Grafton Group Regulatory News (GFTU)

Grafton Group plc

AGM Update

Grafton Group plc ("Grafton" or "the Company") announced on 5 May 2023 that while all resolutions put to shareholders at the 2023 Annual General Meeting ("the AGM") of the Company were passed, a minority (21.03%) of shareholders chose not to support resolution 3h which related to the re-election of the Company's Non-Executive Chair, Mr. Michael Roney, as a director of the Company.

In line with the provisions of the 2018 UK Corporate Governance Code, the Company engaged in a consultation process with shareholders to gain an understanding of their reasons for voting against the re-election of Mr. Roney and now provides this update on the views received from shareholders.

Based on the views expressed by those shareholders who were identified as having voted against and who responded to the consultation, the level of votes against Mr. Roney's re-election was informed by a mix of factors. Of the institutional investors who responded, (i) two shareholders referred to the Company not having set net zero targets or published Scope 3 greenhouse gas emissions data, (ii) two shareholders cited insufficient gender diversity on the board and at senior management level and (iii) two shareholders mentioned the number of Board appointments held by Mr. Roney in listed companies. One shareholder expressed the personal view that the Company could and should have a better Chair.

As outlined in the Report for the Half Year to 30 June 2023 published on 31 August 2023, Grafton has committed to setting science-based targets (SBTi) by the end of 2024 and, as part of the target setting process, it is developing a transition plan that shows how these targets will be achieved, how progress will be monitored and the estimated financial impact of implementation. Grafton is committed to delivering net zero carbon emissions by no later than the end of 2050.

As also outlined in the Half Year Report, Grafton takes its climate change responsibilities very seriously and will only set targets that it has a high level of confidence can be achieved. Setting science-based targets requires accurate Scope 3 data and this data is currently being compiled under a detailed and complex process. The approach being adopted is to follow the Science Based Targets Methodology which is grounded in an objective scientific evaluation of what can be achieved. 

As noted in the 2022 Annual Report, three of the Board's eight directors are women (38%) and the Board is mindful of and committed to achieving the target set by the FTSE Women Leaders Review of having a minimum of 40% of Board positions held by women by 2025. The Board notes, however that certain shareholders have more stringent targets than the 2025 target set by the FTSE Women Leaders Review.

The Group seeks where possible to prioritise the appointment of women to leadership positions and is committed to increasing representation of women in senior leadership positions across the Group. Grafton has introduced initiatives to provide career development opportunities for female colleagues including participation in management development programmes, mentoring, coaching and flexible working arrangements.

The Board recognises the increased focus in recent years on Directors' board commitments and notes that a number of institutional investors apply a stricter voting policy than the market generally in relation to Chair and Directorship roles on the boards of listed companies. The Board of Grafton believes that Mr. Roney has always devoted ample time to his role as Chair and that he effectively discharges the functions and obligations of the role. This was very evident in the Group's response to the pandemic and his involvement in the major strategic decisions made by the Board in recent years. He also led the search for a new CEO and provides continuity following the appointment of Mr. Eric Born to the role at the end of 2022.

As noted in the 2022 Annual Report, the Nomination Committee monitors all Directors' external commitments and would take appropriate action in the event of any concerns being raised about the ability of any director, including the Chair, to dedicate sufficient time to their roles.

Mr. Roney has a distinguished track record in international business, he brings significant experience to the role, provides clear direction and leadership to the Board and makes a major contribution to the strategic development of Grafton. The Board acknowledges Mr. Roney's influential role for the benefit of all stakeholders in the Company.

The Company will set out further details on these matters in the 2023 Annual Report.

For further information please contact:

Grafton Group plc +353 1 216 0600

Charles Rinn

Company Secretary