Corporate governance

Chairman

Robert Watson is one of the Hilton Foods founders and as such has an intimate knowledge of the business as well as having relationships with key decision makers at supermarket retailing businesses around the world. He has held senior Hilton Board positions since 2002 and during that time has guided the Group to significant continuous and sustainable growth including a successful flotation in 2007. This success is illustrated by Hilton’s total shareholder return over the past ten years showing average compound annual growth of 9.4%, which compares with 4.4% achieved by the FTSE 250 Index. A further indicator of Hilton’s enduring success is the average compound annual growth in Hilton Foods adjusted operating profit which, over the 17 years since flotation, is 11.3%.

Robert joined Hilton Foods initially as Chief Executive, transitioning during 2018 to Executive Chairman and in 2021 he moved into a non-executive capacity. This transition path had been discussed with our major shareholders over a number of years to ensure both openness and transparency and to gauge their views. They have been supportive of these changes to date and Hilton Foods will continue to engage with them in the future to ensure that this remains the case.

Robert has been instrumental in Hilton Foods success over a prolonged period and Hilton’s other Directors continue to have the strong view that Robert’s knowledge and experience within the business can contribute to our further growth and success in the future. The Board believes that he has demonstrated, and will continue to demonstrate, objective judgement that is in the best interests of the Group. The 2022 external board evaluation supported the Board’s view that under the leadership of Robert Watson Hilton Foods has grown to be a successful FTSE 250 company.

Whilst Robert cannot be designated as independent under the UK Corporate Governance Code, the Board believes that he has, since moving to Non-Executive Chairman, distinguished himself by critically scrutinising decisions purely on the basis of his extensive knowledge of the Group, its history, the industry in which it operates and its stakeholders. He has shown that he is able to chair and monitor the Group without prejudice and that he is impartial in his judgement and voting behaviour. He is also supported in this by a strong Senior Independent Director.

In view of the above, the Board believes that there are valid exceptional circumstances envisaged by the Code which are in the best interests of the Group and its stakeholders for Robert to continue as the Hilton Foods Chairman. We do also appreciate stakeholder concerns to ensure appropriate governance, and specifically with regard to the balance of the Hilton Foods Board, which comprises a majority of independent Non-Executive Directors. The Board maintain an ongoing focus on appropriate succession planning arrangements and it is now anticipated that Robert will step down by the end of 2024. The process to appoint his successor has commenced and is being led by the Senior Independent Director.