New legislation has been introduced to help stakeholders better understand how directors have discharged their duty to promote the success of the company, while having regard to the matters set out in section 172(1)(a) to (f) of the CA2006.
In 2019 the directors continued to exercise all their duties, while having regard to these and other factors as they reviewed and considered principal decisions.
Although the Company has multiple stakeholders the Board considered its key stakeholders were our employees, customers, suppliers, partners and local communities.
By working collaboratively with our customers, we develop innovations to meet consumer needs. The Board engages with customers through the CEO and receives regular information about customers in the board reports and other business reports.
We recognise that a collaborative approach to innovation can often accelerate time to market, reduce costs and create differentiation. The Board engages with our partners through the CEO and receives regular information about customers in the board reports and other business reports.
We have a clear responsibility to engage with shareholders and lenders of our business and their views are an important driver of our strategy. We keep our shareholders regularly informed while lenders receive quarterly updates on the performance of the organisation.
We rely on the knowhow, creativity and entrepreneurial spirit of all our people. The Board has direct engagement with employees, principally hrough our Global Workforce Advisory Panel (GWAP) – a body set up in line with requirements outlined in the recently updated Financial Reporting Council’s UK Corporate Governance Code. GWAP is constituted of 15 employee representatives from across our global footprint, supported by additional ‘Voice Champions’ in smaller offices. The primary purpose of the group is to promote an effective two-way communications mechanism between the workforce and the Board, by capturing the views of employees on proposals and issues which affect our people, recognising barriers and enablers and helping to address them. GWAP will promote a culture of collaboration and high performance, and consult on and provide advice, support and feedback during the implementation of programmes and policies. The GWAP attended their first Board meeting in April 2019, and in September, hosted their first global ‘Voice week’, engaging with the global workforce to inform feedback to the Board. We also have effective communications and channels of engagement with our employee bodies based in the UK, the Netherlands and Perth in Australia. These employee bodies played a significant role representing employees during the acquisition.
Additionally when Board meetings are hosted in a global location, the Board will engage both formally and informally with employees. In 2019 the Board visited the Washington DC office and hosted an informal networking lunch with locally based employees and a formal senior leadership dinner.
In terms of wider employee engagement our CEO has oversight and delegated responsibility for all other activity through the Chief People Officer, who through the People Strategy, oversees a proactive communications and engagement programme, supporting open and honest dialogue with the global workforce and other formal global staff bodies.
Supply chain integrity is a critical part of our business as we rely on our suppliers to help meet our customers’ needs. We engage with our suppliers via our procurement teams as well as through other functions such as legal, compliance and Health and Safety. The Board receives information through Board reports. More information can be found in our Directors’ Report on page 6.
The Board engages with local communities through the CEO, who delegates oversight to the Chief People Officer. The CPO oversees a comprehensive global outreach programme by, promoting STEM careers to women and girls and tackling social mobility through partnerships with schools and targeted organisations. Over 900 primary and secondary school children attended a ‘STEM insights’ day with Inmarsat in 2019. Inmarsat was also selected as the Technology and Telecommunications Sector Lead for the Social Mobility Pledge, working with the Rt. Hon. Justine Greening to help make social mobility relevant for business in the UK.
When making principal decisions the Board considers the interests of its key stakeholders.
The Board reviewed the proposal for the acquisition of the business. They determined the offer would give Inmarsat shareholders the opportunity to realise, in cash, the value of their holdings in Inmarsat at a material premium to the undisturbed share price. The Board unanimously recommended the offer.
There were multiple stakeholder groups for the Board to consider. Shareholders and convertible bondholders were one of several stakeholder groups to consider throughout the offer process in respect of the price paid, how to deal with dividend payments and the timing for closure of the acquisition. Maintaining ongoing dialogue with shareholders was important throughout the 9 month offer period. Ensuring that there were also continued positive relationships with the Company’s existing lenders throughout the process to ensure their continued support of the business was managed by the Chief Financial Officer under the authority of the Boards. There were regular updates on the acquisition provided to the Company’s partners – covering end users, distributors, value added resellers, manufacturers and others, including regulators across the world, to provide them with open and up to date information about the acquisition. The Board through the CEO and management team considered the effect on its employees and the impacts on existing contractual and employment rights, including pensions and incentive schemes. Additionally they had considered any significant organisational impact. The Board, through the Executive Management Team, regularly informed and engaged with both senior leaders and employees, through regular updates, dedicated intranet hub and Town Hall meetings and with the formal representative employee bodies (UK Staff Forum, Dutch Works Council and Perth Union) and the Global Workforce Advisory Panel. The formal employee bodies were also invited and supported to submit a response to the 2.7 formal offer in the shareholder circular, which the UK Staff Forum decided to do.
The Board considered and approved the capital expenditure on Inmarsat GX7, 8 & 9 and the Polar investment. The Board took account of a number of stakeholder factors in this decision, including the positive impacts on customer service. The Board also took account of the funding risks and financial returns in the project and considered it was in the best interests of the Company to approve the expenditure.