Report of the Directors
Governance

Corporate Governance Report

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Effectiveness

What is the Composition of Our Board?

The board currently comprises the Chairman (Tim Stevenson), the Chief Executive (Neil Carson), three other executive directors (Robert MacLeod, Larry Pentz and Bill Sandford), and four independent non-executive directors (Alan Ferguson, Colin Matthews, Michael Roney and Dorothy Thompson). As announced on 20th May 2013, Odile Desforges will be appointed as a non-executive director with effect from 1st July 2013. As announced on 5th June 2013, Bill Sandford (Executive Director, Precious Metal Products) will retire as an executive director and John Walker (Division Director, Emission Control Technologies) will be appointed as an executive director, each with effect from 9th October 2013.

Our board seeks to ensure that both it and its committees have the appropriate range and balance of skills, experience, knowledge and independence to enable them to carry out their duties and responsibilities effectively. Further information on board and committee appointments can be found below under ‘How do we Appoint to Our Board and its Committees?’ and in the Nomination Committee Report.

The board is of the view that it is the right size to meet the business’ requirements, that changes to its composition and that of its committees can be managed without undue disruption, and that it is not so large as to be unwieldy. It also believes that it includes an appropriate combination of executive and non-executive directors (and, in particular, independent non-executive directors). The size and composition of the board is, however, kept under review by the Nomination Committee.

Throughout the year (other than for the period from 25th July 2012 to 4th October 2012 as referred to above), and up to the date of approval of this annual report, at least half the board members, excluding the Chairman, were non-executive directors determined by the board to be independent (as referred to further below).

How do we Appoint to Our Board and its Committees?

The board, through the Nomination Committee, follows a formal, rigorous and transparent procedure to select and appoint new board directors. The processes are similar for the appointment of executive and of non-executive directors.

The Nomination Committee leads the process for board appointments and makes recommendations to the board. Further information on the Nomination Committee and its work is set out in the Nomination Committee Report.

In considering board composition, the Nomination Committee assesses the range and balance of skills, experience, knowledge and independence on the board, identifies any gaps or issues and considers any need to refresh the board. If, after this evaluation, the Nomination Committee feels that it is necessary to appoint a new non-executive director it then prepares a description of the role and of the capabilities required for the appointment and sets objective selection criteria accordingly. The benefits of diversity on the board, including gender diversity, are carefully considered and this is discussed more fully under ‘Boardroom Diversity’.

The Nomination Committee considers any proposed recruitment in the context of the company’s strategic priorities, plans and objectives, as well as the prevailing business environment. It also takes into account succession plans in place and this is discussed further under ‘Succession Planning’ below. It seeks prospective non-executive directors who can make positive contributions to the board and its committees and who have the capability to challenge on strategic and other matters. This is balanced with the desire to maintain board cohesiveness. The Committee uses external search consultancies to help with the appointment process and appointments are ultimately made on merit against the agreed selection criteria.

The board recognises the importance of developing internal talent for board appointments, as well as recruiting externally, and Johnson Matthey has a variety of mentoring arrangements and a wide range of management development programmes for all employee levels. It also recognises the need to recruit non-executive directors with the right technical skills and knowledge for its committees and who have the potential to take over as committee chairmen.

Succession Planning

The board recognises that effective succession planning is not only a fundamental component of board effectiveness but is also integral to the delivery of Johnson Matthey’s strategic plans. It is essential in ensuring a continuous level of quality in management, in avoiding instability by helping mitigate the risks which may be associated with any unforeseen events, such as the departure of a key individual, and in promoting diversity.

The board, through the Nomination Committee and the MDRC, is actively engaged in ongoing succession planning to ensure plans are in place for the orderly and progressive refreshing of the board and to identify and develop senior management with potential for board and CEC positions.

