Section 172 (1) Statement The revised UK Corporate Governance Code was published in July 2018 and applies to accounting periods beginning on or after January 1, 2019.
The Companies (Miscellaneous Reporting) Regulations 2018 require Directors to explain how they considered the interests of key stakeholders and the broader matters set out in section 172(1) (A) to (F) of the Companies Act 2006 (‘S172’) when performing their duty to promote the success of the Company under S172.
This S172 statement, explains how the Directors: a) have engaged with employees, suppliers, customers and others; and b) have had regard to employee interests, the need to foster the Company’s business relationships with suppliers, customers and others, and the effect of that, on the principal decisions taken by the Company during the financial year.
The S172 statement focuses on matters of strategic importance to the Company, and the level of information disclosed is consistent with the size and the complexity of the business.
General confirmation of Directors’ duties
The Board has a framework for determining the matters within its remit and certain financial and strategic thresholds have been determined to identify matters requiring Board consideration and approval. When making decisions, each Director ensures that he/she acts in the way he/she considers, in good faith and that would most likely promote the Company’s success for the benefit of its shareholders, and in doing so have regard (among other matters) to:
S172(1) (A) “The likely consequences of any decision in the long term”
The Company is part of RPM International Inc. (“RPM”) group of companies, which is a global group of companies, the ultimate parent of which is listed on the New York Stock Exchange, and all of the Company’s shares are held internally within the RPM group. The Company has adopted the RPM Code of Conduct, The Values and Expectations of 168, which encourages the RPM core principles of integrity, commitment, responsible entrepreneurship and moral courage are the cornerstone for each decision made in the short or long term. The Directors understand the business and the evolving environment in which it operates, including the related risks and challenges. Based on the Company's purpose to grow our presence in the infrastructure, highways and utilities sector the strategy set by the Board includes continued strengthening of the Company’s position as a leading manufacturer, supplier of specialist construction products and services while keeping the core principles, safety and social responsibility fundamental to day-to-day business operations.
S172(1) (B) “The interests of the Company’s employees”
The Directors recognise that employees are fundamental and instrumental to the success of the business which is dependent on attracting, retaining, and motivating a diverse group of talented and qualified employees. With the intent of ensuring that it remains a responsible employer (including with respect to pay, benefits, health and safety and the workplace environment), the Directors factor the implications of decisions on employees where relevant and feasible. Employee engagement, organisational culture and attracting and retaining talent is key to the business, as is compliance with applicable employment legislation. Employee satisfaction is measured through employee surveys, the results of which are reviewed in detail and appropriately addressed when required. A one to one/appraisal program is also part of the Company’s culture.
To engage employees we have introduced a bi-monthly “how are we performing” report as well as being in the process of setting up a USL Academy for internal product training. We also plan to send out regular employee satisfaction surveys.
S172(1) (C) “The need to foster the Company’s business relationships with suppliers, customers and others”
Deploying the Company’s strategy requires strong and mutually beneficial relationships with suppliers and customers. The Company seeks the promotion and application of sound corporate governance principles in such relationships, which are prescribed in standards such as the Company’s Code of Conduct, Supplier Code of Conduct, Distributors and Applicators Code of Conduct and Modern Slavery requirements.
The Company assesses its customer base to ensure compliance with applicable laws in relation to the sales of its products, including those related to corruption.
Moreover, the Directors receive information updates on a variety of topics that indicate and inform how customers and suppliers have been vetted and engaged. These can range from information regarding contract management, business strategies, projects, and investments.
Plans to improve Customer and supplier relationships include:
S172(1) (D) “The impact of the Company’s operations on the community and the environment”
In conducting our business, the Company seeks to minimise waste, reduce our impact on the environment and reduce the use of energy and resources and is accredited to ISO14001 Environmental Management Systems and regularly reports on safety and environmental performance matters to the Board and the RPM group. The Company aims to meet the demand for its products and services in ways that are economically, environmentally and socially responsible.
The company always considers the environmental impact of our neighbours and plans working hours accordingly to avoid noise pollution to the local housing estate.
S172(1) (E) “The desirability of the Company maintaining a reputation for high standards of business conduct”
The Board periodically reviews and approves business conduct frameworks, such as standards of conduct, policies and procedures related thereto, and ensures personnel participates in training covering topics regarding health and safety, bribery and corruption, data protection, cyber security and modern slavery. All personnel has access to the RPM Compliance Hotline, as well as the RPM reporting platform through which any compliance or ethics issues can be discussed or reported. The Company also performs due diligence before entering into new supplier or distributor agreements. These measures help to ensure high standards of business conduct are maintained.
S172(1) (F) “The need to act fairly as between shareholders of the Company”
After weighing up all relevant factors, the Directors consider which course of action best enables delivery of the Company’s strategy through the long-term, taking into consideration the impact on the Company’s stakeholders.
Below, we outline some of the principal decisions made by the Board over the year, explain how the Directors have engaged with, or in relation to, the different key shareholders and how shareholders’ interests were considered as part of the decision-making process.
During the year “Our plan” was formulated to be introduced to the Company – the plan is designed to be non-financial but instead has 4 focus points: