CHAIRMAN’S INTRODUCTION TO GOVERNANCE
Mike Turner CBE Chairman
Good governance is an essential ingredient of GKN’s long-term success. As a Board, we set the strategic direction and risk appetite of the Group with the overarching aim of increasing its long-term value. It is therefore vital that we have a strong governance framework in place that enables us to make the right strategic decisions and take calculated risks that we manage carefully to safeguard our shareholders’ investment.
candidates to replace Andy and Marcus Bryson, who retired from the Board in December 2014. This reflects the strength of our talent pipeline and the value of our succession planning process.
At GKN we believe in doing the right thing, always. The authorities and policies associated with good governance will only be effective if the right values, culture and business practices are set and demonstrated by the Board and embedded within the organisation. To this end, during the year we communicated a revised code of conduct (the GKN Code) to all GKN employees, reinforcing our commitment to doing the right thing and reminding our employees about the standards of behaviour we expect from them. The GKN Code highlights the importance we place on maintaining working environments that promote safe working practices, honest conduct, diversity and inclusivity, the delivery of high quality products and speaking up to report wrong behaviour.
The Board is ultimately responsible for setting the risk appetite of the Group and ensuring that appropriate risk management systems are in place. As part of our strategic review in June 2015, we defined the Group’s appetite for risk against each of our key risk areas and communicated this to the Executive Committee, which manages the Group’s risks on a day-to-day basis. The risk appetite provides clarity on our desired approach to our principal strategic and operational risks. A key element of our role as a Board is to review management performance. Mindful of the importance of operational performance and culture as well as financial performance, during 2015 we revised our key performance indicators to include additional non-financial measures. This dashboard will improve our visibility of key areas and better enable us to monitor operational performance and cultural health. Our revised KPIs can be found on pages 11 to 13. This year we report against a revised version of the UK Corporate Governance Code. The new Code contains supplementary principles and provisions relating to going concern, viability and risk management; accordingly you will find additional information on these topics included throughout the annual report to support our compliance with the Code.
The balance of skills, knowledge and experience on the Board and on the committees which support it is crucial to the Group’s success. I am very happy with the composition of our Board. It is a strong Board, in part because its members have relevant and diverse experience. Through robust debate we ensure that we make the best possible decisions. In September 2015, Andrew Reynolds Smith resigned from the Board. The Nominations Committee subsequently considered both succession planning and Board composition and, taking into account the Group’s strategic priorities, recommended the appointment of Kevin Cummings and Phil Swash as executive Directors. I was very pleased that we had such strong internal
Mike Turner CBE Chairman 22 February 2016
GKN plc Annual Report and Accounts 2015