Governance

Chair’s message

Dear Shareholders

On behalf of the Board, I am pleased to present Bodycote’s Corporate Governance Statement for 2021. One of the most significant issues for the Board in 2021 was the continuing COVID-19 pandemic, which was initially declared in March 2020 and continued throughout 2021. It has brought significant human, social, economic as well as business uncertainty, and the Board has taken steps to understand and mitigate the risks posed by and the impacts arising from the ongoing situation.

Most full meetings of the Board and its Committees have been conducted virtually during 2021 with a physical meeting in October and a return to virtual meetings in December. The response to the pandemic continued to be the backdrop for the operational, financial and commercial discussions at Board level. Shareholder feedback and engagement have continued despite the continued COVID-19 outbreak with shareholder perspectives having been received and considered.

The date for the 2021 Annual General Meeting in May remained as initially announced, but in view of social distancing and the requirement to safeguard shareholders’, employees’, and advisers’ safety, the format of the Annual General Meeting was a meeting ‘behind closed doors’. Regular, open and constructive dialogue with shareholders will continue in line with the Group’s broader commitment to meaningful engagement with key stakeholder groups. The Group’s key stakeholders and their differing perspectives are identified and taken into account, not only as part of the Board’s annual strategy and corporate planning discussions, but also in project assessments and general Board conversations. These discussions and assessments focus not only on delivering value for shareholders, but also address the impacts of our decisions and strategies on all stakeholders and are a key aspect of our culture.

In line with the Director’s Duties, the Board’s engagement with employees, shareholders, customers, and communities in 2021 is explained in our stakeholder section on page 18 of the annual report.

The Directors receive regular reports on Safety, Health and Environmental performance to support their oversight and decisions. The Board conducted a review of the existing sustainability processes and has established an initial ESG policy. The Board agreed to join the Science Based Target initiative and management is working to establish targets. A further focus is on improving the effectiveness of communicating current actions and the role of Bodycote as an energy, and therefore carbon optimiser in its customer supply chains. Further information on Board activities can be found on pages 48 to 53 of the annual report.

Ensuring high standards of business conduct is critical for the success of the Group. Employee Engagement Groups led by the designated Non-Executive Director, Patrick Larmon, are in place and virtual meetings took place during the year. The feedback from these forums is reported to the Board and the Executive Directors charged with addressing any particular items that arise. Topics discussed at the Employee Engagement Groups included COVID-19 and safety, IT improvements, communications and operational matters. Feedback was generally positive, and no material concerns other than the general concerns over the pandemic were expressed by employees during the year.

Succession planning is a regular topic for discussion, although the outcome of these discussions is only visible from time-to-time when new appointments are made. For each appointment we are looking to appoint an outstanding candidate, with a diverse range of experience, to maximise Board effectiveness. When we think about diversity, we recognise that this can take many forms including diversity of gender, nationality, social, ethnic background, and of cognitive and personal strength. Diversity at Board level and throughout the Group is a valuable strength.

Daniel Dayan
Chair