Corporate governance

The Board currently comprises a Non-executive Chair, four Non-executive Directors and two Executive Directors, who are equally and collectively responsible for the proper stewardship and leadership of the Company. Their biographical details are set out on pages 64 and 65.

In accordance with the Code, at least half the Board, excluding the Chair, should be Non-executive Directors, who are determined by the Board to be independent in character and judgement, and free from relationships or circumstances which may affect, or could appear to affect, this judgement. The Company regards Alison Littley, Iraj Amiri, Will Truman and Angela Rushforth as ‘independent’ Non-executive Directors within the meaning of the Code and, therefore, is considered to be compliant in this area.

The Board also considers diversity and inclusion throughout the Group and details of the extent to which the Board has met the FCA’s targets, in this regard, are set out on page 79.

The formal schedule of matters reserved for the Board’s consideration includes the following.

• Approval of the Group’s strategy, long-term objectives, annual operating budgets and capital expenditure plans
• Approving transactions of significant value or major strategic importance, including acquisitions
• Approving significant changes to the Group’s capital, corporate or management structure
• Monitoring and assessing the overall effectiveness of the Group’s risk management processes and internal control systems, including those related to health and safety, financial controls and anti-bribery policies and procedures
• Approving the Annual and Half-Year Reports, including Financial Statements
• Approving other corporate communications related to matters decided by the Board
• Board appointments and succession planning and setting Terms of Reference for Board Committees
• Remuneration matters, including the general framework for remuneration and share and incentive schemes.

Subject to those matters reserved for its decision, the Board has delegated to its Audit and Risk, Nomination, Remuneration and Social Values and ESG Committees certain authorities. There are written Terms of Reference for each of these Committees, which are available on the Group’s corporate website at: investors.eurocell.co.uk. Separate reports for each Committee are included in this Annual Report on pages 77 to 111.

Details of how opportunities and risks to the future success of the business have been considered and addressed can be found in the Strategic Report on pages 56 to 63. Details of the sustainability of our business model can be found in the Strategic Report on pages 02 to 63. Our governance framework underpins the delivery of strategy and can be found on pages 68 and 69. An overview of the Group’s strategy can be found in the Strategic Report on pages 14 to 21.

The Directors are ultimately responsible for preparing the Annual Report and Accounts and the Board confirms it considers them, taken as a whole, to be fair, balanced and understandable, and provides the information necessary for shareholders to assess the Company’s position, performance, business model and strategy.

The Board meets regularly to discuss key business issues and prescribe actions as appropriate. The Group’s reporting structure below Board level is designed so that all decisions are made by those most qualified to do so in a timely manner. Day-to-day management and the implementation of strategies agreed by the Board are delegated to the Executive Directors. Key to this delegation is the Executive Committee, which meets each month.

This structure enables the Board to make informed decisions on a range of key issues including strategy and risk management.

All the Directors have the right to have their opposition to, or concerns over, the operations of the Board and/or the management of the Company, noted in the minutes. During the year, no such opposition or concerns were noted.

The Chair and the Non-executive Directors met during the year without the Executive Directors present.

The Chief Executive has principal responsibility for all operational activities and the day-to-day management of the business, in accordance with the strategies and policies approved by the Board. The Chief Executive also has responsibility for communicating to the Group’s employees the expectations of the Board in relation to culture, values and behaviours.

The Senior Independent Director has an important role on the Board, providing a sounding board for the Chair, leading on corporate governance issues and serving as an intermediary for the other Directors. She is available to shareholders if they have concerns, which contact through the normal channels of the Chair, Chief Executive or other Executive Directors has failed to resolve, or for which such contact is not appropriate.

Alison Littley has served as Senior Independent Non-executive Director since her succession to the role from Frank Nelson in May 2024.

All Non-executive Directors are required to allocate sufficient time to the Company to discharge their responsibilities effectively. The Non-executive Directors act in a way they consider will promote the long-term sustainable success of the Group for the benefit of, and with regard to the interests of, its stakeholders.

The Nomination Committee leads the process for Board appointments and makes recommendations to the Board. Prior to appointment, Board members, in particular the Chair and the Non-executive Directors, disclose their other commitments and agree to allocate sufficient time to the Company to discharge their duties effectively and ensure that these other commitments do not affect their contribution.

