Dear Shareholders
On behalf of the Board, I am pleased to present Bodycote’s Corporate Governance Statement for 2023.
During the year, the Board considered ongoing issues around energy costs, inflation and interest rates, macroeconomic uncertainties, climate change and major geopolitical events, as well as the development of Bodycote’s business. The Board, alongside management, sought to assess the risks and opportunities presented by these events and to manage their impact. My role has been to guide the debate at the Board and to ensure that our strategy remains appropriate and on-course. In addition, I led the Nomination Committee in the search for a new Group Chief Executive following the announcement in May 2023 of Stephen Harris’ intention to retire in 2024, which resulted in the appointment of Jim Fairbairn.
Regular, open and constructive dialogue with shareholders continued throughout 2023, consistent with the Group’s broader commitment to meaningful engagement with key stakeholders. I met several significant shareholders personally during the year to discuss shareholder views in relation predominantly to the recruitment of a successor to Stephen Harris. The Group’s key stakeholders and their various perspectives are identified and taken into account as part of the Board’s annual strategy and corporate planning discussions and also in project assessments and many general Board conversations. These discussions and assessments focus not only on delivering value for shareholders, but also address the impact of our decisions and strategies on all stakeholders and this broad approach is a key aspect of our culture. In relation to good governance, there is a clear emphasis on setting the tone from the top and leading by example.
In line with the Director’s Duties, the Board’s engagement in 2023 with employees, shareholders, customers and communities is explained in our stakeholder section on page 18 of the annual report.
The Group’s sustainability agenda has continued to gather pace during the year, including the addition of further resource and investment. A detailed report of activities can be found on pages 35 to 42. The Board provides regular challenge and oversight of the Group’s sustainability agenda, with environmental, health and safety performance being reviewed at every meeting. Climate change is continuing to rise in importance for Bodycote and its stakeholders and as such, climate-related matters have been discussed in the context of both the Group’s strategy and risk management during the year. The Group continues to make good progress towards its science based emissions reduction target, having reduced Scope 1 and 2 emissions by 24% since 2019. Bodycote’s greatest opportunity however lies in its ability to support customers to achieve their sustainability goals, amplifying its impact across a multitude of markets and sectors. Emissions per part can be up to 60% lower when processed with Bodycote, compared with customers’ in-house processes. The Group is augmenting its communications and marketing tools to enable emissions savings for customers and play its fullest role in the transition to a low-carbon economy. The case study on page 13 provides further details about the Group’s work to support customers’ sustainability agendas.
Ensuring high standards of business conduct is critical to the success of the Group. In 2023, in response to employee suggestions, we moved to a divisional model of Employee Engagement Groups led by Non-Executive Director Patrick Larmon, with virtual meetings taking place during the year. The feedback from these forums was reported to the Board and the Executive Directors charged with addressing any particular items that arose. Further information is set out on page 62 of the annual report.
Succession planning is a regular topic for Board discussion, although the outcome of these discussions is only visible when new appointments are made. For each appointment we look to appoint an outstanding candidate, with a diverse range of relevant experience, to maximise Board effectiveness. When considering diversity, we recognise that this can take many forms including gender, nationality, social, ethnic background, and cognitive and personal strengths. Diversity at Board level and throughout the Group is recognised by both the Board and management as a valuable strength. The Board continued to ensure that effective Board succession plans are in place. Ben Fidler was appointed as Chief Financial Officer in February 2023 to replace Dominique Yates who retired from the Board in April 2023. Beatriz García-Cos Muntañola was appointed as a Non-Executive Director in September 2023, with her experience as a serving Chief Financial Officer of a multinational metals group being of particular value to Board discussions. Eva Lindqvist stepped down from the Board at the 2023 AGM after more than nine years of service and Ian Duncan retired in November 2023 following completion of nine years of service.
As announced in October 2023, Jim Fairbairn will succeed Stephen Harris as Group Chief Executive. Jim joined the business in March 2024 and Stephen will retire and step down from the Board after the Annual General Meeting (AGM) in May 2024, following the completion of a comprehensive handover. Jim’s track record in leading and developing specialist global industrial businesses and teams is outstanding, and we look forward to working with him to drive the continuing development and growth of Bodycote.
All Directors plan to attend this year’s AGM, which will provide an opportunity for shareholders to ask questions to the Board. I look forward to meeting any shareholder who can join us and extend my thanks to you all for your continued support.
