20495_Debenhams_AR_151104

DEAR SHAREHOLDER
On behalf of the board, I am pleased
to present the corporate governance
report for the financial year ended
29 August 2015 and to confirm that
Debenhams plc complies with the
UK Corporate Governance Code
(September 2012) (“the Code”). The
corporate governance report together
with the Audit Committee report, the
directors’ remuneration report and the
directors’ report sets out our approach
to governance and how the board has
directed and controlled the Group
during the last year.
In addition to seeking to operate high
standards of corporate governance, the
board also recognises the need to lead
on values and conduct in order to
encourage good behaviours throughout
Debenhams. Our standards of expected
conduct and behaviour are set out in our
code of business conduct policy which
we periodically circulate to all employees
across the business. That policy is
available on the Company’s intranet
alongside all our other business policies.
The following are the key corporate
governance issues that the board has
addressed during the last financial year.
SUCCESSION PLANNING
Succession planning is an important
element of good governance. It ensures
that we are fully prepared for planned or
sudden departures from key positions
throughout the Group.
With that in mind the Nomination
Committee undertook a review of the
succession plans for the board, the
Executive Committee and key roles
within the organisation. The review also
provided visibility on the talent pipeline
and “rising stars” within Debenhams.
THE BOARD
Following the external evaluation process
last year, I conducted an internal evaluation
of the board and its committees during
this year. I am pleased to report that the
results were positive, confirming that the
board and its committees are operating
well and effectively.
candidates and Michael has agreed
to remain in post to ensure an orderly
and smooth handover to his successor.
On behalf of the board I would like to
thank Michael for continuing to lead
Debenhams through a crucial time of
change in retailing and for the good
progress the Company has made
under his leadership. He has worked
enormously hard to develop the
Company’s strategy and the benefits
of this are really starting to show in the
results. I am pleased Michael will remain
with us until we have appointed a suitable
replacement and will help facilitate an
orderly succession process. The board is
confident we have a clear and effective
strategy and when Michael steps down,
he will leave Debenhams in a strong
position to compete and deliver
long-term sustainable growth.
As indicated last year, we welcomed
Matt Smith to the board as Chief
Financial Officer. Matt was appointed
to the board on 26 January 2015. In
addition, Terry Duddy joined the
board as an independent non-executive
director on 10 April 2015. He is also a
member of the Nomination,
Remuneration and Audit Committees.
Martina King’s appointment as an
independent non-executive director
was extended for a further three years
to 31 July 2018 following the end of her
second three year term on 31 July 2015.
Sophie Turner Laing stepped down
from the board following the expiry
of her second three year term, having
served as an independent nonexecutive
director since August 2009.
Sophie’s input during her six years of
service has been extremely valuable
to the board. Since year end, Peter
Fitzgerald’s appointment as an
independent non-executive director has
been renewed for a second three year
term effective from 4 October 2015.
Board composition
As outlined in my letter on page 3,
Dennis Millard is to remain on the
board as a non-independent nonexecutive
director. It is proposed
that Terry Duddy will succeed him
as Senior Independent Director and
Martina King will take over as chair of
the Remuneration Committee, both
appointments to be effective from
14 January 2016.
Following my evaluation of the
directors and my confirmation that they
all continue to perform effectively and
demonstrate commitment to their
roles, the Nomination Committee is, in
line with the Code, recommending that
all the directors of the Company stand
for re-election at the next Annual
General Meeting along with Matt Smith
and Terry Duddy who will both stand
for election to the board having been
appointed as directors during the year.
CORPORATE GOVERNANCE CODE
We have reviewed the new provisions
included in the Financial Reporting
Council’s UK Corporate Governance
Code published in September 2014
which will be effective for our 2016
financial year. The board will therefore
report on the implementation of those
new responsibilities in next year’s
annual report.
I look forward to meeting shareholders
at our next Annual General Meeting
which will be held on 14 January 2016
at 2.00pm at the Wellcome Collection,
183 Euston Road, London NW1 2BE.
NIGEL NORTHRIDGE
CHAIRMAN
Length of non-executive
directors’ service
Governance40-85
Michael Sharp has been Chief Executive
of Debenhams since September 2011 and
it has always been his intention to serve a
five year term. Michael is now two months
into his fifth year and has indicated this is
the right time for the board to commence
a succession planning process so that he
can step down some time in 2016.
Michael will remain in post during the
Christmas trading period and into 2016
and will assist the board in the process of
identifying his successor. This process
will evaluate internal and external
Chairman 10%
Executive directors 30%
Independent non-executive
directors60%
0-3 years 3
3-6 years 2
6-9 years 1
More than 9 years 1
Debenhams plc Annual Report & Accounts 2015
41