Our Governance Framework
The Board oversees the Group’s governance framework, reviews and approves the strategy, monitors management’s performance against agreed targets and ensures appropriate controls are in place and operating effectively. The Board ensures leadership through effective oversight and review, and executive decisions and implementation of strategy are delegated to management.
|
The Board
|
|
The Board is primarily responsible for the Group’s long-term success, for setting the strategy for the leadership and control of the Group and for providing appropriate challenges to ensure management remains focused on achieving the strategic objectives for delivering value to the shareholders and other stakeholders.
The Board defines the company’s purpose and then sets a strategy to deliver it, underpinned by the values and behaviours that shape our culture.
|
|
Our Strategy
|
Our Purpose
|
Our Principal Risks
|
Key activities of the Board 2023
|
|
The Board delegates certain matters to its four principal committees.
|
|
They support the Board’s operation through their focus on specific areas of governance.
|
|
Audit & Risk Committee
|
Remuneration Committee
|
ESG Committee
|
Nomination Committee
|
|
The terms of reference of each Board Committee are available on the Group’s website at www.dalatahotelgroup.com.
|
|
Executive Directors
|
|
The Board delegates the execution of the company’s strategy and the day-to-day management of the business to the Executive Directors, assisted by other members of the Executive Committee.
|
|
Chief Executive Review
|
KPIs
|
Senior Management Team
|
|
Supporting Committees
|
|
The executive directors oversee a number of supporting management committees that provide insight into key business activities and risks.
|
|
Disclosure
Committee
|
Executive Risk Committee
|
Privacy
Committee
|
Hotel Performance Committee
|
Environmental Steering Group
|
The Group actively engages with stakeholders affected by the Board’s strategy and principal decisions, including shareholders, employees, customers and guests, communities, banks and landlords. We also engage with suppliers, industry peers, government and regulatory authorities. Further details on our engagement with stakeholders and how these engagements inform our strategy and decisions can be found in the Stakeholder Review section.
Board membership
As of this report’s date, the Board comprises eight members - a non-executive chair, four non-executive directors and three executive directors.
The directors believe that the Board’s composition provides the necessary skills, knowledge and experience gained from a diverse range of industries and backgrounds required to manage the Group.
The experience of each director is set out in their biographies, and the Board considers that their biographies reflect suitable breadth and depth of strategic management experience.
Role of the Board
The Board is primarily responsible for the Group’s long-term success, for setting the strategy for the leadership and control of the Group, for providing appropriate challenges to ensure management remains focused on achieving the strategic objectives, and for delivering value to the shareholders and other stakeholders.
The Board defines the company’s purpose and then sets a strategy to deliver it, underpinned by the values and behaviours that shape our culture.
A sound understanding of how value is created over time has been key in steering strategies toward the level of sustainable value creation we have delivered. A cornerstone of safeguarding our long-term ambitions has been a commitment to high standards of corporate governance, as well as a board of directors with a depth of experience and expertise. In making and implementing actions, the Board aims to manage the contrast between short-term pressures and the long-term impacts of decisions.
Information flow at meetings
Before each board meeting, the directors receive their papers on a fully encrypted electronic portal system. These papers include detailed monthly accounts and reports from the chief executive, chief financial officer, corporate development director and chief operating officer.
The chief executive, chief financial officer and corporate development director ensure that the Board is kept fully aware on a timely basis of business issues and prospects throughout the Group.
The executive management team structure and the open communication approach in the Group enable issues to be raised quickly. Many of these key issues are brought to the attention of the Board.
In consultation with the Chair and chief executive, the company secretary manages the provision of information to the Board for their formal board meetings and at other appropriate times.
The Chair and chief executive also maintain regular informal contact with all directors.
Whistleblowing
The Group’s whistleblowing arrangements include a dedicated speak-up email address through which all employees and third parties can confidentially raise concerns about possible wrongdoings. All whistleblowing incidents are reviewed and formally investigated by the relevant functional heads. In 2023, the audit and risk committee considered the Group’s whistleblowing policy and arrangements. They reviewed the whistleblowing incidents and outcomes and provided updates to the Board to assess the adequacy of the whistleblowing arrangements. The Board is satisfied that the Group’s whistleblowing arrangements are operating effectively.
