Corporate governance

Mothercare aspires to achieve high standards of Corporate Governance in order to promote the interests of investors, customers, staff and other stakeholders.

Details of the members of the Mothercare plc board are set out in the Management Board section. The Mothercare plc board ordinarily comprises two full-time executive directors, a non-executive chairman and two independent non-executive directors. Directors are subject to annual re-election by shareholders. The board is run on a "unitary" basis.

The chairman and the non-executive directors have been appointed so as to ensure that the appropriate balance is achieved between skills, experience and independence as well as their ability to advise on the range of issues, both domestic and international, that face the company from time to time.

A key responsibility of the role of the directors is ensuring that Corporate Governance compliance by the company is appropriate and reflects, so far as is possible, best practice.

In addition to their board responsibilities, the non-executive directors serve on the Nomination Committee and on the Audit and Remuneration Committees as indicated in their biographies.

Their terms of reference are:

1
Audit & risk committee
  1. Membership
  2. 1.1 The Committee shall comprise at least two members all of whom shall be independent non-executive directors. At least one member shall have recent and relevant financial experience and the committee as a whole shall have competence relevant to the sector in which the company operates. The chair of the board shall not be a member of the committee.

    1.2 Members of the Committee shall be appointed by the Board on the recommendation of the nomination committee in consultation with the chair of the Audit and Risk Committee. Appointments shall be for a period of up to three years which may be extended for up to a further two three-year periods provided members continue to be independent.

    1.3 Only members of the Committee have the right to attend committee meetings. However, the finance director and external audit lead partner will be invited to attend meetings of the Committee on a regular basis and other individuals may be invited to attend all or part of any meeting as and when appropriate.

    1.4 The Board shall appoint the committee chair. In the absence of the committee chair and/or an appointed deputy at a committee meeting, the remaining members present shall elect one of themselves to chair the meeting.

  3. Secretary
  4. The company secretary or their nominee shall act as the secretary of the committee and will ensure that the committee receives information and papers in a timely manner to enable full and proper consideration to be given to issues.

  5. Quorum
  6. The quorum necessary for the transaction of business shall be two members.

  7. Frequency of meetings
  8. 4.1 The Committee shall meet at least three times a year at appropriate intervals in the financial reporting and audit cycle and otherwise as required.

    4.2 Outside of the formal meeting programme, the committee chair will maintain a dialogue with key individuals involved in the company’s governance, including the board chair, the chief executive, the finance director and the external audit lead partner.

  9. Notice of meetings
  10. 5.1 Meetings of the committee shall be convened by the secretary of the committee at the request of the committee chair or any of its members or at the request of the external audit lead partner or finance director if they consider it necessary.

    5.2 Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the committee and any other person required to attend as appropriate no later than five days before the date of the meeting. Supporting papers shall be sent to committee members at the same time.

  11. Minutes of the meetings
  12. 6.1 The secretary shall minute the proceedings and decisions of all meetings of the committee, including recording the names of those present and in attendance.

    6.2 Draft minutes of committee meetings shall be agreed with the committee chair and then circulated promptly to all members of the committee and the company secretary, unless exceptionally it would be inappropriate to do so.

  13. Engagement with shareholders
  14. The committee chair should attend the annual general meeting to answer any shareholder questions on the committee’s activities. In addition, the committee chair should seek engagement with shareholders on significant matters related to the committee’s areas of responsibility.

  15. Duties
  16. The committee should have oversight of the group as a whole and, unless required otherwise by regulation, carry out the duties below for the parent company, major subsidiary undertakings and the group as a whole, as appropriate.

    8.1 Financial reporting

    8.1.1 The committee shall monitor the integrity of the financial statements of the company, including its annual and half-yearly reports, preliminary announcements and any other formal statements relating to its financial performance, and review and report to the board on significant financial reporting issues and judgements which those statements contain having regard to matters communicated to it by the auditor.

