Directors’ statement of compliance with duty to promote the success of the company.
SECTION 172(1) STATEMENT
The revised UK Corporate Governance Code was published in July 2018 and applies to accounting periods beginning on or after January 1, 2019.
The Companies (Miscellaneous Reporting) Regulations 2018 require Directors to explain how they
considered the interests of key stakeholders and the broader matters set out in section 172(1) (A) to
(F) of the Companies Act 2006 (‘S172’) when performing their duty to promote the success of the
Company under S172.
This S172 statement, explains how the Directors: a) have engaged with employees, suppliers,
customers, and others; and b) have had regard to employee interests, the need to foster the
Company’s business relationships with suppliers, customers and others, and the effect of that, on
the principal decisions taken by the Company during the financial year.
The S172 statement focuses on matters of strategic importance to the Company, and the level of
information disclosed is consistent with the size and the complexity of the business.
General confirmation of Directors’ duties
The Board has a framework for determining the matters within its remit and certain financial and
strategic thresholds have been determined to identify matters requiring Board consideration and
approval. When making decisions, each Director ensures that he/she acts in the way he/she
considers, in good faith and that would most likely promote the Company’s success for the benefit of
its shareholders, and in doing so have regard (among other matters) to:
S172(1) (A) “The likely consequences of any decision in the long term”
The Company is part of RPM International Inc. (“RPM”) group of companies, which is a global group
of companies, the ultimate parent of which is listed on the New York Stock Exchange, and all of the
Company’s shares are held internally within the RPM group. The Company has adopted the RPM
Code of Conduct, The Values and Expectations of 168, which encourages the RPM core principles of
integrity, commitment, responsible entrepreneurship and moral courage are the cornerstone for
each decision made in the short or long term. The Directors understand the business and the
evolving environment in which it operates, including the related risks and challenges. Based on the
Company's purpose to be a leading manufacturer of paint products, the strategy set by the Board
includes continued strengthening of the Company’s position as a leading supplier of paint products,
while keeping the core principles, safety and social responsibility fundamental to day-to-day
S172(1) (B) “The interests of the Company’s employees”
The Directors recognise that employees are fundamental and instrumental to the success of the
business which is dependent on attracting, retaining, and motivating a diverse group of talented and
qualified employees. With the intent of ensuring that it remains a responsible employer (including
with respect to pay, benefits, health and safety and the workplace environment), the Directors
factor the implications of decisions on employees where relevant and feasible. Employee
engagement, organisational culture and attracting and retaining talent is key to the business, as is
compliance with applicable employment legislation. Employee satisfaction is measured through
employee surveys, the results of which are reviewed in detail and appropriately addressed when
required. A one to one/appraisal program is also part of the Company’s culture. Greater emphasis has been placed on employee welfare and in September 2020 the Board rolled out a cash-plan
health scheme to all permanent employees which is fully subsidised by the Company.
S172(1) (C) “The need to foster the Company’s business relationships with suppliers, customers and others”
Deploying the Company’s strategy requires strong and mutually beneficial relationships with
suppliers and customers. The Company seeks the promotion and application of sound corporate
governance principles in such relationships, which are prescribed in standards such as the
Company’s Code of Conduct, Supplier Code of Conduct, Distributors and Applicators Code of
Conduct and Modern Slavery requirements. The Company assesses its customer base to ensure
compliance with applicable laws in relation to the sales of its products, including those related to
Moreover, the Directors receive information updates on a variety of topics that indicate and inform
how customers and suppliers have been vetted and engaged. These can range from information
regarding contract management, business strategies, projects, and investments.
The Board will often invite customers and suppliers to visit the Company facilities, which enhances
relationships by having open dialogue on future product concepts or any challenges that need
working through. Field sales employees are key to gathering customer feedback, which in turn
provides the Company with greater understanding of current performance levels.
S172(1) (D) “The impact of the Company’s operations on the community and the environment”
In conducting our business, the Company seeks to minimise waste, reduce our impact on the
environment and reduce the use of energy and resources and is accredited to ISO14001
Environmental Management Systems and regularly reports on safety and environmental
performance matters to the Board and the RPM group. The Company aims to meet the demand for
its products in ways which are economically, environmentally, and socially responsible. Employees
are provided with the option of having a salary deduction paid and administered by the Company
direct to a nominated charity.
S172(1) (E) “The desirability of the Company maintaining a reputation for high standards of
The Board periodically reviews and approves business conduct frameworks, such as standards of
conduct, policies and procedures related thereto, and ensures personnel participate in training
covering topics regarding health and safety, bribery and corruption, data protection, cyber security
and modern slavery. All personnel have access to the RPM Compliance Hotline, as well as the RPM
reporting platform through which any compliance or ethics issues can be discussed or reported. The
Company also performs due diligence before entering into new supplier or distributor agreements.
These measures help to ensure high standards of business conduct are maintained.
S172(1) (F) “The need to act fairly as between shareholders of the Company”
After weighing up all relevant factors, the Directors consider which course of action best enables
delivery of the Company’s strategy through the long-term, taking into consideration the impact on
the Company’s stakeholders.
Below, we outline some of the principal decisions made by the Board over the year, explain how the
Directors have engaged with, or in relation to, the different key shareholders and how shareholders’
interests were considered as part of the decision-making process.
As outlined in the principle risks and uncertainties section of the accounts, the global commodities
supply chain is increasingly volatile and as a business the Company has experienced significant raw
material, labour and energy cost pressures. The Board discussed ways in which the impact of the
inflation could be mitigated within the Company considering the impact on customers, employees
and wider stakeholders. With prices continuing to rise significantly the Board made the decision to
implement price increases to all customers within the financial year.
The standards set by the Board mandate acceptable requirements and behaviours with respect to
the activities of its Directors, employees and others associated with the Company. The Board
regularly reviews its governance procedures and provides oversight of its management team with
respect to any delegated duties, ensuring any consequences of delegation have been considered and
that the risks in doing so are reasonable and appropriate.