The Executive Directors may accept an outside appointment provided that such appointment does not in any way prejudice their ability to perform their duties as Executive Directors of the Company. Darren Waters and Michael Scott do not currently hold any outside appointments.

The Non-executive Directors’ appointment letters anticipate a minimum time commitment of 20 days per annum, recognising that there is always the possibility of an additional time commitment and ad hoc matters arising from time to time, particularly when the Company is undergoing a period of increased activity. The average time commitment inevitably increases where a Non-executive Director assumes additional responsibilities such as being appointed to a Board Committee.

All new Non-executive Directors undergo an induction programme and as such spend considerably more than the minimum commitment during the course of a year. All Non-executive Directors are required to inform the Chair before accepting another position in order to ensure the Director has sufficient time to fulfil their duties. The current Board commitments of all Directors are shown on pages 64 and 65 and their terms of appointment are reported on pages 56 to 62.

The Company’s Articles of Association contain powers of removal, appointment, election and re-election of Directors and provide that all of the Directors must retire and may offer themselves for re-election at each Annual General Meeting (‘AGM’).

At the upcoming AGM, all the current Directors intend to offer themselves for election/re-election, in accordance with the Code. Following the conclusion of the latest Board evaluation process, the Board considers all the Directors to be effective, committed to their roles and to have sufficient time available to perform their duties.

The Board has a process in place to assess the current and future skills and experience needed by the Non-executive Directors against a matrix of requirements, through which it has determined that the Non-executive Directors are independent and that the Board has appropriate and complementary skills and experience.

In accordance with the Code, a formal evaluation of the Board’s performance, along with its Committees, Chair and individual Directors was conducted during the year, with the results presented and discussed at the December 2024 Board meeting. This year’s internal evaluation was performed by the Chair, following the external evaluation by Haddleton Knight in 2023.

Individual interviews were conducted by the Chair with each Board member and the Group Company Secretary. Further sessions were held by the Senior Independent Director with each Board member and the Group Company Secretary, to gain feedback for the Chair. All involved fully engaged with the process and provided their qualitative feedback, which supported an open and frank exchange of views.

The evaluation identified several areas of strength and some areas for enhancement and, overall, concluded that:

• The Board operates in an effective and professional manner and has developed considerably over the last two years
• Governance processes are transparent and well run
• Risks are openly discussed with deep-dive analysis and review of material risks where appropriate
• There is scope, and a desire, from the Board to develop further

In addition, the evaluation highlighted:

• Board agendas and reporting will benefit from being further refined to be more forward-looking
• Greater Board visibility and interaction with the wider workforce will be encouraged and developed further
• Board training will be strengthened to support greater insight into the responsibilities of Directors.

Taking all of this into account, the Board is satisfied that the current composition of the Board, and its Committees, provides an appropriate balance of skills, experience, independence and knowledge to allow the Board and its Committees to discharge their duties and responsibilities effectively and in line with the Code.

The duties to avoid potential conflicts and to disclose such situations for authorisation by the Board are the personal responsibility of each Director. All Directors are required to ensure that they keep these duties under review and to inform the Group Company Secretary of any change in their respective positions.

The Company’s conflict of interest procedures are reflected in its Articles of Association (‘Articles’). In line with the Companies Act 2006, the Articles allow the Directors to authorise conflicts and potential conflicts of interest, where appropriate. The decision to authorise a conflict can only be made by non-conflicted Directors.

The Board, and its Committees, considers conflicts or potential conflicts at each meeting and, where such instances are identified, takes appropriate action, usually by excluding the conflicted party from any related discussions/decisions.

The Articles require the Company to indemnify its officers, including officers of wholly-owned subsidiaries, against liabilities arising from the conduct of the Group’s business, to the extent permitted by law. The Group carries Directors’ and Officers’ liability insurance.

There were six full Board meetings held during 2024, five meetings of the Audit and Risk Committee, three meetings of the Remuneration Committee, two meetings of the Nomination Committee and three meetings of the Social Values and ESG Committee. All of these meetings were held in-person and attendance was as shown in the table above.

All Board members, including the Chair of the Board, the Chief Executive, and the Chief Financial Officer, are invited to all Committee meetings regardless of whether they are members of the Committee. However, they are never involved in discussions or decisions pertaining to their own compensation or appointment or replacement. In addition, the Audit and Risk Committee also meets with the external auditors without any Executive Directors being present.

