Annual Report and Accounts 2012 - Speedy Hire plc

Performance evaluation
During the year ended 31 March 2012, the Chairman and
Company Secretary engaged the services of specialist performance
consultants SCT Consultants Ltd to carry out a detailed and
independent review of the Board’s processes, procedures and
effectiveness. SCT Consultants Ltd has no other connection with
the Company. Their report did not identify any areas of significant
weakness in the Board’s effectiveness. Most areas examined
attracted high ratings alongside constructive recommendations to
improve the processes for risk management and the management
of top talent, in order to further enhance the Board’s effectiveness.
The areas attracting the most positive ratings were chairmanship,
the clarity of the role and terms of reference, the focus on
addressing and developing company performance and the
clear and effective relationship between sub-committees and the
Board. It was also found that the Board has a good mix of skills
and capabilities and in recent times has been both streamlined
and strengthened with new appointments. However the Board
continues to develop the way it works in line with best practice,
and in particular over the next year will be working to develop
more lead indicators on performance and strategy implementation,
strengthen its risk management processes, and to ensure it has
an outstanding pipeline of future talent.
Re-election
Under the Company’s articles of association, all Directors are
subject to election by shareholders at the first AGM following
appointment and all Directors are subject to retirement by rotation
provisions requiring re-election at intervals of no more than three
years. Biographical details of all the Directors, including those
subject to re-election, are included in this report in order to enable
shareholders to take an informed decision on any re-election
resolution. The letters of appointment of each of the Non-Executive
Directors and the Chairman confirm that appointments are for
specified terms and that reappointment is not automatic. Ishbel
Macpherson commenced her second three-year term in 2010.
Michael Averill commenced his second three-year term in 2011.
James Morley commenced his first three-year term in 2009.
Directors’ remuneration
Level and make-up of remuneration
The performance-related elements of the remuneration of the
Executive Directors form a significant proportion of their potential
total remuneration packages. The performance-related elements
of the schemes in which the Executive Directors are entitled to
participate are set out in more detail in the Remuneration Report.
The Remuneration Committee, with the advice of New Bridge
Street (an Aon Hewitt Company) (NBS), reviews on a regular basis
the Company’s remuneration policy including the design of
performance-related remuneration schemes. Such performancerelated
elements have been designed with a view to aligning the
interests of the Executive Directors with those of shareholders and
to incentivise performance at the highest level. The Board’s policy is
that no executive share options should be offered at a discount,
save as permitted by the Listing Rules.
Governance 39
The policy of the Board is that the remuneration of the Non-Executive
Directors should be consistent with the levels of remuneration paid
by companies of a similar size. The levels of remuneration also
reflect the time, commitment and responsibilities of each role
including, where relevant, Chairmanship of Board Committees.
It is the policy of the Board that remuneration for Non-Executive
Directors should not include share options or any other
share-based incentives. No current Executive Director serves
as a Non-Executive Director elsewhere.
The service contracts of all Executive Directors provide for
termination by the Company on one year’s notice.
Procedure
The Board has constituted a Remuneration Committee which
met three times during the year. Its terms of reference are included
in the UK Corporate Governance Code Compliance Statement and
are fully compatible with the provisions of paragraph D.2.1 of the UK
Corporate Governance Code. The Remuneration Committee
consists of the Non-Executive Directors, excluding the Chairman,
who are independent of management and free from any business
or other relationship which could materially interfere with the
exercise of their independent judgement. The Chief Executive
occasionally attends by invitation but is not present for discussions
relating to his own remuneration. The Remuneration Committee
has appointed NBS to advise it in relation to the design of
appropriate Executive remuneration structures. NBS has no other
connection with the Company.
The responsibilities of the Remuneration Committee include setting
remuneration policy, ensuring that remuneration (including pension
rights and compensation payments) and the terms of service of the
Executive Directors are appropriate and that Executive Directors are
fairly rewarded for the contribution which they make to the Group’s
overall performance. It is also responsible for the allocation of
shares under long-term incentive arrangements approved by
shareholders and in accordance with agreed criteria. In addition,
it monitors current best practice in remuneration and related issues.
The remuneration of Non-Executive Directors is dealt with
by a Committee of the Board specifically established for this
purpose comprising the Chief Executive and the Group Finance
Director without the presence of the Non-Executive Directors. It is
the policy of the Board to review the remuneration of Non-Executive
Directors periodically. However in view of recent difficult economic
circumstances the remuneration of Non-Executive Directors was
not increased during the year ended 31 March 2012.
The Board’s policy is that all new long-term incentive schemes
(as defined in the Listing Rules) and significant changes to existing
schemes should be specifically approved by shareholders,
while recognising that the Remuneration Committee must have
appropriate flexibility to alter the operation of these arrangements
to reflect changing circumstances.
Speedy Hire Plc Annual Report and Accounts 2012
Governance