Investors
Chair’s message
Dear Shareholders
On behalf of the Board, I am pleased to present Bodycote’s Corporate Governance Statement for 2024. Like other businesses in our sector, Bodycote has been faced a number of macro-economic headwinds during the year, including weak industrial demand and temporary supply chain disruption in the aerospace sector. Despite this challenging backdrop, the business has remained resilient and has made good operational progress, with ongoing focus on cost control initiatives and improved operating margins. Throughout the year, the Board, with management, has assessed the risks and opportunities presented by these events to ensure we remain best-placed to manage their impact.
Board changes
In March 2024, we welcomed Jim Fairbairn to the Board as our new Group Chief Executive designate. With considerable experience in managing engineering businesses, and an impressive track record in leading and developing specialist global industrial businesses, the Board believes he is well-placed to build on the foundations laid by Stephen Harris over many years. We look forward to working with Jim over the coming years to drive our continuing development and growth. Stephen Harris stepped down from the Board at the end of May 2024. During his tenure with Bodycote he reshaped the business and significantly improved its quality and financial performance.
Further changes to our Board will take place later in 2025, when Patrick Larmon steps down as Non-executive Director having reached his nine years on the Board. The recruitment process for
this position has commenced, with candidates identified reflecting a diverse range of relevant experience and diversity characteristics, which we believe will maximise continued Board effectiveness.
Stakeholder engagement
Regular, open and constructive dialogue with shareholders continued throughout 2024. I met with several significant shareholders, including at our Capital Markets Event, to discuss shareholder views in relation to governance matters. The Group’s key stakeholders and their various perspectives are taken into account as part of the Board’s annual strategy and corporate planning discussions. This ensures the Board is able to focus on delivering value for shareholders, while addressing the impact of decisions and strategies on all stakeholders.
During 2024, the Board collectively had the opportunity to visit four sites in the US and Germany, giving Directors the opportunity to speak first-hand with colleagues, listen to their questions, and better understand their views and those of the organisation. Two virtual meetings were held with our Employee Engagement Groups in North America and Europe. The feedback from these forums was reported to the Board, with management charged with addressing particular areas of development. Further details are set out on page 76.
Governance
The Group’s long-term sustainable success is contingent on our commitment to good governance standards. The Board continues to be guided in its approach by the application of the UK Corporate Governance Code 2018 (the ‘2018 Code’) as we believe good corporate governance is about effective oversight, including how we provide assurance on our performance to stakeholders and in how we report on that performance.
Board evaluation
The Board understands the benefits of annual performance evaluations, both for Directors on an individual basis, as well as for the Board as a whole. In accordance with the 2018 Code, an externally facilitated effectiveness evaluation was undertaken in 2024. This provided an objective view of our performance and proposed areas for focus as we continue to update our approach.
Sustainability
Good progress has been made on sustainability, which the Board regards as an important initiative both commercially and for our position with investors and other stakeholders. As a result of the Company being on track to deliver against its SBTi target ahead of schedule, the target to reduce our Scope 1 and 2 emissions was increased to 46% by 2030, up from 28%. Our Sustainability report sets out the activities undertaken throughout 2024.
AGM
All Directors plan to attend this year’s AGM, which will provide an opportunity for shareholders to ask questions of the Board. I look forward to meeting any shareholders who can join us. I would like to extend my thanks to all our stakeholders for their continued support over the year.
Daniel Dayan
Chair
13 March 2025