Below board level, there is a structured approach to succession planning designed to secure a pipeline of talented and capable individuals from within Johnson Matthey who will ultimately progress to board and CEC positions. Each of Johnson Matthey’s divisions and corporate functions prepare and maintain succession plans, assisted by divisional and group Human Resources. The CEC rigorously reviews these plans each year. A key aim is to ensure broad experience and encourage cross fertilisation across the group’s divisions. The identification and development of high potential individuals is also considered by the CEC. The CEC’s review of the succession plans generally leads to further refinement and changes, resulting in the final plans which are submitted to the MDRC. Each year the MDRC, with input from the Group Director, Human Resources, reviews succession policy, the management development and succession planning process and the senior management succession plans.

Johnson Matthey has in place a range of ongoing talent management and development initiatives designed to further develop senior management. Many of these approaches are well established, but new initiatives are developed and introduced which are designed to support current strategic imperatives, including, for example to encourage cross divisional cooperation. Examples launched in the year are the executive development programme with London Business School, aimed at developing senior level talent and boosting their capabilities around strategy and leadership, and a global training curriculum to support the group’s Manufacturing Excellence programme.

As referred to in the Nomination Committee Report, in 2011/12 the Nomination Committee considered board composition and began planning for non-executive director succession following the retirement in July 2012 of Sir Thomas Harris. In considering the balance of skills and experience, and diversity, including gender, on the board, the Nomination Committee identified that the addition of a non-executive director with experience in technology, including technology strategy development and delivery, would be beneficial. It further decided to actively search for a suitable additional female non-executive director. The succession process was effected during the year leading to the appointment of Colin Matthews and Odile Desforges as non-executive directors.

The Nomination Committee also planned for executive director succession given the proposed retirement of Bill Sandford, leading to the appointment of John Walker as an executive director, effective from 9th October 2013, and certain other changes to executive directors’ responsibilities.

Succession planning at board and senior management level for Johnson Matthey encompasses potential succession to all senior roles including that of Chief Executive, and considers the identification, development and readiness of potential internal successors. During the year, the board (through the Nomination Committee) appointed the executive search consultants, Russell Reynolds Associates, to conduct a leadership assessment and development review in respect of the members of the CEC to assist in consideration of succession planning.

In respect of succession planning, the board (through the Nomination Committee and the MDRC) will focus during the coming year in particular on the key issues of mobility across the group and between Johnson Matthey’s divisions and businesses, talent management and diversity.

Boardroom Diversity

Our board believes that diversity is important for board effectiveness. In November 2011 the board published a statement on board diversity. This is set out in the Investor Relations / Corporate Governance section of our website.

Gender Diversity Statistics

  Number Proportion
The board One woman on the board as at 31st March 2013 (2012 one) 11% of total board membership (2012 11%);
20% of non-executives on the board (2012 20%)
  Odile Desforges will join the board on 1st July 2013, taking the number of women on the board to two From 1st July 2013 – 20% of total board
membership; 33% of non-executives on the board
Senior management 35 women out of 208 total as at 31st March 2013  (2012 32 women out of 196 total) 17% of senior management (2012 16%)
Graduate intake   27% of graduate intake
(2012 30%)
The group 2,750 women employees as at 31st March 2013 (2012 2,205) 25% of group employees
(2012 22%)

The company has taken, and continues to take, several steps to promote diversity, including gender diversity, both at senior management level and in the boardroom. Developing policies and processes that prevent bias in relation to recruitment and promotion form the basis. However, the key to progress lies in actively promoting diversity and ensuring that other positive measures are taken. These measures include requesting balanced shortlists when recruiting, looking at diversity mix in company events and conferences, actively discussing diversity in succession planning, promoting industrial and scientific careers to women and developing family friendly and flexible employment policies. There are challenges to overcome, particularly in respect of gender diversity given the sector in which Johnson Matthey operates, but we are making good progress.

Diversity Policy

During the year, our board reviewed the broad question of diversity, including gender diversity, within Johnson Matthey and considered a policy on diversity. It adopted a diversity policy at its meeting in March 2013 and this is set out in full in the Nomination Committee Report.

