As a family owned business, we run the Group in a way consistent with an agreed set of core values, that cover how we deliver value to shareholders and the wider community and how we interact with our stakeholders, including shareholders, employees, customers and suppliers. Accordingly, we have not applied a specific corporate governance code during 2023. The Board will continue to monitor the development of private company corporate governance before deciding, in conjunction with the shareholders, whether it would be beneficial to formally adopt a specific corporate governance code such as the Wates Principles.
Our corporate governance arrangements are as follows:
The Group’s mission statement was set by our founder, Sir Arnold Clark, and is "to provide exceptional value for money and the highest levels of customer service."
The Board sets our overall strategy and values and formally meets on a quarterly basis to monitor performance against that strategy. The Group’s values are embedded in its operations and reinforced during induction for new employees and at regular Director led branch and departmental meetings across the Group. Employee feedback helped to create five core values: Family, Communication, Progression, Community and Recognition. These are the values that guide and inform everything we do and reflect our principles as a business. The Group has a zero-tolerance approach on bribery and corruption, tax evasion and modern slavery. Breach of the Group values is considered to be a disciplinary matter. The Board holds regular meetings with groups of local managers to seek feedback on trading conditions and the effectiveness of the Group’s overall strategy. Our approach to diversity and inclusion focuses on the right person for the role irrespective of gender, race or religion.
We aim to deliver sustainable business growth through the following objectives:
During the year, the Board comprises of Lady Clark, as non-executive Chairwoman, and 8 Directors:
Following a reassessment of the current Board structure and Director’s roles and responsibilities, it was agreed that J T Graham, S R Grant and C S Henry would step down from the Board as of 5 February 2024. On the same date, W G P Gall also stepped down from the Board after 60 years of service as a Director of the Company.
Appointments to the Board are discussed with the Chairwoman prior to any appointment being confirmed. All new Directors are required to participate in an induction programme upon appointment. Whilst this encompasses standard governance and regulatory items aimed at ensuring that they fully understand, and are equipped to effectively discharge, their duties as Directors, it is also tailored to their individual training and developmental needs.
The Board contains no independent non-executive Directors. The Board considers that the current Directors bring objective contributions and judgements to Board deliberations in addition to constructive challenge of matters outside their core responsibilities.
The Board is supported by a senior management team made up of individuals with a wide range of backgrounds, skills and experience. Executive Directors hold regular operational meetings with their respective leadership teams and meet with the senior management team on a weekly basis to monitor business performance and agree required actions, after which an informal meeting of Executive Directors considers appropriate responses and actions. Generally, the Board formally meets quarterly to discuss longer term strategy, with additional annual strategy meetings held with the senior management team.
The Board is committed to developing a more diverse workforce, including at the most senior levels, but recognise that this will be achieved through gradual evolution.
Our ongoing approach includes:
The relationship between the Board and shareholders is managed through formal General Meetings and other family/shareholder meetings. Family/shareholder matters are dealt with in family/shareholder meetings, whilst business matters are dealt with by the Board. Each shareholder receives a copy of the Group's Annual Report as well as regular updates on business performance, issues and social responsibility matters.
The Board seeks to ensure that the necessary financial, legal and human resources are in place for the Group to be able to meet its objectives, to review management performance and to ensure that its obligations to its shareholders are understood and met.
The health and safety of our customers, staff and wider communities is a priority and the Directors ensure all required resources are available to achieve this, as well as promoting a safety culture on branch visits.
The Board receives regular and timely information on all key aspects of the business, including health and safety, risks and opportunities, the financial performance of the business, strategy, operational matters, market conditions and sustainability, all supported by Key Performance Indicators (KPIs). The Board receives information regarding the sales performance of the business throughout the working day.
All Directors have a clear understanding of their roles and have access to legal advice on their responsibilities or relevant regulations. The Board receives regular briefings on new regulations impacting the Group.