    8.1.2 In particular, the committee shall review and challenge where necessary:

    8.1.2.1 the application of significant accounting policies and any changes to them;

    8.1.2.2 the methods used to account for significant or unusual transactions where different approaches are possible;

    8.1.2.3 whether the company has adopted appropriate accounting policies and made appropriate estimates and judgements, taking into account the external auditor’s views on the financial statements;

    8.1.2.4 the clarity and completeness of disclosures in the financial statements and the context in which statements are made;

    8.1.2.5 all material information presented with the financial statements, including the strategic report and the corporate governance statements relating to the audit and to risk management.

    8.1.3 The committee shall review any other statements requiring board approval which contain financial information first, where to carry out a review prior to board approval would be practicable and consistent with any prompt reporting requirements under any law or regulation.

    8.1.4 Where the committee is not satisfied with any aspect of the proposed financial reporting by the company, it shall report its views to the board.

    8.2 Narrative reporting

    Where requested by the board, the committee should review the content of the annual report and accounts and advise the board on whether, taken as a whole, it is fair, balanced and understandable and provides the information necessary for shareholders to assess the company’s performance, business model and strategy and whether it informs the board’s statement in the annual report on these matters.

    8.3 Internal controls and risk management systems

    The committee shall:

    8.3.1 keep under review the company’s internal financial controls systems that identify, assess, manage and monitor financial risks and other internal control and risk management systems;

    8.3.2 review and approve the statements to be included in the annual report concerning internal control, risk management, including the assessment of principal risks and emerging risks, and the viability statement.

    8.4 Compliance, speaking-up and fraud

    The committee shall:

    8.4.1 review the adequacy and security of the company’s arrangements for its employees, contractors and external parties to raise concerns, in confidence, about possible wrongdoing in financial reporting or other matters. The committee shall ensure that these arrangements allow proportionate and independent investigation of such matters and appropriate follow up action;

    8.4.2 review the company’s procedures for detecting fraud; and

    8.4.3 review the company’s systems and controls for the prevention of bribery, and receive reports on non-compliance.

    8.5 Internal audit

    If the company resolves to have an internal audit function, the committee shall:

    8.5.1 monitor and review the effectiveness of the company’s internal audit function in the context of the company’s overall risk management system;

    8.5.2 approve the appointment and removal of the head of internal audit;

    8.5.3 review and approve the role and mandate of internal audit, monitor and review the effectiveness of its work, and annually approve the internal audit charter ensuring it is appropriate for the current needs of the organisation;

    8.5.4 review and approve the annual internal audit plan to ensure it is aligned to the key risks of the business, and receive regular reports on work carried out;

    8.5.5 ensure internal audit has unrestricted scope, the necessary resources and access to information to enable it to fulfil its mandate, ensure there is open communication between different functions and that the internal audit function evaluates the effectiveness of those functions as part of its internal audit plan, and ensure that the internal audit function is equipped to perform in accordance with appropriate professional standards for internal auditors;

    8.5.6 meet the head of internal audit at least once a year, without management present, to discuss their remit and any issues arising from the internal audits carried out. In addition, the internal auditor has direct access to the board chair and to the committee chair, providing independence from the executive and accountability to the committee;

    8.5.7 Whilst the company does not have an internal audit function, the committee shall consider annually whether there should be one and make recommendations to the board accordingly; and

    8.5.8 consider explaining the absence of such a function in the annual report

    8.5.9 monitor and assess the role and effectiveness of the internal audit function in the overall context of the company’s risk management system and the work of compliance, finance and the external auditor; and

    8.5.10 consider whether an independent, third-party review of processes is appropriate.

