Adnams is committed to high standards of corporate governance incorporating best practice. It has a long history of applying good corporate governance and is committed to continuously improving its corporate governance to support its purpose, values and strategies. The Board has regard to the requirements of the Quoted Company Alliance Corporate Governance Code (QCA Code), insofar as it is thought appropriate in relation to the nature and size of the company and has chosen to adopt early, where considered appropriate, the 2023 version of the QCA Code (2023 QCA Code). Where the company has not elected to adopt part of the 2023 QCA Code, this is stated under the relevant principle below. Details on how it applies the ten principles of the 2023 QCA Code are set out below and on the company’s website at https://adnams.co.uk.
Adnams plc is subject to the UK City Code on Takeovers and Mergers.
Purpose, strategy and business model promoting long-term value for shareholders
Principle 1 of the 2023 QCA Code requires the company to establish a purpose, strategy and business model which promote long-term value for shareholders. Adnams was founded over 150 years ago; and to have achieved such longevity the business has focused over those years on producing quality products, serving customers well and looking after its people. Today the purpose of the company is threefold: to be a company that creates memorable moments for its customers, to be a company that shareholders are proud to own, and to be an exemplar in all it chooses to do. The company believes doing these things well will create customer, staff and supplier loyalty and create enduring competitive advantage. This will in turn generate sustainable shareholder returns over the long term.
Ethical values and behaviours
Principle 2 of the 2023 QCA Code requires the company to promote a corporate culture that is based on ethical values and behaviours. The company’s values and embedded culture of sustainable success are what drive the business to continually improve. The culture is set by the Board and is regularly considered and discussed at Board meetings based on feedback to and from the Chief Executive Officer and the senior leadership team and has implemented a ‘direct to the CEO’ initiative to further empower any member of the team to directly contact the Chief Executive Officer. The staff handbook and policies promote this culture and include such matters as whistleblowing, social media use, anti-bribery and corruption, anti-facilitation of tax evasion, modern slavery, communication, equality and diversity, prevention of sexual harassment and general conduct of employees. The Board takes responsibility for the promotion of ethical values and behaviours throughout the company, and for ensuring that such values and behaviours guide the objectives and strategy of the company.
Understanding and meeting shareholders’ needs and expectations
Principle 3 of the 2023 QCA Code requires the company to seek to understand and meet shareholder needs and expectations. The Board seeks to understand the needs and expectations of its stakeholders, particularly shareholders. The company provides shareholders and other stakeholders with relevant information in a timely and balanced manner and has recently introduced shareholder bulletins to provide updates between the usual full year and half year report and accounts reporting cycles. Adnams actively encourages shareholders to participate in its Annual General Meeting (AGM) as an opportunity to ask questions and raise issues during the formal business or, informally, before or after the meeting. The company sends its annual report and accounts and half yearly report and accounts to all shareholders. Copies are also available for download from the company’s website.
Topics discussed with shareholders and the action taken have included:
| Topic | Action / Response |
| Shareholder Communication | Improved shareholder communication and dialogue, including the introduction of the shareholder bulletin. |
| Financial Performance | Steps continue to be taken to increase sales, reduce costs and reduce the company’s cost of servicing its debt facilities. |
| Board Structure & Director’s Tenure | New directors and interim chair appointed. |
| Rebranding of Certain Products | Independent feedback sought and shared with shareholders. |
The company’s approach to meeting investor needs regarding environmental and social matters is set out in the section 172 statement in the report and accounts.
The Board has not adopted early the part of the 2023 QCA Code requiring appropriate quantitative and qualitative reporting of the company’s environmental and social matters to meet investor needs and expectations, to allow the company to retain its focus on returning to profitability.
Shareholder liaison:
The company has a dedicated email address for shareholder queries, shareholder@adnams.co.uk. This is constantly monitored, and any queries are referred to the relevant director, team member or the company secretary for an appropriate response.
Shareholders can also write to the company at its registered office.
Wider stakeholder interests
Principle 4 of the 2023 QCA Code requires the company to take into account wider stakeholder interests, including social and environmental responsibilities and their implications for long term success. The Board recognises its legal responsibility to promote the long-term success of the company for the benefit of its members as a whole, taking into account the interests of other stakeholders, including customers, employees, partners, suppliers, regulators, the environment and its local communities. The company’s underlying principle in how it operates is to be an exemplar in all it chooses to do and to be the model company that delivers for all stakeholders, whether they are customers, suppliers, shareholders, employees, its local community or the environment. This drives the purpose and values that are central to Adnams. The Board and management use this model alongside appropriate financial analysis and methods in its decision-making. The company sets out in its annual report significant levels of work performed by Adnams across the natural, built and social environment, in line with the requirements of s.172 of the Companies Act 2006. Adnams benefits from a very active Board, with a deep understanding of this multifaceted business. Discussions focus on tenants, customers, staff welfare, cash flow and overall financial position.
The Board has not adopted early the part of the 2023 QCA Code requiring further disclosures in the report and accounts or on its website beyond what is already disclosed, to allow the company to retain its focus on returning to profitability.