Division of Responsibilities
Board Roles
There is a clear division between the executive and non-executive responsibilities, ensuring accountability and oversight. The Chair and Chief Executive roles are separately held, and their responsibilities are well defined, set out in writing and reviewed by the Board.
|
Chair -
John Hennessy
|
- Leads the Board, sets each meeting agenda and ensures the Board receives accurate, timely and precise information to monitor, challenge and guide and make sound decisions;
- Promotes a culture of open debate between the executive and non-executive directors and holds meetings with the non-executive directors without the executive directors present;
- Regularly meets with the chief executive and other senior management to stay informed;
- Ensures effective communication with shareholders and other stakeholders;
- Promotes high standards of corporate governance; and
- Promotes and safeguards the interests and reputation of the company.
|
|
Chief Executive -
Dermot Crowley
|
- Provides coherent leadership of the company, including representing the company to customers, suppliers, governments, shareholders, financial institutions, employees, the media, the community and the public and enhances the Group’s reputation;
- Leads the executive directors and senior management team in running the Group’s business;
- Develops and implements Group objectives and strategy having regard to shareholders and other stakeholders;
- Manages the Group’s risk profile and ensures appropriate internal controls are in place; and
- Ensures compliance with legal, regulatory, corporate governance, social, ethical and environmental requirements.
|
|
Senior Independent Director -
Elizabeth McMeikan
|
- Works closely with the Chair, acting as a sounding board and providing support;
- Responsible for conducting an annual performance review of the Chair;
- Provides advice and judgement to the Chair as necessary, serving as an intermediary to the other directors when necessary; and
- Is available for shareholders with concerns that cannot be addressed through the normal channels of Chair or Chief Executive Officer.
|
|
Non-Executive Directors
|
- Review the performance of executive management;
- Review Group financial information and provide advice to management; and
- Assist in strategy development and ensure appropriate and effective internal control systems and risk management are in place.
|
|
Company Secretary -
Sean McKeon
|
- Ensures compliance with board procedures and provides support to the Chair to ensure board effectiveness;
- Ensures the Board has high-quality information, adequate time and appropriate resources to function effectively and efficiently;
- Assists the Chair by organising induction and training programmes and ensuring that all directors have full and timely access to all relevant information;
- Provides advice and keeps the Board updated on corporate governance developments; and
- Facilitates the directors’ induction programmes and assists with professional development.
|
|
Designated Non-Executive Director With Responsibility For Workforce Engagement -
Gervaise Slowey
|
- Monitors the effectiveness of engagement programmes established for employees;
- Provides regular updates to the Board and
- Attends regular engagement with employees from various sectors of the business.
|
Time commitment
Under the terms of their appointment, all directors agreed to the ‘Time Commitment Schedule’, requiring them to allocate sufficient time to discharge their responsibilities effectively. As part of the board evaluation process completed in October 2023, each non-executive director confirmed that they continue allocating sufficient time to effectively discharge their responsibilities. Also, any potential appointment to the Board of another company must be approved by the Board.
Conflicts of interest
The Board considers potential conflicts of interest as a standing agenda item at each board meeting, and each director must notify the company in advance of any interest in any transaction to be considered by the Board.
Meetings and attendance
The Board meets sufficiently regularly to ensure that all its duties are discharged effectively. Board meetings are intentionally held at Dalata hotels in different locations to broaden the Board’s exposure to the markets in which the Group operates and to provide opportunities to meet frontline staff and colleagues.
During 2023, the Board held nine formal board meetings and three other full-day meetings dealing with strategy, management presentations and a day dedicated to training.
Independence
The Board considers the independence of each of the non-executive directors upon appointment and on an annual basis. The Board has determined all of the non-executive directors, except for the Chair, who was independent on appointment, to be independent within the meaning of the term as defined in the Code.
Appointments to Board
The nomination committee is responsible for a formal, rigorous and transparent procedure for the appointment of new directors.
Jon Mortimore, non-executive director, joined the Board on 1 August 2023.
Re-election of directors
In accordance with the provisions of the Code, the company’s director re-election policy requires that all directors should retire at the 2024 Annual General Meeting and offer themselves for election.
Ongoing director training and development
The Board engages in development through a series of presentations with experts on a range of topics, including risk management, corporate governance and strategy.
The Board received two half-day presentations in May and October 2023 from management team members covering various topics related to their areas of responsibility.
In November 2023, the company secretary facilitated a directors’ training day, which both executive and non-executive directors attended. Our Directors are invited to identify areas in which they would like additional information or training, following which the Company Secretary will arrange for the necessary resources to be put in place. The resulting sessions may be internally or externally facilitated.
