STRATEGIC REPORT CORPORATE GOVERNANCE REPORT Chairman’s introduction to Governance Board and leadership changes GOVERNANCE The Company announced on 27 April 2021 that Chief Executive Officer, Craig Hayman, will leave the Group after the Company’s AGM in July. Craig’s contribution during his three-year tenure will resonate in future years as we see the ongoing benefits of the combination with the Schneider Electric industrial software business and the recently acquired OSIsoft, consolidating AVEVA’s prime position in the world of industrial software. The Board and I would like to thank Craig for his dedicated service as CEO and we wish him all the best for the future. Peter Herweck has been transferred from Schneider Electric at the request of the Board to the role of AVEVA’s CEO, effective from 1 May 2021. Peter has over 30 years of experience in automation, digitalisation and industrial software and has served on AVEVA’s FINANCIAL STATEMENTS Board since 2018, most recently as Vice Chairman, making him the In FY21, a global pandemic and the largest ideal appointment at this stage of AVEVA’s development. Following his appointment as CEO, Peter has resigned as member acquisition in our corporate history made of the Nomination Committee and as Vice Chairman effective from good governance more important than 1 May 2021. ever for AVEVA. Here, our Chairman My colleagues on the Board and the ELT and I would also like to express our gratitude to David Ward, whose decision to step down outlines how the Board continues to from his current role as our Finance Director and Company Secretary meet its responsibilities to support good with effect from 7 May 2021 was announced in January 2021. David has been with AVEVA since January 2011, and the support and decision-making and enable effective counsel he has provided to the Board have made an enormous responses to the challenges we contribution to our success. collectively face. Claire Denton, Group General Counsel, took over the role of Company Secretary with effect from 7 May 2021. Our people and culture As included in last year’s Annual Report, Emmanuel Babeau AVEVA’s rapid and responsible action in the face of the Covid-19 resigned as Non-Executive Director, Vice Chairman and as member crisis protected the interests of all stakeholders, most especially of the Remuneration Committee on 30 April 2020, following his our employees’ health and safety and our customers’ needs. resignation from Schneider Electric. In accordance with the terms This clearly indicates the resilience of our business, our culture of the Relationship Agreement between the Company and and our colleagues. Schneider Electric (the Relationship Agreement), Schneider Electric appointed Olivier Blum to the Board and the Remuneration I am confident that our collective ability to adapt and innovate in Committee. Please see page 125 for further detail on the terms the face of such rapid and significant change was pivotal to our of the Relationship Agreement. success in FY21. I would like to thank everybody whose collective energy and commitment made a contribution during FY21. Board response to Covid-19 During the year, the Board oversaw and supported the response of OSIsoft acquisition targeting long-term the ELT to the challenges and pressures created by the pandemic. resilient growth As part of this, it worked closely with the ELT and Company Secretary to implement a range of governance and process changes The year’s single most significant event was the acquisition of to strengthen our strategic, tactical and operational response. OSIsoft. This, the largest strategic acquisition in our history, will permanently underpin our future success. We undertook the The Board also re-evaluated meeting agendas and frequency to acquisition from a position of strength and as part of our deliberate ensure we could focus on key priorities. This included increasing corporate strategy that is enabling us to build the resilience that the frequency of Board and ELT meetings to stay ahead of our stakeholders demand. developments, share insights, make timely decisions and steer the organisation through the crisis. We also adapted the Board and In order to deliver the acquisition’s full strategic, operational and ELT engagement schedule to ensure that we continue to deliver on financial benefits, OSIsoft’s founder Dr J. Patrick Kennedy will our responsibilities to our key shareholders. remain involved in the business. As explained in the combined circular and prospectus published by the Company on 6 November We recognise how important it is to have an open and ongoing 2020 (the Prospectus), he has taken on the newly-established role dialogue with shareholders, employees and other stakeholders, of Chairman Emeritus, which is not a Board position, but will particularly during times of change. Throughout the year, therefore, smooth the cultural integration of the OSIsoft business. Please see members of the Board and senior management took part in pages 72 to 73 for a description of the acquisition process and