The Board is committed to full compliance with the UK Corporate Governance Code (the “Code”) and to achieving high standards of corporate governance both in the boardroom and throughout the Group.
We believe that good governance comes from an effective Board which provides strong leadership to the Company and engages well with both management and stakeholders. The clear division of responsibilities within Ferguson’s governance structure ensures constructive relationships and enables the Board to work collaboratively.
Ferguson plc, the parent company of the Ferguson Group, is a Jersey registered company and is tax resident in the United Kingdom.
Certain strategic decisions and authorities of the Company are reserved as matters for the Board with other matters, responsibilities and authorities delegated to its Committees.
Committees of the Board support the Board in the fulfilment of its duties. The standing Committees of the Board are the Audit Committee, the Remuneration Committee, the Nominations Committee and the Major Announcements Committee. These Committees take strategic decisions of a substantive nature.
The Board may appoint ad hoc committees to facilitate the implementation of its decisions or to consider specific matters in further detail between scheduled meetings. The Board may delegate matters of a substantive nature to a special purpose committee.
The Executive Committee, Treasury Committee, Disclosure Committee and other administrative committees implement strategic decisions and executive or administrative matters. These committees are not Committees of the Board.
Each Director is required to attend all meetings of the Board and Committees of which they are a member. In addition, senior management from across the Group and advisers attend some of the meetings for the discussion of specific items in greater depth.
In order to provide the Board with greater visibility of the Group’s operations, to provide further opportunities to meet senior management and to gain a deeper understanding of local market dynamics, the Board aims to visit at least one of the Group’s business unit locations each year.
The Role of the Board
The Board is collectively responsible for the long-term success of the Company.
The Board’s primary role is to provide effective and entrepreneurial leadership necessary to enable the Group’s business objectives to be met and to review the overall strategic development of the Group as a whole. The Board has a strong culture of open debate. All Directors are actively encouraged to challenge existing assumptions and to raise difficult questions.
Certain strategic decisions and authorities of the Company are reserved as matters for the Board with other matters, responsibilities and authorities delegated to its Committees. The matters reserved for the Board for its decision are set out in a formal schedule, and include:
The Board meets regularly during the year, as well as on an ad hoc basis as required by time-critical business needs.
Ferguson plc has a premium listing on the London Stock Exchange, and is therefore subject to the Listing Rules of the UK Listing Authority. Although the Company (being Jersey incorporated) is not subject to the UK Companies Act, the Board retains its standards of governance and corporate responsibility as if it were subject to the Act, provides shareholder safeguards similar to those of a UK registered company, has regard to relevant institutional shareholder guidelines and complies with the dilution limits detailed in the Investment Association’s Principles of Remuneration.
Our 2019 Corporate Governance Report, including the reports from the Audit, Nominations and Remuneration Committees describes how the Board has complied with the Code’s main principles and seeks to demonstrate how those principles have been applied during the year under review. For the financial year ended 31 July 2019, we reported against the 2016 version of the Code (“2016 Code”). The 2016 Code was replaced by the 2018 version of the Code (“2018 Code”) as the standard against which the Company measures itself at the start of the financial year ending 31 July 2020. Information on how the Company has complied with the 2018 Code will be provided in the 2020 Annual Report and Accounts.