Nominations committee

To view the Terms of Reference for this committee, please click here


The role of the Nominations Committee is to set the people agenda of the business. Ensuring that there is a fair, orderly succession for appointments to the Board is its primary purpose and therefore, by design and by default, the Nominations Committee plays a vital role in influencing the culture, strategy and long-term success of the business by making recommendations on appointment to the Board.

This is never more true than when considering an appointment for a new Chief Executive Officer. Succession planning for a high-performing founder CEO presents some unique and interesting challenges given that it is a situation which occurs so infrequently. We have provided more detail about the CEO succession process in the case study on page 68 of the 2017 Annual Report but needless to say, recruitment of our new CEO dominated the agenda for the Nominations Committee during 2017.

That said, during 2017 the Nominations Committee also managed to discharge its recurring duties addressing big issues such as boardroom diversity and non-executive director succession planning. On issues such as diversity, it is imperative that the Board (facilitated by the work of the Nominations Committee) sets the tone for the rest of the business and during 2018 the Nominations Committee will dedicate more time to consideration of diversity (in all its guises) across the business as a whole. Our priority will always be to ensure a diversity of perspective but we must also recognise the wider societal issues and responsibilities which come with being a responsible employer.

The ongoing effectiveness of the Board is also important during periods of transition in the top team. We engaged Independent Board Evaluation (IBE) to undertake our external Board effectiveness review in 2016 which was undertaken shortly after I had assumed the role of Chairman of the Board. In order to ensure a continuum from the external process, we asked IBE to support our internal review process in 2017 which was undertaken by our Senior Independent Director. Ensuring that we fully revisited the observations and recommendations from the external effectiveness evaluation in 2016 helped ensure that our 2017 effectiveness review was more a iterative process than in previous years. More detail about the methodology and recommendations can be found later in the report.


The Committee meets at least twice a year and at any other such time as the Chairman of the Committee requires. Only the attendance of members of this committee is shown in the table below, although other Directors, where appropriate, have often also attended at the invitation of the Committee Chair.

In compliance with the UK Corporate Governance Code and the Committee's terms of reference, during the year the Nominations Committee consisted wholly of independent Non-Executive Directors and the Chairman of the Board. Subject to successful annual re-election to the Board, appointments to the Nominations Committee are for a period of three years, which may be extended by the Committee provided the Director remains independent.

Meeting Attendance


Role of the Nominations committee

  • Regularly reviews the structure, size and composition (including the skills, knowledge, experience and diversity) required of the Board compared to its current position and makes recommendations to the Board with regard to any changes
  • Gives full consideration to succession planning for Directors and certain other senior executives in the course of its work, taking into account the challenges and opportunities facing the Company, and what skills and expertise are therefore needed on the Board in the future
  • Formulates plans for succession for both Executive and Non-Executive Directors and in particular for the key roles of Chairman and Chief Executive Officer Identifies and nominates candidates to fill Board vacancies as and when they arise, for the approval of the Board
  • As part of the process for nominating candidates for appointment, obtains details of and reviews any interests the candidate may have which conflict or may conflict with the interests of the Company
  • Keeps under review the leadership needs of the organisation, both Executive and Non-Executive, with a view to ensuring the continued ability of the organisation to compete effectively in the marketplace
  • Makes recommendations to the Board regarding the membership of the Audit, Nominations and Remuneration Committees, and any other Board Committees as appropriate, in consultation with the chair of each committee
  • Recommends, or not, the re-appointment of any Non-Executive Director at the conclusion of their specified term of office and the re-election by shareholders of any Director under the annual re-election provisions, in each case having given due regard to their performance and ability to continue to contribute to the Board in the light of the knowledge, skills and experience required
  • Considering any matters relating to the continuation in office of any Director at any time including the suspension or termination of service of an Executive Director as an employee of the Company subject to the provisions of the law and their service contract

Supporting actions, processes and information:


An effective Nominations Committee will establish a stable leadership framework. Part of its work must also be to proactively manage change to reassess the future leadership needs of the Company.

As detailed in the remainder of this report and in the case study on page 68 of the 2017 Annual Report, the Nominations Committee has successfully managed a Board succession programme which has ensured a smooth introduction of both Executive and Non-Executive Directors to the Board.

The Nominations Committee remains committed to a programme of reviewing and refreshing the Non-Executive membership of the Board to ensure there is sufficient balance between the introduction of fresh perspectives and the maintenance of continuity and stability. Where possible, the Board will ensure a phased transition of Non-Executives in order to avoid wholesale changes to the make-up of the Board (see chart to the right for tenures of the Non-Executive Directors).

Non-Executive Tenure as at 30 December 2017

Non-Executive Tenure as at 30 December 2017

At the Nominations Committee meeting in February 2017, the Committee recommended to the Board that it appoint Debbie White as Non-Executive Director. From a strong field of candidates, it was felt that Debbie provided the best diversity of perspective and cultural fit to help with the leadership of the business in the long-term.

