Educational Attainment
Level 7 – Master's degree
Level 6 – Bachelor's degree
Level 5 – Higher National Diploma
How the Board operates
The Board and its Committees have a scheduled forward programme of meetings. This ensures that sufficient time is allocated to each relevant discussion and activity and the Board's time is used effectively.
The table below shows the attendance of Directors at the Board and Committee meetings held during the year. In addition to those scheduled meetings, unscheduled Board and Committee meetings were convened throughout the year as and when the need arose. Four additional Board calls were held during the period to discuss the release of the 20-week trading update, the interim results, the 40-week trading update and the emerging COVID-19 pandemic. These additional meetings were all quorate, and all Directors received the relevant papers and provided the required approval. During the year the Board also held a Strategy meeting to discuss the Company's strategic review.
| Board member | Board scheduled: 9 | Audit Committee scheduled: 4 | Remuneration Committee scheduled: 6 | Nomination Committee scheduled: 2 | ESG Committee scheduled: 2 |
| Executive Directors | | | | | |
| Graham Stapleton | 99 | N/A | N/A | N/A | 22 |
| Loraine Woodhouse | 99 | N/A | N/A | N/A | N/A |
| Non-Executive Directors | | | | | |
| Keith Williams | 99 | N/A | 66 | 22 | N/A |
| David Adams | 99 | 44 | 66 | 22 | N/A |
| Jill Caseberry | 99 | 44 | 66 | 22 | N/A |
| Helen Jones | 99 | 44 | 66 | 22 | 22 |
Meetings attended
Possible meetings
Other members of the Executive Team and professional advisors attended Board meetings by invitation as appropriate throughout the year.
At each Board meeting, the Chief Executive Officer delivers a high-level update on the business, and the Board considers specific reports, reviews business and financial performance, as well as key initiatives, risks and governance. In addition, throughout the year the Executive Team and other colleagues deliver presentations to the Board on proposed initiatives and progress on projects.
Board in Action – Case Studies
In January, Jill Caseberry, Non-Executive Director, spent the day conducting store visits in Twickenham and New Malden. This was a good opportunity to gain a greater insight into the store operations, as well as to witness the new cycling range and store layout which Jill described as "hugely impressive visually and impactful in terms of improved sales rates."
Jill took the opportunity to discuss product development and innovation throughout the business with Paul Tomlinson, Interim Cycling Director. They discussed the new range of reflective cycle clothing for enhanced safety and style, and the exclusive range of folding balance bikes which were developed with Trunki. Jill was also able to gain a practical insight into the store-wide services proposition and its operational logistics.
In February 2020, David Adams, Non-Executive Director, visited the McConechy's operation in Scotland with Andy Randall, Managing Director of Halfords Autocentres. The aim of the visit was to look at the integration programme put in place to bring McConechy's into the Halfords Group, to discuss the opportunities identified during the process of acquisition of the business, and to visit some of the operations.
To this end, they visited the McConechy's Head Office in Ayr, meeting key members of the McConechy's management team and the integration support put into the business from Halfords. In particular, David and Andy discussed the communications programme with the McConechy's colleagues, before visiting garages and commercial operations in Ayrshire and Renfrewshire.
In July 2019, two of our Non-Executive Directors, David Adams and Helen Jones, visited the Brompton factory in Greenford. Founded in 1975, Brompton produces the iconic, hand-built folding bikes, popular with commuters. Halfords introduced Brompton bikes to its cycling range in 2018, and this relationship provides a greater choice of premium brands for Halfords' customers as well as reinforcing its specialist cycling credentials. For Brompton, having access to Halfords' mainstream customer base was extremely attractive, their objective being to promote the many health and environmental benefits of cycling to a wider audience.
On arrival at the factory, David and Helen were given a tour and were introduced to all the highly trained people, including the brazers who assemble each bike by hand. Every Brompton bike sold anywhere in the world is hand-built on this site. The emphasis on quality and precision was evident throughout the tour.
Helen stated that "as Non-Executive Directors it's really important to understand our suppliers and their relationship with Halfords. On this occasion, we recognised the pride in the Brompton brand but also the important role we at Halfords play in meeting customers' needs and making cycling accessible to all."
Concerns
The Chairman seeks to resolve any concerns raised by the Board, whether these arise in a Board meeting or in another forum. Where raised and unresolved in a Board meeting, the unresolved business can be recorded on behalf of a Director in the minutes of the relevant meeting. A resigning Non-Executive Director would also be able to raise any concerns in a written letter to the Chairman, who would bring such concerns to the attention of the Board. No such concerns have been raised throughout the period.
Board Activities in FY20
Main Areas:
Strategy
Key activities and discussions:
- Reviewed the progress and delivery of the Group Strategy.