The Group Company Secretary is also Secretary to the Audit and Risk, Remuneration, Nomination, and Social Values and ESG Committees, and attends all meetings for this purpose.

In order to provide Directors enough time to evaluate their papers beforehand, Board packs are issued the week before each meeting. Even if a Director is unable to attend a Board meeting for any reason, they are nevertheless informed beforehand, given access to pertinent documents, and their opinions are shared with the other Directors.

Board packs are distributed in the week prior to each meeting to provide sufficient time for Directors to review their papers in advance. If Directors are unable to attend a Board meeting for any reason, they nonetheless receive the relevant papers and are consulted prior to the meeting and their views are made known to the other Directors.

The Group Company Secretary’s services and advice are available to all Directors. In addition to advising the Board on all governance-related issues through the Chair, the Group Company Secretary has responsibility for making sure that all Board processes are followed. The Board receives updates from the Group Company Secretary on new laws, corporate governance and regulatory matters, and the responsibilities and duties of the Directors. Among the matters reserved to the Board is the appointment and removal of the Group Company Secretary.

Vicky Williams has served as Group Company Secretary since her appointment in May 2024, following Paul Walker’s departure.

Directors may, at the Company’s expense, seek independent expert assistance as needed. Board Committees confirm annually that they have access to sufficient resources to carry out their responsibilities, including the ability to hire outside consultants as they see fit.

Following appointment, a new Director undergoes an induction programme, which includes a teach-in from members of the Executive Committee on important business topics, such as the background to our markets and industry, the Company’s strategy, commercial approach, manufacturing and logistics operations, administrative functions and culture.

Summary of induction programme:

Individual development and training needs are identified through the Board evaluation process and through individual reviews between the Directors and the Chair.

The Board recognises that it is responsible for determining the nature and extent of the risks it is prepared to face in order to accomplish its strategic goals and for the oversight of the Group’s internal control systems.

The effectiveness of the Group’s internal control and risk management systems has been assessed by the Board through the consideration of reports received from both management, and KPMG as part of our internal audit programme. This includes an assessment of the financial, operational, and compliance controls for the time period covered by this Annual Report, as well as an evaluation of current and emergent risks.

The Strategic Report comments in detail (pages 02 to 63) on the nature of the principal risks and uncertainties facing the Group; in particular those that would threaten our business model, future performance, solvency or liquidity and the measures in place to mitigate them. In conducting its review, the Board has included a robust assessment of these and other emerging risks and the effectiveness of mitigating controls.

The Audit and Risk Committee Report on pages 82 to 87 describes the internal control system and how it is managed and monitored. As described in prior reports, the cyber incident in 2022 was not the result of a breakdown in internal controls. Our investments over the last several years in cyber security played a major role in identifying the incident, enabling core systems to be restored quickly and mitigating the overall impact on the Group. Throughout the subsequent period, we have continued to invest in enhancing our cyber security to provide further resilience in this area.

The Board confirms that no significant failings or weaknesses were identified in relation to the review. The Board also recognises that these systems can only offer a reasonable level of assurance against material misstatement or loss and that they are designed to manage rather than eliminate the risk of failing to meet business objectives.

As required by s172 of the Companies Act 2006, the Directors of the Company must act in the way they consider, in good faith, would most likely promote the success of the Company for the benefit of its shareholders. In so doing, the Directors must have regard (among other matters) to:

• The likely consequences of any decision in the long term
• The interests of the Company’s employees
• The need to foster the Company’s business relationships with suppliers, customers and others
• The impact of the Company’s operations on the community and the environment
• The desirability of the Company maintaining a reputation for high standards of business conduct
• The need to act fairly as between members of the Company.

To better comprehend the effects of its decisions and operations, as well as the interests and viewpoints of our major stakeholders, the Board takes into account information from all areas of the business. This covers topics including key risks, legal and regulatory compliance, plus evaluations of strategy, financial performance, and operational performance. The Board and its Committees receive this information through reports that are circulated before each meeting and, where necessary, in-person presentations.

As a result of these activities, the Board has gained a thorough understanding of the interests and viewpoints of all key stakeholders, as well as other relevant factors, which helps the Directors comply with the requirements of section 172 of the Companies Act of 2006.