After careful consideration, the Committee also recommended to the Board that Mark Allen should be reappointed as Non-Executive Director with effect from May 2017. Having served on the Board for six years, Mark's appointment was agreed by the Board and extended for a further three years.

The Nominations Committee also considers Executive Director succession as part of its routine succession planning process and during 2017 it recommended that Andrew Livingston be appointed as successor to Matthew Ingle as Chief Executive Officer following the latter's retirement in 2018. Further information about the recruitment process can be found in the case study on page 68 of the 2017 Annual Report.

Senior Independent Director Succession

Tiffany Hall was appointed Senior Independent Director in April 2017. She replaced Michael Wemms who had served as Senior Independent Director since November 2006. Michael undertook a number effectiveness evaluations on behalf of the Board and was responsible for overseeing the Chairman succession process during 2015.


Boardroom Diversity

The Board recognises the importance of ensuring that there is diversity of perspective, background and approach in its management team and on its Board. Since the business was established in 1995, it has sought to enable individuals to progress within the organisation regardless of age, gender, background or formal qualifications.

We believe that it is in the interests of the business and of its shareholders for us to build a stable, cohesive and representative Board. Whilst the setting of targets on particular aspects of diversity may be relevant in many cases, we feel that this could be given inappropriate focus within the context of a smaller board, resulting in the possible overlooking of certain wellqualified candidates.

The Nominations Committee will continue to seek diversity of mindset as well as of gender, race, and background when considering new appointments in the period to 2019, and it will continue to review this policy on an annual basis to ensure it remains appropriate. More widely, we are committed to developing a long-term pipeline of executive talent that reflects the diversity of Howdens' business and its stakeholders. As at 30 December 2017, 25% of Board members were women. Both of the Executive Directors were male.

Group diversity policy

The Group promotes the importance of diversity and adopts an Equal Opportunities Policy under which training and career development opportunities are available to all employees, regardless of gender, religion or race.

The Group is committed to meeting the code of practice on the employment of disabled people and full and fair consideration is given to disabled applicants for employment. It aims to do all that is practicable to meet its responsibility towards the employment and training of disabled people. The Group welcomes, and considers fully, applications by disabled persons, having regard to their particular aptitudes and abilities. It is also the Group's policy to retain employees who may become disabled while in service and to provide appropriate training.

Group Gender Diversity Statistics

The Nominations Committee reviews the gender statistics shown in the chart to the left against Office for National Statistics (ONS) averages each year and, in relation to gender diversity in the Board, against other FTSE250 company averages. Similarly, where other data is available, this is presented to the Committee in order to determine whether there are any implicit diversity issues.

Group Gender Diversity (as at 30 December 2017)

Group Gender Diversity (as at 30 December 2017)

* including Executive Directors

Case Study: CEO Succession

The Nominations Committee has considered Executive Director succession as part of its routine succession planning for a number of years. In 2016, Matthew Ingle indicated that he would consider retirement conditional upon the Board identifying a suitable successor as CEO. The Nominations Committee therefore agreed to identify, at the appropriate time, an individual who, should it become necessary, would ultimately be able to undertake the role of CEO of Howdens.

The Nominations Committee, supported by the Interim Group HR Director and the Company Secretary, agreed:

  • A specification for the role and responsibilities for a new CEO (alongside the roles and responsibilities of the Chairman and Senior Independent Director);
  • To appoint Zygos as the external search partner*; and
  • An interview and selection process.

It was also agreed that the Company Secretary was responsible for ensuring that the approved process steps were followed. The Nominations Committee requested that the Remuneration Committee determine an indicative reward package but that this should be in line with the Remuneration Policy for Executive Directors. With the assistance of Zygos, a long list of candidates was drawn up for consideration by the Nominations Committee. Both internal and external candidates were invited to participate in the process.

The Nominations Committee considered formal appraisals of all candidates selected from the long-list. A significant number of the candidates met with the Chairman and some of the Non-Executive Directors. Following the conclusion of these meetings, the Nominations Committee met to agree a short list of candidates.

Three candidates were considered for further consideration. All three candidates met with the Non-Executive Directors and the Chairman. References were taken for each candidate and psychometric profiles undertaken for selected candidates. Following a further Nominations Committee meeting, it was agreed to seek to engage with a particular individual and agree contract terms.

The Remuneration Committee, with support from the Interim Group HR Director, worked with Matthew Ingle to agree a retirement arrangement which was fair and in line with the Remuneration Policy. The Committee also agreed an onboarding package with the new CEO which took account of the bonus and long-term incentives he would forfeit from leaving his previous role. More information and detail about both Matthew and Andrew's remuneration arrangements can be found in the Remuneration Committee Report, which starts on page 72 of the 2017 Annual Report.

After contractual arrangements had been agreed with both parties in principle, the Board met on 6 July 2017 to consider the recommendations of both the Nominations Committee and the Remuneration Committee. They unanimously approved the proposals and internal and external announcements were made on 7 July.