Risk management
Principle 5 of the 2023 QCA Code requires the company to embed effective risk management, internal controls and assurance activities, considering both opportunities and threats, throughout the organisation. Adnams recognises that effective risk management is critical to enable the company to meet its strategic objectives and therefore has a framework for identifying and managing risk. The key risks facing the company and commentary on risk adaptation are included in the company’s annual report and have been for more than a decade.
The Audit Committee has considered the independence of the auditors including their length of tenure and other services provided to the company. The company’s auditor has confirmed that it considers itself to be independent and the Audit Committee is satisfied that the company’s auditor is independent.
The Board has not adopted the part of the 2023 QCA Code requiring further disclosures in the report and accounts beyond what is already disclosed, to allow the company to retain its focus on returning to profitability.
The Board
Principle 6 of the 2023 QCA Code requires the company to maintain the board as a well-functioning, balanced team led by the Chairman. At the beginning of 2024, the Board comprised four executive directors and four non-executive directors. During the year, and J Adnams, AC Wood and K Hester retired as executive directors of the company. Following the retirement of J Adnams as Chairman of the company, the Board appointed WS Townsend as the Interim Non-Executive Chairman of the company. The Board is responsible to shareholders for the proper management of the company. It meets at least ten times per year, setting and monitoring strategy, reviewing trading performance, ensuring adequate funding, formulating policy on key issues and reporting to shareholders.
Board meeting agendas are set in consultation with both the CEO and Chairman, with consideration being given to both standing agenda items and the strategic and operational needs of the business. Comprehensive Board papers are circulated in advance of meetings, giving directors ample time to review the documentation and enabling an effective meeting. Resulting actions are tracked for appropriate delivery and follow-up. The directors have a broad knowledge of the business and understand their responsibilities as directors of a UK public company admitted to trading on the Aquis Access Market and having appropriate corporate governance procedures.
The Board has two standing committees covering Audit and Remuneration. A Nomination Committee is convened as required and further committees may be created from time to time.
The Audit Committee meets not less than twice annually. The committee provides a focal point for the company’s external auditors. Members of the Finance team attend meetings at the invitation of the committee. The committee is responsible for reviewing a wide range of financial matters including the annual figures and reports and monitoring the controls which are established in the company to ensure the integrity of the financial information reported to shareholders. During 2024 the committee was chaired by S Berendji.
The Remuneration Committee meets twice annually. The Head of Human Resources attends at the invitation of the committee. During 2024 the committee was chaired by WS Townsend.
During 2024 the membership of the Audit and Remuneration Committees comprised the three independent non-executive directors: S Berendji, WS Townsend and SM Sharp (Senior Independent Director).
Membership of the Nomination Committee is agreed according to the circumstances of the nomination. During 2024 the Nomination Committee comprised the independent non-executive directors: S Berendji, WS Townsend and was chaired by SM Sharp (Senior Independent Director).
In addition, the Board holds an annual strategy session to review its medium- to long-term strategic plans at which all directors are normally present.
Non-executive directors’ letters of appointment stipulate that they are expected to devote such time as is necessary for the proper performance of their duties. The Board is satisfied that all directors have continued to be effective and demonstrate commitment to their respective roles.
At each AGM of the company the following directors retire from office and may offer themselves for reappointment:
(a) any director appointed by a resolution of the Board since the last AGM; and
(b) one third of the directors, being those directors who have been longest in office since their appointment or reappointment.
At the 2025 AGM the following directors will retire from office:
– JEI Hanlon (retiring by rotation)
– S Berendji (retiring by rotation)
Each of the above directors intend to offer themselves for reappointment.
The 2023 QCA Code recommends that all directors retire at each AGM and, if applicable, offer themselves for reappointment. Whilst adopting most of the 2023 QCA Code earlier than required, the Board has elected to not adopt early this part of the 2023 QCA Code due to the number of recent changes in the Board and the ongoing succession planning.
The Board has carefully considered the position of each of the directors offering themselves for reappointment and considers their contribution to be significant and effective; accordingly, the Board recommends their reappointment.
Governance Structures and directors’ experience, skills and capabilities
Principle 7 of the 2023 QCA Code requires the company to maintain appropriate governance structures and ensure that individually and collectively the directors have the necessary up-to-date experience, skills and capabilities.
The company maintains appropriate governance structures and processes that are fit for purpose and support good decision-making by the Board. The Chairman leads the Board and is responsible for its governance structures, performance and effectiveness. The Board retains ultimate accountability for good governance and is responsible for monitoring the activities of the Executive team. The non-executive directors are responsible for bringing independent and objective judgement to Board decisions. The executive directors are responsible for the operation of the business and delivering the strategic goals agreed by the Board.
The Board is supported by the Audit Committee, Remuneration Committee, Nomination Committee and such other committees as may be deemed appropriate from time to time. There are certain material matters which are reserved for consideration by the full Board. Each of the committees has access to information and external advice, as necessary, to enable the committee to fulfil its duties.
As part of the company’s commitment to continuous improvement, the Board regularly reviews the company’s governance framework to ensure that it remains effective and appropriate for the business.
