Corporate Governance

Hotel Chocolat

 

Hotel Chocolat Group plc

Corporate Governance Statement

Approved by the Board on 11th October 2023

 

An introduction from our Chair

 

The Hotel Chocolat Board is fully committed to strong governance of the business within a culture that recognises and delivers on our responsibilities to all the Group’s stakeholders, including shareholders, customers, suppliers, colleagues and the wider community. In this section of our report, we have set out our approach to governance and provided further information on how the Board and its committees operate.

 

The Board has adopted, and believes that it complies with, all of the principles of The QCA Corporate Governance Code (QCA Code). The corporate governance framework which the Group operates, including Board leadership and effectiveness, Board remuneration and internal control, is based upon practices which the Board believes are proportional to the size, risks, complexity and operations of the business and reflective of the Group’s values. Our governance framework continues to evolve as the business and its operations and ambitions develop.

 

Stephen Alexander, Chair

 

Governance Principles Compliant Explanation Further Reading
Deliver Growth
Establish a strategy and business model to promote long-term value for shareholders. ✓ The strategy for the Group is decided by the Board and progress towards delivering objectives is actively tracked and debated by the Directors. See page 8 of the 2023 Report & Accounts to find out more about our strategy and business model, and page 16 for review of the business performance against the strategy set.
Seek to understand and meet shareholder needs and expectations. ✓ Regular meetings are held with investors and analysts and the Board regularly considers how decisions could impact, and be received by, shareholders. Our AGM provides an opportunity for all shareholders to hear from and ask questions of our Directors and we have extended opportunities for dialogue with retail shareholders through arrangement of a separate management presentation of the full years results aimed at private investors. See page 54 of the 2023 Report & Accounts for more information on our relations with shareholders. We also publish information relevant to shareholders on our website www. hotelchocolat.com/uk/investor-relations.html including all regulatory alerts.
Take into account wider stakeholder and social responsibilities and their implications for long-term success. ✓ The Board has identified the main stakeholders in the business and regularly discusses how employees, suppliers, customers, and others in the community and the environment might be affected by decisions and developments in the business. We take our social responsibilities seriously and constantly strive to enhance our environmental and social credentials. See pages 40 to 43 of the 2023 Report & Accounts to learn more about how we collate feedback from our stakeholders and take account of their needs and priorities and our responsibility to the environment. These actions that the Board have taken in response to this feedback have been included on page 54.
Embed effective risk management, considering both opportunities and threats, throughout the organisation. ✓ Both the Board and Audit Committee regularly review risks, including new threats, and the processes to mitigate and contain them. Whilst the Board is responsible for risk, our culture seeks to empower all colleagues to manage risk effectively. We have summarised the main risks faced by the business and how they are being managed on pages 24 and 25 of the 2023 Report & Accounts. Further details about our approach to risk management and internal controls are provided in the Audit Committee report on pages 60 to 63 of the 2023 Report & Accounts.
Brand Trust
Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders ✓ We communicate with a range of stakeholders. Employee concerns and issues are represented in the boardroom by Sophie Tomkins who, as an independent Non- executive Director, has been given special responsibility in this respect. We also actively engage with our cacao growers and other suppliers and with Hotel Chocolat guests in store and online. Further information on our dialogue with stakeholders and shareholders can be found in our sustainability report on pages 26 to 39 of the 2023 Report and Accounts and in our corporate governance statement on pages 48 to 54. We also publish information relevant to our wider stakeholders on our website www. hotelchocolat.com/uk/investor-relations.html including all regulatory news alerts.
Establish a strategy and business model to promote long-term value for shareholders. ✓ The strategy for the Group is decided by the Board and progress towards delivering objectives is actively tracked and debated by the Directors. See page 8 of the 2023 Report & Accounts to find out more about our strategy and business model, and page 16 for review of the business performance against the strategy set.
Maintain a dynamic management framework
Maintain the Board as a well-functioning, balanced team led by the Chair ✓ Our Board works well together as a team exploiting the deep experience of strategy, retail, international and financial matters. Meetings are characterised by lively debate and active idea generation and management are rigorously challenged and held to account. Our Directors and details of their individual roles, backgrounds and experience are provided on pages 46 and 47 of the 2023 Report & Accounts.
Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities. ✓ We assess the adequacy of the Board’s collective skills and experience as part of the annual Board effectiveness review. Directors’ individual development needs are discussed annually with the Chair. Further information about how Directors keep their knowledge and skills up-to-date is provided on page 52 of the 2023 Report & Accounts
Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement. ✓ An annual Board review is undertaken to consider the Board’s effectiveness, track improvements since the previous year and plan additional actions. The criteria assessed as part of the Board evaluation and the outcomes of that process are summarised on page 53 of the 2023 Report & Accounts.
Promote a corporate culture that is based on ethical values and behaviours. ✓ The Hotel Chocolat values of authenticity, originality, and ethics have always underpinned, and are evident in, everything we do. Examples include our Gentle Farming Programme, Engaged Ethics Programme sustainability commitments, workforce engagement and community activities. Our sustainability report on pages 26 to 39 of the 2023 Report & Accounts illustrates some of the ways in which our corporate culture positively influences what we do.
Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board. ✓ Our governance structures are underpinned by the matters which the Board reserves to itself. A scheme of delegation, including established committees, an annual agenda plan, regular business deep-dives and good information flows all contribute to the Board making well-informed and properly debated decisions. More detailed information about our governance structures and processes can be found in our corporate governance statement on pages 48 to 54 of the 2023 Report & Accounts and the reports of the Audit Committee and Remuneration Committee on pages 60 to 66 of the 2023 Report & Accounts.
Ensure the Audit Committee obtains assurance on effective risk management and related controls. ✓ The Audit Committee reviews the risk register and liaises with the Board, management and the Group’s auditor to devise a programme of assurance, including key matters for ‘deep-dive’ reviews by the Board. See the Audit Committee report on page 60 of the 2023 Report & Accounts.
Ensure Director skillsets are kept up to date. ✓ Directors are expected to undertake necessary personal development and appropriate external network, with additional support and input from the company secretary and Nomad. See Director biographies on pages 46 and 47 of the 2023 Report & Accounts and corporate governance statement on pages 48 to 54.