Corporate Governance Statement

Statement of compliance with the UK Corporate Governance Code (the "Code").

The board remains committed to the achievement of high standards of corporate governance which it considers to be central to the effective management of the Group. Considerable progress has been made during the reporting year to continue to develop appropriate and adequate corporate governance arrangements. This has nevertheless been a challenging year as has been explained in the Chairman's Statement and the Business Review.

The following sections, together with the Directors' Remuneration Report, the Directors' Report and the directors' biographies, provide an explanation of how the principles of the Code have been applied and of areas of non-compliance during the period in which compliance with the Code was required. The audit committee report in section 11 also forms part of this statement.

The board

The board is collectively responsible for promoting the success of the Group and for implementing the company's business model as set out in the Business Review. The board provides leadership for the Group and concentrates its efforts on strategy, performance, governance and internal control, as set out in a schedule of matters reserved for the board. The system of internal control in place within the Group is designed to manage rather than eliminate risk, and can provide only reasonable, not absolute, assurance against material misstatement or risk.

As at the date of this report, the board has ten members: the non-executive Chairman, the Chief Executive Officer, four executive directors and four non-executive directors. Biographies of these directors appear in the Board of Directors. During the reporting period the board was compliant with the ratio of non-executive directors to executive directors (Code provision B.1.2) from 6 May 2011 (following the resignation of Diane Savory), until the appointment of Susanne Given (Chief Operating Officer) on 10 April 2012. The board is at present non-compliant in this area, and has been since 10 April 2012. The nomination committee has considered this matter and it is not intending to appoint an additional non-executive director at this stage, but will continue to keep this matter under review. Therefore at the date of this report, the ratio of non-executive to executive directors does not comply with the principles of the Code.

During the financial year ended 29 April 2012, SuperGroup complied with the relevant provisions set out in the Code, in all areas apart from Code provision B.1.2, as set out above and B.2.1 as set out on page 40 under nomination committee.

Keith Edelman is the Group's Senior Independent Director. A summary of the responsibilities of the Senior Independent Director are available on our website. In his role as Senior Independent Director, he has met with shareholders to listen to their views, in particular after the market update in October 2011 and continues to make himself available.

Non-executive director independence

The independence of the non-executive directors is considered at least annually along with their commitment and performance on the board and relevant committees. During the year the Chairman and the Senior Independent Director took on additional external roles and there has been no impact to SuperGroup Plc.

All the non-executive directors are considered by the board to be independent of management and free from any relationship that could materially interfere with the exercise of their independent judgement.

The board meets regularly to consider issues relating to the overall performance, strategy and future development of the Group. In accordance with the Code, a schedule of matters reserved to it for decisions has been approved by the board and this has been communicated widely to the Group.

The principal matters reserved for the board are:

  • Setting and managing Group strategy;
  • Changes relating to the Group's capital structure including share issues and buybacks;
  • Financial reporting and controls;
  • Ensuring maintenance of sound internal controls and risk management;
  • Capital expenditure and long term commitments;
  • Board membership and appointment;
  • Remuneration policy;
  • Delegation of authority; and
  • Corporate governance and company policy.

The requirement for board approval on these matters is understood.

The board receives appropriate and timely information to enable it to discharge its duties.

The division of responsibilities between Chairman and Chief Executive Officer is set out in writing and agreed by the board in accordance with provision A.2.1 of the Code.

The non-executive directors meet with the Chairman separately from time to time, without the executive directors present, (reference provision A.4.2 of the Code). During the year of reporting, the non-executive directors have met without the Chairman present to appraise the performance of the Chairman. This review was led by the Senior Independent Director.

All members of the board of directors, and the sub-committees, have sufficient resources and a budget set aside to allow access to independent advice as required, (reference provision B.5.1 of the Code). For non-executive directors, a relevant clause is included in their letters of appointment setting out their required time commitment (reference B.3.2).

All directors have access to the advice and services of the Company Secretary, who is responsible to the board for ensuring that board procedures are complied with (reference provision B.5.2). The appointment of the Company Secretary is a matter for the board, as set out in the schedule of matters reserved for the board.

Operational matters, trading performance and the development of proposals for the board, where required under the schedule of matters reserved for the board, are controlled by an executive committee that consists of the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, the Brand and Design Director, the Chief Executive Officer (Wholesale and International), the Head of e-Commerce and the Head of European Business Development.

The board has appointed committees to carry out certain duties, and these are detailed below. Each of these committees is chaired by a separate chairman and has written terms of reference, available on the website, www.supergroup.co.uk.

Minutes are prepared for each of these meetings by the Company Secretary and presented at the following respective meetings for approval. All committees have sufficient resources to undertake their duties.

Audit committee:Steven Glew (Chairman)
Ken McCall
Indira Thambiah
Remuneration committee:Keith Edelman (Chairman)
Steven Glew
Indira Thambiah
Nomination committee:Peter Bamford (Chairman)
Keith Edelman
Julian Dunkerton

Performance evaluation

A board evaluation to assess the performance of the board, its non-executive directors and committees was carried out in early May 2012, to assess performance for the financial period ending 29 April 2012, in accordance with the Code provision B.6.1. This involved the use of an online questionnaire to the directors and covered a range of issues around board and committee processes, board roles and responsibilities. This is an annual process carried out by an independent third party. In addition, a process of continued assessment has been undertaken during the financial period with the Chairman conducting meetings with the directors. The performance of the executive directors during the period of reporting was monitored by the Chief Executive Officer and the Chairman.

Re-election of directors

At the AGM in 2011, all directors offered themselves for re-election. At the AGM in 2012, all of the directors will again retire and will offer themselves for re-election, with the exception of Susanne Given and Shaun Wills who having been appointed during the period, will offer themselves for election (reference provision B.7.1).

The board believes that each of the directors standing for re-election continue to be effective. In addition, the Chairman, having carried out an evaluation of their performance is satisfied that the individuals continue to demonstrate commitment to the role.

Remuneration committee

A description of the work of the remuneration committee is made available in the Directors Remuneration Report.

Board and committee attendance

The table below gives details of directors' attendance at scheduled board and committee meetings during the financial year ended 29 April 2012:

Board
meeting
Audit
committee
Nomination
committee
Remuneration
committee
Maximum number10434
Peter Bamford103
Keith Edelman1034
Steven Glew1044
Indira Thambiah934
Ken McCall84
Julian Dunkerton103
Theo Karpathios10
James Holder10
Chas Howes19
Susanne Given21
Shaun Wills21
Diane Savory3
  1. Chas Howes resigned from the board on 23 April 2012 and so was eligible to attend 9 of the meetings during the financial year.
  2. Susanne Given and Shaun Wills were appointed to the board on 10 April and 23 April respectively and so were only eligible to attend one meeting.
  3. Diane Savory resigned from the board on 6 May 2011, prior to any meetings taking place.

During the year, additional board meetings were held as required to respond to the needs of the Group.

From time to time, committee meetings are attended by non-members by invitation from the relevant chairman. Attendance is set out in the various committee reports.

Directors' conflicts of interest

The company's Articles of Association permit the directors to consider and, if thought fit, to authorise situations where a director has an interest that conflicts, or may possibly conflict, with the interests of the Group. In deciding whether to authorise a conflict or potential conflict, the non-conflicted directors must act in a way they consider would be most likely to promote the success of the Group, and they may impose limits or conditions when giving their authorisation, or subsequently, if they think it is appropriate. Any authorisation given is recorded in the board minutes. As previously disclosed Julian Dunkerton's brother-in-law was a director of Tokyo Retail Limited until this company was acquired by the Group (see note 5). In accordance with the Companies Act 2006, the board has considered and authorised any director's reported potential conflicts to date. The board will continue to monitor and review potential conflicts of interest on a regular basis.

Nomination committee

Peter Bamford is chairman of the nomination committee and the other committee members are Keith Edelman and Julian Dunkerton. The board is satisfied that the chairman was independent on appointment and Keith Edelman is an independent non-executive director. The board is aware that currently the majority of the committee are not independent (reference provision B.2.1 of the Code). The nomination committee will continue to monitor this situation. The nomination committee is responsible for nominating candidates for appointment to the board, having assessed the skills and experience required by the Group.

All appointments to the board are considered, while maintaining a suitable balance of skills and experience as required by the Group from time to time, and role descriptions are drawn up accordingly (reference provision B.2.2 of the Code). The Chairman and all non-executive directors have declared their other significant commitments, including all other board positions, to the board prior to being appointed (reference provisions B.3.1 and B.3.2 of the Code). The Chairman and the non-executive directors are aware of their on-going obligation to disclose any changes to their other commitments as they arise, and have adhered to this during the financial period. In accordance with the provisions of the Code, a broad indication of the time involved with other significant commitments is disclosed by the non-executive directors.

Their expected time commitment to SuperGroup is included in the terms and conditions of appointment which are available for inspection at the Registered Office of SuperGroup Plc (reference provision B.3.2 of the Code).

None of the existing executive directors holds non-executive directorships.

During the year of reporting, the nomination committee held three meetings. Following the resignation of Diane Savory from the board in May 2011, the nomination committee developed a job specification for a Chief Operating Officer and recognised that this would be a wider remit than that previously held. The nomination committee appointed an external search company to assist with the recruitment of a suitable candidate to this role.

Following the request from Chas Howes to resign from his position as Group Finance Director, the nomination committee again appointed an external search company to assist with the recruitment of a suitable successor.

The search for these two positions was based on merit and a set of objective criteria.