This year, the Directors have received updates and presentations on the following areas:
- ESG Commitments and net zero carbon pathway;
- Executive remuneration trends and best practices;
- Inclusion and diversity;
- Carbon Pricing;
- Artificial Intelligence;
Each director may obtain independent professional advice at the company’s expense to further their duties as a director. The company secretary and his deputy support each committee. In addition, each committee can seek independent professional advice.
Board diversity
The Board has adopted a Board Diversity Policy, which is reviewed annually. The policy aims to help achieve the optimum board composition of skills and experience.
In accordance with the policy, all board appointments are made on merit, in the context of the skills, experience, independence and knowledge that the Board requires to be effective.
The policy statement also acknowledges that an effective board will include and make good use of differences in the skills, regional and industry experience, background, race, gender and other distinctions between directors. These differences will be considered in determining the optimum composition of the Board and, when possible, will be balanced appropriately.
Further details on the policy application are set out in the Nomination Committee Report.
Annual Board Evaluation
An annual evaluation process is undertaken, which considers the effectiveness of the Board, its principal committees and individual Directors. This review identifies areas for improvement and informs training plans for our directors.
The Board follows a formal three-year cycle developed to enable reviews to be led from a fresh perspective each year. In 2023, we conducted an externally facilitated evaluation.
Board Induction
We develop detailed, tailored inductions for each new non-executive director and executive director. This includes one-to-one meetings with the Chair and each of the non-executive Directors. One-to-one meetings are also arranged with the CEO, CFO, Company Secretary, and other executive committee members. New Directors also meet members of our operational teams and visit our hotels to understand the business and have a chance to experience our culture in person.
Workforce engagement
The Board is committed to meeting its responsibilities to all stakeholders in the business. It places significant value on maintaining successful relationships with the Group’s workforce, suppliers, customers and the communities in which it operates. In her position as workforce engagement director, Gervaise Slowey has continued to work with the Company Secretary and the Chief People Officer to develop a meaningful two-way dialogue between employees across the company and the wider Board.
In February 2023, the Board received independent staff engagement results. The results were extremely positive, and any areas that need more focus are part of the action plan for 2023/2024.
During 2023, Gervaise met with the following employees:
- General Managers & teams at our new Maldron Finsbury Park Hotel;
- General Manager & team at Clayton Charlemont Hotel;
- Employees on our Altitude Training Programme;
- Employees on our Navigate Training Programme
- HR Managers
The engagement with the employees was designed to obtain feedback on things that work well and things we could do better considering customers, our people and our culture. The feedback from the workforce informed her recommendations to the Board for 2023/2024. The Board recognises the importance of ongoing communication. It demonstrates that it has listened to and acted upon feedback. The Board remains committed to enhancing its engagement activities and strengthening its relationship with the workforce into 2024.
Risk management
The Risk Management section explains how the Board oversees risk management.
Internal controls
The Board has responsibility for maintaining sound risk management and internal control systems and, at least annually, reviewing the effectiveness of these systems. These internal control systems are designed to manage rather than eliminate the risk of failing to achieve a business objective.
They can, therefore, only provide reasonable and not absolute assurance against material misstatement or loss.
Assessment of the principal risks facing the Group
The Board and audit and risk committee received and reviewed reports from group internal audit to help their annual assessment of the Group’s principal risks and the controls in place to mitigate them. The principal risks and the mitigating factors are outlined in the Risk Management section.
Annual assessment of the effectiveness of risk management, internal control and financial reporting systems
The Board and audit and risk committee received and reviewed reports from group internal audit to help with their annual assessment of the effectiveness of the Group’s risk management, internal controls and financial reporting systems, and are satisfied that the systems have been operating effectively throughout the year to the date of the report.
Shareholder Engagement
The Board actively seeks and encourages engagement with investors, including its major institutional shareholders and shareholder representative bodies. During 2023, the Company has continued to engage with shareholders in a proactive manner.
The charts below set out the number of meetings held by the Non-Executives, Executive Directors and our Investor Relations team. These meetings include one-to-one meetings, group meetings, and conference meetings.
Number of shareholder meetings in 2023
AGM
The Annual General Meeting will be held on 25 April 2024 at Clayton Hotel, Cardiff Lane, Dublin.
Formal notification will be sent to shareholders at least 20 working days before the meeting in accordance with the provisions of the Code. Other general meetings may also be convened from time to time upon at least 14 working days’ notice or where specific requirements are met, including prior approval by shareholders by way of a special resolution, upon 14 days’ notice in accordance with the Code.
The Annual General Meeting gives shareholders an opportunity to hear about business developments and ask questions of the Chair and, through him, the chairs of the various committees and its committee members. Shareholders attending the meeting are informed of the number of proxy votes lodged for each resolution.
