Board of Directors image

Dear Shareholder,

The Board’s role is to provide leadership to the Group to assist it in achieving its strategic aims, and to promote the long-term success of the Group for the benefit of its shareholders and those with whom we connect. For an iconic brand like Burberry with a 158-year-heritage guided by the values – to protect, explore and inspire – we believe that this is an important responsibility.

The Board’s role is particularly important during times of significant change. In October, Angela Ahrendts informed the Board that she had decided to step down as Chief Executive Officer and the Board unanimously agreed that Christopher Bailey would be her successor as Chief Creative and Chief Executive Officer. Christopher assumed this role on 1 May. I want to thank Angela personally for building a great culture and leading the Company through its transformation over the last eight years.

The appointment of Christopher as Chief Creative and Chief Executive Officer is a natural progression. Christopher has been at Burberry since 2001 and has overseen all consumer-facing activities including products, creative marketing, store design, consumer technology and digital innovation. Christopher will continue to create and drive the vision for the Company closely supported by an outstanding and experienced senior management team.

The Board is also in a period of evolution as it has been focused on how to build on its relevant skills and competencies for the future in accordance with its succession plan. Good progress has been made on this during the year, with the announcement of the appointment of three new non-executive directors. Longer-serving Board members will step down as appropriate but it is important to ensure stability while new Board members settle into their roles. The Board will continue to focus on its succession plan during the coming year.

I am delighted to welcome Matthew Key and Jeremy Darroch who have joined the Board as non-executive directors during the year, and Carolyn McCall who will join the Board as a non-executive director on 1 September 2014. These appointments bring additional mobile, digital, media, financial, consumer travel and general management experience to the Board, reflecting the Group’s strategy. Carol Fairweather joined the Board in July and assumed the role of Chief Financial Officer on Stacey Cartwright’s departure, and John Smith is now well established as the Group’s Chief Operating Officer.

The 2013/14 Board effectiveness review confirmed that the Board had performed well, maintaining its business focus despite a number of key challenges during the year. As the Board has been in transition during the year, the Board will be conducting an externally facilitated review during 2014/15 and will report its findings next year.

The year ahead will continue to be impacted by a challenging external environment and significant regulatory changes to the rules on directors’ remuneration and narrative reporting. Burberry continues to experience growth and the evolution of its business. The Board and I will endeavour to ensure that we continue to grow in a long-term and sustainable way for our shareholders and wider stakeholders, and to provide appropriate support to ensure a smooth management transition and Board evolution.

Sir John Peace

Chairman



Governance

The Board is collectively responsible for promoting Burberry's long-term success, for setting its strategic aims and ensuring a framework of prudent and effective controls.

This report sets out the Board’s approach and work during the financial year 2013/14 and, together with the Directors’ Remuneration Report, includes details of how the Company has applied and complied with the principles and provisions of the UK Corporate Governance Code ('the Code'). The directors consider that the Company has complied with the provisions of the Code throughout the year, with the exception of conducting an externally facilitated board effectiveness review. The rationale for not conducting an externally facilitated review is set out on page 77 on the Annual Report.

Our Board

The Board currently consists of ten members – the Chairman, the Chief Creative and Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer and six independent non-executive directors. Christopher Bailey was appointed as Chief Creative and Chief Executive Officer and as a director on 1 May 2014 following Angela Ahrendts stepping down on 30 April 2014. A list of directors and their biographies is set out on the Directors and Management page.

The Chairman, Sir John Peace, has led the Board as Chairman since 2002. The Chairman is responsible for leading and managing the business of the Board and ensuring its effectiveness. He sets the agenda for Board discussions and ensures that the Board receives accurate, timely and clear information, particularly in relation to the Company’s performance. He promotes a culture of openness and trust which allows for debate and constructive challenge of the executive directors.

The Chairman works collaboratively with the Chief Creative and Chief Executive Officer, Christopher Bailey, in setting the Board agenda and ensuring any actions agreed by the Board are effectively implemented.

During the year, the Chairman maintained regular contact and met with the Senior Independent Director and other non-executive directors outside of formal board meetings. The Chairman also met with the non-executive directors without the executive directors being present.

The Chairman is also responsible to shareholders for the Company’s performance and has regular discussions with the Company’s main institutional shareholders.

The major commitments of the Chairman are detailed in his biography and have not changed during the year.

The Senior Independent Director, Philip Bowman, supports the Chairman in his role and leads the non-executive directors in the oversight of the Chairman. The Senior Independent Director is also available as an additional point of contact for shareholders.

The Non-Executive Directors provide strong experience and independent support to the Board. They assist in the development of strategy and provide constructive challenge and support to management.

The Chief Creative and Chief Executive Officer, Christopher Bailey, is responsible for the management of the business, developing the Group’s strategic direction for consideration and approval by the Board and implementing the agreed strategy. The Chief Creative and Chief Executive Officer is assisted by members of his senior management team who meet regularly. Members of the senior management team are identified on page 107 of the Annual Report.

The Company Secretary, Catherine Sukmonowski, is responsible for supporting the Chairman in the delivery of the corporate governance agenda.

Role of the Board

Burberry continues to experience growth and evolution of its business while in a period of transition in its leadership. It is the responsibility of the Board to ensure we continue to grow in a controlled and sustainable way for our shareholders and wider stakeholders, and to provide appropriate support to ensure a smooth management transition and Board evolution.

The Board is ultimately responsible for promoting the long-term success of the Group. The Board leads and provides direction for management by setting strategy and overseeing its implementation by management. The Board is also responsible for oversight of the Group’s systems of governance, internal control and risk management.

Specific key decisions and matters have been reserved for approval by the Board. These include decisions on the Group’s strategy, the annual budget and operating plans, major capital expenditure and transactions, financial results, the dividend, the approval of risk appetite and other governance issues. The matters reserved for the Board’s decision are set out in writing and available on this website.

Role of the Board Committees

The Board is supported in its activities by a number of committees including the following principal committees: Audit Committee; Nomination Committee; and Remuneration Committee. All the non-executive directors are members
of each of the principal committees of the Board. The Board believes this to be appropriate as the Board remains relatively small and ensures the linkage between the work of the Committees and the Board.

The terms of reference of each of the principal committees can be viewed below:

Audit Committee

Nomination Committee

Remuneration Committee

The Committees, if they consider it necessary, can engage third-party consultants and independent professional advisors and can call upon other resources of the Group to assist them in discharging their respective responsibilities.

In addition to the relevant committee members and the Company Secretary, external advisors and, on occasion, other directors and members of the senior management team attend committee meetings but only at the invitation of the Chairmen of the Committees.

You can view the Audit Committee report here, Nomination Committee here and the Remuneration Committee report can be downloaded here.

Corporate Governance Hierarchy


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