Governance Policy

Group Policy

Chairman’s Introduction

The Board of Total Produce plc is firmly committed to business integrity, high ethical values and professionalism in all of its activities and operations. Our strategic priorities are all underpinned by a strong company culture of conducting business in an honest and ethical manner. The Board recognises the importance of maintaining the highest standards of corporate governance and that it is accountable to its shareholders in this regard. The Board has adopted the Quoted Companies Alliance (QCA) Corporate Governance Code, issued in April 2018. The Code is constructed around ten broad principles as explained in the Corporate Governance Statement as listed below.

PRINCIPLE 1: Establish a strategy and business model which promote long-term value for shareholders

The Company has maintained a consistent business model and strategy since the inception of the Group in 2006 which is described in our annual report on pages 8 to 9. The Group’s vision is to continue to develop our position as one of the world’s leading fresh produce companies. The Group’s ambition is to deliver long-term stakeholder value by leveraging our collective skills at a local level and by continued global growth by acquisition and through partnerships.

Key challenges to delivering our business model and strategy are identified and addressed through the risk management process. This is set out below in principle 4. The Group strives to constantly review and improve our processes in line with industry best practice and new regulatory requirements.

PRINCIPLE 2: Seek to understand and meet shareholder needs and expectations

Communication with shareholders is given a high priority by Total Produce plc. The Group recognises the importance of maintaining regular dialogue and meetings with shareholders to ensure the Group’s strategy and performance are understood. The Group communicates with its shareholders by way of the AGM combined with the Annual Report and the financial statements, preliminary and interim results announcements and presentations, which are disseminated to shareholders via our website. Stock Exchange announcements in respect of trading updates and corporate activity are similarly published on our website.

The contents of the Annual Report including the Operating Review, the Financial Review, the Directors’ Report and Financial Statements (in addition to Stock Exchange announcements, Preliminary Results Announcements and Interim Results Announcements) have been reviewed by the Board in order to ensure a balanced and clear presentation so that the Group’s position and results may be properly appreciated by shareholders.

The Board considers that the Annual Report and accounts taken as a whole is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s position, performance, business model and strategy.

In addition, the Group successfully engages with its existing and potential institutional shareholders through investor meetings, conference calls, analysts’ briefings and attending various broker conferences throughout the year and more particularly after the announcement of the preliminary and interim results. During the year there were 96 meetings, calls and presentations held with shareholders, including:

DateDetailActivity
January 2019Investor MeetingsDavy Conference, New York
March 20192018 Preliminary ResultsRoadshows in Dublin, London & Paris
March 2019Investor MeetingsGoodbody Conference, Paris
May 2019Trading Update and AGMConference calls and meetings
August 20192019 Interim ResultsRoadshows in London & Amsterdam
September 2019Investor MeetingsRoadshows in Dublin, London & Amsterdam
October 2019Brocker desk meetingsGoodbody Conference, Paris

The Executive Directors and Non-Executive Directors are kept informed on investor issues and the outcome of meetings with shareholders.

The Chairman is available to discuss strategy and governance with major shareholders. The Chairman and the Senior Independent Non-Executive Director are available to address concerns with shareholders which cannot be addressed through normal channels. In addition the Committee Chairs are available to discuss significant matters relating to their areas of responsibilities with shareholders.

A business presentation is provided at the Company’s AGM followed by a question and answer forum which offers shareholders the opportunity to interact with the Board. The AGM is valued by the Board as an occasion where individual shareholders’ views and suggestions can be noted and considered by the Directors.

Details of proxy voting are announced in respect of each resolution considered at the AGM or at any EGM and subsequently posted on our website www.totalproduce.com. The Company arranges for the Notice of the AGM and related papers to be sent to shareholders at least 20 clear working days in advance of the meeting. If 20% or more of the votes have been cast against a resolution the company will engage with significant shareholders to understand the reasons behind such votes.

Contact details for those responsible for shareholder liaison can be found here

PRINCIPLE 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success

In addition to our shareholders, our understanding of the nature of the responsibilities to the wider group of stakeholders is unambiguous. We understand that this engagement is a key part of the long-term success of the Group.

Principle 3 Shareholders

As a customer orientated organisation, the delivery of premium quality, safe, traceable produce to the consumer must always remain our primary concern. We acknowledge these responsibilities inherent in the pursuit of this goal, most notably to the emerging and developing nations from which we source, and more specifically to our local and global partners in production. These responsibilities extend beyond the growers and their people to the environment in which they operate. We are also committed to meeting our broader social and commercial responsibilities to our own employees and shareholders – as we are to our wider social obligations to the communities we serve across the global marketplace.

