Section 172 Statement - Financial Times Group Limited
This Statement applies to Financial Times Group Limited (the "Company")
Section 172 requires that “a director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:
a) The likely consequences of any decision in the long term;
b) The interests of the company’s employees;
c) The need to foster the company’s business relationships with suppliers, customers and others;
d) The impact of the company’s operations on the community and the environment;
e) The desirability of the company maintaining a reputation for high standards of business conduct; and
f) The need to act fairly between members of the company."
The statutory board (the “Board”) delegates responsibility to the FT group management board (the “Management Board”) for developing and implementing strategy, and for the day to day management of the FT group business. Reporting to the Management Board, there are a number of decision-making committees across the group. These committees help the Management Board to drive strategy, allocate resources and govern the approach to issues such as data usage and technology, and compliance with the FT’s Editorial Code.
In performing their duties under s.172, the directors of the Company have had regard to the matters set out in s.172(1) as described below.
The Board recognises that to compete in an ever-changing world, the FT Group needs to be strong from the inside out. Developing a clear set of brand values and personality helps the FT Group to cohere and supports consistent decision-making.
The directors continue to ensure that the brand values, which are reflective of the Company’s desire to maintain a reputation for high standards of business conduct, are applied throughout the Company and its wholly owned UK subsidiaries (“FT Group”). They are:
Integrity: we are truthful, accurate, ethical and decent;
Trust: we deliver our commitments;
Curiosity: we are open minded and eager to learn, always exploring new ideas;
Subscriber focus: we have an unmatched understanding of our subscribers and channel our resources to meet their needs;
Ambition: we are leaders not followers, aiming to be the best and make a difference;
Inclusion: we value different perspectives and experiences, making us truly global in outlook.
The recommendations of an internal FT Governance Review Group, which have been published to all staff, continue to be implemented with the endorsement of the Board. These cover areas such as: oversight of the FT Group and its performance by its owner and sole shareholder, Nikkei; internal decision-making processes and transparency; and engagement, including employee engagement.
The Company is not required to adopt a UK Corporate Governance code, however we continue to strive for best practice and believe that our approach is broadly aligned with the Wates Corporate Governance Principles.
On appointment to the Board, new directors are provided with training and guidance on their duties, and formal appointment letters are issued to directors joining the Board and Management Board which reflect their statutory duties. The same processes are applied to new directors appointed to any FT Group subsidiary company.
The Board’s decision making is appropriately informed by s.172 factors, which are actively considered and referenced in board minutes and aided by the inclusion of these factors in board papers to the extent relevant. A proforma document has been developed in order to provide guidance to senior managers on the preparation of board papers to aid the Board in identifying the relevant stakeholder considerations in its decision making.
The following table provides further examples of the effect that having regard to the s.172 factors has had on the Company’s decisions and strategies during the financial year:
Section 172 (1) factors | Matter |
a) the likely consequences of any decision in the long term; and b) the interests of the company's employees; and e) the desirability of the Company maintaining a reputation for high standards of business conduct. |
In January 2022 the Board approved the acquisition of the remaining 49% equity stake in Longitude Research Limited (“Longitude”) in accordance with the put-call option entered into upon the acquisition of the initial 51% equity stake in 2018. Longitude is a commercial research and thought leadership provider to global corporate clients, providing integrated marketing solutions that combine world class insight (based on research and evidence) with creative storytelling, delivered to an influential audience. The Board considered the rationale for the transaction in the context of our corporate development strategy and having reviewed the financial performance of Longitude since the initial equity acquisition. The Board actively considered Longitude’s growth strategy and its alignment within the wider FT Group. |
a) the likely consequences of any decision in the long term; and f) the need to act fairly as between members of the company. |
The Board formally considers, approves and adopts strategic and operating plans and budgets annually, as appropriate. During the year FT Group’s Consolidated Strategic Plan for 2023-2028 was reviewed and discussed with Nikkei management prior to its formal approval and adoption by the Board. The Management Board is regularly updated on, and actively monitors and proactively responds to progress against those plans. |
a) the likely consequences of any decision in the long term; and e) the desirability of the Company maintaining a reputation for high standards of business conduct; and f) the need to act fairly as between members of the company. |
In October 2022 the Board approved the payment of an interim dividend of £3.9m out of the accumulated profits of the Company to its sole shareholder, Nikkei, Inc. In considering and approving the dividend the Board had regard to the dividend expectations agreed with Nikkei, Inc. together with the Company’s financial considerations including the cash position of the Company and the FT Group, any identified risk of the impairment of the carrying value of investments in group entities, the utilisation of the Company’s funding facilities and shareholder and broader stakeholder interests. |
