Corporate Governance Report: Bunzl's Performance and Strategy

This report provides a comprehensive analysis of Bunzl's corporate governance, examining its company purpose and communication with stakeholders, and critically evaluating the separation of the CEO-chair role and its impact on financial performance. The report assesses the extent of board independence and its influence on board performance, highlighting the importance of the board in enhancing effectiveness and financial outcomes. It also analyzes the significance of external auditor rotation or independence in managing company risk exposure, and discusses Bunzl's approach to remuneration, justifying the strategies employed. The analysis covers various aspects including board characteristics, compliance with governance codes, and the implications of different governance practices on the overall success and sustainability of the enterprise. The report uses Bunzl's financial data and reports to support its arguments, offering insights into the company's strategic goals and performance metrics.

Corporate Governance
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Contents
TASK...............................................................................................................................................3
Discuss about the company purpose and communication with stakeholders..............................3
Critically evaluate the separation of CEO-chair and its current financial performance..............4
Discuss the extent of enterprise compliance with requirement for board independence and
significance of independence on board performance..................................................................6
Evaluate the importance board on improving its effectiveness and company financial
performance.................................................................................................................................7
Analyse the importance of external auditor rotation or independence on the company exposure
to risk...........................................................................................................................................9
Discuss the approach to remuneration and justify the approach taken by enterprise................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14
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TASK
Discuss about the company purpose and communication with stakeholders
Company purpose and communication
with shareholders
Approach and Justification/ implication
Communication with stakeholders
(Culture, purpose and strategy-
Company’s Purpose-
The purpose for Bunzl enterprise to engage with
stakeholders because it can help to deliver essential
business solution around the global world. At certain level,
Bunzl will be creating as long term sustainable values in
order to provide the benefit, advantage for stakeholders.
Bunzl creating value for stakeholders-
Customers- it provide the benefit from a one stop-shop for
all essential products with one order. Moreover, invoice
and one delivery are together with different kind of service.
Thereby lowering their overall price or cost of doing
enterprise. Afterwards, it will be eliminating hidden price
of in-house procurement and distribution.
Employee- It would support the Bunzl in context of
equality and diversity throughout effective policies as well
as procedures. It allows for business to increase the career
opportunities in progression for organization.
Supplier- Bunzl enterprise will use the variety of national,
international and local suppliers, both a non-exclusive or
exclusive basis. In order to provide the better services as
possible.
Strategy-
Bunzl is constantly looking to grow business
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organically both by developing and expanding the
organization in global marketplace. In this way, the board
of director will interact with stakeholder such as
employees. In order to implement an effective strategies
such as unique service offering. It specialise that is able to
represent the need of customers. Moreover, it would
implement as marketing strategy to promote the product
and service related awareness among potential consumers.
Organization’s culture-
It continue to take important steps to embed a more
proactive safety culture in Bunzl enterprise. Company has
been carried out the safety related perception and measure
positive response by the participants to setup of recognised
different indicators (Jadoon and et.al., 2020). Bunzl will
help to create a more proactive safety culture by
developing skills, competencies needed to conduct the
effective organization’s culture or environment. The
efficient one stop-shop operating model that allows
potential consumer which become beneficial from either
culture or environment impact of doing enterprises.
Critically evaluate the separation of CEO-chair and its current financial performance
Board Characteristics Approach and Justification Implications
Separated Roles of
CEO/Chair
According to the report 2019, Bunzl
Company’s should consider an
Finanical Strategic goals-
Following a review for
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Yes effective approach to ensure
effective leadership as suggested by
UK code of Corporate Governance.
The organization have included as
separate CEO, which can perform
the different roles and
responsibilities (Lilja, 2020). By
using the academic theory, it has
been justified that Bunzl will draw
implication and evidence whether
separation of CEO-chair plays
important role in the financial
performance.
Financial Performance against
Annual bonus targets-
Chief executive officer (CEO) has
been performed the different
activities, annual bonus plan or
enterprise currently operate as set out
in policy section. In 2019, it against
the targets set were as follows and
committee did not exercise any kind
of discretion to override the
formulaic result or outcome.
overall performance which against
the specific perfonal objective in
2019. Identifying the committee
and involvement of CEO in which
calculate the bonus percentage
payable in relation to the non-
financial strategic goals.
