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Corporate governance reportcontinuedBoard performance evaluationThe Board runs an annual formal evaluation to assess theoverall performance of the Board and the contribution madeby individual directors. The exercise during the year alsocovered a review of the effectiveness of the work of thesub-committees of the Board. The process is undertaken inan open manner with responses from each director to detailedquestionnaires being submitted to the Company Secretary.These are then discussed on a one-to-one basis by theChairman and the individual director. Feedback on theeffectiveness and performance of the sub-committeesis considered by the respective committee chairmen withthe Chairman. The directors (led by the Senior IndependentDirector and in the absence of the Chairman) convenea separate meeting to discuss the performance of theChairman. Due to the size of the Board we are of the viewthat the Board is best placed to carry out such evaluation.However, the Board is mindful of the recommendation underthe Code that this exercise should be externally facilitated atleast every three years. During the coming year we willconsider the engagement of some form of external facilitationto assist with the evaluation. The current internal evaluationprocess is co-ordinated and overseen by the CompanySecretary who liaises with the Chairman and the SeniorIndependent Director to summarise the output from thediscussions and the conclusions are reported by the Chairmanto the whole Board.The results of this year’s evaluation process found thatthe Board and its committees continue to perform well.The Audit Committee is seen to be effective with its workbeing further supported during the year by the appointmentof a Head of Internal Audit. The work of the RemunerationCommittee is being further supported by the appointmentof an independent external firm. The non-executive directorsare comfortable about their knowledge and skills and theirability to challenge the executive directors. The directors aresatisfied that they are kept up to date with legislative changesas they affect the Group and with the information they receiveabout business and trading performance and developments.Meetings with senior management from the various sitesacross the Group have taken place during the year to helpbroaden the understanding of the non-executive directorsof the operational needs of the organisation. This has furtherassisted the directors to feel more able to contribute tomeaningful discussions on strategy with particular referencebeing placed during the year on Project Refresh.Areas for improvement, arising from the evaluation exercisefor the forthcoming year, include succession planning forsenior management and timeframes sufficient to allow theBoard to consider external announcements.Induction, development and supportAll new directors receive formal and in-depth inductionprogrammes involving site visits, face-to-face meetings withsenior executives and the issue of an induction manualcontaining key documents relating to the new appointee’s roleon the Board. Independent external training is also provided bythe Group’s legal advisers, Addleshaw Goddard. Jeff Carr andSandra Turner have both undertaken their induction training.The Company places importance on ongoing training anddevelopment to ensure directors have the skills andknowledge to discharge their duties effectively. Trainingand development take the form of regular briefing paperson regulatory/legislative developments and on other topicsof specific relevance to them, including their duties andobligations as directors of a listed company. Additionally,all directors are entitled to undertake external trainingrelevant to their particular duties. During the year, Colin Smithand Bob Lee (as chairmen of the Audit and RemunerationCommittees respectively) continued to attend updates anddiscussion meetings held by leading advisory bodies.All directors have access to the Company Secretary, who isresponsible for ensuring that Board procedures are followedand that the Company complies with all applicable rules,regulations and obligations governing its operations.Operational management of the GroupThe relationship between the Board and the Chief Executiveis governed by the non-executive directors, particularlythrough the work of the Board sub-committees under whichthe non-executive directors take active roles to influenceand challenge the work, performance and recommendationsof the Chief Executive and his executive management.The Board takes overall responsibility for approving Grouppolicies, including those relating to social responsibility andbusiness ethics, health and safety, and sustainability andenvironmental matters, copies of which are available on theGroup’s website at www.mcbride.co.uk. The implementationof these policies is delegated to the Chief Executive andthen cascaded throughout the organisation via the GMTand the divisional management teams. The managementof the Group’s business activities is also delegated to theChief Executive who is ultimately responsible for establishingobjectives and monitoring executive actions and performance.The Chief Executive chairs a monthly meeting of the GMTwhose role is to assist with the development and implementationof the Group’s strategy, culture and commercial plan, toconsider commercial, financial and operational matters,allocate resources across the Group and ensure transfer andsharing of knowledge