The Board takes responsibility for considering stakeholder needs and interests in its decision-making.
The Board shapes the framework within which stakeholder relationships are developed and maintained, and the purpose of stakeholder engagement in relation to decision making and strategy. The Board itself has a robust programme of stakeholder engagement, aimed at identifying and understanding the interests of the Group’s customers, workforce, supply chain and strategic partners, communities, governments and investors so that the interests of these key stakeholders can be taken into consideration when decisions need to be taken. The Board however cannot, on its own, ensure meaningful reflection of all stakeholder views across the Group. In addition to the Board’s programme of stakeholder engagement, there is also a network of mature executive and business-led stakeholder relationships across the Group which complements actions taken by the Board. Where appropriate, feedback is reported to the Board to support the timely recognition of emerging stakeholder issues. There are many different ways in which the Group engages with its key stakeholders, as set out on pages 125 to 129 of the 2023 Annual Report and Accounts. Specific Board engagement with the Group’s workforce and shareholders is set out below.
Workforce
The Board recognises that the workforce is the Group’s most valuable resource and is pivotal to building its long-term sustainable success. The Board is therefore committed to constructive two-way dialogue with the workforce to enable a better reflection of their interests in future strategic decisions.
To ensure Balfour Beatty is an employer of choice, operating effectively, and creating a working environment where all employees feel safe, valued, and are given the tools to succeed and develop throughout their careers, the Board must listen and engage meaningfully with employees.
Following a review of Board-led workforce engagement mechanisms, Louise Hardy, non-executive Director, was appointed as the Group’s Workforce Engagement Lead in 2022. Louise was tasked with establishing and shaping the Group workforce engagement strategy and reporting to the Board on outcomes and insights. Further details of the workforce strategy can be found in our 2023 Annual Report on pages 126 and 127. Louise’s other responsibilities as the Board’s Workforce Engagement Lead are set out on page 131.
In 2023, Louise met with some of the UK’s Affinity Networks to understand their experiences of working life at Balfour Beatty, what could be done to enhance their experience, and what approach to engagement was needed to enhance communications and develop an efficient two-way feedback loop between the workforce and the Board.
During 2023 actions were taken to enhance workforce engagement. All engagement activities are recorded centrally and reported to the Board periodically to ensure balanced coverage across the Group’s Business Units and key employee types are identified through the output of the employee engagement survey. Key findings from the engagement activities are also discussed to ensure that any lessons learned can be applied, any further engagement activities are organised and any relevant actions are taken to address the key findings. Further enhancements will be made in 2024.
Investors
Investors play a valuable role in the corporate governance of the Company. The Board is committed to maintaining an open dialogue with its investors, which is achieved through a programme of structured engagement, including visits to key project sites and facilities. A selection of investor events that took place in the year can be found within the investor calendar in our 2023 Annual Report and Accounts page 129.
Institutional investors
The Group Chair, Group Chief Executive, and Chief Financial Officer held meetings with individual institutional investors throughout 2023. The Remuneration Committee Chair also held meetings with institutional investors as part of the remuneration policy consultation exercise. In addition, the executive Directors conducted analyst presentations following the announcements of the Group’s financial results and they also carried out an investor site visit to Old Oak Common station in November.
Either on request by investors or at Company presentations and one-to-one meetings, Committee Chairs will engage with investors on matters specific to the remit of their respective Committees. The Senior Independent non-executive Director is also available to shareholders as a separate channel to report any other views or concerns. In addition, management engages with proxy advisory firms to support them in their reporting to their members. The outcomes of engagement activities are reported back to the full Board.
The Board receives biannual reports from the Head of Investor Relations summarising analyst research briefings and changes to institutional shareholdings, as well as ad hoc reports on share price movements.
Engaging directly with shareholders is integral to effective Board decision making that promotes shareholder and wider stakeholder value. It provides an opportunity for candour, insight, and the means to build relationships with key shareholders. The Board concluded that the key benefits arising from its direct shareholder engagement initiatives held throughout the year included the opportunity to:
- build transparency and trust;
- provide greater clarity over Board decisions and the decision-making process;
- showcase the Board’s skills, experience, and diversity, enabling shareholders to assess the composition and effectiveness of the Board as a decision-making unit; and
- enhance the Board’s self-awareness and understanding of shareholder expectations.
Retail investors
The Company’s website provides access to full year and half year results information in addition to a plethora of information on the Company including in relation to the Group’s operations, governance, health and safety, and sustainability so that retail investors can keep equally as informed as institutional investors. Retail investors are also encouraged to raise any questions or queries they may have with the Company Secretary, who will arrange for an appropriate response to be provided.
Investors are consulted on an ongoing basis to ensure that the Group has a full and clear understanding of their views.
Annual General Meeting (AGM)
The Board was delighted to welcome investors to our in-person AGM in May 2023, providing shareholders with the opportunity to ask questions and engage with the Board directly.