Details of the meeting and resolutions to be proposed are sent out in the shareholders’ Notice of Meeting.
Key Activities of the Board in 2023
Key Activities of the Board:
The key activities considered by the Board during the year are set out opposite. The Board recognises the value of maintaining close relationships with its stakeholders, understanding their views and the importance of these relationships in delivering our strategy and the Group’s Purpose. The Group’s key stakeholders and their differing perspectives are considered as part of the Board’s discussions. Board meeting discussions are structured using a carefully tailored agenda that is agreed upon in advance by the Chair in conjunction with the CEO and Company Secretary. A typical Board meeting will comprise the following elements:
Performance reports, including Chief Executive Overview, CFO Review, Chief Operating Officer Review and Acquisitions and Development Report. Deep dive reports into areas of particular strategic importance to evaluate progress, provide insight and, where necessary, decide on appropriate action. Read more about some of the topics covered during the year opposite.
|
Financial
|
- The Board approved the 2024 Group Budget
- The Board agreed on the Viability statement period to be reported in the Annual Report
- Approved the financial strategy of the business
- The Board approved the payment of the interim dividend to shareholders
- The Board approved the half and full-year results announcements, Annual Report and Investor Presentations on the recommendation of the Audit & Risk Committee
|
|
Risk Management and Internal Control
|
- Reviewed the Group’s principal risks and considered emerging risks which could impact the five-year plan
- Received regular reports on health and safety matters
- Ongoing review of the development risks at development sites
- Received an update on Cyber & IT Security
- Verbal updates from the Audit and Risk Committee chairs on the critical areas discussed
- Reviewed the compliance training completion rates
|
|
Sustainability and Environmental
|
- The Board received updates on the evolution of the Group’s innovation projects
- Regular updates/understanding of a net zero roadmap for the Group
- Received updates on progress made against our medium-term targets
|
|
Acquisitions & Development
|
- Approved the acquisition of Maldron Hotel Finsbury Park
- Approved the acquisition of Clayton London Wall
- Approved the acquisition of Clayton Hotel Amsterdam
- Approved the acquisition of Edinburgh development site
- Received regular updates on planned refurbishments and development projects
|
|
Workforce and Culture
|
- Discussed the gender pay gap
- Reviewed workforce policies
- Discussed our progress on Inclusion and Diversity within the Group
- Reviewed and analysed the results of employee engagement survey
- Received updates on our community and social impact work and fundraising activities for our charity partners
- Monitored the company's culture
|
|
Governance, Legal and Regulatory
|
- Board succession planning and diversity
- Appointed Jon Mortimore as Non-Executive director
- Routinely considered potential Board conflicts of interest
- Received regular governance updates from the Company Secretary
- External Board Effectiveness Review
|
Progress against 2022 evaluation findings
|
Opportunities for refinement
|
Update on actions
|
|
Broader Trends- Focus more on macro environment customer trends and how these impact the business
|
In 2023, at the board strategy day, the board received a presentation from the Head of Marketing on competitor brands and feedback from our 100 Voices project.
|
|
Strategy- Gain more of an understanding of how technology impacts our strategy
|
The board received a presentation from senior management on all the innovation projects within the Group and how they impact the company's strategy.
|
|
Decision Making- Incorporate ESG more into our understanding
|
The board has integrated ESG into all its decision-making.
|
2023 Board Evaluation Process
For the 2023 evaluation, Independent Audit was tasked with “challenging the board on whether they are as good as the 2022 self-assessment suggested, and holding the board to a high standard versus the best boards they see”.
STAGE 1
- Briefing and review of board and committee papers
- One-to-one Teams interviews with board members, key executives, the Company Secretary, and external advisors
- Observing a Board meeting on 28 August 2023, the Audit and Risk Committee meeting on 24 August 2023, the ESG and Remuneration Committees on 18 September 2023 and the Nomination Committee on 2 October 2023.
A comprehensive brief was given to the evaluator by the Chair in June 2023. In September, detailed one-to-one interviews were conducted over Teams with each board member. The following topics were discussed during the one-to-one sessions:
- Value and Role
- Compositions and dynamics
- Strategic direction
- Management team
- Information and support
- Risk discussion
- People and culture
- Stakeholders
STAGE 2
- Results collated, reported & evaluated
The evaluator compiled a draft report based on the information and views supplied at the interviews.
STAGE 3
- Discussed with the chair and company secretary
The draft report and recommendations were initially discussed with the chair and presented to the company secretary. The chair approved its circulation to all board members.
