Governance Report Our governance* *At year end 2019. 1. Jamie Pike 3. Trudy Schoolenberg 5. Neil Daws Chair Independent Non-Executive Director Managing Director, Steam Specialties and Senior Independent Director 2. Nicholas Anderson 4. Kevin Boyd 6. Caroline Johnstone Group Chief Executive Chief Financial Officer Independent Non-Executive Director In this section Board overview* 1. Board leadership and Company purpose 74 Core expertise – Board of Directors 74 – Chair’s introduction 76 2 10 – Our approach to governance 78 3 – Engaging with our stakeholders 79 3 – Employee Engagement Committee Report 82 4 9 2. Division of responsibilities 85 3. Composition, succession and evaluation 89 – Nomination Committee Report 89 6 – Board Evaluation 92 8 4. Audit, risk and internal control 93 6 – Audit Committee Report 93 7 – Risk Management Committee Report 98 5. Remuneration 102 – Remuneration Committee Report 102 – Remuneration at a glance 106 International Operational Product development – Annual Report on Remuneration 2019 107 Senior management Strategy People – Remuneration Policy 2020 122 Engineering Sales and marketing Regulatory disclosures 133 M&A Finance Statement of Directors’ responsibilities 137 72 Spirax-Sarco Engineering plc * At year end 2019. Annual Report 2019 7. Peter France 9. Jane Kingston Andy Robson Independent Non-Executive Director Independent Non-Executive Director Group General Counsel and Company Secretary Governance Report Governance 8. Jay Whalen 10. Kevin Thompson President, Watson-Marlow Independent Non-Executive Director Nationality Gender Length of service 8 7 5 1 1 2 3 1 2 2 British1 Dutch Male Female 5+ years 1–3 years American1 Irish2 3–5 years Less than 1 year 1 N.J. Anderson holds dual British and American citizenship. 2 J. Pike holds dual British and Irish citizenship. Spirax-Sarco Engineering plc 73 Annual Report 2019 Governance Report 1. Board leadership and Company purpose Board of Directors* *At year end 2019. Jamie Pike MBA, MA, MIMechE Nicholas Anderson BSc Engineering, MBA Kevin Boyd BEng, CEng, FIET, FCA Chair Group Chief Executive Chief Financial Officer N* EE RK* RK Appointed to the Board Appointed to the Board Appointed to the Board May 2014 March 2012. Appointed Chief Operating Officer May 2016 Areas of experience in August 2013 and Group Chief Executive in Areas of experience Senior management, engineering, international January 2014 Finance and accounting, engineering, pensions, Background Areas of experience international, M&A Jamie Pike joined Burmah Castrol in 1991 International, operational, industrial, sales and Background and was Chief Executive of Burmah Castrol marketing, engineering, strategy, M&A Before joining the Group in 2016, Kevin Boyd was Chemicals before leading the Foseco buy-out Background Group Finance Director for Oxford Instruments in 2001 and its subsequent flotation in 2005. Before joining the Group in 2011 as Director plc. Prior to that he was Group Finance Director Prior to joining Burmah, he was a partner at Bain EMEA, Nicholas Anderson was Vice-President of Radstone Technology plc and previously held & Company. Jamie was educated at Oxford, of John Crane Asia Pacific (part of Smiths Group senior finance positions within Siroyan Ltd and holds an MBA from INSEAD and is a Member of plc), based in Singapore, and President of the TI Group (now Smiths Group plc). Kevin is a the Institute of Mechanical Engineers. John Crane Latin America, based in the USA. Chartered Engineer, a Chartered Accountant and External appointments Previously, Nicholas held senior positions with a Fellow of the Institute of Chartered Accountants Chair of Cobham plc - stepped down Cobham’s Alcoa Aluminio in Argentina and Brazil, starting and the Institution of Engineering and Technology. Board in January 2020. his career with the Foseco Minsep Group plc External appointments in Brazil. Non-Executive Director and Audit Committee Chair of EMIS Group plc. Trudy Schoolenberg PhD Peter France Caroline Johnstone BA, CA Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director & Senior Independent Director A EE N R A EE* N R A EE N R Appointed to the Board Appointed to the Board Appointed to the Board March 2018 March 2019 August 2012 Areas of experience Areas of experience Areas of experience International, operational, industrial, sales and Finance, people, international, M&A Engineering, product development, oil marketing, engineering Background and petrochemical Background Caroline Johnstone has nearly 40 years’ Background Peter France was Chief Executive Officer of experience of working with large global Prior to her most recent position at AkzoNobel, Rotork plc from 2008 to 2017. He also gained organisations on turnaround, culture change, Trudy Schoolenberg