Local at heart, global by nature, Total Produce operates a decentralised structure. Local operations, experienced as they are in the dynamics of the local marketplace, identify the required resources and establish relationships specific to their own market and circumstance. In consultation with regional management, Group management assesses the collective requirements of our operations and seeks to leverage the cumulative strength of the broader Group, endeavouring to deliver synergies, efficiencies and ultimately a competitive advantage.

Customers, growers and suppliers

The fresh produce industry is very much people orientated. A commitment to effectively and transparently engage with stakeholders permeates throughout our organisation locally and internationally. Engagement with customers and growers in our industry, both formally and informally, is typically conducted on a daily basis.

Consumers

Co-ordinating the complete supply and demand chain is what we do. In doing so, our ambition is to satisfy the global fresh produce consumer, with whom we engage via a broad suite of marketing communications including digital media such as Facebook, Twitter, Instagram, YouTube and a variety of websites and Smartphone Apps.

Employees

We recognise too, our responsibility to engage with our own employees. Total Produce operates a relatively flat operational structure and employee engagement varies across our operations from informal open door policies where there is an open invitation to all employees to contribute to decision making, to more formalised structures in other markets.

Environmental, Social and Governance

The European Commission has published recommendations governing the recognition, measurement and disclosure of environmental issues in the annual reports of companies. Although the provisions of the recommendations are not binding on the Group in the conduct of its business, the Group recognises its social responsibility and endorses the growing trend towards environmental accountability.

The influence and impact of engagement and feedback from our broad stakeholder base is presently most obvious in our ongoing efforts to Reduce, Remove and Replace single-use plastic with compostable plastic packaging (see our Annual Report on pages 34 to 35 for more information on the work in this area).

The Group actively promotes best business practices and standards that seek to enhance the health, education and conditions of workers and their families and to universally encourage the use of sustainable farming methods by its suppliers. Total Produce is supportive of governmental efforts to combat slavery and human trafficking, as outlined in the Total Produce UK Modern Slavery Act Statement.

Our Sustainability report, set out on pages 20 to 45 of the Annual Report, includes examples of our work in these areas.

PRINCIPLE 4: Embed effective Risk Management, considering both opportunities and threats throughout the organisation

Risk management within Total Produce plc is co-ordinated by an Executive Risk Committee (‘ERC’ or the ‘Committee’) which directs the implementation of the process consistently throughout the Group. Responsibility for the identification and evaluation of financial, operational and compliance risks is delegated to senior management, which reports back to the Committee. The Committee meets during the year, as required, to identify, assess and manage risk. In this process it reviews the relevant findings, and makes recommendations. The Committee reports its findings and recommendations to the Audit Committee, which in turn reports to the Board. Please see the Risk and Risk Management Report on pages 14 to 19 of our Annual Report for further information including the principal risks faced by the Group.

PRINCIPLE 5: Maintain the Board as a well-functioning, balanced team led by the Chairman

Total Produce plc is led by a strong and effective Board of Directors and its members acknowledge their collective responsibility and legal obligation for defining the corporate governance arrangements. Ultimate responsibility for the approach to and quality of the Corporate Governance structures rests with the Chairman.

Total Produce considers that the structure of its Board is appropriate for the AIM and Euronext Growth markets on which its shares are traded, allowing for an efficient decision making process. All of the Directors have fiduciary responsibilities to shareholders.

In addition, the Executive Directors are responsible for the operation of the business while the Non-Executive Directors bring independent objective judgment to bear on Board decisions by constructively challenging management and helping to develop and execute the Group’s strategic objectives.

Each of the Executive Directors has extensive knowledge of the fresh produce industry, in addition to wide-ranging business skills and commercial acumen. This is complemented by the broader industry expertise and background of the Non-Executive Directors.

All of the Directors take their roles and responsibilities seriously and undertake their duties diligently. The Board as a whole is therefore well placed to address any major challenges for Total Produce should they arise. All of the Directors bring objective judgment to bear on issues of strategy, performance, resources (including key appointments) and standards of conduct.

Effective governance is fostered by the separation of the roles of the Executive Chairman and the Chief Executive, as this division of responsibilities at the head of the Group ensures a balance of power and authority. The Executive Chairman has overall responsibility for Group strategy and to see that the Group achieves a satisfactory return on investment for shareholders.

The Chairman oversees the operation and effectiveness of the Board and ensures appropriate interaction between it, executive management and the Company’s shareholders.

The Chief Executive is responsible for developing and delivering the Group’s strategy, and ensuring, along with the Finance Director, that the Directors receive accurate, timely and clear information, and is accountable for the overall performance and day-to-day management.

In light of the Group’s continued expansion, E I Hurley and H F Nolan were appointed to the Board as Non-Executive Directors during 2019.