As explained in the Nomination Committee Report, the board has not set express diversity quotas or measurable objectives for implementing the policy. However, in making its most recent non-executive director appointment, the board required an all women short list for the selection process and has appointed Odile Desforges as a non-executive director with effect from 1st July 2013, bringing total female representation on the board to 20%.

Board Evaluation Process

A new supporting principle has been included in the 2012 Code to the effect that evaluation of the board should consider the balance of skills, experience, independence and knowledge of the company on the board, its diversity, including gender, how the board works together as a unit and other factors relevant to its effectiveness. Our board followed this principle in its board and committee evaluation process in 2011/12 and again in the process undertaken in 2012/13. Further information is set out under ‘Evaluation of the Board, Board Committees and Directors’.

Appointments to the Board

As described under ‘How do we Appoint to Our Board and its Committees?’, the search for board candidates is conducted, and appointments made, on merit, against objective selection criteria having due regard for the benefits of diversity on the board, including gender. Further information on diversity in the context of board appointments is contained in the Nomination Committee Report.

Board Balance – Independence of the Non-Executive Directors and the Chairman

The question of the independence of the non-executive directors is relevant to board balance.

The board reviewed director independence at its meeting in March 2013. In determining each director’s independence, the board considers all relevant relationships and circumstances, including those set out in the Code. It considers, for example, whether the director has, or has had within the last three years, a material business relationship with Johnson Matthey, holds cross directorships or has significant links with fellow directors through involvement in other companies or bodies, or represents or has a material connection to a controlling or significant shareholder or is nominated by a shareholder.

The board considers that there are no business or other relationships or circumstances which are likely to affect, or may appear to affect, the judgment of any non-executive director. Each non-executive director is determined by the board to be independent in character and judgment.

There are no cross directorships or reciprocal directorships among the directors; no two directors are also directors of another company.

Tim Stevenson was considered by the board to meet the independence criteria set out in the Code on his appointment as Chairman in July 2011.

Information on the company’s procedures for authorising potential conflicts of interest is set out under ‘Directors’ Conflicts of Interest’.

Time Commitment of the Chairman and the Non-Executive Directors

The board recognises that it is vital that all directors should be able to dedicate sufficient time to Johnson Matthey to effectively discharge their responsibilities.

The time commitment required by Johnson Matthey is considered by the board and by individual directors on appointment. The letters of appointment of the Chairman and of each non-executive director set out the expected minimum time commitment for their roles. Each undertake that they will have sufficient time to meet what is expected of them for the proper performance of their duties and acknowledge that there may, on occasion, be a need to devote additional time. The minimum time commitment considered by the board to be necessary for a non-executive director, and provided in the letters of appointment, is two days per month following induction. In his letter of appointment, Tim Stevenson undertook to devote such time to the affairs of the company as is required by his duties as Chairman.

The other significant commitments of the Chairman and of each non-executive director are disclosed to the board before, with an indication of the time involved. The board requires to be, and is, informed of subsequent changes as they arise.

Details of Tim Stevenson’s other significant commitments are set out in the Board of Directors section. Tim retired as Chairman of The Morgan Crucible Company plc on 31st July 2012. There were no other changes to his significant commitments during the year.

Details of the non-executive directors’ other significant commitments are set out in the Board of Directors section. Since his appointment to the board, Alan Ferguson has been appointed as a non-executive director of a number of companies and he serves as chairman of the audit committee of each of these. These appointments were reported to the board as they arose. The board assessed the impact of these appointments and confirms that Alan continues to be able to manage his time commitments and allocate sufficient time to the company to discharge his responsibilities effectively, including his responsibilities as Chairman of our Audit Committee.

Terms of Appointment of the Non-Executive Directors

The non-executive directors are appointed for specified terms subject to annual election and to the provisions of the Companies Act 2006 (the 2006 Act) relating to the removal of a director.