 Finance director will
manage or contol the
successsion, handover
process ofor New CEO.
 Improve its current
working capital in term of
performance measured by
working sales and capital
percentage, compared in
2018 (Pradita and Fauzi,
2020).
 Continue to drive its digital
progress in the groups such
as customers, suppliers.
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Discuss the extent of enterprise compliance with requirement for board independence and
significance of independence on board performance.
According to Bunzl report 2019, the board of company has for many years, had a remuneration.
CEO and committee members are appointed as new CEO which has been perform different
roles to handle the responsibilities.
Board Characteristics Approach and Justification Implications
Independence
Proportion of independent
board members
The primary role of every
members to establish a proper
interaction and ensure that
company’s executive properly
done their significance task
with independently. To extent
the Bunzl enterprise
compliance with fulfil all
essential need or requirements
for board independence
(Saeedian, SAEIDI and
ASHRAFI, 2020). Moreover,
identifying the importance of
independence among board
members where they can
easily consider as framework
or policy for director
remuneration, setting all kind
of elements of remuneration
which provide better
By using legal compliance
within organization,
identifying importance to
company’s purpose, values
and strategy applicable in the
long term sustainable success.
The board shall also ensure
that maintain a proper formal
and transparent procedures for
developing or creating policy.
This can help to review
workforce remuneration and
other related policies,
alignment of rewards,
incentive with business culture
or environment.
In accordance with
compliance combined with the
code on Corporate
Governance (CG), each and
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advantage, benefits. every committee members
have independently improve
the overall performance for
Bunzl Company’s.
Evaluate the importance board on improving its effectiveness and company financial
performance.
Accountability Components Approach and Justification Implications
Board Evaluation Assess the Bunzl Company’s
adherence to the succession,
composition and evaluation
principles, by identifying the
current importance of
Compliance. It help for each
or every board and committee
members to implement
appropriate strategic approach.
In order to improve the overall
board effectiveness. It is
directly relates with the
current financial performance.
As per review the Bunzl
report 2019, the board
continues to provide strong,
effective leadership and
The Board recognises that
sustainable enterprise success
is not possible without
identifying business purpose
and sound or corporate
Governance. In this way, the
board should consider a good
governance in Bunzl and
implement a suitable strategy.
Therefore, it automatically
improve the overall business
financial performance
(Štrukelj, Mulej and Žižek,
2020). Effectiveness of
directors, executive and
management plays an integral
role in this by promoting the
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independent scrutiny while
promoting the long term
successive business goals.
Sometimes, it provide the
better advantage, benefit of its
current stakeholders. As per
analysis, it has found that
Bunzl enterprise can appoint
as new board members such as
Chief executive officer,
financial officer, chairman,
non-executive director and so
on. Every broad have
performed the key role in the
culture of organization,
committed to ensure that
business purpose, value and
high standards of Corporate
governance.
positive behaviour. The board
monitors adherence to the
group’s corporate culture in
different number of ways,
including by interaction with
staff members from across the
business. Reviews the results
of employee engagement,
identifying the importance of
long-term business success in
the financial performance. As
part of strategic planning
process within current
business financial
performance, the board
members are grouped together
to reach a better conclusion in
term of growth and
development. It can help to
utilise all kind of security
risks, controls and suppliers to
audit financial performance in
proper manner.
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Analyse the importance of external auditor rotation or independence on the company exposure to
risk.
Accountability Components Approach and Justification Implications
External Auditors
The Company’s
auditors, Lloyd Pitchford as
chairman, he was attend the
annual general meeting
(AGM) in order to respond
towards the stakeholder
questions (Štrukelj, Mulej and
Žižek, 2020). However, it
might be increased on the
committee activities.
Basically, it can include
various activities in 2019
report. The contract of
auditors are becoming 4 –
years, identifying entire
business financial
performance.
According to the audit
committee report 2019,
ensuring the integrity of
group’s financial reporting,
risk management and other
kind of assurance processes. It
continues to be consider one
of committee’s key priorities.
Internal control and Risk
management-
According to report
2019, the Committee is
responsible for reviewing on
behalf of its board, maintain
the effectiveness of Bunzl
Company on the basis of
internal financial controls. The
overall internal controlled by
Staff members. it applicable
appropriate procedures to
design or manage risks, threat,
independently to exposure the
The chairman of
committee holds the
preparatory discussion with
the Bunzl senior management.
