead and steward the business.
The Committee reviewed the Board Diversity Policy during the year. We also ensured that the Board considered whether diversity and inclusion across the wider business was being progressed, including discussions with management at site visits during the year. The Board recognises the benefits of diversity. Our Directors come from different backgrounds, nationalities, a wide range of professions and each brings unique capabilities and perspectives to our Board discussions.
We are committed to maintaining a diverse Board. Appointments to the Board and throughout the Company will continue to be made on merit and overall suitability for the role against objective criteria with due regard to the benefits of diversity (including, but not limited to, ethnicity, experience, gender, nationality, age and educational and social backgrounds as well as individual characteristics such as broad life experience).
When recruiting, we require any search agency to have signed up to the “Enhanced Voluntary Code of Conduct for Executive Search Firms” covering Board appointments, as accredited by the Hampton-Alexander Steering Group.
The Board monitors progress against this policy. In terms of Board diversity, an analysis of Directors by gender as at 29 February 2020 is as follows:
Any future appointments will continue to be made to the Board on merit and with the aim of recruiting Directors who offer the right skills and who can complement the rest of the Board with a view to achieving effective diversity, in its widest sense.
The Committee and the Board recognise the importance and benefit of diversity beyond the Board and in this regard seek to ensure that all recruitment decisions are fair and non-discriminatory and that all employees get an equal opportunity to achieve their full potential. During the year, the Group commenced working with The Pipeline who provide targeted development for women in senior positions to support them in making the transition into Executive Committee roles.
Statistical gender diversity employment data for the Company as at 29 February 2020 is as follows:
Male Number/ Percentage
The Committee and the Board are committed to greater diversity throughout the Company and recognise this will require continued focus on an inclusive culture and a systematic review of existing recruitment, retention and promotion practices during the forthcoming year.
The Responsibility section of the Annual Report on pages 37 to 49 provides further detail on the approach being taken to better understand our diversity and employees’ views on inclusion and the implementation of the Policy across the Group.
Evaluation of the Committee
The evaluation of the Committee was completed as part of the FY2020 external Board evaluation process conducted by Independent Audit. An explanation of how this process was conducted, the conclusions arising from it and the outcome of that review can be found on pages 64 and 65.
This report was approved by the Board of Directors on 3 June 2020.
Chairman of the Nomination Committee