Any term beyond six years for a non-executive director is subject to particularly rigorous review and takes into account the need for progressive refreshing of the board.

As referred to in the Nomination Committee Report, the terms of appointment of Michael Roney and Dorothy Thomson were considered at a meeting of the Nomination Committee in March 2013 and, after careful review, it recommended to the board that their terms be extended by a further three years to 31st May and 31st August 2016 respectively. The board accepted these recommendations at its meeting in March 2013 and the terms of appointment were extended.

Except for Michael and Dorothy, none of our non-executive directors who will be proposed for re-election at the 2013 Annual General Meeting (AGM) will have served longer than six years.

The terms and conditions of appointment of the non-executive directors and the contracts of service of the executive directors with the company can be inspected at our registered office during normal business hours. They will also be available for inspection at The Royal Society, 6-9 Carlton House Terrace, London SW1Y 5AG from 10.00 am on 25th July 2013 until the conclusion of our 2013 AGM.

Annual Re-Election of Directors

Our Articles of Association require one third of the board to retire by rotation at each annual general meeting. However, the Code provides that all directors of FTSE 350 companies should be subject to re-election by their shareholders every year subject to continued satisfactory performance. In accordance with this provision, the board has decided that all directors will retire at each annual general meeting and offer themselves for re-election by shareholders.

Each director stood for re-election at the 2012 AGM. At the 2013 AGM all directors will be offering themselves for re-election or election (in the case of Colin Matthews and Odile Desforges as they were appointed to the board either during, or since the end of, the year).

Biographies of each of our directors, including details of their other directorships and responsibilities and previous positions held, together with any further relevant factors including details of their skills and experience and contributions that they can make to the board, are set out in the 2013 AGM circular to shareholders. This is to assist shareholders to take an informed decision on the resolutions for their election or re-election.

The circular also details why the board believes each director should be re-elected based on continued satisfactory performance in the role. In the circular, the Chairman confirms to shareholders that, following formal performance evaluation, the performance of each non-executive director proposed for re-election continues to be effective and that they demonstrate commitment to the role (including commitment of time for board and board committee meetings). Further information on performance evaluation is given under ‘Evaluation of the Board, Board Committees and Directors’.

Information and Support

The board has processes in place to ensure that it receives the right information in the right form and at the right time to enable it to effectively discharge its duties. The Chairman, through the Company Secretary and with the support of the executive directors and management, ensures that this information is of high quality in terms of its accuracy, clarity, appropriateness, comprehensiveness and currency. Directors are able to seek clarification or amplification from management where necessary. The role of the Company Secretary in providing support and information is described above.

Independent Professional Advice

The non-executive and the executive directors have access to independent external professional advice (such as legal and financial advice) at the company’s expense where they judge this necessary to discharge their responsibilities as directors.

Director Induction and Development

Induction

Johnson Matthey puts full, formal and tailored induction programmes in place for all its new board directors. While directors’ different backgrounds and experience are taken into account, the induction is aimed to be a broad introduction to the group’s businesses and its areas of significant risk. Key elements of the induction process are meeting the executive directors and senior and middle management individually and collectively and visiting the group’s major sites in order to be briefed on group strategy and on individual businesses. As part of his induction programme during the year, Colin Matthews visited Johnson Matthey’s Technology Centre at Sonning Common, UK to learn more about the group’s R&D efforts.

Familiarisation, Training and Development

We take various steps to ensure that all of our directors continually refresh their knowledge and skills so that they can effectively fulfil their roles on our board and its committees and so that their contributions remain informed and relevant. The intention is that all directors have familiarity with, and appropriate knowledge of, Johnson Matthey and gain access to our operations and employees. The board ensures that the company provides the necessary resources to allow this to happen.