    8.6 External audit

    The committee shall:

    8.6.1 consider and make recommendations to the board, to be put to shareholders for approval at the annual general meeting, in relation to the appointment, re-appointment and removal of the company’s external auditor;

    8.6.2 develop and oversee the selection procedure for the appointment of the audit firm in accordance with applicable code and regulatory requirements, ensuring that all tendering firms have access to all necessary information and individuals during the tendering process;

    8.6.3 if an external auditor resigns, investigate the issues leading to this and decide whether any action is required;

    8.6.4 oversee the relationship with the external auditor. In this context the committee shall:

    8.6.4.1 approve their remuneration, including both fees for audit and non-audit services, and ensure that the level of fees is appropriate to enable an effective and high-quality audit to be conducted; and

    8.6.4.2 approve their terms of engagement, including any engagement letter issued at the start of each audit and the scope of the audit;

    8.6.5 assess annually the external auditor’s independence and objectivity taking into account relevant law, regulation, the Ethical Standard and other professional requirements and the group’s relationship with the auditor as a whole, including any threats to the auditor’s independence and the safeguards applied to mitigate those threats including the provision of any non-audit services;

    8.6.6 satisfy itself that there are no relationships between the auditor and the company (other than in the ordinary course of business) which could adversely affect the auditor’s independence and objectivity;

    8.6.7 agree with the board a policy on the employment of former employees of the company’s auditor, taking into account any relevant ethical standard and legal requirements, and monitor the application of this policy;

    8.6.8 monitor the auditor’s processes for maintaining independence, its compliance with relevant law, regulation, other professional requirements and any relevant ethical standard, including the guidance on the rotation of the audit partner and staff,

    8.6.9 monitor the level of fees paid by the company to the external auditor compared to the overall fee income of the firm, office and partner and assess these in the context of relevant legal, professional and regulatory requirements, guidance and any relevant ethical standard;

    8.6.10 assess annually the qualifications, expertise and resources, and independence of the external auditor and the effectiveness of the external audit process, which shall include a report from the external auditor on their own internal quality procedures;

    8.6.11 seek to ensure coordination of the external audit with the activities of the internal audit function;

    8.6.12 evaluate the risks to the quality and effectiveness of the financial reporting process in the light of the external auditor’s communications with the committee;

    8.6.13 develop and recommend to the board the company’s formal policy on the provision of non-audit services by the auditor, including prior approval of non-audit services by the committee and specifying the types of non-audit service to be preapproved, and assessment of whether non-audit services have a direct or material effect on the audited financial statements. The policy should include consideration of the following matters:

    8.6.13.1 threats to the independence and objectivity of the external auditor and any safeguards in place

    8.6.13.2 the nature of the non-audit services

    8.6.13.3 whether the external audit firm is the most suitable supplier of the non-audit service

    8.6.13.4 the fees for the non-audit services, both individually and in aggregate, relative to the audit fee

    8.6.13.5 the criteria governing compensation.

    8.6.14 meet regularly with the external auditor, (including once at the planning stage before the audit and once after the audit at the reporting stage) and at least once a year, meet with the external auditor without management being present, to discuss the auditor’s remit and any issues arising from the audit;

    8.6.15 discuss with the external auditor the factors that could affect audit quality and review and approve the annual audit plan and ensure that it is consistent with the scope of the audit engagement having regard to the seniority, expertise and experience of the audit team;

    8.6.16 review the findings of the audit with the external auditor. This shall include but not be limited to:

    8.6.16.1 a discussion of any major issues which arose during the audit;

    8.6.16.2 the auditor’s explanation of how the risks to audit quality were addressed

    8.6.16.3 key accounting and audit judgements;

    8.6.16.4 levels of errors identified during the audit.

    8.6.17 review any representation letter(s) requested by the external auditor before they are signed by management;

    8.6.18 review the management letter and management’s response to the auditor’s findings and recommendations; and

    8.6.19 review the effectiveness of the audit process, including an assessment of the quality of the audit, the handling of key judgements by the auditor, and the auditor’s response to questions from the committee.