The Board is satisfied that the directors collectively and individually have the necessary up-to-date experience, skills and capabilities as well as an appropriate balance of personal qualities to deliver the company’s long-term strategic objectives. The Board is committed to maintaining and where possible increasing diversity across the organisation, including at Board level and within the Executive team.
The Board regularly reviews its composition and that of its committees to ensure that it has access to diverse perspectives and the necessary up-to-date experience, skills and capabilities to discharge its duties effectively. In accordance with the company’s articles of association, each director retires by rotation every three years. The Board also reviews the length of time each director has served on the Board and assesses if contributions made by each director remain effective.
Changes are made to the composition of the Board and its committees to ensure the right balance of complementary skills and capabilities for the next phase of the company’s strategic direction.
The Nomination Committee and Remuneration Committee also work to ensure the right balance of skills, knowledge and capabilities on the Board. Further information about the Board, including biographies describing each director’s experience, are set out in the company’s report and accounts and on the company’s website.
The company encourages each director to identify their individual training needs to support the effective operation of the Board and the delivery of the company’s strategy.
The Company Secretary advises the Board members on their corporate and legal responsibilities and matters of corporate governance.
Procedures are in place to enable individual directors to seek independent advice at the expense of the company. The Board and its committees may take external advice as appropriate.
Further information will be provided as the company looks to fully adopt the 2023 QCA Code.
Board evaluation
Principle 8 of the 2023 QCA Code requires the company to evaluate board performance based on clear and relevant objectives, seeking continuous improvement. The Board conducts an annual evaluation process to assess its effectiveness, as well as that of its committees and the individual Directors as part of the Board’s commitment to continuous improvement.
The Board has not adopted early the part of the 2023 QCA Code recommending an externally facilitated Board performance review, in the interest of saving costs, although the Board will carry out its own internal performance review.
Following the good succession planning in 2022 and 2023, resulting in the appointment of WS Townsend and S Berendji as new non-executive directors of the company and the appointment of JEI Hanlon as the new Chief Executive Officer of the company, consideration is now being given to the appointment of a new permanent chairperson for the company and a new Senior Independent director.
Board reviews
The board performance review is performed by the Chairman using performance review criteria developed by the company and experience of similar reviews in other companies. Less formal reviews are also carried out as part of the company’s succession planning and candidate selection process.
Criteria that may be used to review the criteria against which board, committee, and individual effectiveness is considered may include:
· Board Contribution to Company Performance
· Company Strategy and Board Input
· Understanding the Business, Regulatory Environment, and Competition
· Risk Management and Mitigation
· Board Composition, Skills, and Diversity
· Board Behaviour, Relationships, and Challenge
· Induction, Development, and Training
· Succession Planning and Talent Retention
· Board Committees and Division of Responsibilities
· Board Meetings: Conduct, Focus, and Priorities
· Board Support, Information Quality, and Provision
· Leadership, Individual Contribution, and Effectiveness
· Stakeholder and Shareholder Engagement
Further information will be provided as the company looks to fully adopt the 2023 QCA Code.
Remuneration policy
Principle 9 of the 2023 QCA Code requires the company to establish a remuneration policy which is supportive of long-term value creation and the company’s purpose, strategy and culture. Although a new principle, the substance of this principle was already in the previous version of the QCA Code and included in the company’s remuneration policy to support its threefold approach to be a company that creates memorable moments for its customers, to be a company that shareholders are proud to own, and to be an exemplar in all it chooses to do.
Communication with shareholders and other stakeholders
Principle 10 of the 2023 QCA Code requires the company to communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other key stakeholders.
The company’s annual report and its half year report are key communication channels through which updates can be given to shareholders. Additionally, the Board uses the company’s AGM as a means to engage directly with shareholders, to give information and receive feedback about the company and its progress. The company may also hold shareholder open days to allow shareholders to engage informally with the company.
The company’s website is updated on a regular basis with information regarding Adnams’ activities and performance, including financial information.
Attendance at Board and Committee meetings
The Board meets regularly throughout the year and receives accurate, timely and clear information in a form and of a quality appropriate to enable it to discharge its duties effectively. During 2024 there were ten regular scheduled Board meetings and one strategy session, additional interim Board meetings were also held. There were two meetings of each of the Audit Committee and Remuneration Committee and three meetings of the Nominations Committee held during the year. The attendance of the directors is set out in the company’s report and accounts.
Where a director is unable to attend a particular meeting, the materials for the meeting are provided to them, their views are sought in advance and subsequent briefings are provided as appropriate.
Further information will be provided as the company looks to fully adopt the 2023 QCA Code.
Internal control
The Board acknowledges its responsibility for maintaining a system of internal control, including providing a reasonable, albeit not absolute, assurance against misstatement or loss.
To meet this responsibility, the Board relies upon:
– an organisation structure with clearly defined lines of authority and responsibility, limits for authorisation of transactions and segregation of duties;
– the production and review of regular monthly management information to agreed timescales;
– the identification of key performance indicators with explanations of variances;
– a formalised process for reviewing all company activities during the year;
– detailed annual operating budgets for all businesses; and
– formal authorisation procedures for all investment and capital expenditure.
The Audit Committee considers the system of internal financial control operated effectively during the year.