Matters Reserved for the Board

Constitution

The Board of Directors should, in line with the UK Corporate Governance Code 2014 (the “Code”), include a balance of executive and non-executive directors (and in particular independent non-executive directors) such that no individual or small group of individuals can dominate the Board’s decision making.

Membership

This requirement of the Code is interpreted to mean that at least 50% of a company’s Board should be independent non-executive directors.

Quorum

The quorum necessary for the transaction of business can be decided upon by the Board, however, the Company’s current Articles of Association require the quorum to be any two directors to be present in person or by alternate director.

Meetings

The Chairman shall meet with the Company Secretary, annually, to determine the number of meetings to be held.

Annual General Meeting

The Company’s Articles of Association state that subject to legislation, the Company shall hold an annual general meeting in each period of six months beginning with the day following its accounting reference date. Its accounting reference date is 31 March.

Matters Reserved for the Board

This formal schedule of matters is generally specifically reserved for the Board’s decision, however certain matters are capable of delegation:

  1. to committees of the Board for recommendation back to the Board; or,
  2. to committees of the Board for their own decision; or,
  3. to Management.

It is important to note that items marked with an asterix are not considered suitable for complete delegation either because

  1. of the requirements of the Companies Act; or,
  2. under the recommendations of the Code, they are the responsibility of an Audit, Nomination or Remuneration committee, with the final decision required to be taken by the Board as a whole.

A.1     Authority

1.1     *The division of responsibilities between the Chairman, and the Chief Executive which should be in writing.

1.2.      *Undertaking of a formal and rigorous review, on an annual basis, of its own performance, and that of its committees and individual directors.

1.3.      *Assessment of which directors are independent.

1.4.      *Receiving reports from Board Committees on their activities.

1.5.      This Schedule of Matters Reserved for the Board.

1.6.      *Consideration of the balance of interests between the various stakeholders of the Company including shareholders, employees, customers, suppliers and the community.

1.7.      Approval of New Store Capex/Store Rightsizes and Store Regears with a capital cost >£500k or, payback longer than four (4) years.

1.8.      Approval of Business Systems investment (including IT) in excess of £2m.

1.9.      Approval of any other Project Investment in excess of £5m.

1.10.   Establishment of any new committee(s) of the Board including Terms of Reference and membership.

A.2     Strategy and Management

2.1.      Approval of the Group’s Strategy and Business Plan.

2.2.      Approval of the annual operating and capital expenditure budgets and any material changes thereto.

2.3.      Extension of the Group’s activities into new business or geographical areas.

2.4.      Any decisions to cease to operate all or any material part of the Group’s business.

A.3     Structure, Capital and Financing

3.1.      Changes to the Group’s (or any company within the Group) capital structure, including (the incorporation of any new subsidiary or LLP), reduction of capital, share issues (other than under employee share schemes) and any share buyback.

3.2.      Any changes to the Company’s listing or its status as a PLC.

3.3.      Incorporation of any subsidiary and change of company name or trading name.

3.4.      Corporate acquisitions investments or disposals of greater than £500,000 in value.

A.4     Approval of the Group’s Banking Facility Arrangements

A.5     Investor Relations

5.1.      *Approval of all Circulars, Prospectuses and Listing Particulars.

5.2.      *Approval of press releases concerning matters decided by the Board.

5.3.      *Receiving reports on the views of the Group’s shareholders.

5.4.      *Appointment or removal of Brokers.

A.6     Contracts

6.1.      Contracts in which a director or other related party is interested.

6.2.      Business where there is, or is the potential for, a director to have, a conflict of interest.

6.3.      Any proposed material acquisition of the assets of another company or business.

6.4.      The acquisition or disposal of shares in a listed company.

6.5.      Any binding commitment to enter into a material strategic alliance, joint venture, partnership or profit sharing arrangement.

