DCC Regulatory News (DCC)

22 Feb 2007 07:01

DCC PLC22 February 2007 Planned Board Changes On 26 May 2006, in a Stock Exchange announcement, DCC plc informed the marketthat the Chairman, Alex Spain, intended to retire as Chairman and from the Board in advance of the annual general meeting in 2007. He will retire on 30 June 2007. In that Stock Exchange announcement, it was noted "The Nomination Committeekeeps Board renewal, structure, size and composition under regular review,including the skills, knowledge and experience required. The Committee hasparticular regard to the leadership needs of the organisation, both executiveand non-executive, and therefore gives full consideration to succession planning for the chairman and chief executive." In considering succession planning for the retiring Chairman, Alex Spain, andthe role of the Chief Executive, Jim Flavin, the Nomination Committee has beensignificantly influenced by the following considerations: • The DCC business model has generated superior investment returns for shareholders since flotation in 1994. However the diversity of the business model, while reducing risk, makes DCC more complex from a management perspective. Each of its five market sector divisions need to be as competitive and informed as singly focused company competitors. In addition, group added value must be constantly sought and achieved through group synergies, procurement initiatives, management development, best practice, etc. Consequently day-to-day operational leadership and the achievement of operational excellence is more demanding in DCC. • The Chief Executive, Jim Flavin, has recommended that it is now timely to bring increased focus to DCC's overall strategic direction to ensure that it is best positioned for sustainable long-term growth. The Board is in full agreement with this recommendation. This strategic review should be carried out without too much distraction from day-to-day operational matters. • As the founder of DCC, Jim Flavin has played a very hands-on role as Chief Executive/Deputy Chairman. Since its foundation in 1976, he has been the central driving force, leading a highly skilled and committed executive team. He is willing and motivated to play a continuing important and active role in the further growth and development of DCC. Arising from these considerations the Nomination Committee, having consultedwith the non-executive directors who are not on the Committee, with majorshareholders and with the Irish Association of Investment Managers, recommendedto the Board that, on the retirement of Alex Spain as Chairman, - Jim Flavin should take over the chairman's role and, for a three-year transition period, should be an executive chairman with primary responsibility for strategy development. - Tommy Breen, DCC's Chief Operating Officer, should be promoted to the position of Group Managing Director. In this role, he should take on significant elements of Jim Flavin's current chief executive responsibilities and should have primary responsibility for day-to-day operational matters. Tommy Breen, who is an Economics graduate of Queen's University Belfast and a Chartered Accountant, joined DCC in October 1985. During his period with DCC he has gained broad experience and knowledge of the DCC Group. He has served at a senior management level as managing director of three of DCC's five divisions, namely DCC Energy, DCC SerCom and DCC Environmental Services, and became Group Chief Operating Officer in July 2006. Corporate Governance In accordance with provision A.4.1 of the Combined Code on Corporate Governance('the Code'), the majority of the members of the Nomination Committee areindependent non-executive directors and the Chairman of the Board, who is alsochairman of the Nomination Committee, did not chair the meeting dealing with theappointment of his successor. The Committee was also in compliance with Codeprovision A.4.3 in relation to the preparation of a detailed job specification. Following the retirement of Alex Spain, the Board will have six non-executivedirectors and three executive directors. These six non-executive directors areTony Barry, Roisin Brennan, Michael Buckley, Paddy Gallagher, Maurice Keane andBernard Somers. Collectively they have extensive board experience in leadingpublic companies and have deep knowledge of corporate governance best practice.The Board believes they are all fully independent. In making their recommendation the Nomination Committee, having consulted withthe non-executive directors who are not on the Committee, have sought tocarefully balance the requirements of the Code with what they believe to be inthe best interests of shareholders. The Committee also considered Code provision A.2.1 relating to the division ofresponsibilities between the chairman and the chief executive. In setting out adetailed statement of the role and responsibilities of the executive chairman,the Committee has defined the distinctive but complementary role of theexecutive chairman to the role and responsibilities of the group managingdirector, which the Committee set out in a separate comprehensive statement. The Nomination Committee also considered Code provision A.2.2 and believe forthe reasons set out earlier in this statement that it is appropriate and inshareholders' interest that the chief executive should become chairman. Majorshareholders have been consulted in advance as required by this Code provision.The Irish Association of Investment Managers has also been consulted. The Board is in compliance with Code provision A.1.3. As required by thisprovision, the non-executive directors, led by the senior independent director,will meet without the executive chairman present at least annually to appraisehis performance and on such other occasions as are deemed appropriate. Board Decision At a meeting of the full Board it was unanimously decided to accept therecommendation of the Nomination Committee and accordingly on 1 July 2007 JimFlavin will become Executive Chairman and Tommy Breen will become Group ManagingDirector. For reference: Jim Flavin, Chief Executive/Deputy ChairmanTelephone: +353 1 2799400 Note to Editors DCC plc is a sales, marketing and business support services group focused on theenergy, IT and entertainment products, healthcare, food and beverage andenvironmental markets. DCC's shares are listed on the Irish and London StockExchanges. DCC's market capitalisation is approximately €2.2 billion. This information is provided by RNS The company news service from the London Stock Exchange