Grainger plc (Company) has separated the roles of the non-executive Chairman and the Chief Executive Officer (CEO).
The Chairman's primary role is to lead the Board and to ensure that it is independent, effective and complementary. The CEO's primary role is to provide the overall management and leadership of the Company. It is the responsibility of both to uphold and promote the highest standards of integrity and probity within the Company and its subsidiaries (Group).
In order to ensure the success of the Company, it is essential that the Chairman and CEO have a close relationship, based upon trust, with the Chairman providing support and advice while respecting the importance of the CEO’s executive responsibilities. It is particularly important that both promote effective relationships and open communication, both inside and outside the Boardroom, between non-executive and executive directors.
The respective duties and responsibilities of each of the Chairman and the CEO, as agreed by the Board, are detailed below:
It is the Chairman's responsibility to:
- Chair Board meetings, general meetings and Nominations Committee meetings;
- lead the Board and ensure its effectiveness on all aspects of its role;
- run the Board and set the agenda for Board meetings. The agenda should take full account of the issues and the concerns of all Board members. Agendas should be forward looking and concentrate on strategic matters. The Chairman must ensure that clear strategic objectives for the Company are agreed by the Board and reviewed and that the Board is able to monitor their implementation. In general, the Chairman should ensure that the Board receives accurate, timely and clear information, in particular about the Company’s performance, to enable the Board to make sound decisions, monitor effectively and provide useful and wise advice;
- manage the Board to ensure that sufficient time is allowed for discussion of complex or contentious issues, where appropriate arranging for informal meetings beforehand to enable thorough preparation for the Board discussion. It is particularly important that non-executive directors have sufficient time to consider critical issues;
- encourage active engagement by all the members of the Board and promote a culture of openness and debate;
- ensure a clear structure for, and the effective running of, Board Committees;
- be available to shareholders, be confident that there are effective communications with shareholders and that the Board has a clear understanding of the views of the major investors, including their major issues and concerns;
- maintain an effective and complementary Board, initiating change and planning succession in Board appointments, subject to Board and shareholder approval. This includes taking the lead in identifying and meeting the development needs of individual directors as well as addressing the development needs of the Board as a whole with a view to enhancing its overall effectiveness as a team. This includes reviewing the performance of the Board and its committees at least once a year and acting on the results of performance reviews. The Chairman should also ensure that directors continually update their skills and the knowledge and familiarity with the Company required to fulfil their role both on the Board and on Board Committees;
- ensure that new non-executive directors receive a properly constructed induction programme that is comprehensive and appropriate, facilitated by the Company Secretary;
- hold meetings with the non-executive directors, without the executive directors present;
- ensure that appropriate plans are in place for the succession of the executive directors of the Company;
- provide support and advice (a mentoring role) to the CEO;
- be responsible for the response to any takeover approach received by the Company;
- ensure that the Company operates within an appropriate corporate governance framework;
- report personally in their annual statements how the principles relating to the role and effectiveness of the Board (in sections A and B of the UK Corporate Governance Code) have been applied;
- ensure that the Company's values are maintained and observed at all times; and
- represent the Company as and when necessary.
- to agree the annual performance objectives of the CEO
It is the CEO's responsibility to manage the business and to drive it forward, including to:
- formulate and propose the strategic direction of the Company (including its CSR objectives), and incorporate this into a business plan, for regular discussion and agreement by the Board;
- implement the Board’s agreed strategic business plan in accordance with the Company's values;
- ensure that Board decisions are effectively implemented and progress reported back to the Board;
- propose, and then ensure the implementation of, Company policies as agreed by the Board;
- have overall responsibility for the operational and financial performance of the Company;
- receive reports from the senior executives;
- manage the Company’s affairs and resources on behalf of the Board, except for those reserved for decision by the Board;
- ensure the Company has appropriate organisational structures;
- provide clear leadership, inspire and support the Company’s employees in all areas of the Company’s business, including the development of ideas, products and operations. Ensure employees have all relevant up to date information, including relevant information from the Board;
- draw up plans for the succession to the key management positions within the Company, ensure that appropriate plans are made for other levels of management within the business, and ensure that these plans are discussed with the Board and progress reported. This includes the identification, development and promotion of high performing employees into appropriate positions of leadership including proposing new executive directors;
- ensure that key relationships with customers, suppliers and government are fostered;
- be the main day to day contact with existing and potential investors, providing the appropriate level of information about the Company’s business, its results and strategic direction;
- act as a liaison between the Company and the public, with responsibility for ensuring the profile of the Company; and
- ensure that there are appropriate processes in place to identify and to manage risk.
- To agree the annual performance objectives for the other executive directors.