The Group seeks to provide competitive remuneration packages that will attract and retain executives of the calibre required to take forward the Group’s strategy. Remuneration comprises a base salary, biannual discretionary bonus, dependent upon individual qualitative performance, and a competitive benefits package. The remuneration package of each Director is discussed and agreed by the Chief Executive and the Chairwoman, as the senior family representative on the Board. Discussions with the Chairwoman take into account business performance and the level of change to employee remuneration.
Led by the Chairwoman, the Board is responsible for generating long-term shareholder value by setting the Group’s strategic direction. The Board is responsible for approval of the Group’s risk appetite, determining the nature and extent of significant risks the Group is willing to take to achieve its objectives. The Board has established delegated authorities and controls to ensure efficient management of the Group’s operations. The Group uses its Internal Audit function to assist its monitoring of performance and risk. The Board consider the principal risks to be those that could cause the greatest damage if not effectively evaluated, understood and managed. These principal risks are considered to be:
| Risk | Potential impacts | Mitigating actions |
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| Failure to respond to negative market and economic risks |
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| Failure to meet customer expectations |
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| Failure to maintain relationships with manufacturers and finance providers |
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| Adverse changes to manufacturer delivery systems that bypass the current dealer network |
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| IT systems failure and data security |
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| Failure to attract and retain our skilled workforce |
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| Failure to respond to environmental changes (including moving to greener technologies, tax changes, emission targets) |
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| Legislative, regulatory changes and major business interruption |
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The following disclosure describes how the Directors have had regard to the matters set out in Section 172 (1) (a) to (f) and forms the Directors’ statement required under Section 414CZA of The Companies Act 2006.
Engaging with stakeholders to deliver long-term success is a key area of focus for the Board and all decisions take into account the impact on a wide range of stakeholders. Views of stakeholders are gathered by Directors and inform the decisions made in Board meetings. Stakeholders are impacted by, or benefit from, decisions made by the Board in different ways. However, it is the Board’s priority to ensure that the Directors have acted both individually and collectively in the way that they consider, in good faith, would be most likely to promote the success of the Group for the benefit of its members as a whole with regard to all its stakeholders and to the matters set out in paragraphs (a) to (f) of Section 172 (1) of the Companies Act 2006. How the Directors have complied with Section 172 is set out below:
| Who? | Why? | How? | What? | Outcomes and actions |
|---|---|---|---|---|
| Stakeholder group | Why is it important to engage? | How management and/or Directors engaged | What were the key topics? | What was the impact of the engagement including any actions taken? |
| Customers | Delivering exceptional customer service and genuine value for money is key to customer retention |
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| Employees | Ensuring the business has the right culture and values is critical to the delivery of a first-class customer experience |
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| Manufacturers | Access to vehicles is important for our franchise businesses as well as our Contract Hire and Daily Rental business |
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| Finance providers | Access to affordable finance is essential to ensure the ongoing viability of our Contract Hire and Daily Rental businesses and to enable customers to finance vehicle purchases |
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| Wider community | Giving back to the community is one of our core values |
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| Regulators | Compliance with regulatory requirements is essential for the long-term benefit of the Group |
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| Shareholders | Shareholder support is essential to enable a long term strategic approach |
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We define principal decisions as both those that are material to the Group and those that are significant to any of our key stakeholder groups. In making the following principal decisions, the Board considered the outcomes from its stakeholder engagement processes in addition to maintaining our reputation for high standards of business conduct and the need to act fairly between members of the Group.
The Board took the decision to carry a higher level of used and nearly new car stock in advance of the Real Sale which commenced in December 2023. This allowed us to access a number of bulk purchase deals from manufacturers, helping ensure that we had over 37,000 vehicles available for sale.
The Board took the decision to add three significant investment properties in Chertsey, Dartford and Northampton, all of which represented attractive investments at the time of purchase. Towards the end of the year, the decision was taken to reduce our trading footprint with the closure of four existing branches, which were either of the wrong size or were not deemed to be economically viable going forward. These properties are currently in the process of being marketed for sale or rent.