The Board

 Board composition

Rotork is led by an effective Board which consists of eight members: the Chairman, four independent non-executive Directors and three executive Directors. Apart from the Chairman, all non- executive Directors are considered to be independent from Rotork and are appointed for an initial term of three years. Upon the completion of this term, the appointment is reviewed and, if appropriate, extended.

Rotork is compliant with the recommendations of Lord Davies’ ‘Women on Boards’ initiative, with female representation on the Board standing at 25% as at 31 December 2015.

The biographies of the directors and details of Board committee membership are set out in our Annual Report on pages 60 to 61.

All directors are subject to annual re-election at the Annual General Meeting in line with the Code.

Directors’ attendance at Board and Committee meetings during 2015:

Key:
A = Audit Committee
R = Remuneration Committee
N = Nomination Committee

 

Board Meeting

A

R

N

RH Arnold

13

     3(i)

  1(i)

1(i)

LM Bell

13

    5

5

3

GB Bullard

12

    5

4

2

JM Davis

13

     6(i)

 1(i)

1(i)

PI France

13

    6(i)

5(i)

3

SA James

13

6

5

3

MJ Lamb

  12  

6

4

 1

RC Lockwood(ii)

   5   

  2(i)

2(i)

2

JE Nicholas

   13  

6

5

3

GM Ogden(iii)

3

N/A

1(i)

1(i)

(i) By invitation.
(ii) RC Lockwood retired from the Board on 24 April 2015.
(iii) GM Ogden retired fromthe Board on 31 March 2015.

Roles and responsibilities

There is a documented clear division of responsibilities between the Chairman and the Chief Executive to ensure that there is a balance of power and authority between leadership of the Board and executive leadership. The division of responsibilities was reviewed and updated during 2015 following MJ Lamb’s appointment as Chairman.

All Directors are entitled to seek independent, professional advice at the Company’s expense in order to discharge their responsibilities as Directors. Rotork maintains appropriate directors and officers’ insurance cover.

How the Board Operates Effectively

Board Activities

As part of Rotork’s Board effectiveness, day-to- day responsibility for the running of the Company is delegated to executive management. However, there are a number of matters where, because of their importance in the context of the Group’s operations, it is not considered appropriate to do this. The Board therefore has a formal and documented schedule of matters reserved for its decision. Download the Schedule of Matters Reserved.

In 2015, the Board met 10 times at scheduled meetings and three times at additional meetings.

All Directors constructively challenge executive management at Board meetings and are entitled to unfettered access to information and management across the Group. Rotork’s executive directors understand the distinction between their roles as executive managers and as Board directors. Rotork Board members come from a variety of professional backgrounds including engineering, legal, accountancy and international sales, and collectively possess significant managerial experience, as well as experience of being company directors of other public limited companies.

The Chairman, through the Company Secretary, ensures that the Board agenda and all relevant information is circulated to the Directors sufficiently in advance of the meeting. During 2015, the Company transitioned to a new, secure, web-based platform for the hosting of Board information, including Board packs, relevant documentation and minutes of previous meetings of the Board and its Committees. This has greatly improved the availability of information for the Directors, and the platform also facilitates rapid communication between all members of the Board. The Chairman and the Company Secretary discuss the agenda in detail ahead of every meeting and the Chairman and Chief Executive hold a review meeting ahead of each Board meeting.

At least once annually, the Board travels to and meets at one of Rotork’s locations, other than its head office in Bath. This allows the Board, and in particular the non-executive Directors, the opportunity to gain a deeper understanding of overseas businesses and their markets and to interact with local management and staff, as well as to view new capital investments and acquisitions. In 2015, the Board visited Rotork’s manufacturing facility in Shanghai, China and met with and received presentations from local management.

At each Board meeting, the Board receives presentations from senior management regarding that senior manager’s area of responsibility. The principal purpose of the presentations is to consolidate the Board’s understanding of the Group’s operations, and in particular current strategic and operational issues facing divisional management. The presentations are structured such that the Board has the opportunity to ask questions and constructively challenge senior management following their presentations. Management presentations normally take place immediately before the meeting so that any issues raised in them can be considered in wider Board discussions, particularly around strategy and risk. In 2015, the Board received presentations from management of all four business divisions, together with the management from Group business functions, including sales and IT.

The Chief Executive and Group Finance Director present to the Board the content of full and half year results announcements, together with all trading updates issued by the Company, and the Board is invited to comment on and approve those announcements.

Induction and development

New Board members receive a suitable and tailored induction. This is facilitated by the Company Secretary under the direction of the Chairman. No new Director appointments were made in 2015. However, additional induction activities were undertaken by MJ Lamb as a result of his appointment as Chairman in April 2015. This included a number of site visits to Rotork facilities in both the UK and overseas, together with meetings with investors.

Directors are encouraged to continually update their professional skills and knowledge. During 2015, development activities for the Directors included participation in external training seminars.

The Chairman is responsible for reviewing the level and nature of training given to the Directors at least annually.

Performance evaluations

During February 2016, the Board commenced a detailed review of its performance. As noted in the statement from the Chairman on page 62, the annual performance review was delayed until after the end of the financial year to allow MJ Lamb additional time to assess the performance and operation of the Board in his role as Chairman. As in previous years, the review process was externally facilitated by Vivienne Cassley of Useful Thinking, an independent external consultancy. This year, the written questionnaire which formed the basis of previous performance reviews was augmented by a series of one- on-one interviews between Vivienne Cassley and the Directors, held during February 2016, during which the performance of the Board and each of its members was critically examined.

The Chairman is due to formally report on the outcome of the evaluation process at the March Board meeting, with individual feedback meetings with Directors being held in March ahead of that meeting.

JE Nicholas is the current Senior Independent Director. As part of his role, he annually arranges a meeting of the non-executive Directors to appraise the Chairman’s performance. This feedback is used by him to discuss with the Chairman his performance.

Diversity on the Board

Rotork currently has 25% female representation on the Board, in line with the recommendations of Lord Davies’ 'Women on Boards' initiative. The Board is cognisant of the 'next step recommendations' set out in Lord Davies’ five year summary report published in October 2015 and, as part of the Group’s continuing commitment to fostering diversity in its business (described in more detail in the report of the Nomination Committee on page 73), will continue to pursue initiatives designed to increase diversity at all levels within the Group.