As detailed in our Chairman’s Corporate Governance Introduction, committee membership was reviewed during 2019 and changes adopted Each of the Non-Executive Directors bring considerable business experience and independent challenge to the Board’s deliberations and an unfettered perspective to their advisory and monitoring roles.

The Board considers that the independent Non-Executive Directors are sufficient to maintain the balance between Executive Directors and Non-Executive Directors on the Board. Following the Board changes announced in May 2019, which will be effective 31 March 2020, the Board will be made up of six independent Non-Executive Directors and three Executive Directors.The terms and conditions relating to the appointment of the Non-Executive Directors are available for inspection at Charles McCann Building, Rampart Road, Dundalk, Co. Louth, during normal office hours.

Independence of Non-Executive Directors

The Board has determined all of the Non-Executive Directors to be independent. In arriving at its conclusion, the Board considered many factors including, inter alia, whether any of the Non-Executive Directors:

  • has been an employee of the Group within the last five years;
  • has, or had within the last three years, a material business relationship with the Group;
  • receives remuneration from the Group other than a director’s fee;
  • has close family ties with any of the Group’s direct advisers, Directors or senior employees;
  • holds cross-directorships or has significant links with other Directors through involvement in other companies or bodies;
  • represents a significant shareholder; or
  • has served on the board for more than nine years from the date of their first election

 

R B Hynes was first elected to the Board in May 2007. The Board has assessed and concluded that notwithstanding her tenure on the Board, and having regard to her knowledge and experience, that she is independent of management and that she discharges her duties in an independent manner.

Operation of the Board

The Board met regularly throughout the financial year with 7 scheduled Board meetings, in addition to which meetings are called as and when warranted by matters arising. Attendance at scheduled Board and Committee meetings during the year was as follows:

BoardAudit CommitteeCompensation Committee Nomination Committee
Nomination Committee 7432
C P McCann 72
C P McCann 72
F J Davis 72
J F Gernon 6
E L Hurley 74
R B Hynes 613
J J Kennedy 7231
M J Meghen 711
H F Nolan4*2
S J Taaffe742
K E Toland71

* Helen Nolan was appointed to the Board as a Non-Executive Director on 1 July 2019.

All Directors attended all Committee meetings held during their period as members of their respective committees.

C P McCann, J F Gernon and R P Byrne attended Compensation Committee meetings as required. R P Byrne, F J Davis and J F Gernon attended Audit Committee meetings when required.

Additional Board or Committee meetings were held to issue formal approvals, or deal with other matters of a routine or administrative nature.

Under their terms of appointment, Non-Executive Directors provide confirmation, on an annual basis, that any other commitments do not impact on their role with Total Produce.

Board papers and key information are shared prior to each meeting to allow sufficient time for the Directors to be briefed on the matters thus enabling them to actively contribute to Board and Committee meetings.

The Chairman held meetings with the Non-Executive Directors without the Executives present. There is interaction, as necessary, between senior executive management and Board members.

The Board has identified and formally adopted a schedule of key matters that are reserved for its decision, including the annual budgets, interim and preliminary results announcements, the Annual Report, interim and final dividends, the appointment or removal of Directors and the Company Secretary, circulars to shareholders, Group treasury policies and capital expenditures and acquisitions in excess of €20m.

Certain other matters are delegated to Board Committees, the details of which are set out in principle 9, see below.

PRINCIPLE 6: Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities

Total Produce plc is led by a strong and effective Board of Directors. Please click here for information on our directors including the relevant experience, skills and capabilities that each Director brings to the Board. In addition, each of the Directors are diligent in their approach and draw on their personal experience and knowledge to address all of the matters that require attention at Board and Committee meetings. Both individually and as a group they strive to create shareholder value whilst also taking into account the wider stakeholder group.

Board members are selected (refer to the Nomination Committee terms of reference below) for their relevant experience, and appropriate training is available to them whenever necessary. On an annual basis Directors confirm to the Chairman that their training and development needs have been met. Directors receive a full, formal and tailored induction into the Group’s activities and into the operation and procedures of the Board on their appointment.

R B Hynes is the Senior Independent Non-Executive Director, with the primary role of supporting the Group Chairman on all governance related matters. She is available to shareholders, and other stakeholders, if they have concerns which they have been unable to resolve through the normal channels of Chairman, Chief Executive Officer or other Executive Directors.

The Company has access to external professional advisors including, but not limited to, Actuaries, Auditors, Legal Advisors, Tax Advisors and Accountants available to them to provide independent advice on all significant matters which arise during the course of the year.

