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I Am Pleased to Present Halma's Corporate Governance Report for 2019 in What Has Been Another Strong Year for the Group

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I Am Pleased to Present Halma's Corporate Governance Report for 2019 in What Has Been Another Strong Year for the Group Introduction to governance I am pleased to present Halma’s Corporate Governance Report for 2019 in what has been another strong year for the Group. This report aims to provide stakeholders — Furthering the Group’s capabilities UK Corporate Governance Code with an understanding of the governance and pipeline of acquisition and In July 2018, the Financial Reporting framework within which Halma and its partnering opportunities. Council published the revised UK companies operate. In last year’s report, — Promoting gender diversity across Corporate Governance Code (the New I outlined four key Board priorities: all organisational levels and driving Code). The Board has reviewed the changes brought about by the New Code, — Focusing on talent and culture to improvement in ethnic and particularly its increased emphasis on support Halma’s growth strategy. international diversity across Halma. company culture, values and workforce — Monitoring the regulatory and — Communicating and executing the engagement. In response, the Board commercial implications of the UK’s Halma 4.0 growth strategy – delivering considered its approach to workforce exit from the EU and overseeing strong organic and acquisition growth engagement and monitoring of culture planning and preparation activities. and developing our thinking in the areas as further described on pages 78 and 79 of Convergence and Edge. — Advancing the Group’s international of this report. — Supporting our senior management by expansion initiatives. In addition, the Board has updated providing them with tools and insight to Purpose and culture the matters reserved for its decision drive innovation and collaboration to The Board assesses and monitors the and will be approving changes to the monetise our technology and knowhow Group’s culture and ensures its alignment terms of reference of its committees in the digital ‘big data’ space. with our purpose and strategy. Our in accordance with the New Code — Seeking new acquisition and partnering strategy is powered by Halma’s purpose Principles and Provisions. The Company opportunities. of growing a safer, cleaner, healthier will report on its application of the future for everyone, every day. The Group’s Principles of the New Code in the 2020 Progress in 2019 culture is an essential component of our During the year, the Board successfully Annual Report and Accounts. strategy as demonstrated by the Talent delivered against our priorities, details of & Culture Growth Enabler. Our culture The Board recognises the importance which are set out in the Strategic Report. promotes autonomous and agile decision- of good governance and, throughout I am very proud of Halma’s continued making, constructive challenge, innovative the year ended 31 March 2019, we have success and sustained growth which is diversity of thought, and a sense of shared complied with the Provisions set out in underpinned by a culture of openness, purpose and open collaboration. It is the UK Corporate Governance Code 2016 transparency and collaboration essential that the Board and executive (the Code). This report, along with the throughout the organisation. management act in a constructive and Committee reports, describes how the Effective succession respectful manner, exhibiting the tone Board has applied Principles of the Code. During the year, Marc Ronchetti joined the that we expect across our companies. I trust that you will find it useful in Board as Chief Financial Officer. Marc has Based on my interactions with the understanding Halma’s governance already made a significant contribution workforce, I am pleased to report that structure which is the foundation of and has brought a wealth of operational, this is the case at all levels within Halma. our growth strategy and our purpose. technical and financial experience. We also recognise the importance of Board priorities for 2020 aligning employees’ interests with those Looking forward to next year, the Board of our shareholders. During the year, will continue to focus on the Group’s 91% of our UK employees participated talent and culture along with the in our all-employee share plan. Across following priorities: the Group, over 30% of employees have received share incentives. Employees Paul Walker — Leveraging Halma’s Brand and are also eligible to participate in cash Chairman launching a new global website. based profit-share and bonus schemes. 