united-utilities-annual-report-2015

More documents

Recommendations

Info

UNITED UTILITIES GROUP PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015Stock Code: UU.unitedutilities.comCorporate governance reportLetter from the ChairmanAlthough there are time constraintsfor non-executive directors whoalso have an executive role, theseindividuals bring valuable currentmarket experience to any board table.Similarly, we encourage our executivedirectors to serve as a non-executivedirector elsewhere to help broadentheir experience, although this isrestricted to one other directorship ina company which does not conflict withUnited Utilities’ business.Our CEO, Steve Mogford, has madesome changes during the year to thestructure of his executive team ofsenior managers. This has resulted in achange of reporting lines and a relatedchange in the male:female ratios of theexecutive team (excluding the CEO andCFO) of 4:3, (2014: 5:5).Our ethos and cultureOne of our key core values, both atboard level and as a company, is toact with integrity, by applying thehighest standards of responsiblebusiness practice. The company hascomplied with the 2012 UK CorporateGovernance Code in accordance withthe FCA’s Listing Rules with which wewere required to comply for the yearended 31 March 2015. For the periodfrom 25 July 2014 (on the retirementof Nick Salmon) until 1 September2014 (on the appointment ofStephen Carter), there were only twoindependent non-executives directorsappointed to the remunerationcommittee, notwithstanding thefact that the Code requires thatthree independent non-executivedirectors be appointed. During thistime no meetings of the remunerationcommittee were scheduled or held andas a result we do not regard this asbeing an incident of non-compliancewith the Code.Our approach to riskWe adopt a prudent approach tothe way we manage the risks to ourbusiness; we feel this is appropriatefor an organisation such as oursthat provides a vital service toits customers, and is an approachthat permeates the culture of ourbusiness. That being said, we are acommercial organisation operatingwithin a regulated framework, andaccepting some level of risk is anormal consequence of doing business.It is the board’s and the executiveteam’s role to understand the risksassociated with each activity of thebusiness and that actions are takento mitigate these risks as they feelappropriate. The greatest risk to ourbusiness is ensuring that we get theconstituent elements of our five-yearlybusiness plans correct to ensure ourfinanceability, and that they are agreedby Ofwat in its final determination, aswe are bound by these plans for thefollowing five-year period with limitedopportunity to change them.Our investorsThe remuneration committee, underSara Weller’s leadership, has beeninstrumental in updating the executivedirectors’ remuneration packages toensure they align the directors’ andsenior managers’ interests with thelong-term interests of the companyand its shareholders. At the time thechanges were introduced in 2013,the committee went to considerableeffort to consult on the changes witha number of the company’s largeinvestors. At the 2014 AGM, 98.48per cent of the vote was in favour ofthe directors’ remuneration policy and,although only an advisory vote, 99.39per cent of the votes cast were infavour of the directors’ remunerationreport, which would suggest that ourinvestors are comfortable with ourapproach to reward.We welcome any feedback you mayhave on this annual report -please email any comments you mayhave to secretariat@uuplc.co.ukDr John McAdamChairman62
UNITED UTILITIES GROUP PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015Stock Code: UU.unitedutilities.comCode principle: LeadershipOverview of the board’sresponsibilities• The board is responsible forsetting the strategy of thegroup and ensuring the longtermsuccess of the group forcustomers, investors and widerstakeholders; and in creatingshareholder value• The board is responsible forchallenging and encouraging theexecutive team in its interpretationand implementation of how itmanages the business, and that itis doing so in accordance with thestrategic goals the board has set• The board is responsible forensuring the company’s internalcontrol systems (includingfinancial, operational andcompliance) and processes aresound and fit for purpose. Seethe ‘accountability’ section of thisreport on page 74 for more detail• The board is responsible forensuring that the company has thenecessary financial resources