a) the likely consequences of any decision in the long term; |
In June 2023, the Board extended the Company’s £100m committed funding facility with one of our primary banking partners by one year to July 2025; and the extension of the uncommitted internal funding facilities with the Company’s subsidiary The Financial Times Limited. In deciding to approve this, the Board carefully considered the funding requirements of the Company and FT Group, the latest outturn performance for 2023, the preliminary strategic plans for 2024-2029 and all identified major planned expenditures. |
b) the interests of the company's employees;
|
The Board has engaged with and consulted FT Group employees and their representatives on a regular basis, to enable the Board to have regard to their interests when making decisions. As the main employing entity of FT Group, a detailed summary of this is covered in the financial statements of The Financial Times Limited. |
c) the need to foster the Company's business relationships with suppliers, customers and others; | The Board recognises the importance of maintaining good working relationships with the FT Group’s suppliers, customers and others and that effective engagement with these stakeholders is key in order to successfully deliver the FT Group's strategy. A detailed summary of this is covered in the financial statements of The Financial Times Limited. |
d) the impact of the Company's operations on the community and the environment; and e) the desirability of the Company maintaining a reputation for high standards of business conduct; |
Reflective of the Board’s consideration of FT Group’s impact on the community and the desire to maintain high standards of business conduct, FT Group’s New Agenda messaging continued throughout 2022. We left behind a global pandemic, but Russia's invasion of Ukraine and the following global financial repercussions meant the need for New Agenda journalism was as important as ever. We launched our 'Make sense of it all' campaign to promote the FT as the leading destination for global insights and analysis during a time of social and financial turmoil.
|
a) the likely consequences of any decision in the long term; and d) the impact of the Company's operations on the community and the environment; and e) the desirability of the Company maintaining a reputation for high standards of business conduct. |
During the year, FT Group’s emissions reduction targets, as approved by the Management Board in 2021, were verified by the Science Based Targets initiative. A sub-committee of the Management Board continues to co-ordinate the necessary work to achieve these targets including in relation to business travel, our supply chain, leveraging our influence in the wider business community and embracing the New Agenda of responsible capitalism. In November 2022, a set of Sustainability Objectives and Key Results for 2023 were approved by the Management Board. With endorsement from the Management Board, FT Group has again donated advertising space in the Financial Times newspaper to organisations working in areas that benefit the environment and the wider community. During the year, we donated space to Make My Money Matter, Ethical Consumer, As We Sow, Possible, Business Declares and World Land Trust. In May 2022, in partnership with Infosys, FT Group also delivered 'The Climate Game - can you reach net zero by 2050?' an interactive experience where players seek to save the world from the worst effects of climate change, underlining FT Group's commitment to providing access to authoritative information about climate change and policy. |
d) the impact of the Company's operations on the community and the environment. |
The Board continued its support to the financial literacy charity bearing the FT’s name: FT Financial Literacy and Inclusion Campaign (“FLIC”). Although it runs independently of FT Group, during the year it was agreed to continue supporting FLIC with the provision of:
|
f) the need to act fairly as between members of the Company.
|
The Company remains wholly owned by Nikkei, Inc., a privately owned Japanese registered company. The Company’s CEO reports to the Chairman of Nikkei on the overall performance of the FT Group as set out in regular detailed business reports. Nikkei is represented on the Company’s statutory and management boards and the Company is subject to oversight by the audit and supervisory boards of Nikkei. |
a) the likely consequences of any decision in the long term; and c) the need to foster the Company's business relationships with suppliers, customers and others; |
During the year, the Management Board was regularly updated on the progress of FT Group’s subscriptions strategy, which they had approved during 2020. The purpose of this strategy is to help accelerate growth across our core audiences and diversify our offerings to build a more robust business. These updates enabled the Management Board to review progress against this strategy and our relationship with our customers, having regard also to the long term interests of the Company and FT Group. |
e) the desirability of the Company maintaining a reputation for high standards of business conduct; | The Board approved the Company’s annual statement on Modern Slavery, and Tax Policy Statement. It has also ensured that robust policies are in place on Anti-Bribery and Corruption, Conflicts of Interests and Whistleblowing, as well as a stringent Editorial Code of Practice. The Board ensures that all policies are effectively communicated to FT Group employees and that periodic reviews are undertaken to renew and refresh policies as appropriate. |
This statement was included in the Strategic Report of the Company for the year ended 31 December 2022 and approved for issue by the board on 11 September 2023.