Directors

The Board

The Board determines the strategic direction of the Company and reviews its operating and financial position. The Board ensures that the necessary resources are in place in order for the Company to meet its objectives. It has a schedule of matters specifically reserved to it, which can be amended only by the Board itself and which has been reviewed and updated during the financial year under review.

These matters include approval of:

  • membership of the Board and its committees;
  • the annual and half year results and interim management statements;
  • the Group strategy, operating plans and financial policy;
  • acquisitions and divestments;
  • the annual budget including operating and major capital expenditure;
  • treasury and tax policies;
  • dividend policy;
  • material amendments to the Company’s pensions schemes;
  • the overall system of control and risk management.

The schedule of matters is available on the Company’s website. All other matters relating to the management of the Company are delegated to the Operating board within clearly defined limits of authority. The Board monitors the performance of management and aims to ensure that the strategy, policies and procedures adopted are not only in the long term interest of shareholders but also meet the needs of Northern Foods’ customers, employees, suppliers and the local communities in which it operates. The Operating board is responsible to the Board for developing the strategy and for the overall performance of the Group and for managing the Group’s businesses as defined by the Board.

The Board, chaired by Anthony Hobson, has seven directors, comprising two executive directors and five non-executive directors. The executive directors are Stefan Barden, Chief Executive and Andrew Booker, Group Finance Director. Orna Ni-Chionna is the senior independent director. The non-executive directors possess a range of skills and experience and bring independent judgement to bear on issues of strategy, performance and resources that are vital to the success of the Group. The non-executive directors have a particular responsibility to challenge constructively the strategy proposed by the executive directors; to scrutinise, and challenge performance; and to satisfy themselves that the Group maintains a sound system of internal control to safeguard shareholders’ investment and the Company’s assets.

Attendance at Board meetings and committees of the Board

The Board met nine times during the year, including one meeting devoted to strategy review. In addition, the chairman held one separate meeting with the non-executive directors without the executive directors being present to discuss Board related issues including structure and succession planning. The non-executive directors also met once without the chairman present to appraise his performance. The Board holds meetings in London or Leeds and at least one meeting each year is held at one of the operational sites. In April 2008 the Board met in Naas, Ireland at the site of the Green Isle Foods’ business.

The table below shows the number of meetings of the Board, audit, remuneration and nomination committees held during the year, and the number of meetings attended by each director. The directors attended Board and committee meetings wherever possible unless personal circumstances prevented their attendance, as shown below. Where a director is unable to attend a Board or committee meeting, his/her views on agenda items are canvassed in advance of the meeting and incorporated into the discussions.

Number of
meetings held
30 March 2008 to
28 March 2009

Board1
9

Audit2
3

Remuneration3
5

Nomination4
2

Number of meetings attended

S Barden

9/9

n/a

n/a

n/a

R J S Bell

8/9

n/a

5/5

2/2

A M Booker5

3/3

n/a

n/a

n/a

A J Hobson

9/9

n/a

n/a

2/2

A K Illsley

8/9

3/3

5/5

2/2

J K Maiden6

6/6

n/a

n/a

n/a

O G Ni-Chionna

9/9

3/3

5/5

2/2

D T Nish

9/9

3/3

2/5

1/2

Notes
1
A J Hobson is chairman of the Board
2
D T Nish is chair of the audit committee
3
O G Ni-Chionna is chair of the remuneration committee
4
A J Hobson is chair of the nomination committee
5
A M Booker was appointed to the Board on 17 November 2008
6
J K Maiden resigned from the Board on 14 November 2008

The chairman is not a member of the remuneration and audit committees but attends by invitation. Senior executives below Board level are periodically invited to attend Board meetings to make presentations on their areas of responsibility.

Chairman and chief executive

There is a clear, written division of responsibility between the chairman and the chief executive. The chairman is responsible for leadership of the Board, setting the agenda and ensuring its effectiveness. He is also responsible for ensuring that the directors receive accurate, timely and clear information, and for effective communication with shareholders. The chairman also facilitates the effective contribution of the non-executives directors and ensures a good working relationship between executive and non-executive directors. The chairman’s other significant commitments and any changes during the year are detailed in his biography. The Board is satisfied that the commitments of the chairman outside the Company are not such as to interfere with the performance of his duties. The chief executive is responsible for operating the business and implementing the Board’s strategies and is supported in these matters by the Operating board.

Board balance and independence

The Company complies with the requirement of the Combined Code that there should be a balance of executive and non-executives, such that no one individual has unrestricted powers of decision. There is a succession plan, approved by the Board, to ensure continual review of the balance of skills and experience.

Influence is balanced within the Board by virtue of a non-executive senior independent director and a further three non-executive directors whose skills and business experience are invaluable in constructively challenging and developing the Group’s strategy and direction.

The Board uses criteria to assist in arriving at its decision that the non-executive directors are independent. These include:

  • a deep appreciation of the Group’s business and activities so that a thorough evaluation of information received can be made;
  • objective decision-making after debate;
  • objective challenge of management;
  • a clear and consistent approach demonstrating that he/she has the good of the Group uppermost in his/her behaviour when challenging others and defending his/her viewpoints.

