CORPORATE GOVERNANCE continued
We meet formally approximately nine times a year. In order to increase visibility of the Group’s operations and provide further opportunities to meet senior management, at least one Board meeting is combined with a visit to the Group’s business locations. In 2015 we visited GKN Driveline’s factories in Celaya and Villagran, Mexico, where we toured the facilities, reviewed business performance and met with employees. At our visit to Villagran we also opened a new state-of-the-art manufacturing facility for premium propshaft production to support Mexico’s growing automotive sector and the broader growth in demand for all-wheel drive vehicles in the Americas. In addition to regular Board reviews of strategic projects, we hold one two-day Board meeting per year which is devoted to reviewing progress made against Group strategy and discussing longer-term strategic options. During this meeting we receive detailed updates on markets and technology trends from external experts and we discuss and approve the strategy for each division and the Group. A number of informal meetings are also held during the year which help to ensure that there are strong relations between Directors. Additionally, I meet from time to time with the non-executive Directors without the executive Directors being present so that we can discuss their priorities and concerns. I have set out below the areas on which we focused in 2015.
• Reviewed and approved the Group’s strategic plans and annual budget. • Reviewed a number of potential acquisitions. • Approved the acquisition of Fokker and the associated funding, including an equity placing. • Approved the acquisition of Sheets Manufacturing Inc. • Conducted a post-investment review of Volvo Aero, acquired in 2012. • Assessed the risks to the achievement of the Group’s strategy and reviewed the Group’s risk appetite. • Considered and debated the principal risks and uncertainties which could impact the Group. • Approved the level of risk financing and insurance. • Agreed severe but plausible scenarios to model and test the viability of the Group. • Considered succession planning for the Board and for senior executive positions within the Group. • Evaluated the effectiveness of the Board and agreed appropriate actions. • • • • • Reviewed divisional strategic and operational performance. Approved revised KPIs to support our ongoing monitoring of management performance. Considered Group financial performance against budget and forecast. Considered health and safety performance throughout the Group. Reviewed the half year and annual results and approved the annual report and interim financial statements.
• Considered and approved revised Group authority limits. • Assessed, with the support of the Audit & Risk Committee, the effectiveness of internal control and audit processes.
In line with the UK Corporate Governance Code, certain Board responsibilities are delegated to our Board committees, which play an important role in supporting the Board. Reports on the activities of our principal committees can be found on the following pages, and their terms of reference are available on our website. All Board committees are supported by the Company Secretariat.
Only the committee chairman and members are entitled to be present at committee meetings, although additional attendees may be invited should their input be required. In order that the Board remains fully updated on their work, the committee chairmen formally report on committee activities at the subsequent Board meeting.
GKN plc Annual Report and Accounts 2015