served as Vice-President wide experience in a number of key roles at delivering value from mergers and acquisitions of Global Research & Development at Wärtsilä Rotork plc from 1989 to 2008 including acting and cost optimisation programmes. She sat Oy. Trudy previously held senior management as Chief Operating Officer and Director of Rotork on the Board of the Assurance practice of positions with Royal Dutch Shell plc and South East Asia based in Singapore. PricewaterhouseCoopers (PwC) as people was Head of Strategy for Shell Chemicals. Peter is a Chartered Director of the Institute partner. Caroline is a chartered accountant and a Until October 2016, Trudy served as Director of Directors member of the Institute of Chartered Accountants of Integrated Supply Chain and Research, of Scotland. She also provides consulting External appointments Development and Innovation, Decorative Paints services to a range of international clients. Chief Executive Officer of ASCO Group Limited. Division of AkzoNobel. External appointments External appointments Non-Executive Director and Audit Committee Non-Executive Director of COVA and Low & Chair of both Synthomer plc and Shepherd Bonar PLC. Non-Executive Director and Senior Group Ltd, a private company which owns Independent Director of Accsys Technologies plc. Portakabin Limited. 74 Spirax-Sarco Engineering plc Annual Report 2019 Neil Daws CEng, FIMechE Jay Whalen** BA, MBA Andy Robson LLB Law Barrister Managing Director, Steam Specialties President, Watson-Marlow Group General Counsel and RK RK Company Secretary Appointed to the Board Appointed to the Board Appointed as Group General June 2003 March 2012 Counsel and Company Secretary Areas of experience Areas of experience June 2012 Manufacturing, engineering, product Sales and marketing, engineering, product Areas of experience Report Governance development, sales and marketing, broad development, operational, international International law, corporate governance, operational experience business development international business development including Background Background mergers and acquisitions, business restructuring, information technology, Neil Daws joined the Group in 1978 and held Jay Whalen joined the Group in 1991 as contract negotiation positions in production and design engineering President of Watson-Marlow Inc. in the USA. prior to being named as UK Supply Director. He was named Sales and Marketing Director Background Following this, Neil has held responsibility for of the global Watson-Marlow business in 2002 Before joining the Group in 2012, Asia Pacific, Latin America, the Group’s Supply and in 2010 was appointed to his current Andy Robson was General Counsel and operations, including the Group’s health, safety Group position of President, Watson-Marlow Company Secretary of RM Plc, a role he held and environmental matters and, more recently, Fluid Technology Group. Prior to joining for 14 years. Prior to this, Andy was European EMEA. Watson-Marlow, Jay was Vice-President General Counsel with Cendant Corporation Operations for Harvard Bioscience, Inc. headquartered in Baltimore, USA. ** As previously announced, Jay Whalen retired from the Board on 31st December 2019. Jane Kingston BA Kevin Thompson BSc, FCA Further reading Independent Non-Executive Director Independent Non-Executive Director Read about our Board diversity, composition, succession A EE N R* A* EE N R and evaluation. Appointed to the Board Appointed to the Board See pages 89-92 September 2016 May 2019 Areas of experience Areas of experience A Audit Committee Human Resources, remuneration, international, Finance, tax and treasury, engineering, M&A N Nomination Committee engineering Background EE Background Kevin Thompson was Group Finance Director Employee Engagement Committee From 2006 until her retirement in December of Halma plc from 1998 to 2018, having joined R Remuneration Committee 2015, Jane Kingston served as Group Human Halma as Group Financial Controller in 1987. RK Risk Management Committee Resources Director for Compass Group PLC. Kevin qualified as a Chartered Accountant with * Prior to this, she served as Group Human PricewaterhouseCoopers (PwC) and is a Fellow Denotes Committee Chair Resources Director for BPB plc. Jane has of the Institute of Chartered Accountants in Flag denotes country of citizenship worked in a variety of sectors, including roles England and Wales with Blue Circle Industries plc, Enodis plc External appointments and Coats Viyella plc and has significant Member of the Financial Reporting Lab Steering international experience. Group and a Trustee of the Great Ormond Street External appointments Hospital Children’s Charity. Non-Executive Director of Inchcape plc. Stepped down from the