Introduction from the Chairman, Sir John Armitt CBE
In this section of the Annual Report, we describe governance at National Express, the principal activities of the Board and its Committees and how we have complied with the principles of the September 2014 edition of the UK Corporate Governance Code (the ‘Code’) which applied to the Company for the whole of the financial year ended 31 December 2016.
The Board believes that effective governance is essential to protecting shareholder value and the sustainable growth of the Group. Strong governance is also a foundation stone for a healthy corporate culture of values, attitudes and behaviours demonstrated by a company, not only within its operations, but also in its relations with its stakeholders and the wider community and environment which are affected by the Company’s conduct. As a Board, we recognise that the correct tone needs to be set from the top with the Directors leading by example to ensure that good standards of behaviour permeate throughout all levels of the National Express Group. The way we live and breathe our culture can be seen by the way in which our Values are becoming increasingly embedded across all our businesses and how they underpin our business model and strategy of delivering long-term shareholder value.
The role and effectiveness of the Board is essential to a successfully run company and the way in which we operate is set out on the following pages. We have a strong cast of Directors with a broad range of sector and function experience across different geographies and in the key areas of transport and digital technology – a balance that results in effective collective decision making. As announced in January, after two and a half successful years as Group Finance Director and as part of his career development with the Group, Matthew Ashley will be moving to become President and Chief Executive Officer for North America. Matthew will take up this operational role from 1 September 2017 and will remain on the Board as an Executive Director. To fill the Group Finance Director role as a result of this move, I am delighted that Chris Davies will be joining the Board as an Executive Director following our AGM on 10 May 2017. Chris brings significant international and strategic experience that will benefit the Company as we continue our growth strategy.
National Express continues to evolve and expand geographically through pursuing business opportunities in new markets and through its programme of bolt-on acquisitions in North America as described in the Strategic Report. The Board recognises that managing such growth effectively requires clear oversight by an effective Board. This year’s evaluation of the effectiveness of the Board and its Committees identified the main areas for continued focus and development for the year ahead being a review of the Executive pipeline and succession planning, greater diversity on the Board and bringing more external viewpoints to the Board.
The Board recognises its responsibility to present a fair, balanced and understandable assessment of the Group’s position and prospects in this Annual Report, to assess the principal risks of the Group, to ensure that effective systems of risk management and internal control are in place and to provide a statement as to the Group’s long-term viability. The actions that we have taken during the year to comply with these requirements can be found in this section of the Annual Report.
Relations with shareholders
The Board recognises and values the importance of maintaining healthy and open communications with our shareholders to ensure mutual understanding of the Group’s strategy, objectives, governance and performance. The Board receives regular investor reports which detail the feedback from investor meetings. This helps inform Board discussion on the views of investors and analysts on strategy.
We were pleased to have received 98.30% of votes in favour of our Remuneration Report at the 2016 AGM. Whilst our current remuneration policy will continue for its final year during 2017, one of the Remuneration Committee’s principal areas of focus for this year will be to review the existing policy and engage with shareholders to consider the changes required to ensure that our remuneration framework continues to support and drive the delivery of our strategic vision. The resulting revised policy will be put forward for approval at the 2018 AGM.
Annual General Meeting
This year, our Annual General Meeting will be held at 2.00pm on Wednesday, 10 May 2017, once again in Hall 9 at the International Convention Centre, Broad Street, Birmingham B1 2EA. I would encourage you to attend and meet me and the Board.
Sir John Armitt, CBE