  17. Reporting responsibilities
  18. 9.1 The committee chair shall report formally to the board on its proceedings after each meeting on all matters within its duties and responsibilities and shall also formally report to the board on how it has discharged its responsibilities. This report shall include:

    9.1.1 the significant issues that it considered in relation to the financial statements and how these were addressed;

    9.1.2 its assessment of the effectiveness of the external audit process, the approach taken to the appointment or reappointment of the external auditor, length of tenure of audit firm, when a tender was last conducted and advance notice of any retendering plans; and

    9.1.3 any other issues on which the board has requested the committee’s opinion.

    9.2 The committee shall make whatever recommendations to the board it deems appropriate on any area within its remit where action or improvement is needed.

    9.3 The committee shall compile a report on its activities to be included in the company’s annual report. The report should include an explanation of how the committee has addressed the effectiveness of the external (and if adopted, any internal) audit process, the significant issues that the committee considered in relation to the financial statements and how these issues were addressed, having regard to matters communicated to it by the auditor, and all other information requirements set out in the Code.

    9.4 In compiling the reports referred to in 9.1 and 9.3, the committee should exercise judgement in deciding which of the issues it considers in relation to the financial statements are significant, but should include at least those matters that have informed the board’s assessment of whether the company is a going concern and the inputs to the board’s viability statement. The report to shareholders need not repeat information disclosed elsewhere in the annual report and accounts, but could provide cross-references to that information.

  19. Other matters
  20. The Committee shall:

    10.1 have access to sufficient resources in order to carry out its duties, including access to the company secretariat for assistance as required;

    10.2 be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members;

    10.3 give due consideration to relevant laws and regulations and any other applicable guidance, codes, rules as appropriate;

    10.4 be responsible for oversight of the coordination of the internal and external auditors;

    10.5 oversee any investigation of activities which are within its terms of reference;

    10.6 work and liaise as necessary with all other board committees ensuring interaction between committees and with the board is reviewed regularly, taking particular account of the impact of risk management and internal controls being delegated to different committees;

    10.7 ensure that a periodic evaluation of the committee’s performance is carried out; and

    10.8 at least annually, review its constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the board for approval.

  21. Authority
  22. The Committee is authorised to:

    11.1 seek any information it requires from any employee of the company in order to perform its duties;

    11.2 obtain, at the company’s expense, independent legal, accounting or other professional advice on any matter it believes it necessary so to do;

    11.3 call any employee to be questioned at a meeting of the committee as and when required; and

    11.4 have the right to publish in the company’s annual report, details of any issues that cannot be resolved between the committee and the board. If the board has not accepted the committee’s recommendation on the external auditor appointment, reappointment or removal, the annual report should include a statement explaining the committee’s recommendation and the reasons why the board has taken a different position.

March 2024

2
Remuneration committee
  1. Constitution
  2. The Remuneration Committee is responsible for setting the remuneration policy for all executive directors and the Company’s chairman and senior management. It meets at least twice a year with other meetings scheduled as required. The quorum for the transaction of business shall be two.

  3. Membership
  4. 2.1 The Committee comprises at least two members, all of whom are independent non-executive directors. The chair of the board may serve on the Committee as an additional member if they were considered independent on appointment as chair.

    2.2 Members of the Committee are appointed by the board on recommendation of the Nomination Committee and in consultation with the chair of the Remuneration Committee. The Board shall appoint the Committee chair who shall be an independent non-executive director. In the absence of the Committee chair the remaining members present shall elect one of themselves to chair the meeting. The chair of the board shall not be chair of the Committee.

    2.3 Only members of the Committee have the right to attend committee meetings and other individuals may be invited to attend for all or part of any meetings as and when appropriate and necessary.

    2.4 Appointments to the Committee are made by the board and shall be for a period of up to three years extendable by no more than two additional three-year terms, so long as members continue to be independent.

    2.5 The company secretary or his or her nominee shall act as the secretary of the Committee and will ensure that the committee receives information and papers in a timely manner to enable full and proper consideration to be given to the issues.

  5. Engagement with shareholders
  6. The committee chair should attend the AGM to answer any shareholder questions on the committee’s activities. In addition, the committee chair should seek engagement with shareholders on significant matters related to the committee’s area of responsibility.