many stakeholder meetings, including with the Company’s page 60 for an overview of the Chairman Emeritus appointment. largest investors. aveva.com | Annual Report 2021 59 CORPORATE GOVERNANCE REPORT CONTINUED Chairman Emeritus Governance and the Board The Board undertakes an annual review of its own Dr J. Patrick Kennedy’s and its Committees’ performance and effectiveness. employment agreement This year, we conducted an internal evaluation of our was entered into on performance and further details on the process, 25 August 2020 between outcomes and actions of the evaluation can be found AVEVA, OSIsoft and on page 79. Dr J. Patrick Kennedy (the PK Employment A time of crisis makes good governance more Agreement). important than ever, supporting agile and effective decision-making, bringing assurance to all Pursuant to the PK stakeholders and facilitating recovery. To achieve Employment Agreement, this, we, as a Board, need to ensure we have the Dr J. Patrick Kennedy agreed right people in place to support our strategy to transition to the non-Board and plans. role of Chairman Emeritus following completion of the To help provide continuity following the OSIsoft acquisition of OSIsoft. acquisition and the transition to the enlarged Group, I have agreed to extend my term of appointment as Pursuant to the PK Employment Agreement, Dr J. Patrick Kennedy’s Chairman beyond the ninth anniversary of my tenure. role will continue for an initial one-year term, with the initial term Please see the Nomination Committee report for being extended for successive terms of one year each on mutual clarification on this decision. agreement of the parties, provided that each successive term can be terminated earlier on at least 30 days’ notice by either party. Dr J. As Peter Herweck has taken up an executive position Patrick Kennedy’s role and responsibilities as Chairman Emeritus will on the Board, Schneider Electric, the Company’s include assisting the enlarged Group with the integration of the majority shareholder, is entitled to appoint a OSIsoft business, representing the enlarged Group at high-profile replacement Non-Executive Director to the Board speaking engagements and enterprise-customer sessions, and to the Nomination Committee pursuant to the participating in strategy sessions with the enlarged Group’s core terms of the Relationship Agreement. The Company strategy leadership team, and providing further mentorship and is in discussions with Schneider Electric regarding advisory support as mutually agreed with the enlarged Group. such appointments. The role of Vice Chairman is a requirement of the Relationship Agreement and Dr J. Patrick Kennedy will devote between 50 and 70 days per year of discussions with Schneider Electric will include his time to the role and in consideration for such services provided consideration of this. pursuant to the PK Employment Agreement, Dr J. Patrick Kennedy will receive a base salary at an annual rate of $300,000. In the event that In addition to the Company’s discussions with Dr J. Patrick Kennedy performs services exceeding 70 days per Schneider Electric, the Nomination Committee is annum, compensation will be as mutually agreed with the enlarged currently in the process of identifying an additional Group, though if Dr J. Patrick Kennedy performs services exceeding independent Non-Executive Director to join the 80 days per annum, these will be compensated at a per diem rate of Board. Enhancing the diversity of the Board will be a $3,000. Dr J. Patrick Kennedy will be entitled to continue participating key consideration during our search and also in our in the medical plan and other benefit plans that OSIsoft provides to its discussions with Schneider Electric regarding any most senior employees (including reimbursement of business expenses candidates they nominate for appointment pursuant in accordance with OSIsoft’s policies). Remuneration for the Chairman to the Relationship Agreement. The Nomination Emeritus role falls within the remit of the Remuneration Committee. Committee report on pages 78 to 82 contains commentary on the search. Dr J. Patrick Kennedy has undertaken to comply with all legal and regulatory requirements and codes of practice or compliance manuals I would like to thank my fellow Board members, issued by AVEVA relating to transactions in securities (including the the ELT and all our colleagues at every level Market Abuse Regulation) and, whilst Dr J. Patrick Kennedy’s legal of AVEVA for their support, commitment and and/or beneficial interest in the Company’s ordinary shares (including contribution during what has been an exceptional through Dr J. Patrick Kennedy’s interest in Estudillo Holdings LLC period of change, full of unconventional and (Estudillo)) equals or exceeds 3% of the outstanding share capital of unexpected challenges. AVEVA, to consult with AVEVA and its brokers prior to offering or disposing (or agreeing to offer or dispose) of any legal or beneficial Looking ahead, as a Board, we fully expect the interest in the ordinary shares.