Each board meeting includes one or more business or strategy presentations from the division directors and senior managers. To ensure that the board is kept up to date on important matters, including environmental, legal, governance and regulatory developments, presentations are also made to the board by external and internal advisers. In the year, presentations made included ones on the Process Technologies business by its division director, Emission Control Technologies’ market by its division director, the Manufacturing Excellence initiative by the Manufacturing Excellence Director and legal risk and intellectual property (IP) risk by the Group Legal Director and the Group IP Director respectively.

The board also holds at least one board meeting per year at one of the group’s operational sites and takes the opportunity to tour the site and discuss business issues, risks and strategy with local management. Two site meetings were held during the year as detailed above. Individual non-executive directors also undertake site visits.

These presentations, meetings and site visits help the non-executive directors to familiarise themselves with, and gain a greater insight into, Johnson Matthey’s businesses and help to give a balanced overview of the group. They enable the non-executive directors to continue to develop and refresh their knowledge and understanding of our businesses, the markets in which we operate and our key relationships. They are also important for building links with our employees.

As part of the annual performance review process referred to below under ‘Evaluation of the Board, Board Committees and Directors’, our Chairman, Tim Stevenson, meets with each director annually on a one to one basis to discuss any individual training and development requirements. Tim is also available throughout the year to discuss these areas.

Indemnification of Directors and Insurance

Under Deed Polls dated 20th July 2005 Johnson Matthey granted indemnities in favour of:

These indemnities were in force during the year for the benefit of all persons who were directors of the company or of its subsidiaries at any time during the year and remained in force for the benefit of all persons who were directors of the company or of its subsidiaries as at the date when this annual report was approved.

The company has appropriate directors and officers liability insurance cover in place in respect of legal action against, amongst others, its executive and non-executive directors.

Copies of the Deed Polls and our Articles of Association can be inspected at our registered office during normal business hours. They will also be available for inspection at The Royal Society, 6-9 Carlton House Terrace, London SW1Y 5AG from 10.00 am on 25th July 2013 until the conclusion of our 2013 AGM.

Neither the company nor any subsidiary has indemnified any director of the company or a subsidiary in respect of any liability that he or she may incur to a third party in relation to a relevant occupational pension scheme.

Directors’ Conflicts of Interest

We have established procedures in place in accordance with our Articles of Association to ensure we comply with the directors’ conflicts of interest duties under the 2006 Act and for dealing with situations in which a director may have a direct or indirect interest that conflicts with, or may conflict with, the interests of the company. Johnson Matthey has complied with these procedures during the year and up to the date of approval of this annual report. During the year, details of any new conflicts or potential conflict matters were submitted to the board for consideration and, where appropriate, these were approved.

In March 2013 the board undertook an annual review of the register of previously approved conflict or potential conflict matters and, to the extent that these were still relevant, agreed that they should continue to be authorised on the terms previously set out. In each case, the review was undertaken by directors who were genuinely independent of the matter. Authorised conflict or potential conflict matters will continue to be reviewed by the board on an annual basis.

The board confirms that Johnson Matthey complies with its procedures in place to authorise conflict situations and is satisfied that its powers to authorise conflict situations are being exercised properly and effectively and in accordance with its Articles of Association.

Evaluation of the Board, Board Committees and Directors

Our board carries out a formal annual evaluation of its own performance and that of its committees and individual directors with the aim of improving effectiveness. The evaluation, which is led by the Chairman, seeks to be as rigorous and objective as possible.

The process for evaluation of the board considers its strengths and weaknesses, its range and balance of skills, experience, independence and knowledge of the company, its diversity, including gender diversity, how the board works together as a unit and any other factors considered relevant to its effectiveness. Individual evaluation aims to show whether each director continues to contribute effectively and to demonstrate commitment to the role (including time commitment). The Chairman acts on the results of the performance evaluation. Strengths are recognised and any weaknesses addressed.