In general, head of internal
audit, external auditors which
give prior in the committee
meeting and discuss about the
different facilities and
services.
Making a proper
recommendation to the board
in which concern about the re
appointment of external
auditors. Afterwards, it will
approve remuneration and
engagement with stakeholders
in term of audit strategy
planning.
Head of internal audit,
external auditors are
performed the assessment of
fraud risk, controls over the
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enterprise risk. Afterwards,
organization can meet its
business objective such as
reasonable but absolute
assurance against material
based mis-statement or loss.
The effectiveness of internal
financial control or manage
any kind of risk by using
framework through reports
from chief financial officer.
organizational consolidation
as well as reporting system,
Afterwards, tax risks and other
processes for setting a suitable
strategic plan in order to
monitor the ongoing
performance of company.
Discuss the approach to remuneration and justify the approach taken by enterprise.
Remuneration Components Approach and Justification Implications
Structure of Remuneration
Most recent year (either 2020
or 2019)
Total Pay – 100%
Fixed Pay – 62.3%
Annual Bonus – 51.1%
LTIP -2.2 %
Previous year (either 2019 or
2018)
Total Pay – 100%
Fixed Pay – 103.1%
The Remuneration of
different executive directors
which reflects on the resilient
performance within
challenging market situation
or condition (Štrukelj, Mulej
and Žižek, 2020). According
to the report, the overall
structure of remuneration of
CEO for two years 2019-2020
in context of total
Performance and reward in
2019-
Bunzl Company has
planned the long term business
strategy which remained
constant during 2019. In order
to focus on the organic and
acquisition growth, operating
model improvement. The
variable pay result or outcome
is consistent maintain with
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Annual Bonus – 50.1 %
LTIP – 2.3%
remuneration of fixed pay,
including salary, pension,
benefits. Bunzl Company have
concerned about the long term
incentive plan and increase
overall enterprise
performance.
The Remuneration
framework is based on the
crucial element in which
enable them to compete for
key talent internationally,
continuing to drive as high
performance culture focus on
the delivering shareholder
value (Štrukelj, Mulej and
Žižek, 2020).
By using remuneration
policy, it has been justified the
relationship between firm
performance and remuneration
(salary, benefits & pension),
annual bonus:- long term
business success.
Remuneration is one of
the important aspect for
overall business which help
assessment in term of business
performance metrics.
Bonus-
In setting the incentive
targets, it should consider as
performance potential of
different part of enterprise. On
target the performance level
on behalf of bonus and closely
related to the budget level in
term of performance.
Annual bonus payment is
combination of different key
financial targets, with
consideration of personal
objective. In 2019, resulted the
financial performance on the
annual bonus for chief
executive officer (Štrukelj,
Mulej and Žižek, 2020). It has
been increased the 107.01% of
salary, Fixed bonus 62.3% of
its maximum opportunity and
equates 90% of Salary.
In 2020, the growth of
27.3% which was completely
adjusted into two different
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them to acquire more benefit,
advantage in context of
growth and development.
That’s why, it has been rapidly
changed accordingly. As per
analysis, it become easier for
estimating the salary payment
as per annual basis.
disposals of businesses during
recent period. As a result,
100% of option vesting within
2020 financial years. Fixed
price will increase 10% and
adjusted increased by 15% in
2020.
CONCLUSION
From above discussion, it has concluded that Corporate Governance is based on the
combination of rules, regulation and processes by which enterprises are operating, regulating and
controlling. It encompasses the both external as well as internal factors that affect on the interest
of company’s stakeholders, including shareholders, suppliers, customer and government
management.
On the other hand, it has been focused on the BUNZL company, it is based on the British
multi-national distribution and outsourcing enterprise headquartered in London, UK. In recently,
BUNZL have been changed the number of time at the time of its existence, frequently
incorporating the disparate business interests. The company was established in 1940 in London.
it has been summarised about the Bunzl annual report 2019, building a sustainable future and
proven implementing suitable strategy in term of business performance improvement. In this
documentation, it has been identified the company’s purpose, communication with stakeholders.
Moreover, identifying the financial performance for BUNZL and their effectiveness. Therefore,
it can help to explain a full justification on the basis of entire annual report. It can identify the
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