- Refreshed the five-year business plan.
- Reviewed the internal and external communication of the strategic plan.
- Received regular updates on the progress of the One Halfords Group website.
- Reviewed potential M&A opportunities.
- Reviewed disposal and closure opportunities.
Link to Stakeholder
Governance
Key activities and discussions:
- Received regular updates from the Chairs of the Remuneration, Audit, Nomination and ESG Committees.
- Reviewed and approved the FY19 Annual Report.
- Reviewed and approved the Directors' Conflicts of Interests Register, Group policies, the Group Risk register and the roles of the Chairman, CEO and SID.
- Reviewed and approved the updated defence manual.
Link to Stakeholder
Board Matters
Key activities and discussions:
- Reviewed succession plans for the Board and the senior team, and reviewed updates against searches for candidates to fulfil senior roles.
- Reviewed the Board and Committees' programme and forthcoming meeting schedule.
- Reviewed the outcome of the internal FY19 Board evaluation.
- Discussed and agreed the scope of the external FY20 Board evaluation and its outcome.
- Discussed the Board programme of visits.
Link to Stakeholder
Financial and Risk Management
Key activities and discussions:
- Reviewed monthly business reviews and trading performance.
- Reviewed and approved the prelim, interim and trading update approaches and announcements.
- Reviewed and approved the dividend recommendations and dividend policy.
- Reviewed and approved the FY20 budget and forecast, the FY21 budget, and hedging strategy.
- Discussed the financial risk presented by the COVID-19 pandemic.
Link to Stakeholder
Key activities and discussions:
- Received updates on the Autocentres transformation and operating model.
- Reviewed, approved and received regular updates on the outsourcing arrangements for IT.
- Reviewed the proposal to centralise customer calls to improve call response rates.
- Reviewed and approved the opportunity to further develop the roll-out of LED lighting across the estate.
- Approved the delegated authority for the CFO to purchase electricity at the most advantageous rate available.
- Discussed, managed and mitigated the risks presented by the COVID-19 pandemic.
Link to Stakeholder
Shareholder and Stakeholder Relations
Key activities and discussions:
- Received an update on the ESG strategy.
- Reviewed colleague engagement survey results and colleague turnover.
- Discussed the progress on defining, developing and monitoring Halfords' Company culture.
- Discussed the work undertaken on the Group's colleague engagement initiatives (e.g. One Team Strategy, Huddles, Listening Groups and SLT meetings).
- Reminder to Directors of obligations under Section 172 of the Companies Act 2006.
- Reviewed monthly investor relations reports and annual shareholder body reports.
- Reviewed and approved the 2019 Notice of the Annual General Meeting.
Link to Stakeholder
Board Priorities for the Following Year
Main Areas:
Strategy
Key activities and discussions:
- Review the progress and delivery of the Group Strategy, particularly any changes required in response to COVID-19.
- Review any potential M&A opportunities.
Link to Stakeholder
Governance
Key activities and discussions:
- Receive regular updates from the Chairs of the Remuneration, Audit, Nomination and ESG Committees.
- Review and approve the FY20 Annual Report.
- Review and approve the Directors' Conflicts of Interests Register, Group policies, the Group Risk register and the roles of the Chairman, CEO and SID.
Link to Stakeholder
Board Matters
Key activities and discussions:
- Review succession plans for the Board and the senior team.
- Review the Board and Committees' programme and forthcoming meeting schedule.
- Discuss and agree the scope of the internal FY21 Board evaluation and its outcome.
- Review the Board programme of visits.
Link to Stakeholder
Financial and Risk Management
Key activities and discussions:
- Review monthly business reviews and trading performance.
- Review and approve trading update approaches and announcements.
- Review and approve the dividend recommendations and dividend policy.
- Review and approve the FY21 budget and forecast, the FY22 budget, banking arrangements and the debt /hedging strategy.
Link to Stakeholder
Key activities and discussions:
- Review commercial matters brought to the Board for attention and potential approval.
Link to Stakeholder
Shareholder and Stakeholder Relations
Key activities and discussions:
- Review colleague engagement survey results and colleague turnover.
- Discuss the progress monitoring Halfords' Company culture.
- Reminder to Directors of obligations under Section 172 of the Companies Act 2006.
- Review monthly investor relations reports and annual shareholder body reports.
- Review and approve the 2020 Notice of the Annual General Meeting.