  7. Duties
  8. The committee shall have delegated responsibility for:

    4.1 determining the policy for directors’ remuneration and setting the remuneration for the company’s chair and executive directors, including the company secretary. The remuneration of non-executive directors is a matter for the chair and executive members of the board. No director or manager is involved in any decisions as to their own remuneration.

    4.2 designing remuneration policies and practices to support strategy and promote long-term sustainable success, with executive remuneration aligned to company purpose and values, clearly linked to the successful delivery of the company‘s long-term strategy and that enable the use of discretion to override formulaic outcomes and to recover and /or withhold sums or share awards under appropriate specified circumstances.

    4.3 within the terms of the remuneration policy, and in consultation with the chair and /or chief executive as appropriate determining the total individual remuneration package of each executive director, the company chair and have oversight of senior managers’ remuneration including, where appropriate, bonuses, incentive payments and performance-based incentives or other share awards. The choice of financial, non-financial and strategic measures is important, as is the exercise of independent judgement and discretion when determining remuneration awards, taking account of company and individual performance, and wider circumstances;

    4.4 having full authority to appoint remuneration consultants, and to commission or purchase any reports, surveys or information which it deems necessary at the expense of the company.

    4.5 reviewing the design of all share incentive plans for approval by the board and, where required, shareholders. For any such plans, determine each year whether awards will be made, and if so, the overall amount of such awards, the individual awards for executive directors, other designated senior managers and the performance targets to be used.

    4.6 reviewing the ongoing appropriateness and relevance of the remuneration policy.

    4.7 reviewing workforce remuneration and related policies.

  9. Reporting responsibilities
  10. 5.1 The Committee chair shall report to the Board after each meeting on the nature and content of its discussion, recommendations and action to be taken.

    5.2 The Committee shall provide a description of its work in the company’s annual report in line with regulations and corporate governance guidance and that disclosures and a report on the directors’ remuneration policy and practices is included in the annual report and put to an advisory vote at general meeting as necessary. If remuneration consultants have been appointed, they should be identified in the annual report.

    5.3 The Committee shall ensure that the company maintains contact as required with its principal shareholders about remuneration. The chair of the Committee should attend the annual general meeting to answer any shareholder questions on the Committee’s activities.

  11. Other matters
  12. The Committee shall:

    6.1 have access to sufficient resources in order to carry out its duties, including access to the company secretariat for advice and assistance as required;

    6.2 be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members;

    6.3 give due consideration to laws and regulations, corporate governance code provisions and published guidelines or recommendations regarding the remuneration of company directors and the operation and formation of share incentive plans and the requirements of other applicable rules as appropriate;

    6.4 periodically, review its constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the board for approval;

    6.5 ensure that a periodic evaluation of the committee’s own performance is carried out;

    6.6 the committee is authorised by the board to obtain, at the company’s expense, outside legal or other professional advice on any matters within its terms of reference.

    March 2024

3
Nomination committee
  1. Constitution

    The Nomination Committee meets at least once a year with other meetings scheduled as required and makes proposals for appointments to the board and carries out the selection process.

  2. Membership
  3. 2.1 The Committee comprises at least two members, the majority of whom are independent non-executive directors.

    2.2 Appointments to the Committee are made by the board and shall be for a period of up to three years extendable for further periods of up to three years, provided the director still meets the criteria for membership of the Committee.

    2.3 Only members of the Committee have the right to attend committee meetings and other individuals may be invited to attend for all or part of any meetings as and when appropriate and necessary.

    2.4 The Committee chair should be either the chair of the board or an independent non-executive director, or in the absence of the committee chair, whoever is appointed by the Committee to that position for the meeting. The chairman of the board shall not chair the Committee when it is dealing with the matter of succession of the chair of the board.