The table overleaf sets out the Board’s approach to stakeholder engagement in the context of some of the most important decisions made during 2024. The Board will sometimes engage directly with certain stakeholders on certain issues, but the size and distribution of our stakeholders and of the Eurocell Group dictate that stakeholder engagement often takes place at an operational level. To give greater understanding to this, we have provided clear cross-referencing to where more detailed information can be found in this Annual Report.

As described in Stakeholder engagement on pages 73 to 75, we acknowledge that our colleagues provide the foundation for our Company’s performance and success, and that in the present social, political, and economic climate, active engagement is more important than ever.

To supplement the team briefings, continuous improvement workshops, and health and safety forums already in place, the Group hosts a variety of colleague engagement initiatives. These include:

• A digital Company magazine, ‘Eurocell & You’, which updates on performance and other important activities around the Group, with a focus on information sharing and colleague engagement
• Frequent colleague focus groups with the designated Non-executive Director, Alison Littley, to ensure that the Board hears the opinions of the workforce
• Departmental listening groups to allow colleagues to provide direct feedback from which appropriate action plans can be formulated
• Group-wide staff surveys, to provide invaluable insight into how our colleagues feel
• Review of retention and recruitment challenges, to identify areas for improvement and ensure we remain competitive in the labour market
• Improvements to the induction process for new colleagues
• More flexible working arrangements, including hybrid working when appropriate
• Improvements in colleague facilities and restrooms as part of an overall staff welfare improvement programme
• Ongoing opportunities for all colleagues to become shareholders through the Save As You Earn scheme.

The Board evaluates and tracks culture through:

• Examining staff survey results and response rates
• Reviewing staff turnover rates
• Scrutinising health and safety data, including near-misses
• Reviewing colleague whistleblowing cases
• Engaging with senior management and colleagues
• Observing attitudes towards internal and external auditors and regulators like HMRC and HSE.

Through the implementation of consistent annual salary evaluations, annual bonus target-setting, and benefit entitlement, executive compensation has been, and remains, in line with the Company’s overall pay policy. As a result, it has not been considered necessary to engage with colleagues on this matter.

Overall, the Board is pleased with how culture, including values and behaviours, are evolving across the Group, and with the increasing levels of colleague engagement now taking place.

This Corporate Governance Statement, together with the Nomination Committee Report, the Audit and Risk Committee Report and the Remuneration Committee Report, provide a description of how the principles and provisions of the Code have been applied during the year.

It is the Board’s view that, during 2024, Eurocell plc was in compliance with the relevant provisions set out in the Code in all material respects.

This statement complies with sub-sections 2.1, 2.2(1), 2.3(1), 2.5, 2.7, 2.8(a) and 2.10 of Rule 7 of the Disclosure Rules and Transparency Rules of the Financial Conduct Authority. The information required to be disclosed by sub-section 2.6 of Rule 7 is shown on pages 112 to 115.

Our AGM will be held at our Head Office (see Company Information on page 173 for details) on 15 May 2025.

The notice of our AGM, together with the Directors’ voting recommendations on the resolutions to be proposed, is included on a separate circular to shareholders and will be dispatched at least 21 clear days before the meeting. The notice will be available to view at investors.eurocell.co.uk. 

All Directors intend to attend the AGM, including the Chairs of the Audit and Risk, Remuneration, Nomination and Social Values and ESG Committees, who are available to answer questions. The Board welcomes questions from shareholders who have an opportunity to raise issues informally or formally before or during the meeting.

For each proposed resolution, the proxy appointment forms provide shareholders with the option to direct their proxy vote either for, or against, the resolution or to withhold their vote. The proxy form and any announcement of the results of a vote make it clear that a ‘vote withheld’ is not a vote in law and will not be counted in the calculation of the proportion of the votes for and against the resolution.

All valid proxy appointments are properly recorded and counted by Equiniti, the Company Registrars. Information on the number of shares represented by proxy, the proxy votes for and against each resolution, and the number of shares in respect of which the vote was withheld for each resolution, together with the proxy voting result, are given at the AGM. The total votes cast, including those at the AGM, are published on our website (investors.eurocell.co.uk) immediately after the meeting.