Following the appointment to the board of Susanne Given as Chief Operating Officer on 10 April 2012, the nomination committee recommended to the board that the appointment of an additional non-executive director should be deferred at this point in time. The board approved this recommendation, while recognising that it did not fully comply with the recommendations of provision B.1.2 of the Code.

The principal functions of the nomination committee include the following:

  • To review the structure, size and composition of the board and recommend changes when appropriate;
  • To consider and recommend succession planning for executive and non-executive directors;
  • To identify and nominate candidates for the approval of the board to fill board vacancies or new positions as and when they arise; and
  • To evaluate the skills, experience and knowledge of board members.

The terms of reference of the nomination committee are available on our website at www.supergroup.co.uk.

During the financial year, Susanne Given and Shaun Wills were appointed to the board and were given a full induction in accordance with B.4.1 of the Code.

Information and professional development

Non-executive directors meet regularly with members of the executive committee and members of the senior management team to gain first-hand experience of the business. Senior managers regularly attend board meetings to make presentations to the directors. This year, these presentations have included such topics as: sourcing, logistics, IT strategy, international franchise rollout and product development. In addition, the non-executive directors make site visits to ensure that they are kept up to date with developments across the Group. To date, all directors have received instruction on their responsibilities as a director from the Group's legal advisors and company's stockbrokers. In addition, the board is provided with regular briefings on legislative developments. During the year, the board was briefed on boardroom diversity and compliance with the UK Bribery Act 2010.

Communication with shareholders

The company and the Group recognise the importance of communicating with shareholders. Communication with institutional shareholders is undertaken as part of SuperGroup's investor relations programme, in which non-executive directors are encouraged to participate. The Chief Executive Officer and the Chief Financial Officer have continued to develop a mutual understanding of objectives between the Group and institutional shareholders by making presentations after the preliminary and interim results and communicating regularly on developments. The non-executive directors attend some of these meetings to hear feedback from shareholders.

The Chairman and Senior Independent Director have arranged meetings with institutional shareholders to gain a balanced understanding of their views and concerns and discuss strategy development and corporate governance. In addition, in view of the market updates made during the financial period, there has been a need for a proactive approach to communicating with shareholders. The Chairman has led this and ensured that the views of shareholders are communicated to the board as a whole.

The Chairman, the Senior Independent Director and the non-executive directors are in regular communication with the significant private shareholders (the three original executive directors), who sit on the board.

The company's AGM will be held on 20 September 2012, at which time shareholders will have the opportunity to ask questions. The chairmen of the audit, remuneration and nomination committees, together with all other members of the board of directors, will be present to answer shareholder questions (reference provision E.2.3 of the Code).

Shareholders will have the opportunity to meet non-executive directors at additional times in the year.

The full Annual Report and Financial Statements are made available to all shareholders and potential investors. Other information about the company and Group is made available on the website at www.supergroup.co.uk.

The Takeover Directive

In accordance with the Disclosure and Transparency Rules ("DTR") 7.2.6R and the Companies Act 2006 ("CA2006"), a statement on the Takeover Directive is included within the Directors Report.

Internal control

The board is ultimately responsible for the Group's systems of internal control and for reviewing its effectiveness annually as set out in C.2.1 of the Code. Following the market update on 20 April 2012, a full and comprehensive review of the adequacy of the existing internal controls is underway. This review is being led by the Chief Operating Officer and the Chief Financial Officer.

In accordance with the revised guidance for directors on internal control (the "Revised Turnbull Guidance"), the board confirms that there is an ongoing process for identifying, evaluating and managing the risks faced by the Group. This process was put in place prior to the IPO in March 2010 and has been continually developed, and facilitated, by our Head of Business Assurance and Internal Audit Function. This process was in place throughout the year under review and up to the date of approval of the Annual Report and Financial Statements. These systems are there to manage rather than eliminate risk, and can provide only reasonable, and not complete assurance against material misstatement or loss.

In respect of our financial reporting process and the process for preparing the consolidated accounts, management monitors the processes underpinning the Group's financial reporting systems through regular reporting and review. Data for consolidation into the Group's financial statements is reviewed by management to ensure that it reflects a true and fair view of the Group's results.

During the year of reporting, the audit committee continued to use the services of KPMG LLP as the Group's internal auditors. KPMG LLP have continued a review of internal controls and have had in place an internal audit plan for the year ahead. This internal audit plan has allocated responsibility for identifying and evaluating significant risks to the relevant business area, on a continuing basis and this is regularly reviewed by the audit committee in accordance with the Turnbull Guidance, (provision C.2.1).

The report was approved by the board of directors on 11 July 2012 and signed on its behalf by:

Wendy Edwards
Company Secretary
11 July 2012
Registered Office:
Unit 60
The Runnings
Cheltenham
Gloucestershire
GL51 9NW

We use cookies and track users anonymously, check this box and save to disable. We are inferring consent by continuing.