Chairman's statement

At M.P. Evans, we firmly believe that good corporate governance underpins the success of the Group. It supports decision-making in the board room, as well as the Group-wide culture that engenders trust in the way we operate and conduct our business.

As chairman, in addition to setting the Group’s strategy in conjunction with the board, one of my primary responsibilities is to ensure that an effective corporate governance framework exists, and that clear policies, which have been approved and endorsed by the board, are embedded throughout all levels of the organisation. I am also responsible for ensuring the effective operation of the board. The composition of the board, the breadth and depth of its skill set, the diversity of its members to facilitate insight and perspective on matters being considered, and the inclusive environment within which constructive debate is enabled, are hugely important to the effectiveness of the board in its strategy setting and decision-making. The Group operates in a sector where timelines are long and hence where there is a premium on boards in which shareholders can place their long-term trust.

Following a period during which we welcomed new members to the board and prepared for further changes to some key roles within the board and senior management, it has been a great pleasure to see how smoothly these transitions have occurred and have benefited the Group during 2023. I am confident that we have a very strong and fully engaged board which has a good balance of skills, experience and diversity to support and further the Group’s strategy, as well as a culture of which we are proud. More information on our non-executive board members, including whether they are considered independent, can be found in the following corporate governance report. The success of these transitions has not been by accident, but the result of taking seriously our commitment to good corporate governance, a major element of which is focused on board composition and succession planning. Ensuring that we have the right people in the right roles is something to which we regularly dedicate time as a whole board, and whilst we carry out our own board evaluation annually, an exercise which board members welcome as an opportunity to reflect and provide constructive feedback, in truth we are constantly challenging and developing ourselves. Where necessary, we bring in external specialists to support the board and senior management in their decision-making, and access to training is available to ensure knowledge is up to date.

I am particularly proud of the great strides we have made in understanding our carbon balance sheet this year, which has enabled us to set a sensible zero-emissions target based on scientific analysis. Importantly, the work we have accomplished in this area, spearheaded by our chief executive Matthew Coulson together with our expanded sustainability team and our specialist ESG consultants, has enabled us to establish baseline metrics which will inform our approach to the risks and opportunities associated with climate change. In preparing and, in 2023, publishing our first TCFD report (covering data from 2021 and 2022), we have had the opportunity to build on our data-gathering processes, reflecting on ways to improve our own practices further whilst giving confidence to our stakeholders that we are committed to, and are already a significant way along, our carbon-reduction journey. As a producer of sustainable palm oil operating to the RSPO’s strict guidelines, we have long been committed to the ESG agenda. Practices, such as our utilisation of byproducts in the production of energy and compost, already help to reduce our carbon balance sheet, and we are constantly seeking new ways to make further reductions. One of our next opportunities will be to engage with our supply chain to understand more about what our suppliers and customers are doing to achieve carbon reduction. During the early part of 2024, the Group also published a stand-alone ESG report which is available on our website (www.mpevans.co.uk). This clearly describes our approach and performance relating to environmental, social, and governance matters for the years 2021, 2022 and, where applicable, 2023. The development of increasingly sophisticated metrics in relation to ESG enables us to provide high-quality information to our shareholders and wider stakeholders. It is testimony to the importance the board places on building trust with our stakeholders. During the year, we also rebuilt our website, a project which will give us further tools to enhance the way we communicate with our stakeholders. Further details of the ways in which the board engages with shareholders is set out in the corporate governance section of this annual report.

Stakeholder engagement and promotion of the Group’s values were also very much at the forefront of the 150-year celebratory lunch that followed the AGM in June 2023. This event was open to all our shareholders. It was also attended by several members of senior management from Indonesia, as the climax to a week they had spent with us in the Tunbridge Wells office, taking part in workshops designed to promote the exchange of ideas, and in social events that provided an opportunity to deepen relationships with UK colleagues and the board. This followed a board visit to Indonesia in April, where the newest non-executive directors were able to meet local staff and visit the Group’s Bumi Mas plantation in East Kalimantan.

During the latter part of the year, awareness of the Group’s zero tolerance of bribery and corruption was refreshed by online ‘ABC’ training completed by over 340 members of staff, including board members and the most senior managers in Indonesia and the UK. This supplemented ongoing training and socialisation of the Group’s policies throughout the workforce, led by the Indonesian human resources team. The Group sees ethical behaviour as a competitive advantage to building trust with suppliers and attracting and retaining high-performing staff.

At least annually, the board considers who the Group’s stakeholders are, and how the board engages with them. This helps to embed into the board’s decision-making process the practice of considering wider stakeholder issues. The whistleblower hotline continues to be effective as a channel for stakeholders to report potential wrongdoing, and whilst we are pleased that no serious whistleblower issues have been identified to date, any grievances reported are treated as an opportunity to see if improvements need to be made in the way we do things.

The board, supported by the audit committee, has continued to make progress on the areas of risk identification, management, mitigation, and disclosure. As well as reviewing matters reported by the internal audit team, and monitoring the internal controls over financial reporting, there is regular dialogue between the Group’s head of risk in Indonesia and executive directors, to ensure that mitigation strategies are being developed, deployed and are effective, and that any newly identified risks are assessed.

The corporate governance information and QCA compliance index on our website is updated annually following the board’s review and was last updated in September 2023. I am pleased to report that the latest review affirmed our full compliance with the QCA Code. The board has already been briefed on the recent updates to both the QCA Code and the UK Corporate Governance Code and has decided that the QCA Code continues to provide an appropriate and robust framework to support the growth of the Group and its ability to deliver returns to its shareholders that also benefit wider stakeholders, and will seek to implement the updated QCA Code at the earliest opportunity.

Peter Hadsley-Chaplin
Chairman

19 March 2024