6.6.      The making of a takeover offer.

6.7.      Changes to this document and the Group’s Delegated Authorities (known as ‘How We Do Business’).

6.8.      Approval of parent company guarantees.

A.7     Policies and Statements

7.1.      Review and approve the Group Policies and Statements set out in the list attached at Appendix 1 which include:

(i). the Tax Policy;

(ii). the Treasury and Hedging Policy;

(iii). the Sanctions Policy;

(iv). the Health and Safety Policy;

(v). the Data Protection Policy;

(vi). the Share Dealing Code and the Share Dealing Policy;

(vii). the Ethical Trading Statement and Code of Conduct; and

(viii). the Modern Slavery Statement.

7.2.      Review Energy Savings Opportunity Scheme Assessment prior to Environment Agency compliance notification.

A.8     Audit, Financial Reporting and Controls

8.1.      *Approval of the Preliminary announcement and Final results.

8.2.      *Approval of the Group’s dividend policy.

8.3.      *Declaration of any interim dividend and recommendation of the final dividend (whether in cash or in specie).

8.4.      *Approval of the Annual Report & Accounts.

8.5.      Receiving reports on, and reviewing the effectiveness of the Group’s risk and control processes to support its strategy and objectives.

8.6.      Undertaking an annual assessment of the Group’s audit, financial reporting and controls and the processes referred to in A9.1 to A9.5.

A.9     Nominations

9.1.      *Changes to the structure, size and composition of the Board.

9.2.      *Selection of the Chairman of the Board and the Chief Executive.

9.3.      *Appointment or removal of the Company Secretary.

A.10     Remuneration

10.1.      *The introduction of any new share incentive plan or major changes to existing plans. The Board recognises that the introduction of a change to the share plans may also need to be put to shareholders for approval.

10.2.      *Determination, following a recommendation from the Chief Executive, of the fees of the non executive directors.

B.        Matters that can be delegated to Board Committees for recommendations to the Board

B.1     Audit Committee

1.1.      Approval of the Committee’s Terms of Reference.

1.2.      *Approval of the half-year report and interim results.

1.3.      *Approve any significant changes in accounting policies or practices.

1.4.      *Appointment, reappointment or removal of the external auditor. (Once approved by the Board a resolution will be put before the members in annual general meeting).

1.5.      Approval of an appropriate statement on Internal Control and Risk Management for inclusion within the Annual Report.

B.2     Nomination Committee

2.1.      *Approval of the Committee’s Terms of Reference.

2.2.      *Appointment of the Senior Independent Director.

2.3.      *Appointments to the Board

2.4.      *Membership and Chairmanship of the Board Committees.

2.5.      *Ensuring adequate plans are in place for orderly succession to the Board and to Senior Management.

2.6.      *Continuation in office of any director at the end of their term of office, when they are due to be re-elected by shareholders at the Annual General Meeting and otherwise as appropriate.

2.7.      *Review of the effectiveness and independence of non-executive directors.

2.8.      *Removal of any director at any time, including the suspension or termination of service of an executive director as an employee of the group, subject to the law and their service contract.

B.3     Remuneration Committee

3.1.      *Approval of the Committee’s Terms of Reference.

3.2.      *Determining the Remuneration Policy for the executive directors, company secretary senior executives.

B.4     Corporate Social Responsibility Committee

4.1.      *Approval of the Committee’s Terms of Reference.

4.2.      Approval of Corporate, Social, Responsibility Policy.

C.        Matters that can be delegated to Board Committees

C.1     Audit Committee

1.1.      Approval of resolutions and corresponding documentation to be put forward to shareholders at general meeting.

1.2.      Approval of the External Auditors Audit remuneration for audit and non-audit work.

1.3.      Approval of the Group’s Tax Policy and Treasury Policy (including foreign currency and interest rate exposure).