11 June 2019 Halma plc Annual Report and Accounts 2019 How the Board supported strategy Board Composition and Diversity Halma’s clear and focused strategy over many years has led The Board recognises the benefits of a to a strong financial performance and consistent dividend diverse leadership team. The charts below growth. The Board has supported the evolution of Halma’s illustrate the diversity and composition growth strategy and ensures that sufficient human and capital of the Board. resources are available to enable our companies to deliver Report Strategic sustainable growth. Strategic Growth Enablers Composition Mergers & Acquisitions Executive 4 The Board’s governance role The Board has set a clear strategy which includes a significant growth Non-executive 6 element being delivered through M&A. Key resources, both in terms of people and finances, are made available to ensure that we can deliver this strategy. The M&A pipeline is regularly reviewed and discussed by the Board and all material acquisitions are subject to its approval. Gender Post-acquisition value creation strategies are under regular review. Female 4 Male 6 International Expansion Governance The Board’s governance role The Board has formally adopted matters reserved for its decision and Age a schedule of matters that it delegates to executive management. This governance structure ensures that major changes, financial 40-49 4 commitments or new business developments are considered by the 50-59 Board, while permitting local and sector autonomy to operate and 4 grow our companies. 60-69 2 Talent & Culture Nationality The Board’s governance role The Board recognises the importance of talent and culture in driving not UK 6 only Halma’s growth, but also the behaviour that we expect from our Financial Statements people across the Group. In September 2016, the Board recognised the US 3 importance of leading talent from the top and promoted Jennifer Ward The Americas 1 to the Board. Talent discussions are a key feature at each Nomination Committee meeting. Tenure Finance & Risk 0-3 years 3 The Board’s governance role The Board has established a clear and robust framework to control 3-6 years 3 financial investment, oversee financial performance and to manage 6-9 years 2 risks and opportunities. 9+ years 2 Digital Growth Engines The Board’s governance role The Board are aware of the changing landscape and the risks and Other Information opportunities that will arise as the digital revolution, and inherent data -related responsibilities, continue to proliferate. Strategic Communications The Board’s governance role The Board recognised the need for our companies to be more strategic in their communications with stakeholders. A key focus has been on adequately resourcing our central team to support our businesses in developing market-leading positions by connecting with customers through their brand, marketing, product positioning and the effective use of all media channels. Halma plc Annual Report and Accounts 2019 Board of Directors We have a team of ambitious leaders who are driven by our purpose and focused on growing the business. Committee Membership Paul Walker Andrew Williams A Audit Committee Chairman Group Chief Executive N Nomination Committee Appointed: April 2013 (July 2013 as Chairman) Appointed: July 2004 (February 2005 as Group R Remuneration Committee Career and experience: Paul gained extensive Chief Executive) Chair of Committee management, operational, financial and Career and experience: Andrew joined Halma Member of Committee technology sector experience in his executive career in 1994 as Manufacturing Director of an operating as Chief Executive Officer of The Sage Group plc company, becoming its Managing Director in from 1994 to 2010, having previously been its 1997. He joined Halma’s Executive Board in 2002 Finance Director and Chief Financial Controller. and was appointed as Group Chief Executive In addition to the appointments listed below, in 2005. Andrew has proven his ability to grow he has held several board positions including as and acquire companies globally while evolving non-executive Director at Diageo plc and Mytravel the Group portfolio for sustainable growth and Group plc. Paul provides strong leadership to the high returns. He brings clear strategic leadership Board and is committed to robust corporate to the Board and has a deep understanding governance and stakeholder engagement. of the operating companies and the Group’s Paul qualified as a Chartered Accountant stakeholders. He is a Chartered Engineer. with Ernst & Young. Current appointments: Current appointments: Capita plc, non-executive Director Ashtead Group plc, non-executive Chairman Sophos Group plc, non-executive Director N Experian plc, non-executive Director (Paul will retire as a Director of Experian plc on 24 July 2019) N R Adam Meyers Jennifer Ward Marc Ronchetti Sector Chief Executive, Group Talent and Communications Chief Financial Officer Medical & Environmental Director Appointed: July 2018 Appointed: April 2008 Appointed: September 2016 Career and experience: Marc joined Career and experience: Adam became
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