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The Board

Board Membership

Richard Pennycook (Chairman)
Michael Wemms (Senior Independent Director)
Andrew Cripps (Non-Executive Director)
Tiffany Hall (Non-Executive Director)
Mark Allen (Non-Executive Director)
Geoff Drabble (Non-Executive Director)
Debbie White (Non-Executive Director)
   
Matthew Ingle (Chief Executive Officer)
Mark Robson (Deputy Chief Executive & Chief Financial Officer)

The Board is structured to ensure that there is a clear distinction between the strategic functions of the Board and the operational management of the Company. The Board currently comprises two Executive Directors, the Chairman and six Non-Executive Directors.

The Non-Executive Directors have been selected for the diversity of their backgrounds as well as their personal attributes and experience. The current Board members bring a wide range of skills and experience to the Board.

DIRECTORS' INDEMNITY & INSURANCE

Howdens has provided indemnities to the Directors (to the extent permitted by the Companies Act 2006) in respect of liabilities incurred as a result of their office. Howdens also maintains appropriate insurance cover against legal action brought against it or its subsidiaries, Directors and Officers. Neither the indemnity nor insurance provides cover in the event that the Director is proved to have acted dishonestly or fraudulently.

INDEPENDENCE

In compliance with Provision B.1.2 of the UK Corporate Governance Code, at least half of the Directors were independent throughout the year. The Board considered that all of the Non-Executive Directors were deemed to be independent for the duration of the period.

The Board considered that Richard Pennycook was independent upon his appointment as Chairman on 5 May 2016.

Meeting Attendance

The Board held regular meetings during 2016 and received accurate and timely information. Only the attendance of Directors is shown in the table below, although members of the Executive Committee have also attended at the invitation of the Chairman and Chief Executive Officer.

A full list of Directors who served during the year are set out in the attendance table below.


  Attendance No. of meetings
Will Samuel* 4 4
Mark Allen 7 7
Andrew Cripps** 6 7
Geoff Drabble 7 7
Tiffany Hall 7 7
Matthew Ingle 7 7
Richard Pennycook 7 7
Mark Robson 7 7
Michael Wemms*** 6 7

* Will Samuel retired from the Board on 5 May 2016.
** Andrew Cripps was unable to attend the Board meeting on 15 February 2016 due to ill health.
*** Michael Wemms was unable to attend the Board meeting on 3 November 2016 due to a conflict with another commitment.

This table and the attendance tables in the Committee reports show the number of meetings individual Directors could have attended (taking account of eligibility, appointment and retirement dates during the year) and their actual attendance.

If a Director is unable to attend a meeting, they are still provided with all the papers and information relating to the meeting and are encouraged to discuss the issues arising directly with the Chairman and Executive Directors. The Non-Executive Directors also met three times during the year without the Executive Directors present.

EXECUTIVE COMMITTEE AND COMPANY SECRETARY

The principal purpose of the Executive Committee, which generally meets twice a month, or more frequently if required, is the implementation of the Group's strategy and operational plans. The Committee monitors the operational and financial performance of the business, as well as being responsible for the optimisation of resources and the identification and control of operational risk within the Group.

THE ROLE OF THE BOARD

The business of the Company is managed by the Board who may exercise all the powers of the Company subject to the provisions of the Articles of Association, the Companies Act and any ordinary resolution of the Company.

The Board has responsibility for the overall management and performance of the Group. They are collectively responsible for challenging and assisting in the development of strategy and ensuring that there are sufficient resources in place to meet the strategic objectives which have been set.

Matters reserved for consideration by the Board are detailed in a schedule which is reviewed annually and was last reviewed and approved in January 2017. These key matters include setting the Group's values and standards as well as decisions about strategy, acquisition and disposals, risk management and internal control, capital projects over a defined level, annual budgets, Group borrowing facilities and consideration of significant financial and operational matters. The Board also considers legislative, environmental, health & safety, governance and employment issues.

The Board is also responsible for determining the nature and extent of significant risks and maintaining sound risk management and internal control procedures throughout the Group.

The Board reviews the performance of and provides counsel to the senior management in their day-to-day running of the business, and is ultimately responsible for the safeguarding of shareholders' interests and ensuring its own effectiveness.

The Board is also responsible for protecting the culture and values of the business, a role particularly pertinent to Howdens where integrity, respect and recognition are fundamental tenets of the business.

THE ROLE OF NON-EXECUTIVE DIRECTORS

The Non-Executive Directors have been selected for the diversity of their backgrounds as well as their personal attributes and experience. The current Board members bring a relevant range of skills and experience and all actively contribute in discussion. Non-Executive Directors have the same general legal responsibilities to the Company as any other director. The Board as a whole is collectively responsible for promoting the success of the Company by directing and supervising the Company's affairs. In addition to these requirements of all Directors, the role of the Non-Executive has the following key elements:

Strategy: Non-Executive Directors should constructively challenge and contribute to the development of strategy;

Performance: Non-Executive Directors should scrutinise the performance of management against agreed goals and objectives;

Risk: Non-Executive Directors should satisfy themselves that financial information is accurate and that financial controls and systems of risk management are robust and defensible; and

People: Non-Executive Directors are responsible for determining appropriate levels of remuneration of executive directors and have a primary role in appointing, and where necessary removing, senior management and in succession planning.