    2.5 The company secretary or his or her nominee shall act as the secretary of the Committee.

    2.6 The quorum for meetings is two.

  4. Engagement with shareholders

    3.1 The committee chair should attend the annual general meeting to answer any shareholder questions on the committee’s activities. In addition, the committee chair should seek engagement with shareholders on significant matters related to the committee’s areas of responsibility.

  5. Duties

    The Committee should carry out the duties below for the parent company, major subsidiary undertakings and the group as a whole as appropriate.

    The Committee shall:

    4.1 review the structure, size and composition (including the skills, knowledge, experience and diversity) of the board and operating board and make recommendations to the board with regard to any changes;

    4.2 review succession planning to board and other senior management positions taking into account the challenges and opportunities facing the company and the skills and expertise needed on the board in the future;

    4.3 consider candidates from various sources, a wide range of backgrounds giving due regard to benefits of diversity on the board including gender and taking care that appointees have enough time to devote to the position;

    4.4 prior to the appointment of a director, other significant time commitments should be disclosed prior to appointment and to the board as they arise. The proposed appointee should also be required to disclose any other business interests that may result in a conflict of interest. These must be authorised by the board prior to appointment and any future business interests that could result in a conflict of interest must not be undertaken without prior authorisation of the board;

    4.5 ensure that, on appointment to the board, non-executive directors receive formal letters of appointment that provide clear parameters of expectation in time commitment, committee service and other involvement;

    4.6 review the results of the board evaluation process that relate to the composition of the board and succession planning;

    4.7 Review annually the time required from non-executive directors. Performance evaluation should be used to assess whether the non-executive directors are spending enough time to fulfil their duties.

    Make recommendations to the board on:

    4.8 any changes needed to the succession planning process if its periodic assessment indicates the desired outcomes have not been achieved;

    4.9 suitable candidates as new directors and succession for existing directors;

    4.10 membership of the audit and remuneration committees, and any other board committees as appropriate, in consultation with the chair of those committees;

    4.11 the re-appointment of any non-executive director at the conclusion of their specified term of office having given due regard to their performance and ability to continue to contribute to the board in the light of knowledge, skills and experience required;

    4.12 the re-election by shareholders of directors under the annual re-election provisions of the Code or the retirement by rotation provisions in the company’s articles of association, having due regard to their performance and ability, and why their contribution is important to the company’s long-term sustainable success in the light of the skills, experience and knowledge required and the need for progressive refreshing of the board, taking into account the length of service of individual directors, the chair and the board as a whole;

    4.13 any matters relating to the continuation in office of any director at any time including the suspension or termination of service of an executive director as an employee of the company subject to the provisions of the law and their service contract; and

    4.14 the appointment of any director to executive or other office.

  6. Reporting

    5.1 the committee chair shall report to the board after each meeting on the nature and content of its discussion, recommendations and action to be taken;

    5.2 the Committee shall make whatever recommendations to the board it deems appropriate on any area within its remit where action or improvement is needed, and adequate time should be made available for board discussion when necessary;

    5.3 the Committee shall produce a report to be included in the company’s annual report describing the work of the nomination committee including its activities during the year, the process used in relation to appointments, and/or external advisers used in any recruitment during the year and, if so, whether it has any connection with the Company; how board evaluation has been conducted, the outcomes and actions taken, and how it has influenced or will influence board composition. The report should include the Company’s policy on diversity and inclusion.

  7. Other matters

    The Committee shall:

    6.1 have access to sufficient resources in order to carry out its duties, including access to the company secretariat as required;

    6.2 be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members;

    6.3 give due consideration to laws and regulations, corporate governance code provisions and the requirements of other applicable rules as appropriate;

    6.4 arrange for periodic reviews of its own performance and, at least annually, review its constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the board for approval.

    6.5 The Committee is authorised by the board to obtain, at the company’s expense, outside legal or other professional advice on any matters within its terms of reference.