Having successfully secured a suitable candidate for the role and discharged its announcement obligations, the Nominations Committee tasked the Interim Group HR Director with formulating transitional arrangements for the outgoing and incoming CEOs which included a detailed induction plan for the new CEO Designate.

Andrew Livingston joined Howdens on 29 January 2018 as CEO Designate.

* Zygos does not have any other business relationship with the Company.


Role of the Nominations committee

  • Provides appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members
  • Annually reviews the time required from Non-Executive Directors and undertakes a performance evaluation to assess whether Non-Executive Directors are spending enough time to fulfil their duties
  • Ensures that on appointment to the Board, Non-Executive Directors receive a formal letter of appointment setting out clearly what is expected of them in terms of time commitment, committee service and involvement outside Board meetings

Supporting actions, processes and information:


All new Directors undertake an induction programme upon joining the Board. Whilst each induction programme is tailored to the specific needs of the individual, we strive to provide a dynamic introduction to the real nature of the business through the provision of specifically selected information, by meeting with individuals (both internal and external) who are central to the ongoing success of the business and by visiting key sites such as depots, manufacturing sites and distribution centres.

The Nominations Committee recognises that regular reacquaintance with the culture of the business underpins the effectiveness of Non-Executive Directors. Non-Executive Directors are encouraged to meet with Howdens' employees at all levels in order to maintain a broad view of the business. Non-Executive Directors are also invited to attend Howdens' events following their initial induction.

During 2017, all Directors also received bespoke Howdens culture training, developed in-house for depot staff and management.

The individual training and development needs of Directors are also considered as part of the annual Board evaluation process. Ongoing training and development for the Directors includes attendance at formal conferences and internal events as well as briefings from external advisers.

Directors are also encouraged to attend external seminars and briefings as part of their continuous professional development. All members of the Board are members of the Deloitte Academy which provides in-depth updates on financial reporting and corporate governance matters.


In line with the Board's policy to undertake an external Board effectiveness review every three years and following the evaluation conducted by Independent Board Evaluation (IBE) in 2016, the 2017 review was undertaken by the Senior Independent Director. In order to ensure that we built on the progress made following the 2016 report, IBE were engaged to provide support to the Senior Independent Director for the 2017 effectiveness evaluation. The evaluation focused on the following areas:

  • Role and performance of the Chairman
  • Shareholder relations: accountability and communication
  • Strategy
  • Governance, compliance and risk
  • Board dynamics, focus and priorities
  • Succession planning: Board and Executive Committee
  • Board Composition: culture, skills and diversity
  • Decision-making: objectivity, process and outcomes
  • Board papers and presentations
  • 2016 Recommendations
  • Emerging issues and future challenges for the board



Summary conclusions and recommendations

This Board was deemed effective by the evaluation participants, and was even said by some to be functioning better than in 2016. The areas that received positive feedback from participants were shareholder accountability and relationships, governance, compliance and risk, board focus and succession planning. Recommendations were made across a number of areas and the Chairman, Senior Independent Director and Company Secretary have agreed to progress these during 2018.


Role of the Nominations committee

  • Gives due consideration to laws and regulations, the provisions of the UK Corporate Governance Code and the requirements of the UK Listing Authority's Listing, Prospectus and Disclosure and Transparency Rules and any other applicable rules, as appropriate

Supporting actions, processes and information:


The Nominations Committee is scheduled to meet at least twice during 2018. It will continue to consider Board succession and review the balance of skills on the Board. In addition, it will also assess the time commitment and performance of Non- Executive Directors, plan the board evaluation process, discuss boardroom diversity, and review the Committee's terms of reference.

Appointments and Re-appointments

With regard to the appointment and replacement of Directors, the Company is governed by its Articles of Association, the UK Corporate Governance Code, the Companies Act and related legislation. On that basis, during 2017, the Nominations Committee began a search for a new Non-Executive Director as a replacement for Tiffany Hall.

Russell Reynolds Associates was engaged by the Committee to assist with the identification of suitable candidates. Further details on the outcome of this search will be provided following its conclusion in 2018 and reported in full in the 2018 Annual Report. Russell Reynolds Associates does not have any other business relationship with the Company.

During 2018, the Nominations Committee will continue to ensure that a continuous transition process takes place between new and long-serving Non-Executive Directors occurs.

Annual General Meeting (AGM) elections and re-elections

As stated in the Corporate Governance Report, and with the exception of Matthew Ingle, all of the Directors not appointed since the last AGM will retire in accordance with the UK Corporate Governance Code and each will offer themselves for re-election in accordance with Article 118 of the Articles of Association at the 2018 AGM.

Andrew Livingston, having been appointed since the last AGM, will offer himself for election in accordance with Article 117 of the Articles of Association.

In proposing their re-election, the Chairman confirms that the Nominations Committee has considered the formal performance evaluation in respect of those Directors seeking re-election, and the contribution and commitment of the Directors that are required to offer themselves for re-election. He has confirmed to the Board that their performance and commitment is such that the Company should support their re-election.


By order of the Board

Richard Pennycook
Nominations Committee Chairman

28 February 2018


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