Link to Stakeholder
The findings identified by the FY20 external review were as follows:
| Topic | FY20 outcomes |
| Strategic plan | The Board mentioned that continued delivery and clear reporting of the progress against the delivery plan is essential throughout the year. |
| NED programme | The introduction of a NED programme to ensure the best contribution from the NEDs. |
| Quality and structure of Board meetings | The Board highlighted the importance of getting out and about to the different locations around the Group, and to split some of the Board and Committee meetings over two days. This would allow more time for location visits and ensure time is available to receive the required number of management presentations. |
| Quality of Board packs | The Board felt that more focus is required in Board papers to ensure the Board is able to effectively monitor the progress on delivery. |
| Culture and talent | Being a people-driven, service-based business, the Board felt that a renewed review of our culture was necessary to ensure that it evolves and remains fit for the future. The Board will also monitor the talent within the business and the implementation of appropriate succession planning. |
| Board training | All Board members to update on training they have received. |
The findings identified by the FY19 internal review were as follows:
| Topic | FY19 outcomes | Progress made in FY20 |
| Newly established Board | There were significant changes during FY19, starting with the appointment of Keith Williams, as the new Chair, in July 2018, followed in November 2018 by Loraine Woodhouse joining as the new Chief Financial Officer, and in March 2019 by Jill Caseberry as Chair of the Remuneration Committee. Given these new appointments, the Directors felt that it was too early to evaluate the Board's performance as a whole and therefore their responses focused instead on the need take the correct steps to ensure that the Board became fully integrated with the business to be as effective as possible. Achieving this was regarded as being of particular importance in relation to the delivery of the Strategy. | In June 2019 the Board agreed to appoint an external company to undertake a forward-looking Board evaluation. A number of companies were approached to provide a proposal, and Lintstock was appointed. |
| Delivery of the Strategy | The Strategy was intended to be transformational to ensure the business could be in the best possible place to thrive in future years. During the FY19 evaluation, the Board recognised that the Group needed to differentiate itself from purely online retailers and therefore the continued growth of the services business is important. | We have progressed the Strategy to increase our focus on the delivery of services to customers. The acquisitions made in the period of McConechy's and Tyres on the Drive, which will develop our garage network and our Halfords Mobile Expert offering, are consistent with our aim of offering customers a wider choice of how and when they receive their services from us. |
| Response to regulatory changes | The Board identified that its ongoing training would be particularly important during FY19, especially so given the significant changes in the regulatory landscape for strategically important new areas (such as the provision of financial services to customers) and also in regard to the impact of the new UK Corporate Governance Code. The Board intended to receive regular updates and training throughout the year. | Throughout the year the Board has been kept regularly updated on corporate governance developments such as the obligations in relation to Section 172, the requirement to set out a Company's purpose and the importance of explaining a Company's Culture. In addition, all Directors have spent additional time in the business this year so that they gain a better understanding of the operations and the challenges faced by colleagues. |
Directors and their Other Interests
Details of the Directors' service contracts, and emoluments, as well as the interests of the Directors and their immediate families in the share capital of the Company and options to subscribe for Company shares, are shown in the annual Directors' Remuneration Report.
In line with the requirement of the Companies Act 2006, each Director has notified the Company of any situation in which he or she has, or could have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the Company (a situational conflict), and a register of these is maintained by the Company Secretary.
All Directors are aware of the need to consult with the Company Secretary should any possible situational conflict arise, so that prior consideration can be given by the Board as to whether or not such conflict will be approved.
Risk Management and Internal Control
The Board is responsible for the Group's risk management processes and the system of internal control. This involves ensuring that there is a process to identify, evaluate and manage any significant risks that may affect the achievement of the Group's strategic objectives. The Board considers its appetite in relation to the Group's risks, determining whether the risks and mitigating actions are appropriate to the level of risk. During the year, the Board conducted a review of significant risks. The Group's principal risks and uncertainties, and mitigating actions, are detailed in the Strategic Report.
The risk management and internal control system is designed to manage, rather than eliminate, the risk of failing to achieve business objectives and provides reasonable, not absolute, assurance against material misstatement or loss. The Board has established a continuous process for identifying, evaluating and managing risks faced by the Group and assessing the effectiveness of related controls to ensure an acceptable risk/reward profile. The Audit Committee considers the principal and emerging risks of the business and reviews the mitigating controls with senior management.
The Audit Committee approves and monitors delivery of the Internal Audit Plan for the year which is risk-based and includes assurance of core control processes. Internal Audit provides an update at each Audit Committee meeting, reporting on any key control weaknesses identified and progress made against mitigating actions. The Audit Committee held four scheduled meetings in the year and provided the Board with updates on the effectiveness of internal controls.
Our process for identifying, evaluating and managing the significant risks faced by the Group and assessing the effectiveness of related controls routinely identifies areas for improvement. The Board has neither identified nor been advised of any failings or weaknesses that it has determined to be material or significant.
The management of risk and review of the internal control environment is a continual process supported by all colleagues. The Board supports the development of risk maturity and a strong control culture and will continue to improve the quality of risk reporting.