Governance Framework

This extract from the Halma plc 2017 Annual Report & Accounts has not been updated since publication in June 2017.

Halma companies benefit from a highly decentralised organisational structure which delivers sustainable competitive advantage while maintaining the benefit of being part of a larger group (through collaboration with other Group companies and central investment in areas such as talent development, innovation and international expansion). A robust corporate governance framework is essential in a decentralised group in order to maintain good oversight and control over: financial and management reporting; compliance and regulatory matters; risk management; and the approval of significant decisions (such as acquisitions, disposals or material agreements). The operation of the Board and the committees is described in this Report and further information on each committee is detailed within the separate committee Reports.

The diagram below sets out the top level corporate governance framework for Halma and how the Board and its Committees interact. The interface between the operating companies and this governance framework is described below and is illustrated in the diagram on page 21 of the Annual Report in relation to Group risk management.

Each operating subsidiary company within the Group has its own board of directors, which meets regularly to fulfil its legal duties and operational and financial obligations in managing the affairs of the company. The Sector CEO, or a Sector Vice President, is appointed as a director of each subsidiary within their sector and acts as Chairman at each board meeting. Each subsidiary must operate in accordance with the Group’s internal procedures, which set out the minimum standards required in the areas of financial reporting, health and safety, ethics, HR, administration and information technology. These procedures are made available throughout the Group via a centrally managed electronic portal and are subject to regular review and update. By way of example, a new policy has been added during the year relating to the Modern Slavery Act and many policies have been updated to reflect changes in legislation, financial reporting or best practice.

Each of the four sectors has a management board which meets regularly to review financial and operational performance, M&A and governance matters relating to companies within that sector. Reports prepared by each Sector CEO are provided to, and reviewed by, the Executive Board.

Principal committees of the Board

The Board has established three principal Committees:

The Board has established three principal Committees:

  • the Nomination Committee;
  • the Audit Committee; and
  • the Remuneration Committee.

Details of their constitution, the roles and responsibilities and activities of each Committee during the year are set out in their respective Reports, which follow this Governance Report.

The Board has also established three formal, topic-specific, Committees to which it has delegated certain powers to negotiate, review and administer matters within their area of responsibility:

  • the Share Plans Committee;
  • the Bank Guarantees and Facilities Committee; and
  • the Acquisitions and Disposals Committee.

Each Committee operates under its own terms of reference, which have been approved by the Board.

In addition, the Board has established an informal management committee, the Executive Board, which is chaired by the Chief Executive. This Executive Board provides a forum in which the executives, representing their sector or functional area, can review and take decisions on operational and financial matters that arise in the day-to-day business operations. The Executive Board is also an effective means of implementing actions from the Halma Board and providing oversight of operational matters.

View the Remuneration Committee's Terms of Reference
View the Audit Committee's Terms of Reference
View the Nomination Committee's Terms of Reference
View the Share Plans Committee's Terms of Reference
View the Bank Guarantees and Facilities Committee's Terms of Reference
View the Acquisitions and Disposals Committee's Terms of Reference