andpeople with the necessary skillsto achieve its objectives. It alsoreviews managerial performanceannually• The UUG board has oversight ofcapital expenditure projects withinUUW which exceed £50 million,and any project which materiallyincreases the group’s risk profile oris not in the ordinary course of thegroup’s business• Full details of the matters thatthe board has reserved for itsown decision making due to theirimportance to the business orthe working of the board, can befound on our website at corporate.unitedutilities.com/corporategovernanceDirectors’ tenure as at 31 March 2015John McAdamSteve MogfordRuss HouldenCatherine BellStephen CarterMark ClareBrian MaySara WellerDirectors’ key responsibilitiesTitle Name ResponsibilityChairman John McAdam Is responsible for the leadership of theboard, setting its agenda and ensuring itseffectiveness in all aspects of its roleChief ExecutiveOfficerChief FinancialOfficerIndependent nonexecutivedirectorsSenior independentnon-executivedirector31 March200631 March2007Steve MogfordRuss HouldenCatherine BellBrian MayStephen CarterSara WellerMark Clare31 March2008Governance structure forour board and our committeesIn line with the Code, the board delegatescertain roles and responsibilities to itsvarious principal board committees, asshown in the diagram on page 64. Whilstthe board retains overall responsibility,a sub-committee structure allowsthese committees to probe the subjectmatter more deeply and gain a greaterunderstanding of the detail, and thenreport back to the board on the mattersdiscussed. The reports of the principalboard committees required by the Codecan be found on the subsequent pages.Minutes of the board and principalcommittee meetings (with the exceptionof the remuneration committee) aretabled at board meetings and the chairsof each of the board committees verballyreport to the board on their activities.The executive team is chaired by theCEO, and its members are the senior31 March200931 March201031 March201131 March201231 March201331 March2014To manage the group’s business andto implement the strategy and policyapproved by the board7yrs 2m4yrs 3m4yrs 6m8yrs 1m1yr 5m2yrs 7mTo manage the group’s financial affairsand to contribute to the management ofthe group’s business7m3yrs 1mTo challenge constructively the executivedirectors and monitor the delivery ofthe strategy within the risk and controlframework set by the board31 March2015managers who have a direct reportingline to the CEO. The executive teammeets monthly and is responsible foroperational matters and implementingthe strategies that the board has set, andthe day-to-day running of the business.Short biographies of the executiveteam can be found on our website atcorporate.unitedutilities.com/unitedutilities-executive-teamThe structure chart shown on page 64also shows the principal managementcommittees and a brief description oftheir roles. These committees enablesenior management to understand and,if necessary, challenge the business inits interpretation of the implementationof the strategies the board has set. Theboard received reports from the CEO andCFO at every scheduled board meeting,providing the board with an updatedoverview of the business and its financialposition.Is responsible, in addition to his role as anindependent non-executive director, fordiscussing any concerns with shareholdersthat cannot be resolved through thenormal channels of communication withthe Chairman or chief executive officer63SHAREHOLDER INFORMATION FINANCIAL STATEMENTS GOVERNANCESTRATEGIC REPORT
Page 1 and 2:
helping life flow smoothlyUnited Ut
Page 3 and 4:
UNITED UTILITIES GROUP PLC ANNUAL R
Page 5 and 6:
Page 7 and 8:
STRATEGICREPORTDetailing the past y
Page 9 and 10:
Page 11 and 12:
Page 13 and 14: UNITED UTILITIES GROUP PLC ANNUAL R
Page 59 and 60: GOVERNANCEThe corporate governance
Page 63: UNITED UTILITIES GROUP PLC ANNUAL R
Page 115 and 116:
FINANCIALSTATEMENTSThe full audited
Page 117 and 118:
Page 119 and 120:
Page 121 and 122:
Page 123 and 124:
Page 125 and 126:
Page 127 and 128:
Page 129 and 130:
Page 131 and 132:
Page 133 and 134:
Page 135 and 136:
Page 137 and 138:
Page 139 and 140:
Page 141 and 142:
Page 143 and 144:
Page 145 and 146:
Page 147 and 148:
Page 149 and 150:
Page 151 and 152:
Page 153 and 154:
Page 155 and 156:
Page 157 and 158:
Page 159 and 160:
Page 161 and 162:
Page 163 and 164:
Page 165 and 166:
Page 167 and 168:
show all

united-utilities-annual-report-2015

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?