Following the annual review of independence, the Board is of the opinion that all of the current non-executive directors are independent by these criteria and are free from any relationship or circumstance which could affect, or appear to affect, their independent judgement. David Nish is the Group Finance Director of Standard Life plc which owned 11.26% of the Company’s shares as at 27 May 2009. The Company does not consider that this affects his independence, as his role at Standard Life does not include direct responsibility for investment decisions. This potential conflict of interest was thoroughly reviewed by the directors at a Board meeting held in November 2008, and a resolution was passed authorising the potential conflict. However, should any circumstances change in relation to his role at Standard Life this will be reconsidered and, if necessary, appropriate action taken.

Procedures to deal with directors’ conflicts of interest

The Company has procedures in place to deal with the situation where a director has a conflict of interest and intends to report annually on the effectiveness of these procedures.

A Code of Practice on Conflicts of Interest was approved by the Board on 1 October 2008 and can be viewed on the Company’s website. As part of this process for dealing with conflicts, the members of the Board will endeavour to:

  • consider each conflict situation separately on its particular facts;
  • keep records and board minutes of authorisations granted by directors and the scope of any approvals given;
  • annually review conflict authorisations.

Appointments to the Board

Appointments to the Board are the responsibility of the full Board on the recommendation of the nomination committee. There is a formal, rigorous and transparent procedure for the appointment of new directors which is made on merit and against objective criteria. The criteria are set by the non-executive directors and include identifying any areas where skills are lacking and making appointments to enhance the balance of skills and experience of the Board. In addition, care is taken to ensure that appointees have enough time available to devote to their role.

The terms and conditions of appointment of non-executive directors are available for inspection at the Company’s registered office during normal business hours and at the Annual general meeting (for 15 minutes prior to, and during the meeting). An example of the letter of appointment is available on the Northern Foods website www.northernfoods.com.

In November 2008 Andrew Booker was appointed to the Board as group finance director following a careful selection process and the use of recruitment consultants, The Miles Partnership.

An executive director is permitted to hold one non-executive directorship (and retain the fees from that appointment) provided that the Board considers that this will not adversely affect his executive responsibilities. Any proposed appointment to the board of another company requires the prior approval of the Board. The current executive directors do not hold any such appointments.

Information and professional development

All directors have unlimited access to information regarding the Company, and to the advice and services of the company secretary, whose appointment and removal requires the approval of the Board, and they may obtain external advice, as required, at the expense of the Company.

One week prior to each scheduled Board meeting, the chairman and the company secretary ensure that the directors receive all relevant papers so that they are properly appraised of the Company’s current performance and information on any other matter which is referred to the Board for consideration.

There is a comprehensive induction process, tailored to the needs of the individual directors, which is arranged by the company secretary. This includes meetings with management and external advisors so that the new director receives an appreciation of the activities of the Group, the key drivers of business performance and the significant current issues. Visits to operational sites are encouraged. The training also covers the role of the Board and its committees, corporate governance practices and procedures, and the duties, responsibilities and liabilities of a director of a public listed company. Following his recruitment to the Board, Andrew Booker undertook a formal induction process which included specific training in the role and duties of a director and pensions training. The induction also included prearranged visits to each business within the Group to meet the senior management teams.

Additional training is arranged, by the company secretary, on a group or individual basis as needs arise; for example, when a non-executive director is appointed to a Board committee.

During the year, in order to assist them in their duties, the directors received presentations on the legislative changes implemented under the Companies Act 2006, including the codification of directors’ duties and, in particular, directors’ obligations in relation to conflicts of interests.

Board performance evaluation

It is recognised that the effectiveness of the Board is vital to the success of the Group. In order to evaluate the effectiveness of the performance of the Board, the chairman and its principal committees, a rigorous evaluation is undertaken annually. This process is conducted internally, led by the chairman and supported by the company secretary. As in previous years, this has taken the form of obtaining completed detailed questionnaires, (which are updated and revised each year) from all Board members, analysing the responses, and providing the opportunity for directors to comment on any issues not covered directly by the questionnaire. The responses were analysed and discussed at a meeting of the Board held in April 2009. It was agreed that the results confirmed that the Board and its committees continued to be effective.

The Board evaluation process also aims to identify the areas where improvements can be made. Following last year’s performance evaluation the Board requested regular exposure to, and the opportunity to meet with, senior management, and this has been actioned during the course of this financial year.

Orna Ni-Chionna, Senior Independent Director, has analysed responses to a detailed questionnaire designed to evaluate the performance of the chairman. The results of the survey were discussed with the executive and non-executive directors when the chairman was not present. The outcome of these discussions confirmed that the performance of the chairman was effective and that he continues to provide strong leadership to the Board.

The chairman assesses the performance of the non-executive directors, after consultations with the executive directors and the senior independent director. Following this process, it was confirmed that each individual non-executive director continued to act effectively and to fulfil the duties and responsibilities expected, demonstrating commitment to the role, including commitment of time for Board and committee meetings and other duties.

Re-election of directors

Under the Company’s Articles, all directors are subject to election by shareholders at the first opportunity after their appointment and then to re-election at intervals of no more than three years. Retiring directors may offer themselves for re-election.

Following his appointment as group finance director in November 2008, Andrew Booker will be seeking election by shareholders at this year’s Annual general meeting. In addition, Stefan Barden and Ronnie Bell will be standing for re-election. The Board has set out in the Notice of Annual general meeting (enclosed with this report) their reasons for supporting the election and re-election of these directors at the forthcoming Annual general meeting.

The biographical details of all the directors put forward for re-election are provided on this site and in the explanatory notes contained in the Notice of meeting.

Remuneration

Remuneration and the work of the remuneration committee is set out in the Remuneration report.