    March 2024

4
Non-executive directors letter of engagement

Upon appointment NEDs are issued a letter of engagement. As an ongoing commitment to corporate governance, the terms of this letter are summarised as follows:

  • NEDs are appointed for an initial term of three years. The appointment is terminable on one month's notice, by either party.
  • Appointments are subject to the ratification by the shareholders at the next annual general meeting.
  • NEDs are expected to provide leadership and an independent objective judgement on issues of strategy, performance and resources relating to the company, including key appointments, assist in resolving conflicts of interest and are free to question any executive decision.
  • Duties and responsibilities include attending all board meetings and general meetings, to serve on audit, remuneration and nomination committees and visit operating sites, as appropriate.
  • The appointment, retirement and disqualification of NEDs are governed by the company's articles of association, however, the company may terminate the appointment, without payment of compensation, if the NED accepts a position, without prior board approval, which the Board consider presents a conflict with the interests of Mothercare. In the event a NED fails to secure re-appointment as a director in accordance with the retirement by rotation procedure at the company's annual general meeting, the company is entitled to terminate the NED appointment with immediate effect.
  • NED fees are paid monthly in arrears. They are also reimbursed the cost of all reasonable out-of-pocket expenses incurred as a result of company business. NEDs fees are disclosed in the Annual report.
  • NEDs agree that during the 12 months following the termination of their appointment that they will not enter the employment, or become an officer or consultant to any firm or company that is or is about to become a business competitor of Mothercare.
  • That all share dealings in the company's shares comply with the rules under MAR and agree to consult with the Chairman prior to any dealing in the company's shares.
  • NEDs are entitled to full access, advice and services of the Company Secretary and advisers to the company. They are made aware of the agreed procedure, in accordance with the recommendations in the Best Practice Provisions, to enable NEDs to take independent professional advice at the company's expense in the furtherance of their duties.

Specific contracts in relation to individuals are available for inspection by shareholders at the Company's registered office and before and after the annual general meeting.

5
Matters reserved for the board

The Mothercare plc board delegates day to day responsibility of the business to the Operating Board and other committees of the board. The formal schedule of matters reserved for the board are set out below.

  1. Strategy and management
  2. 1.1 Responsibility for the overall leadership of the Company and setting the Company’s values and standards.

    1.2 Approval of the group’s strategic aims and objectives

    1.3 Approvals of the annual operating and capital expenditure budgets and any material changes to them.

    1.4 Oversight of the group’s operations ensuring:

    1.4.1 Competent and prudent management

    1.4.2 Sound planning

    1.4.3 Maintenance of sound management and internal control systems

    1.4.4 Adequate accounting and other records

    1.4.5 Compliance with statutory and regulatory obligations

    1.5 Review of performance in the light of the group’s strategic aims, objectives, business plans and budgets and ensuring that any necessary corrective action is taken.

    1.6 Any decision to acquire, create or cease to operate all or any material part of the group’s business

  3. Structure and capital
  4. 2.1 Changes relating to the group’s capital structure including reduction of capital, share issues (except under employee share plans), share buy backs (including the use of treasury shares if held).

    2.2 Major changes to the group’s corporate structure, including but not limited to acquisitions and disposals of shares which are materially relative to the size of the group in question (taking into account initial and deferred consideration).

    2.3 Any changes to the Company’s listing or its status as a plc.

  5. Financial reporting and controls

    3.1*  Approval of the half-yearly report, interim management statements, if made. and any preliminary announcement of the final results.

    3.2* Approval of the annual report and accounts, including the corporate governance statement and directors’ remuneration report considered by whole board with formal decision delegated to sub committee

    3.3* Approval of dividend policy

    3.4*  Declaration of an interim dividend and recommendation of final dividend

    3.5*  Approval of any significant changes in accounting policies or practices.

    3.6  Approval of treasury policies including foreign currency exposure and the use of financial derivatives outside of treasury manager’s delegated authority

  6. Internal controls

    4.1 Ensuring maintenance of a sound system of internal control and risk management including:

    4.1.1 approving the group’s risk appetite statements;

    4.1.2 receiving reports on, and reviewing the effectiveness of, the group’s risk and control processes to support its strategy and objectives;

    4.1.3 approving procedures for the detection of fraud and the prevention of bribery;

    4.1.4 undertaking an annual assessment of these processes; and

    4.1.5 approving an appropriate statement for inclusion in the annual report.