1.4.      Ensuring the independence and objectivity of the External Auditor.

1.5.      Approval of appointment of the Head of the Internal Audit Function.

1.6.      Approval of the procedures for the detection of fraud and the prevention of bribery and its associated policy.

C.2     Nomination Committee

2.1.      Approval of the terms of engagement by the Company of non-executive directors and of the terms of service contracts of the Company’s executive directors.

C.3     Remuneration Committee

3.1.      Approval of awards granted under the Company’s Employee and Executive share plans.

3.2.      Major changes to the rules of the Group’s pension schemes, or changes of trustees or (when this is subject to the approval of the Group) changes in the fund management arrangements.

C.4. Ad Hoc Board Sub Committees

4.1.          Review and approve various Group Policies and Statements, some examples of which are set out in Appendix 2 below.

D.        Matters delegated to Management

(via the Group’s Delegated Authorities document known as ‘How We Do Business’)

D.1     Strategy & Management

1.1.      Responsibility for the overall management of the Group.

1.2.      Review of the Group’s performance in the light of the stated strategy, objectives, business plans and budgets and ensuring that any necessary action is taken.

1.3.      Oversight of the activities of the Group ensuring:

(i).   competent and prudent management;

(ii).  sound planning;

(iii).          an adequate system of internal control in accordance with the directors of the Audit Committee; and,

(iv).          compliance with statutory and regulatory obligations.

1.4.      Approval of the appointment of the Group’s key advisors.

D.2      Structure & Capital

2.1.      Changes to the Group’s management and control structure.

D.3     Audit, Financial Reporting & Controls

3.1.      Ensuring maintenance of a sound system of internal controls and risk management.

3.2.      Approval of overall levels of insurance for the Group, including Directors and Officers liability insurance and indemnification of directors.

3.3.      Review of the Group’s overall corporate governance arrangements.

3.4.      Approval of minor changes to the Group’s delegated authorities.

D.3     Contracts

3.1.      Contracts not in the ordinary course of business.

Appendix 1

List of Group Policies and Statements reserved to the main Board of Directors

of Halfords Group PLC

  • Data Protection Policy
  • Diversity Policy
  • Environmental Policy
  • Ethical Trading Statement
  • Health and Safety Policy
  • Information Security Policy
  • Modern Slavery Statement
  • Redundancy Policy
  • Retail Food Safety Policy
  • Safeguarding Policy
  • Sanctions Policy
  • Share Dealing Code
  • Tax Strategy and Policy Document
  • Treasury Strategy and Policy

Appendix 2

List of Group Policies and Statements delegated to

Sub-Committees of the Board of Directors of Halfords Group PLC

Audit Committee

  • Anti-Bribery and Corruption Policy
  • Whistleblowing Policy

Corporate Social Responsibility Committee

  • Corporate Social Responsibility Policy
  • Halfords Sourcing Code of Conduct for Suppliers

Committee of the Board

  • Absence Policy
  • Company Car Policy
  • Disciplinary and Grievance Policies
  • Maternity and Paternity Policies
  • Secondment Policy
  • Shared Parental Leave Policies
  • Social Media Policy
  • Sunday Working Opt-Out Guidelines
  • Transgender Policy
  • Work Experience Policy
  • Young People at Work

GDPR Steering Committee

  • Acceptable Use Policy
  • Automated Decisions Policy
  • Covert Monitoring and CCTV Policies
  • Customer Consent and Colleague Consent Policies
  • Data & Information Security Breach Management Policy and Response Plan
  • Data Diligence Procedure
  • Data Erasure Procedure
  • Data Exchange policy
  • Data Impact Assessment Policy
  • Data Portability Procedure
  • Data Processing Objection or Restriction Procedure
  • Data Quality Policy
  • Data Rectification Procedure
  • Data Response Plan
  • IT and Communications Acceptable Use Policy
  • Legal Basis for Processing Data Statements
  • Legitimate Interests Policy
  • Monitoring Policy
  • Records Management Policy
  • Subject Access Request Procedure
  • Use of Children’s Data Policy
  • Use of Special Categories of Customer Data Policy