THE ROLE OF EXECUTIVE DIRECTORS

As well as their duties as Directors of the Company, the day-to-day running of the Group is delegated to the Chief Executive Officer and the Deputy Chief Executive and Chief Financial Officer by the Board. In May 2014, Mark Robson was appointed Deputy Chief Executive and is responsible for day-to-day management of the business, whilst the Chief Executive Officer focuses on the Company's continuing development and the implementation of the strategy, which the Board has formulated and approved. The Chief Executive Officer also has a particular focus on maintaining and further developing our strong and distinctive culture, which has served the Company well throughout the years and continues to ensure our success for the future.

THE ROLE OF THE COMPANY SECRETARY

The Company Secretary provides the Board with guidance on various governance matters, under the direction of the Chairman, and ensures that effective and timely information flows between the Board and the Senior Management as well as within the Board and between the Board's Committees.

In addition, working with the Chairman, the Company Secretary is responsible for ensuring that Board procedures are followed and that all Directors have access to his advice and services.

All of the Directors have direct and unfettered access to the Company Secretary.

THE ROLE OF ADVISORS

External advisors provide a range of services to the Board and its Committees including banking, brokerage, legal, audit, actuarial, PR and Executive remuneration, as well as other consulting services. Both the Executive Committee and the Board rely on such advisors to provide counsel and opine on specialist matters where necessary. The Non-Executive Directors can engage with advisors at the Company's expense independent of management where appropriate.

The competency, value, length of tenure and independence of advisors is reviewed by the Board on an annual basis. A list of principal advisors to the Company can be found on page 135 of the 2016 Annual Report.

DIVISION OF RESPONSIBILITIES

The roles of Chairman and Chief Executive Officer are separate and clearly defined. The Chairman is primarily responsible for leadership of the Board and has a pivotal role in creating the conditions for individual Director and Board effectiveness including ensuring a culture of openness and debate in the boardroom. The Chairman is responsible for setting the Board's agenda and works closely with the Company Secretary in this regard. He ensures that adequate time for discussion is afforded to all agenda items at meetings. It is also the responsibility of the Chairman to ensure effective communication with the shareholders. The Executive Directors are responsible for satisfactory execution of the policies and strategy agreed by the Board.


The Chairman

The Chairman's role is to lead an effective Board, which provides direction to the Executive team.

Chief Executive Officer

The role of the Chief Executive Officer is to lead the Executive team. The Chief Executive Officer reports to the Board and is accountable to it.

Deputy Chief Executive

The Deputy Chief Executive has responsibility for the day-to-day management of the business as well as his responsibilities as Chief Financial Officer.

Senior Independent Director (SID)

The role of the SID is to provide an alternative communication channel between the Chairman and the Board and to provide an alternative point of contact for principal shareholders to raise issues and concerns.

HOW THE BOARD PERFORMED DURING 2016

Board meetings in 2016 were structured to address the Board's collective responsibilities in relation to strategy, performance and governance.

Despite the strength of the business model and the clarity of the UK strategy, the constituent parts of this strategy were evaluated at each Board meeting, with particular emphasis on first principles and individual tenets of the model. These discussions are underpinned by consideration of the culture and values of the business.

Outside of Board meetings, the Board were provided with performance updates every four weeks and weekly updates were provided during peak trading. This was intended to complement the more detailed operational and finance reports that were provided at each meeting during 2016. In addition to the Executive Directors, the Divisional Chief Operating Officers, the Group Finance Director, the Interim Group HR Director and the Company Secretary were present at all Board meetings to take questions from the Non-Executive Directors. The Board regularly discussed the Group's people agenda with specific regard to organisational development. Health & Safety updates for each division were provided at every meeting.

The Board considered a wide range of governance matters during the year which included but were not limited to the Group risk register, legal and regulatory updates and Group policies. Bespoke training was provided on directors' duties and the updated Market Abuse Regulations. In July the Board agreed a CSR statement of intent in order to provide the divisions with a framework upon which to build specific targets and KPIs.

Board Evaluation

In the previous two financial years, the Board evaluation has been undertaken internally by the Senior Independent Director, with support from the Company Secretary. In keeping with the guidance provided under the UK Corporate Governance Code, the 2016 Board evaluation was externally facilitated by Independent Board Evaluation (IBE). IBE does not have any other business relationship with the Company or with any member of the Board. More information on the 2016 Board evaluation can be found in the Nominations Committee Report on page 58 of the 2016 Annual Report.

Pensions

In 2011 the Board delegated authority to a Pensions Sub- Committee in order to consider all matters relating to the Company defined benefit pension scheme. This was a reaction to the risk that the pension deficit posed to the future viability of the Group at that time. In 2016 the Board recognised that, whilst still an ongoing risk which required careful monitoring and management, the strength of the Group covenant meant that matters in relation to the defined benefit scheme could revert to being considered by the Board as a whole and therefore the Pensions Sub-Committee was disbanded. A separate Funding and Investment Strategy Committee consisting of members of the Executive Committee was established to provide a vehicle for communication with the Pension Trustees on routine funding and investment matters and this Committee, in conjunction with the Company's actuaries, report to the Board on such matters at least twice annually.

 

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