There is an agreed Board procedure facilitating Directors to take independent professional advice, in the furtherance of their duties, at the Company’s expense. Each Board member has access to the impartial advice and services of the Company Secretary, who is responsible to the Board for ensuring that appropriate procedures are followed. The appointment and removal of the Company Secretary is a matter for the Board as a whole. The Company has put in place a Directors’ and Officers’ liability insurance policy.

The Constitution of the Company requires that one-third of the Board must, by rotation, seek re-election at the AGM each year.

PRINCIPLE 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

On an annual basis, the Board evaluates its own performance and that of its Committees and of each individual Director. The Board considers that the objectivity brought to bear by the Non-Executive Directors combined with the experience of the Executive Directors is key to ensuring that the evaluation is robust.

In assessing the performance of the Board in 2019, the Directors considered such matters as the appropriateness of its composition, its effectiveness in developing Group strategy, its contribution to managing the Group’s business and operational risks, its response to developing issues and its communications with the Group’s stakeholders. The evaluation procedures are reviewed each year to ensure they are appropriate. The next Board evaluation will take place before the end of 2020.

The Nomination Committee regularly assesses the Board’s composition, Board members and the various Board roles. The Committee keeps the Group’s succession plans under continuous review.

The Committee and the Board understand the importance of ensuring diversity including gender and the key role a diversified Board plays in ensuring effectiveness. The Board takes diversity into consideration whilst ensuring that the best people are nominated to all appointments, and suitable candidates are selected on the basis of relevant experience, backgrounds, skills and knowledge and insight, having due regard to the benefits of Board diversity.

In assessing the performance of the committees of the Board, the Directors considered the appropriateness of their composition and terms of reference, their effectiveness in fulfilling their roles and their interaction with the Board.

The assessment of the performance of individual Directors included consideration of their contribution to the effective functioning of the Board, the appropriateness of their knowledge, skill and experience levels and their commitment to their roles. In addition, the Non-Executive Directors meet without the Chairman annually to appraise the effectiveness of the Chairman.

The Chairman summarised the outcome of these evaluation processes and reported them to the Board. The Board also concluded that the procedures were considered adequate and no amendments to them were recommended. The Board concluded that the Board, the Directors and its Committees were effective in the performance of their duties.

PRINCIPLE 8: Promote a Corporate culture that is based on ethical values and behaviours

Principle 8 values diagram

In Total Produce, we take great pride in our reputation as a trustworthy partner embracing our responsibilities in the pursuit of best practice. The Board ensures that the Company has the means to determine that ethical values and behaviours are recognised and respected. The foundations upon which this reputation has been built are to be found in the set of values which define the manner in which we conduct our business. Please see our Sustainability Report on pages 20 to 45 of our Annual Report.

Total Produce endeavours to operate its business to very high standards in all respects, and to conduct its business in an honest and ethical manner. It is the policy of Total Produce to carry on its business in compliance with the law, including, but not limited to, those laws relating to bribery and anti-corruption. The Group requires its employees to comply with the law, and to act professionally, fairly and with integrity. Good Faith reporting procedures have been established to allow staff to report concerns. Key internal structures such as the risk management procedures, Audit Committee and internal audit provide assurance that these values are being recognised and valued.

Total Produce seeks to promote alignment with the Company’s corporate culture throughout the Group. We preserve and augment our culture by placing ‘cultural fit’ at the very heart of our criteria when assessing new acquisitions and partnerships, in order to bring together like-minded businesses in pursuit of our common goals.

PRINCIPLE 9: Maintain governance structures and processes that are fit for purpose and support good decision-making

The Board believes the combination of Executive and Non-Executive Directors leads to effective Corporate Governance Structures. Additional assurance is provided through the Audit Committee, Compensation Committee and Nomination Committee. The Board believe the current structures in place are appropriate, given the Company’s size and the markets on which its shares are traded, but continue to review corporate governance arrangements on an ongoing basis.

BOARD COMMITTEES

There are three principal Board committees, the Audit, the Compensation and the Nomination Committees.

Audit Committee

Please click on the link for further details of the composition, terms of reference and activities of the Audit Committee.

Compensation Committee

Please click on the link for further details of the composition, terms of reference and activities of the Compensation Committee.

Nomination Committee

Please click on the link for further details of the composition, terms of reference and activities of the Nomination Committee.

PRINCIPLE 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

As previously set out under principle 2 the Board consider Shareholder Communication to be a high priority. The Company website is an important tool in providing both new and historical reports.

The outcome of all votes cast at shareholder meetings are announced at the time and the outcome of all votes at the AGM will be recorded here

Each year our Board Committees detail the work undertaken during the year. To view these reports for 2019 please click on the links below:

Audit Committee Report

Compensation Committee Report

Nomination Committee Report

Historical reports, presentations and news can be found through the following links: