In line with Section 172(1) of the Companies Act 2006, the Directors of the Company must act in a way which they consider, in good faith, would most likely promote the success of the Company for the benefit of its members as a whole, and in doing so must have regard to a number of other key matters. There must therefore be a careful balance of sometimes competing interests of different stakeholder groups and it is the duty of the Directors to act in such a way should promote the long-term success of the Company as a whole. 

Likely long-term consequences of decisions (s.172(1)(a))

Given the nature of the business, the Board takes a long-term approach to its decision-making to ensure that the Company is able to deliver its strategy of creating long-term sustainable value for all of our stakeholders by developing thriving communities with high quality homes that provide a better way to live.

There has been considerable emphasis on resource efficiency, use of sustainable materials, placemaking and biodiversity as these are aspects that are key to creating a long-term sustainable business and value to our stakeholders. See pages 14 to 25 of the Strategic Report for an overview of the sustainability practices of the Group.

Effective risk management systems are also imperative to understanding the likely long-term consequences of actions. The Board plays a key role in reviewing the Company’s approach to risk, including an assessment of its emerging and principal risks. See pages 38 to 45 of the Strategic Report for a description of the identified risks, procedures for identifying risks and an explanation of how these are being controlled or mitigated.

At least annually, the Board conducts an assessment of the prospects of the Company, taking into consideration the Company’s current position and principal risks. This year the Directors selected a three year timeframe over which to assess the viability of the Company. The Viability Statement can be found on pages 47 and 48 of the Strategic Report.

Maintaining a reputation for high standards of business conduct (s.172(1)(e))

The Directors have regard to the desirability of the Company maintaining a reputation for high standards of business conduct. The Company has in place a Code of Conduct which acts as a guide for employees to doing the right thing in business, focusing on the values and behaviours deemed most important for the Group and seeking to guide employees in their good judgement to act in the Redrow way. The Company also has well-embedded policies in place which assist with ensuring high standards of conduct, including in respect of the following key areas: Health, Safety and Environment; Whistleblowing; Anti-Bribery and Corruption; Human Rights; and Modern Slavery. The Environmental, Social and Governance Disclosures section of the Directors’ Report, from pages 103 to 110, provides further insight into measures put in place by the Board to assist with maintaining a reputation for high business conduct standards.

Acting fairly between members of the Company (s.172(1)(f))

The Directors also have regard to the need to act fairly between members of the Company, aiming to understand their views and act in their best interests. The ownership of the Company follows a ‘one share, one vote’ structure, which assists with promoting parity in shareholder rights. The Board ensures that there is fair and equal dissemination of information to all shareholders and has a dedicated investors section of the Company’s website which is available to all shareholders. This provides easy access to RNS announcements, key financial dates, dividend details, reports and publications. In the ordinary course, and outside of the prohibition on meeting attendance currently in force by the Government due to the COVID-19 pandemic, all members are invited to attend the Annual General Meetings of the Company, offering an opportunity for members of any size shareholding to have a conversation with, and ask questions to, each of the Directors. For any Annual General Meetings where in-person attendance is prohibited due to the Government regulation, all shareholders will be offered the opportunity to submit questions to the Board ahead of the meeting with answers being made available to them.

Having regard to specific stakeholder groups (s.172(1)(b) to s.172(1)(d))

The table which follows seeks to provide insight into how the Board carries out their duty under this section, in particular with those stakeholder groups referenced in s.172(1)(b) to (d) of the Act, and how this links to strategy.

Stakeholder Group Why important to us? Key Priorities of the Stakeholder Group Engagement with Stakeholder Group Impact on Board decisions
Investors Our shareholders provide funds which aid the growth of our business and are vital to our future success Strong financial performance

Good governance practices

Transparency and openness

Adoption of sustainable business practices

Examples of engagement with our shareholders include: 

- formal results presentations immediately following publication of the interim and final results;

- dedicated investor related section of the Company website (providing easy access to RNS announcements, key financial dates, dividend details, reports and publications);

- meetings held between the Directors and significant shareholders;

- comprehensive consultation exercise carried out with major shareholders and proxy advisory firms regarding remuneration practices, Board composition and the impact of COVID-19 on remuneration and the remuneration policy renewal;

- meetings held between the Executive Directors and current and potential significant shareholders; and

- Annual General Meeting, at which each of the Directors were in attendance in 2019, offering an opportunity for shareholders to directly engage with the Board.  

For further details of engagement with shareholders, see page 57 of the Corporate Governance Report, under heading: Shareholder Engagement

Examples of the impact of shareholders on the Board’s decision making include: 

- a change to composition of the Board following consultation with major shareholders; and

- treatment of LTIP award vesting in line with views of major shareholders (i.e. pro-rating LTIP awards to reflect period that a Director served in post as an executive, rather than as an office holder).
Employees Our employees are essential to preserving long-term value and Valuing People is a fundamental part of our strategy Development of our people  

Safety and wellbeing of our people  

Good quality employment opportunities  

Transparency and openness
Examples of engagement with our employees include:

- designated workforce Non-Executive Director;

- employee communication via the intranet, Engage;

- employee engagement meetings;

- annual INsight survey;

- direct email communication channel to the Board;

- promotion of share ownership through employee share plans;

- division specific communications; and

- Company performance communications.  

For further details of engagement with employees, see page 106 of the Directors’ Report under heading: Workforce Engagement
Examples of the impact of employees on the Board’s decision making include:·      

- a commitment to ensuring that 15% of the total workforce are enrolled on formal training programmes at any one time; and

- the introduction of mental health first aiders programme, with currently over 200 employees having received training and been equipped to act in such capacity across the business.  
Suppliers Having strong relationships with our suppliers is important to our long-term success and the Board is briefed on supplier feedback and issues on a regular basis Assistance with training and development opportunities

Assistance with addressing the industry skills shortage

Timely payment practices

Creation of jobs for our subcontractors

Safety and wellbeing of our people

Compliance with laws and regulations 
Examples of engagement with our suppliers include:

- participation in workshops, delivered through our partnership with the Supply Chain Sustainability School, to engage with our suppliers on a number of matters;  

- collaboration with subcontractors on health and safety matters and ensuring that our values on customer service, quality, safety and sustainability are in alignment;  

- working with our supply chain to attract new entrants into the industry and actively supporting our subcontractors to train their recruits to agreed standards, including inviting them to workshops and briefings;  

- engagement by way of a supply chain mapping system enabling us to work with supply partners to identify and avoid high risk products;  

- working with supply chain to find ways to eliminate, reduce or reuse packing; and  

- collaboration with key suppliers to collate their Scope 1 and Scope 2 energy and carbon data allowing the creation of a bespoke online tool to assist with the calculation of greenhouse gas emissions from our supply chain that are applicable to us.
Examples of the impact of suppliers on the Board’s decision making include:

- the Company partnering with the Supply Chain School which has granted access to thousands of online presentations, training modules, guidance documents and checklists with regular invites to attend workshops and briefings;

- the identification of waste reduction opportunities following workshops with suppliers to identify the root causes of waste; 

- engagement of Datum RPO to manage all temporary labour requirement and processes, including carrying out periodic audits to ensure temporary agency workers are legally compliant and there are no instances of modern slavery; and

- placing apprentices, who are employed and trained by the Company, with subcontractors for their apprenticeship, with around 85% of apprentices going on to take a position with the subcontractor at the end of their apprenticeship. 
Customers Putting our customers first is a key principle underpinning our strategic theme of Building Responsibly. The Board believes that the most meaningful praise it can get is from the people who buy our homes.  Build a quality product and provide a great place to live

Provide excellent customer service

Be a considerate constructor and good neighbour

Develop places that enhance health and wellbeing
Examples of engagement with our customers include:

- face-to-face interactions and interactions via the My Redrow app;

- customer feedback via the NHBC survey;

- close monitoring of customer complaints and feedback;

- reports to the Board from the Customer and Quality Director, appointed in 2020 to spearhead and develop the customer services strategy, and the Group Customer & Marketing Director; and

- launch of a series of placemaking videos for customers seeking to engage with them regarding how our developments respond to the unique characteristics of the site and surroundings. 
 Examples of the impact of customers on the Board’s decision making include:

