Corporate Governance

Governance is central to the Board’s operation. Each Director has a clear understanding of the regulatory framework within which the Company operates, their individual roles and responsibilities as a Director, governance best practice and future developments. Governance training starts with a Director’s induction and onboarding plan, and continues throughout their tenure through regular updates from the Company Secretary and annual refresher training, which this year was facilitated by Ashurst. 

While many of the UK governance reforms that were proposed in 2023 did not come to fruition, the Board kept abreast of the potential changes and considered their likely impact on the Company. Feedback, on behalf of the Company, was conveyed on draft legislation, regulation and the proposed changes to the UK Corporate Governance Code in respect of governance, audit and capital reforms. The Audit Committee, on behalf of the Board, are currently mapping the material internal controls that underpin the Group’s reporting, to ensure that any strengthening of controls or further assurance desired can be implemented ahead of the revised Code provision 29 coming into force from 2026.

Board changes

To enable us to continue to operate as an effective Board with the necessary skills to support the Group, we regularly consider the experience and diversity that we have and need for the future. Following the key executive appointments made last year – with Marc Ronchetti being promoted to Group Chief Executive and Steve Gunning joining as Chief Financial Officer – I am pleased to report that the succession and onboarding has been very smooth and they have both embedded well into their roles and brought fresh ideas to the boardroom.

During the year, we were fortunate to secure two new non‑executive Directors: Liam Condon, who brings strong industrial sector knowledge and valuable experience as a serving FTSE CEO; and Giles Kerr, a seasoned Chair and senior director with experience in life sciences, technology and industrial businesses. Tony Rice stepped down as Senior Independent Director in July 2023 and as a non‑executive Director in December 2023, and Roy Twite stepped down as a non‑executive Director in June 2024. Tony and Roy have brought invaluable experience to the Group over their nine year tenure and supported the Board in appointing a new Chair, Chief Executive and two Chief Financial Officers over that period. On behalf of the Board, I would like to thank each of them sincerely for their contribution. Jo Harlow was appointed Senior Independent Director in August 2023, alongside her role as Chair of the Remuneration Committee and as a non‑executive Director.

Board effectiveness

The Board undertook its triennial externally facilitated Board and Committee evaluation this year – with Independent Board Evaluation supporting us with the process, through individual interviews and meeting observation. I am pleased to report that the Board and its Committees are operating effectively and that the boardroom dynamics include a valuable mix of mutual respect, support for management, informed debate and constructive challenge. The transparency of management reporting and openness between the executive and non‑executive Directors was identified as a key feature of our Board culture – which greatly facilitates effective decision‑making – and these are elements that I will continue to uphold, to ensure that diversity of thought and shared accountability prevails.

Stakeholder engagement

Each year, I arrange meetings with our largest shareholders as part of our shareholder engagement programme. This year, I spoke with shareholder stewardship teams and portfolio managers representing circa 25% of the Company’s share capital, which included a mix of UK, continental European and US shareholders. The topics discussed included board succession, the evolution of Halma’s Sustainable Growth Model, M&A, remuneration and talent retention. These conversations were most valuable for hearing the views of our shareholders and it was pleasing to note that investors are supportive of the Company and raised no significant concerns. 

My engagement with shareholders complements the regular interactions that our institutional investors have with Halma’s Executive Board and senior management throughout the year – primarily through meetings with our Group Chief Executive and Chief Financial Officer – and following our Full Year and Half Year results. 

In addition to our in‑person Annual General Meeting, our investor relations team arranged a webinar aimed at retail shareholders and they run a regular programme of engagement with a broad selection of private client brokers.

Employee engagement is a key focus area for the Board and there have been numerous opportunities throughout the year for interaction between Directors and senior management and the wider workforce. Our chosen mechanism for seeking input from, and having open dialogue with, our employee base includes site visits by Directors. Many of our companies had a Director visit over the year and we are looking to further our interactions with colleagues and derive even more value from Director site visits in the year ahead. Following a visit, the Board receives a report which includes aspects such as the operating company’s culture, the quality of the management, the strategic direction of the company and candid comments received during the employee focus discussions.

Board priorities

Each year, the Board sets strategic priorities. For 2023/24 six priorities were chosen and progress has been made in each of these areas. For 2024/25, six priorities have again been agreed to: optimise our portfolio; maintain the agility of our business model; optimise returns; refresh succession plans; embed sustainability and review opportunities for international growth. Further details are set out in our 2024 Annual Report & Accounts.

UK Corporate Governance Code

The Company reports against the Financial Reporting Council’s (FRC) UK Corporate Governance Code 2018 (the Code), which is available at www.frc.org.uk. The Board considers that it has applied all Principles, and complied with all Provisions of the Code for the year ended 31 March 2024. The Board continues to monitor developments in corporate governance and is well‑placed to report in future Annual Reports on its application of the new Code, which becomes effective for Halma from 1 April 2025 and, in respect of provision 29, from 1 April 2026.

We believe that our organisational structure and governance framework enables our companies to  operate effectively and with agility – which means we can continue to deliver value through our sustainable growth, returns and positive impact for the benefit of all of our stakeholders.