50 JUST GROUP PLC Annual Report and Accounts 2019
Section 172 – Examples of decisions during the year This report assesses how the Directors have taken into consideration the Company’s business relationships with suppliers, customers and other stakeholders. It explores how the Directors have engaged with colleagues across the Group and how the principal decisions taken by the Board may impact them.
AREA OF DECISION
MATTER CONSIDERED
WHAT WE DID
STAKEHOLDERS
Based on the strategic priority “Be proud to work at Just” and informed by the UK Governance Code 2018 (the “Code”) the Board considered the most appropriate way for the Group to hear the employee voice in the boardroom.
The Board appointed Steve Melcher, Non-Executive Director, to be responsible for championing workforce engagement activities. He held four face-to-face sessions with colleagues across Reigate, London and Belfast and conversations were framed around topics on the Board’s agenda. Colleagues could ask questions and provide feedback on these and other matters relating to the business, with many of the questions aligned to the areas of strategy, performance and regulation. Frequently asked questions from colleagues covering themes such as our share price and markets and products are being addressed as part of our CEO’s communication and engagement programme (see page 41 “Executive team communication and engagement”). In addition we received feedback on our HUB group of businesses, with a focus on the physical environment, information technology and infrastructure and flexible working. This has been included as part of the strategy development and operational planning processes for the HUB group. The Group has made several steps to meet the new requirements including. • The Group raised £375m of gross proceeds by means of an equity placing and Restricted Tier 1 bond issue in 2019 and this greatly strengthened our capital base. The Board considered the options available and decided to raise the equity capital through an equity placing. A number of shareholders disagreed with the approach chosen by the Board and consequently voted against the share placement authorities at the AGM. • Later in the year, we successfully completed a £125m Tier 2 capital raise via an 8.125% sterling denominated BBB rated ten year issue and the proceeds of the issue will be used mainly to refinance the £100m 9.5% Partnership Life Assurance Company Limited subordinated notes due in 2025. • The Group restructured and updated its internal LTM securitisation to meet revised regulatory requirements. • Further steps have included reducing our new business volumes; extending reinsurance; and taking significant steps to right-size the cost base, including consolidating our property footprint, simplifying our senior management structure, and repricing our products. These management actions have contributed to a markedly reduced new business capital strain and strengthened the capital position of the Group. Further information on the Group’s focus on capital and creating shareholder value can be found on page 8. The Board reviewed the dividend policy taking into account feedback received from shareholders and the Board’s commitment to achieve capital self-sufficiency. The Board concluded it was not in the best interests of shareholders to recommence dividend payments at this time.
The decision was to the benefit of all employees.
EMPLOYEES COLLEAGUE ENGAGEMENT
Following changes in the regulatory landscape, the Board considered the sustainability of the Group and concluded that capital was the number one priority. The Group committed to delivering capital self-sufficiency.
The decision was for the benefit of all stakeholders but principally for the Group’s customers, shareholders and employees.
LONG TERM STRATEGY AND CAPITAL
Given the focus of the Board on the sustainability of the Group and in particular capital self- sufficiency along with regulatory and economic uncertainty, the Directors’ judged it was in the best interests of stakeholders as a whole not to recommend the payment of a final dividend. Every three years the Group is required to ask shareholders to approve the policy for Directors’ remuneration.
This decision benefited customers, society and ultimately
SHAREHOLDERS DIVIDEND POLICY
shareholders. It will enable the Group to meet the new regulatory capital requirements sooner.
The Remuneration Committee on behalf of the Board has considered the Remuneration policy and changes to it from the perspective of the Group’s purpose and aligning the interests of management with that of stakeholders. In particular whether the new policy would drive behaviours and help meet the strategic objectives especially with regards to organic capital generation. The new policy has been developed based on guidance from UK regulators on best practice and after extensive interaction with major investors, who were consulted on the proposed changes. The Remuneration Committee approved the new policy and a resolution will be put to the AGM in May to approve the policy. More information on the new remuneration policy and the consultation process can be found in the Directors’ Remuneration Report.
This decision benefited customers,
SHAREHOLDERS DIRECTORS’ REMUNERATION POLICY
shareholders, and ultimately all stakeholders as it will drive the right behaviours to enable the delivery of the Group’s purpose.
Powered by FlippingBook