Corporate Governance Statement

Adnams’ Corporate Governance Statement

Adnams is committed to high standards of corporate governance incorporating best practice. The Board have regard to the requirements of the Quoted Company Alliance code (“QCA Code”) insofar as it is thought appropriate in relation to the nature and size of the company.

The company 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 believes that it applies the ten principles of the QCA Code, further details of which are set out below.

Adnams plc is subject to the UK City Code on Takeovers and Mergers.

Strategy & Business Model
Principle 1 of the Code requires the company to establish a strategy and business model which promotes long-term value for shareholders. Adnams was founded some 150 years ago; and to have achieved such longevity the business has focussed over those years in 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.

Shareholders’ Needs and Expectations
Principle 2 of the 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. Adnams actively encourages shareholders to participate in its 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 to all shareholders. Copies are also available for download from the company's website.

Stakeholder and Social Responsibilities
Principle 3 of the Code requires the company to take into account wider stakeholder and social 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, owners, 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.

Risk Management
Principle 4 of the Code requires the company to embed effective risk management, 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 Board
Principle 5 of the Code requires the company to maintain the board as a well-functioning, balanced team led by the Chair. The Board comprises four executive directors and four non-executive directors. The Board is responsible to shareholders for the proper management of the company. It meets monthly, setting and monitoring strategy, reviewing trading performance, ensuring adequate funding, examining acquisition possibilities, formulating policy on key issues and reporting to shareholders. The Board has two standing Committees covering Audit and Remuneration. A Nomination Committee is convened as required.

The Audit Committee, chaired by BF McIntyre, meets not less than twice annually. The Committee provides a focal point for the company’s external auditors. The Chief Financial Officer attends 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.

The Remuneration Committee is chaired by NJ Dulieu and meets twice annually. The Director of Culture and Performance attends at the invitation of the Committee.

Membership of the Audit and Remuneration committees comprises the three independent non-executive directors: NJ Dulieu, BF McIntyre and SM Sharp (Senior Independent Director).

Membership of the Nomination Committee is agreed according to the circumstances of the nomination.

In addition, the Board holds an annual strategy day to review its medium to long term strategic plans at which all Directors are normally present.

Directors’ Experience, Skills and Capabilities
Principle 6 of the Code requires the company to ensure that between them the directors have the necessary up-to-date experience, skills and capabilities. The Board is satisfied that it has an appropriate balance of skills and experience as well as an appropriate balance of personal qualities and capabilities 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 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 and Remuneration Committees 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 elsewhere on this website and in the company’s annual report and accounts.

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.

Board Evaluation
Principle 7 of the 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.

Ethical Culture and Behaviours
Principle 8 of the Code requires the company to promote a corporate culture that is based on sound 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. The staff handbook and policies promote this culture and include such matters as whistleblowing, social media use, anti-bribery and corruption, communication 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.

Governance Structure
Principle 9 of the Code requires the company to maintain 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 and Nomination Committee. 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 intends to review the company's governance framework on an annual basis to ensure it remains effective and appropriate for the business.

Shareholders and Other Stakeholders
Principle 10 of the Code requires the company to communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant 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 annual general meeting as a means to engage directly with shareholders, to give information and receive feedback about the company and its progress.

The company’s website is updated on a regular basis with information regarding Adnams' activities and performance, including financial information.

Internal Control
The Board acknowledges its responsibility for maintaining a system of internal control including providing a reasonable, albeit not absolute, assurance against mis-statement 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.