Daniel Dayan
Chair
Dear Shareholders
On behalf of the Board, I am pleased to present Bodycote’s Corporate Governance Statement for 2023.
During the year, the Board considered ongoing issues around energy costs, inflation and interest rates, macroeconomic uncertainties, climate change and major geopolitical events, as well as the development of Bodycote’s business. The Board, alongside management, sought to assess the risks and opportunities presented by these events and to manage their impact. My role has been to guide the debate at the Board and to ensure that our strategy remains appropriate and on-course. In addition, I led the Nomination Committee in the search for a new Group Chief Executive following the announcement in May 2023 of Stephen Harris’ intention to retire in 2024, which resulted in the appointment of Jim Fairbairn.
Regular, open and constructive dialogue with shareholders continued throughout 2023, consistent with the Group’s broader commitment to meaningful engagement with key stakeholders. I met several significant shareholders personally during the year to discuss shareholder views in relation predominantly to the recruitment of a successor to Stephen Harris. The Group’s key stakeholders and their various perspectives are identified and taken into account as part of the Board’s annual strategy and corporate planning discussions and also in project assessments and many general Board conversations. These discussions and assessments focus not only on delivering value for shareholders, but also address the impact of our decisions and strategies on all stakeholders and this broad approach is a key aspect of our culture. In relation to good governance, there is a clear emphasis on setting the tone from the top and leading by example.
In line with the Director’s Duties, the Board’s engagement in 2023 with employees, shareholders, customers and communities is explained in our stakeholder section on page 18 of the annual report.
The Group’s sustainability agenda has continued to gather pace during the year, including the addition of further resource and investment. A detailed report of activities can be found on pages 35 to 42. The Board provides regular challenge and oversight of the Group’s sustainability agenda, with environmental, health and safety performance being reviewed at every meeting. Climate change is continuing to rise in importance for Bodycote and its stakeholders and as such, climate-related matters have been discussed in the context of both the Group’s strategy and risk management during the year. The Group continues to make good progress towards its science based emissions reduction target, having reduced Scope 1 and 2 emissions by 24% since 2019. Bodycote’s greatest opportunity however lies in its ability to support customers to achieve their sustainability goals, amplifying its impact across a multitude of markets and sectors. Emissions per part can be up to 60% lower when processed with Bodycote, compared with customers’ in-house processes. The Group is augmenting its communications and marketing tools to enable emissions savings for customers and play its fullest role in the transition to a low-carbon economy. The case study on page 13 provides further details about the Group’s work to support customers’ sustainability agendas.
Ensuring high standards of business conduct is critical to the success of the Group. In 2023, in response to employee suggestions, we moved to a divisional model of Employee Engagement Groups led by Non-Executive Director Patrick Larmon, with virtual meetings taking place during the year. The feedback from these forums was reported to the Board and the Executive Directors charged with addressing any particular items that arose. Further information is set out on page 62 of the annual report.
Succession planning is a regular topic for Board discussion, although the outcome of these discussions is only visible when new appointments are made. For each appointment we look to appoint an outstanding candidate, with a diverse range of relevant experience, to maximise Board effectiveness. When considering diversity, we recognise that this can take many forms including gender, nationality, social, ethnic background, and cognitive and personal strengths. Diversity at Board level and throughout the Group is recognised by both the Board and management as a valuable strength. The Board continued to ensure that effective Board succession plans are in place. Ben Fidler was appointed as Chief Financial Officer in February 2023 to replace Dominique Yates who retired from the Board in April 2023. Beatriz García-Cos Muntañola was appointed as a Non-Executive Director in September 2023, with her experience as a serving Chief Financial Officer of a multinational metals group being of particular value to Board discussions. Eva Lindqvist stepped down from the Board at the 2023 AGM after more than nine years of service and Ian Duncan retired in November 2023 following completion of nine years of service.
As announced in October 2023, Jim Fairbairn will succeed Stephen Harris as Group Chief Executive. Jim joined the business in March 2024 and Stephen will retire and step down from the Board after the Annual General Meeting (AGM) in May 2024, following the completion of a comprehensive handover. Jim’s track record in leading and developing specialist global industrial businesses and teams is outstanding, and we look forward to working with him to drive the continuing development and growth of Bodycote.
All Directors plan to attend this year’s AGM, which will provide an opportunity for shareholders to ask questions to the Board. I look forward to meeting any shareholder who can join us and extend my thanks to you all for your continued support.
Daniel Dayan
Chair
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