The last externally facilitated review was undertaken in 2010/11 following the appointment of Tim Stevenson as Chairman Designate in March 2011. The board decided to conduct an internal review process in 2011/12 and again in 2012/13. The aim of the 2012/13 evaluation, as expressed by Tim, was to achieve a sense of how the board might further develop as a more engaged and valuable tool for the better running of the business.

Below is a summary of the process, topics, key findings and follow up actions of the evaluations undertaken in 2011/12 (which had not been formally completed at the date of publication of last year’s annual report) and in 2012/13.

  2011/12 Review   2012/13 Review
Performance evaluation process

Similar internal review processes were followed in 2011/12 and in 2012/13:

  • Led by the Chairman in collaboration with the board committee chairmen.
  • Based on one to one interviews by the Chairman with each director, the Company Secretary and the Group Director, Human Resources.
  • Discussion was prompted by a brief questionnaire and open ended questions.
  • The board followed the supporting principle, now included in the 2012 Code, that evaluation of the board should consider, amongst other things, its diversity, including gender diversity.
  • Having in each case consulted with the Chief Executive, the Chairman reported the findings of the 2011/12 review in writing to the board meeting in July 2012 and of the 2012/13 review in March 2013.
  • The board debated the findings and any lessons learned and agreed certain follow up actions and responsibilities as appropriate to address any issues.
  • The board also discussed the evaluation process itself and agreed that internal evaluation had in each case been appropriate and effective following the external evaluation in 2010/11.
Key discussion topics

The topics discussed, which the Chairman considered to be the principal areas of focus following the externally facilitated review in the previous year, included:

  • Strategy and strategy focus.
  • Monitoring financial and non-financial performance.
  • Stakeholder relationships.
  • Risk and uncertainties.
  • Executive remuneration.
  • Key themes for focus in 2012/13.
 

The key areas for discussion, which were determined by the Chairman to be the areas of most importance or value to the board following on from the prior evaluations, included:

  • Dynamics.
  • Organisation.
  • Committees.
  • Shareholder engagement.
  • Succession planning.
Key findings
Overview

Overall the picture was of a board which was considered useful and functional; respected and valued by the executives as a contributor to the way in which they manage the business; and open and clear in its discussions. While there were no new issues arising, there were useful nuances and pointers.

 

As the last evaluation was carried out less than a year previously, there were no major changes or new issues. However, certain themes emerged on which it was noted that further discussion could be useful.

Board process: number of board meetings

Regarded the reduction in the number of scheduled meetings to six per year as working well – but to be kept under review.

Follow up: Kept the number of meetings under review during the year.

 

Confirmed the pattern of meetings was working well but highlighted the continued importance of the non-executive directors being kept up to date on key developments. The board agreed in March 2013 that the number of meetings be kept at six per year unless otherwise required.

Board process: informal interaction

Suggested that board dinners (held on the day prior to board meetings) should be working sessions with specific topics and key issues for discussion.

Follow up: Specific topics and key issues were discussed at board dinners and key matters on the board agenda were discussed.

 

Agreed the continued use of board dinners to informally debate board matters as appropriate.

Board process: location of board meetings

Agreed that board meetings at UK manufacturing / R&D sites continued to be of benefit and suggested that an Asia Pacific (China) board visit and meeting should be held.

Follow up: Board meeting held at the Johnson Matthey Technology Centre at Sonning Common, UK in March 2013. Board meeting planned for Shanghai in October 2013

 

 

Quality of information

Agreed to review whether the Group Operating Report (GOR) could be further tailored to the needs of the non-executive directors.

Follow up: Further KPIs were added to the GOR in the year.

 

Agreed that the use and presentation of certain KPIs provided in the GOR would be further reviewed.

Board composition: mix of skills

Identified a skill ‘gap’, with no current non-executive directors having a technical background.

Follow up: Initiated non-executive recruitment with the specification including a technical background. Colin Matthews was appointed in October 2012.

 

Recognised a continued need to ensure that the non-executive directors collectively have the right expertise to challenge the executives, particularly on strategic issues, from a technology perspective, for example on our new business development activities.