  7. Contracts

    5.1 Approval of major capital projects

    5.2 Contracts which are material strategically or by reason of size, entered into by the Company (or, in the case of a subsidiary, recommendations for approval) in line with group authority levels

    5.3 Contracts of the company (or any subsidiary) not in the ordinary course of business, in line with group authority levels.

    5.4 Major investments including the acquisition or disposal of interests of more than 3 per cent in the voting shares of any company or the making of any takeover offer.

  8. Communication

    6.1 Ensuring a satisfactory dialogue with shareholders based on the mutual understanding of objectives.

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

    6.3 Approval of all circulars, prospectuses and listing particulars with the exception of the approval of routine documents such as periodic circulars which are delegated..

  9. Board membership and other appointments

    7.1 Changes to the structure, size and composition of the board, following recommendations from the nomination committee.

    7.2 Ensuring adequate succession planning for the board and senior management so as to maintain an appropriate balance of skills and experience within the company and on the board

    7.3 Appointments to the board, following recommendations by the nomination committee.

    7.4 Selection of the chairman of the board and the chief executive.

    7.5 Appointment of the senior independent director to provide a sounding board for the chairman and to serve as intermediary for the other directors when necessary.

    7.6 Membership and chairmanship of board committees following recommendations from the nomination committee.

    7.7 Continuation in office of directors at the end of their term of office, when they are due to be re-elected by shareholders at the AGM and otherwise as appropriate.

    7.8 Continuation in office of any director at any time, including the suspension or termination of service of an executive director as an employee of the company, subject to the law and their service contract.

    7.9 Appointment or removal of the company secretary

    7.10 Appointment, reappointment or removal of the external auditor to be put to shareholders for approval in general meeting, following the recommendation of the audit committee.

  10. Remuneration

    8.1 Determining the remuneration policy for the directors, company secretary and other senior executives.

    8.2 Determining the remuneration of the non-executive directors, subject to the articles of association and shareholder approval as appropriate

    8.3 The introduction of new share incentive plans or major changes to existing plans, to be put to shareholders for approval.

  11. Delegation of authority

    9.1 The division of responsibilities between the chairman and the chief executive which should be clearly established, set out in writing and agreed by the board.

    9.2 Establishing board committees and approving their terms of reference, and approving material changes thereto.

    9.3 Receiving reports from board committees on their activities.

  12. Corporate governance matters

    10.1 Undertaking a formal and rigorous review of its own performance, that of its committees and individual directors, and the division of responsibilities.

    10.2 Determining the independence of non-executive directors in light of their character, judgement and relationships.

    10.3 Considering the balance of interests between shareholders, employees, customers and the community.

    10.4 Review of the group’s overall corporate governance arrangements.

    10.5 Receiving reports on the views of the company’s shareholders to ensure that they are communicated to the board as a whole.

    10.6 Authorising conflicts of interest where permitted by the company’s articles of association.

  13. Other

    11.1 The making of political donations

    11.2 Approval of the appointment of the group’s principal professional advisers.

    11.3 Approval of the overall levels of insurance for the group including directors’ and officers’ liability insurance and indemnification of directors.

    11.4 Any decision likely to have a material impact on the company or group from any perspective, including but not limited to, financial, operational, strategic or reputational.

    11.5 This schedule of matters reserved for the board.

    Matters which the board considers suitable for delegation are contained in the terms of reference of its committees.

    In addition, the board will receive reports and recommendations from time to time on any matter which it considers significant to the group.

    * Not considered suitable for delegation as under recommendations of the Code they are the responsibility of an audit, nomination or remuneration committee, or there are other requirements such as Companies Act and the final decision should be taken by the board as a whole.

    March 2021

Powered by Sitecore