STAGE 4
- Presented findings to the board
The board received and considered the report at its November 2023 meeting. Ms Stenson attended the meeting and participated in a discussion on questions arising from its conclusion and recommendations. The board accepted the report’s conclusions and agreed to implement its recommendations.
2023 Board Evaluation findings
The findings affirmed that Dalata has a strong-performing board, performing well across all areas;
Key findings included:
- The Board is made up of experienced and knowledgeable NEDs who show real commitment and provide useful contributions.
- A constructive and open atmosphere in meetings, with inclusive discussions. The boardroom culture was something that NEDs and Management praised and appreciated.
- A highly regarded CEO who has quickly built the confidence and trust of the Board as well as his colleagues.
- Strategic alignment amongst the NEDs and the Management team with a shared vision for the organisation.
- A positive organisational culture which is embodied by the Management team. NEDs feel comfortable that they have enough insight into the organisation, and their oversight in this respect is enhanced by the work being done by the employee engagement NED.
The review highlighted recommendations that would further lift the performance and effectiveness of the Board. The Board discussed these, and the Board agreed to take on these recommendations.
Board Committees
Board committees were also reviewed and considered to function well regarding their effectiveness and decision-making.
Chair Performance
The Senior Independent Director evaluated the Chair's performance based on feedback gathered by an external facilitator, a thorough discussion with non-executive and Executive Directors, and individual input from non-executive and Executive Directors.
The output of this performance review confirmed that John Hennessy continues to be an effective Chair. He is a strong and well-respected Chair with a wealth of experience whose open and friendly style is greatly appreciated by his colleagues and the executive team.
Board Action Plan
The following items were recommended and will be on the board's agenda for 2024.
- Implement a more structured framework for the Board to keep track of strategy and strategy execution
- Elevating the risk discussion at board level
- Succession planning
Case study
How the board monitors culture
Dalata has an open, inclusive, ambitious and agile culture that places people at the heart of what we do, whether that is employees, guests, suppliers or our local communities.
We are focused on delivering exceptional service and experiences for our customers and guests while maintaining our strong financial performance. We are also making great efforts to create value for all our stakeholders as a growing, ethical, responsible and sustainable business.
Our core values of People, Fairness, Individuality and Service underpin our company culture and inform all strategic business decisions.
Purpose and Values
The Board promotes the Group’s purpose and values through its interactions with management, including discussions as part of Board and Committee meetings and site visits to Group companies throughout the year.
The Board always supports and operates according to the Group’s purpose and values. Specifically, discussions and decisions made by the Board and its Committees are based on fulfilling the Group’s purpose and compatibility with our culture and values.
Monitoring Culture
The Board uses multiple sources to assess the strength of culture and understand how it manifests across employee sentiment, observed behaviours and trends. These can be described as a combination of the metrics below, standing reports, and listening channels.
- Employee Engagement Surveys
- Compliance surveys
- Reports from and discussions with management, both in Board meetings and on-site visits
- Reports from the Workforce Engagement Director
- Audits conducted by Group Internal Audit
- Whistleblowing reports
- Training completion rates, including training on the Code of Conduct
- Succession and talent development, with a focus on diversity
- Health & Safety incidents and performance
A key section of the employee engagement survey details people metrics and KPIs under cultural strands. This allows the Board to consider where there are deviations between what is being heard and underlying behaviours.
Another key measure is that during 2023, the board also visited a number of hotels, providing direct access to operations and ensuring all employees could share their experiences with the board. These visits further enhance understanding of the culture and sentiment across the Group.
Case study
Strategy in Action
How The Board Is Making Strategic Decisions
The Board attended dedicated strategy away days in June 2023, discussing short-term and long-term strategic goals and determining the choices the business needs to make to achieve them.
The main discussion themes during the session were:
- Overview of financial projections and firepower
- Review of how recent acquisitions performed
- Understanding the hotel brand landscape
- Strategic options – Short term and Long term
- Understanding sustainability concepts and net zero target options
The Board’s key conclusions included:
- We have the financial capacity to consider purchasing or developing our hotels and continue working with developers and fixed-income investors to secure new or existing leased hotels.
- We will continue to grow, do so responsibly and consider all our stakeholders when making strategic decisions.
- We will continue to look for new ways to deliver our product through our commitment to innovation and technology.
- We will continue on our net zero journey.
Regular strategy away days will continue to be arranged. The Board and management agreed the sessions were extremely productive and will be beneficial as the business continues to transform.