Board composition: diversity

Identified board diversity (including international and gender diversity) as an important issue for focus.

Follow up: Draft diversity policy considered and agreed in March 2013. Search initiated for a further non-executive director based on an all female short list.

 

Recognised that continued focus by the company and by the board on these issues was needed, while ensuring that any changes fitted the needs of the company. Odile Desforges was appointed as a non-executive director with effect from 1st July 2013.

Board dynamics and relationships: challenge from non- executive directors

Recognised openness by executive directors to challenge and that further appropriate non-executive director challenge and debate would be welcomed and helpful.

Recognised continued need to consciously guard against the risk of complacency / ‘group think’.

 

Noted that the culture of the board was felt to be open, that proper discussion and dialogue was possible and that challenge from the non-executive directors was both constructively given and received (for example discussion and challenge concerning operational issues at the Salt Lake City refinery). Recognised, however, that more and focused non-executive director challenge, for example on strategy, would be appropriate.

Environment, health and safety (EHS)

Noted that further discussion was needed concerning EHS assurance to the board, particularly in respect of incident reporting and follow up.

Follow up: EHS reporting was discussed further in the year.

 

Noted improvements in this area but that follow up was required in relation to the nature of the reporting of EHS to the board.

Succession planning

Noted the need for continued board focus on top management succession and oversight of management development and succession throughout the group.

Follow up: Appointment in the year of a new Group Director, Human Resources.

 

Recognised that these issues were now given higher priority within the business. Noted a desire to further improve the board’s exposure over the year to the executive team to support succession planning, including through better targeted exposure to specific individuals.

Strategy

Stressed that rigour must be maintained in future strategy re-examination. Requested a strategic analysis for the board of the group’s trading position with the major car companies and of the related risks and opportunities.

Follow up: John Walker, Division Director, Emission Control Technologies presented to the board on this topic in January 2013.

 

Noted a desire to move the board, in terms of its debate and challenge on strategy, to a yet higher level at the forthcoming strategy discussions in Shanghai, China in October 2013.

Risk management

Recognised that while good progress had been made in the management of risk, there was still work required to embed new processes and to fully consider the board’s ‘appetite’ for risk.

Follow up: A new Head of Internal Audit and Risk was appointed in 2012.

 

Considered that improvements were being made as a result of continued focus in this area.

Audit Committee

No significant actions.

 

No significant actions.

MDRC

No significant actions.

 

No significant actions.

Nomination
Committee

Identified the need to ensure all non-executive directors were fully involved in all major issues affecting the composition of the board and its committees.

Follow up: Steps were taken to ensure the effectiveness of the Nomination Committee by ensuring that all non-executive directors are fully involved in discussions and decisions, and particularly are updated of developments between its meetings.

 

The review recognised that this was now happening.

Future Review

The board intends to undertake an externally facilitated evaluation process at least every three years. In the intervening years, the review will be led by the Chairman supported by the committee chairmen and the Company Secretary.

The board intends to conduct an externally facilitated review in 2013/14.

Review of the Chairman’s Performance

The non-executive directors recognise that the Chairman’s effectiveness is vital to that of the board. Led by Michael Roney, the Senior Independent Director, the non-executive directors are responsible for performance evaluation of the Chairman and for providing a fair and balanced assessment to shareholders.

In March 2013, the non-executive directors, led by Michael, met without Tim being present, to discuss Tim’s performance. In doing so they took into account the views of executive directors. Michael subsequently reported to the board the view of the non-executive directors that Tim continued to demonstrate effective leadership and that his performance and contribution continued to be strong. Feedback was positive on the organisation of board meetings and on how the board was kept informed of matters between board meetings.

During the year, Colin Matthews visited Johnson Matthey’s Technology Centre at Sonning Common, UK as part of his induction programme.

During the visit, Colin was introduced to Johnson Matthey’s scientists who described their R&D work.

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