54 JUST GROUP PLC Annual Report and Accounts 2019
chair’s introduction to governance
I am pleased to present the Group’s Corporate Governance Report for 2019
Dear Shareholder
On behalf of the Board I am pleased to present the 2019 Corporate Governance Report. We welcomed the new Corporate Governance Code 2018 (the “Code”) and the FRC Guidance on Board Effectiveness. The Code was adopted by the Board from 1 January 2019. The Board considers that it has complied with the provisions of the Code. Our Governance Report explains further how we have applied the principles of the Code. LEADERSHIP AND PURPOSE The Board has agreed an effective corporate governance model for the Group, based on the principles and provisions of the Code. We welcome the Code’s strengthened focus on companies generating long-term, sustainable value for shareholders, as well as consideration for other stakeholders and the impact of the business’s operations on wider society. We have upheld these values in our approach to governance throughout the year. The Board oversees the Group’s governance framework that promotes transparency, accountability and challenge as the fundamental underlying principles for the Board’s entrepreneurial and prudent approach to developing the business. During the year we have reviewed our matters reserved for the Board and the terms of reference of our key Committees. During 2019 there continued to be a significant regulatory workload for the Group. The Board continued to work constructively with the PRA to implement the changes required following the publication of PS31/18 in December 2018 and PS19/19 in September 2019. The regulatory environment remains challenging and the impact of changing regulations remain principal risks for the Group. We have faced some difficult decisions that have required us to consider all stakeholders and the long-term sustainable success of the Company. Not all of these decisions, we acknowledge, have been well received by our shareholders. Through our commitment to good governance, the refocus of our strategy to ensure our business model remained economically attractive and taking actions to achieve capital self-sufficiency, the Board believes that the outlook for the business is improving. The share price fell at the start of the year, however the Board was pleased to see the share price recovering at the end of 2019, while noting the share price volatility since year-end. There remains more to do. We will continue to evaluate all of our strategic and business options in line with both the regulatory and economic challenges that we face. I continue to be confident that we are on track to deliver long-term sustainable value for our shareholders and continue to provide good value and outstanding service to our customers. SHAREHOLDER ENGAGEMENT FOLLOWING THE AGM The 2019 AGM saw a number of our shareholders vote against the following resolutions, with the result that they fell below the 80% approval: • Resolution 3 to re-elect me as a Director. • Resolution 14 to renew the authority to allot shares. • Resolution 15 to disapply pre-emption rights. While I was disappointed with these outcomes, in accordance with the Code, we engaged with our shareholders, and in particular those who had voted against, to understand the reasons for the results. This was primarily undertaken through meetings with our Senior Independent Director, Keith Nicholson. Specifically regarding my re-appointment, we understand this was predominantly because of the lack of diversity on the Board. I acknowledge that as Chair of the Company and of the Nomination Committee this is my accountability to progress and we have taken further action on this point.
Chris Gibson-Smith Chair
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