Governance

Chair’s message

Dear Shareholders

On behalf of the Board, I am pleased to present Bodycote’s Corporate Governance Statement for 2020.

The coronavirus pandemic was declared in March 2020 and brought significant human, social, economic and business uncertainty. 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 2020. In the first few months of the pandemic regular board meetings were held to keep contact with the Board members. The agendas were developed with active consideration of the status of the coronavirus pandemic and the current priorities of the Group. Full updates were provided in March and April on  preparedness and response activities to ensure control and co-ordination across the Group. This provided confirmation of employee safety, business resilience and mitigating actions being driven by senior management. The response to the pandemic was the backdrop for the operational, financial and commercial discussions at Board level.

The Board agreed that employee support and well-being should be a key priority, at the forefront of response workstreams – recognising that the pandemic represents a test of the efficacy of the Group’s culture. In particular communications to all employees were increased and the health of all employees monitored and a high-level summary provided to the Board.

Shareholder feedback and engagement has continued despite the coronavirus outbreak with shareholder perspectives having been received and considered.

The date for the 2020 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 changed to a meeting ‘behind closed doors’. The 2019 year-end dividend was announced in early March for payment in June 2020. This dividend was deferred to allow the Board greater clarity on the impact of the pandemic and a catch-up dividend was subsequently paid in September 2020. 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 our project assessments and in our other Board conversations. These discussions, assessments and conversations focus not only on delivering increased value for shareholders, but also address the impacts of our decisions and strategies on the Group’s wider stakeholders. The Board recognises the importance of regular, open and constructive dialogue with shareholders and other stakeholders, and the interests of our stakeholders have been a key aspect of our culture and factor in our decision making.

In line with the Director’s Duties, the Board’s engagement with employees, shareholders, customers, and communities in 2020 is explained in our stakeholder section on page 18 of the annual report.

The Directors receive regular reports on Safety, Health and Environment to support their decisions. The Board also conducted a review of the existing sustainability processes with a view to establishing a broader ESG policy. As a first priority, the Board agreed to focus on improving the effectiveness of communicating current actions and the role of Bodycote as an energy optimiser in its customer supply chains. Further information on Board activities can be found on pages 50 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 meetings have taken 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. In 2020 these forums were held virtually. Feedback was generally very 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, and ethnic backgrounds, and of cognitive and personal strength. Diversity at Board level and throughout the Company is a valuable strength.

The Board continues to ensure that effective succession plans are in place and has appointed a further Non-Executive Director, Kevin Boyd, as of 1 September 2020.

A.C. Quinn
Chair