and best practice. In addition to theChief Executive, the members of the team are the GroupFinance Director, the Managing Directors of each division,the Group Purchasing Director, the Human Resources Director,the Strategic Development Director and the CompanySecretary. Members of the senior management teams areinvited to attend as may be deemed appropriate.Local operational, commercial, supply chain, finance,development and technical issues are delegated via theGMT to senior executive management on a structured basis.Employee and social and community responsibilities aredelegated to the Group Human Resources Director whoreports directly to the Chief Executive. The Chief Executiveis also ultimately responsible for health and safety andenvironmental as well as for customer service and qualitymatters, although day-to-day management is delegatedto the Managing Directors of each division.The Company comprises three reportable divisions: UK;Western Continental Europe; and Central and Eastern Europe.Each division is headed by a Managing Director who isresponsible for its operational management. The ChiefExecutive and the Group Finance Director both attend regulartrading meetings with the management of each division inwhich they review all significant issues, including customerservice, trading and operational performance, forecasts,working capital, people development, capital investmentproposals, health and safety and environmental issues.Reports on progress are tabled at each Board meeting.Board committeesThe Board has an Audit Committee, a Nomination Committeeand Remuneration Committee. Each committee has beenestablished under its own Charter which sets out its termsof reference, authority, composition, activities and duties.The Charters are reviewed and updated as necessary toensure ongoing compliance with the provisions of the Codeand other best practice guidelines. The Charters were lastupdated in June 2011. Copies of the committee Charters areavailable from the Group’s website at www.mcbride.co.uk.The committees are each properly authorised to takedecisions and act on behalf of the Board within the guidelinesand delegations laid down in its Charter. The Board is kept fullyinformed of the work of the committees with reports beingtabled from time to time by the relevant committee chairmen.Each committee may access independent advice as requiredand each is supported by the Company Secretary. Reportsfor each of the committees follow, detailing their membership,roles and activities. The duties of each committee aresummarised below:Audit Committee> monitors the integrity of the financial and regulatoryreporting process of the Group and reviews the Group’saccounting policies and disclosure practices> reviews and recommends the Board to approve all financialstatements and announcements> reviews the effectiveness of the Group’s internal controlsand risk management systems> oversees the Company’s relations with the external auditor,actively considering the cost effectiveness, objectivityand effectiveness of the external audit process and makingrecommendations to the Board in relation to theappointment and remuneration of the external auditor.Remuneration Committee> reviews the overall remuneration policy and makesrecommendations to the Board on remuneration for theexecutive directors and monitors the level and structureof remuneration for key senior executives> reviews the Company’s talent and managementdevelopment plans> principal activities of the Committee during the periodwere:– to deal with reviews of the executive directors’performances over the year against objectives– to establish objectives for the new financial year– to consider related pay award proposals– to consider senior executive salary reviews and bonusand incentive scheme payments– to deal with the allocation of LTIP awards– review of the Company’s new talent management process.The report of the Remuneration Committee is set out onpages 70 to 76.Nomination Committee> responsibility for reviewing the structure, size andcomposition of the Board> considering and recommending the nomination ofcandidates for appointment as executive or non-executivedirectors to the Board.The report of the Nomination Committee is set out onpages 68 to 69.Attendance at meetingsAttendance of individual directors at meetings during the yearended 30 June 2011 is given in the table below:Board Audit Remuneration Nomination General AGMNumber ofmeetings held: 7 3 3 3 1 1Number ofmeetings attended:Iain Napier 7 n/a 3 3 1 1Chris Bull 7 n/a n/a 3 1 1Richard Armitage 7 n/a n/a n/a 1 1Christine Bogdanowicz-Bindert (2) 7 3 3 2 1 1Jeff Carr (1) 3 1 1 1 1 –Bob Lee 7 3 3 3 1 1Colin Smith (2) 7 3 3 2 1 1‘n/a’ indicates the director is not a member of the committee.(1)Jeff Carr’s attendance is shown following his appointments to the Board(on 1 February) and the Committees (on 9 June).(2)Christine Bogdanowicz-Bindert and Colin Smith were unable to attend oneNomination Committee meeting due to prior business commitments. Theyhad each received relevant supporting information and had the opportunityto communicate their views and comments on the matters to be discussedin advance of the meeting.Directors are not present in meetings when matters relatingto them are being discussed.Overview Business review Governance Financials Shareholder informationThe report of the Audit Committee is set out on pages 66 to 67.62 McBride plc Annual Report and Accounts 2011 McBride plc Annual Report and Accounts 2011 63