Corporate Governance Statement

For the year ended 27 March 2020, under The Companies (Miscellaneous Reporting) Regulations 2018, the Company has applied the Wates Corporate Governance Principles for Large Private Companies (published by the Financial Reporting Council (‘FRC’) in December 2018 and available on the FRC website). These new corporate governance reporting requirements will apply to company reporting for financial years starting on or after 1 January 2019 and companies are able to adopt the Wates principles as an appropriate framework when making a disclosure regarding corporate governance arrangements. We have set out below how the Principles would have applied over the past financial year.

Principle 1: Purpose and leadership

The Company’s purpose is to deliver sustainable, profitable long-term growth for the benefit of all its stakeholders.

The directors engage in daily dialogue with colleagues at head office and through frequent visits to stores throughout the country. Employees are kept informed of the Group’s purpose, performance and activities through regular briefings and staff updates including monthly area and head office newsletters. Colleagues are also given the opportunity to communicate their ideas to all levels of management, both directly, through regular Straight Talk attitude surveys, and through employee-nominated Talking Shop and Deeside Voice representatives.

The Group’s purpose has helped guide and develop the strategy and decision-making of the business over the last 12 months, through the expansion of our increasingly popular The Food Warehouse operation, the expansion of our online business, the continuation of our store refit programme and the growth of our partnership with The Range “store in store” operations. These investments will help us achieve long-term sustainable success.

Principle 2: Board composition

The Group has a separate Chairman (our founder, Sir Malcolm Walker) and Chief Executive (Tarsem Dhaliwal) to ensure that responsibilities, accountabilities and decision making are balanced effectively across the Group. The Board comprises a Chairman, Chief Executive, and two additional directors (who are both fully involved in the day to day running of the business) together with three directors representing the interests of Brait, our external shareholder.  The wider trading board of Iceland Foods Limited, includes our Finance Director, Legal Director and other department Heads (such as IT, e-commerce, Supply Chain, Buying, Retail Operations, HR, Marketing and Central Services).

Topco Board directors meet at least four times per year, at fixed board meetings, either at our Head Office in Deeside, or in London, supplemented by additional board meetings or teleconferences (our external shareholder, Brait, is based in South Africa), as and when required. The wider trading board of Iceland Foods, however, meets on a regular weekly basis. All such meetings are conducted behind closed doors and are used as forums for raising or discussing successes, views, ideas and challenges that present themselves, on an open basis.  Topco board directors and the wider trading board are presented with appropriate information packs in advance of those meetings, including updates on trading, store information, financial performance, marketing information and strategy.

We think the size and composition of our board, at both Topco and trading level, is appropriate to our large yet family-oriented business, with appropriate representation at the right level, for our external shareholder. Individual directors make sufficient time available to their respective teams, and then to the trading board, to ensure valuable contributions are made.

The Audit Committee (a committee appointed by the Board, that deals with all material questions concerning auditing and accounting policy of the group, and its financial controls and systems, and other operational matters such as overseeing stock loss in stores, data protection compliance, and regulatory compliance with the Groceries Supply Code of Practice (GSCOP)), considers and addresses business issues and meets on a bi-annual basis.

The Audit Committee provides an adequate level of objectivity and independence.

Principle 3: Director responsibilities

In terms of accountability, our CEO ultimately takes responsibility for most business decisions, except those, which are reserved to our shareholders, under the Topco shareholders’ agreement. Our CEO uses the information reported to him weekly during our wider trading board meetings, with any updates needed or provided, during the ensuing week.

Our Chairman oversees the role and responsibilities of the CEO.

Whilst the wider trading board is able to view business performance holistically on a weekly basis, decisions may be made on a daily basis by senior management and heads of departments, using their extensive knowledge and industry experience. Such members of staff have a clear understanding of the limits of their authority, have clear lines of accountability to their more senior reports, and know when decisions need to be escalated for Board approval.

Principle 4: Opportunity and Risk

The experience gained and lessons learned from 50 years in the grocery retail sector, mean that our Chairman, and thus in turn, our CEO and Board, understand the importance of establishing and exploiting opportunities to grow, whilst also keeping an eye on risk. The business operation is constantly under review by the Board (and our Chairman and CEO, in particular), knowing that standing still can lead to a downturn in success.

In terms of addressing risk, be it financial, reputational or otherwise, the business relies heavily on its legal department to help mitigate its contractual risks, and on its Director of Corporate Affairs, to manage its reputational and PR risks. If there are instances of serious third-party PR wrongdoing, or a risk of it, the Company would turn to an external reputational management expert to assist.

We are confident that our internal control systems allow the Board to make informed decisions on material environmental, social and governance issues. Everything we do is driven by our long-standing commitment to Doing It Right and operating in a sustainable and socially responsible manner.

In terms of reporting risk to the Board, the regular trading board meetings and Topco board meetings, together with the robust reporting lines within departments that ultimately report to the members of the trading board, ensures that risks and threats are identified and escalated promptly, to be addressed as appropriate.

Principle 5: Remuneration

There are remuneration structures in place for directors which provides rewards based on both the group’s overall performance and for individual success stories.

The company believes strongly in equal opportunities, and takes a zero tolerance approach to discrimination and/or victimisation, promoting equal treatment regardless of age, gender, nationality, ethnic origin, religion, disability, marital status or sexual orientation.

Principle 6: Stakeholder relationship and engagement

We aim to deliver high quality, affordable food to our customers, provide secure and safe employment for our colleagues, and create sustainable long-term growth for the benefit of all our stakeholders. We seek to minimise our impact on the environment and have, as noted above, delivered substantial reductions in our carbon emissions, food waste and plastic packaging usage in recent years. Food waste is a significant contributor to climate change and our focus on frozen food is proven to reduce waste substantially at all stages of the supply chain, in stores, and in customers’ homes.

The business believes strongly in its communications with its stakeholders, to promote the company’s brand, reputation and the relationships it has with them, in order to further its purpose.

The stakeholders in our business comprise our shareholders, bondholders, colleagues (our employees), customers, suppliers, landlords, regulators, governments and local authorities, pensioners, creditors, charity partners and community groups in the areas where we operate. We refer to section 172(1) statement in the directors’ report (directors’ duty to promote the success of the company for the benefit of its members as a whole, having regard to it other stakeholders).

Maintaining a happy and committed workforce is critical to the success of our business. The overall satisfaction of our employees is reflected in our prolonged and consistent ranking among the Best Big Companies to Work For in the UK in the annual Sunday Times survey.