-the introduction of our Red Site Managers Inspection iPad app in 2019 for use by site and customer service managers to ensure that identifying and rectifying potential issues during the build is a smooth process leading to a high quality end product;

-  the introduction of our online reservation system which offers the ability for customers to legally complete the reservation process remotely in the comfort of their own home at a pace they are comfortable with, being able to dip in and out of the process until it is complete; and

- during the COVID-19 lockdown, the decision to conduct Hard Hat tours virtually and adapting home preview tours and welcome parties to fit with social distancing guidelines.
Community and Environment Working safely and considerately to protect the
environment is a key principle underpinning our strategic theme of Building Responsibly and we listen to learn to connect with local communities in line with the Redrow 8 placemaking principles.
Support with local causes and community projects

Provide affordable homes

Reduce waste from our construction activities

Be a considerate constructor and good neighbour

Prevent pollution from our construction activities

Mitigate for effects of climate change and flood risk on our developments

Protect and enhance biodiversity

Develop places that enhance health and wellbeing

Share value through the communities we build
Examples of engagement with the communities in which we operate include:

- discussions and consultations with local communities at an early stage to discuss matters that may inform the development process, to enable us to design developments that are sensitive and responsive and foster a sense of belonging;

- direct communications with local wildlife organisations who can be provide a wealth of knowledge about the local context and help influence our designs;

- engaging directly with local schools to ensure that green spaces and play areas are well used;

- working with the emerging community as the development progresses to help foster a sense of community and belonging though active involvement of residents; and

- discussions with a variety of organisations local to our developments, allowing us to understand what is happening locally and enabling us to provide donations and sponsorship for local community projects to ensure that communities continue to thrive. 
Examples of the impact of the community and environment on the Board’s decision making include:

- the introduction of the Company reporting against the Task Force on Climate-related Financial Disclosures (“TCFD”) framework to enhance our climate-related reporting, which can be found on pages 111 to 115 of the Directors’ Report;

- the introduction of our industry-leading biodiversity strategy in summer 2020, our vision being to create the best new developments for wildlife, where people benefit from access to nature-rich spaces and to use our activities to increase biodiversity, inspiring other businesses to do the same;

- the commitment of £188m to the local communities where we build for the development of new schools, local shops, community and health centres, as well as green spaces; 

- the creation of more than 1,600 acres of green space and communal areas on our current developments, including a wide range of spaces suitable for all ages and activities;

- the decision to halt use of hedge netting on our developments due to the potential negative impacts on wildlife;

- the signing up as a contractor partner of the Considerate Constructors Scheme (CCS) and signing-up all our developments to the scheme;

- the maintenance of our environmental management system, which is externally certified to ISO14001; and

- the alignment of our approach to the United Nations Sustainable Development Goals (SDGs), which aim to achieve a better global future for all by addressing key social and environmental challenges such as health and wellbeing and biodiversity.
Government and Regulators Active engagement with governmental bodies and regulators is important to allow us the opportunity to have input on matters relating to our industry where possible and to ensure we are able to put in place appropriate measures to comply with laws and regulations  Compliance with laws and regulations

Ethical operations and practices

Address the UK housing shortage

Provide affordable homes

Prevent pollution from our construction activities

Provide good quality employment opportunities
Examples of engagement mechanisms with Government and regulators include:

- participation in a range of consultations affecting our industry and practices;

- attendance at meetings and forums to engage with policy makers relevant to our operations;

- discussions with Government bodies regarding their new emphasis on the design quality of housing developments;

- closely working with Government bodies to contribute to the agenda on the mandatory biodiversity net gain requirements for new developments;

- Government lobbying in relation to matters impacting the housing market; and 

- reports from the Executive Management Team providing updates on statutory and regulatory developments to be considered by the Board in their decision-making.
Examples of the impact of Government and regulators on the Board’s decision making include:  

- on publication of the Government’s National Design Guide in October 2019, our assessment criteria for our internal placemaking scoring system (the Redrow 8) was refined to reflect the key characteristics of well-designed places set in the Government guidance; and

- ahead of the Environmental Bill coming into force (requiring the updated Defra metric to quantify the ecological impacts by developers), we developed a new Company-wide strategy to ensure that our developments enhance biodiversity and contribute to nature’s recovery. 
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