Food & AgTech Governance

Statement of Compliance with section 172 of Companies Act 2006

Throughout 2020, the Directors have performed their duty to promote the success of the Company under section 172, taking consideration of:

- Issues, factors and stakeholders relevant in complying with section 172(1)(a) to (f);
- Main methods used to engage with stakeholders and to understand issues to which they must have regard; and
- The effect of such issues on the Company’s decisions and strategies during the financial year.

Context for decision making

The Group is part of the Grosvenor Estate, whose activities beyond food and agriculture also comprise Grosvenor Group, an internationally diversified urban property company, financial investments, the management of rural estates and support for the initiatives of The Duke of Westminster’s charitable foundation. Wheatsheaf Group shares the Grosvenor Estate’s purpose for its activities to deliver lasting commercial and social benefit, contributing to the economic, social, and environmental wellbeing of the communities of which it is a part. This approach is wholeheartedly supported by the Board and the Company’s shareholders who judge the success of the business on both measures of commercial returns and the positive impact that its activities have on the communities and the environment in which it operates.

Adopting such an outlook requires that internal and external stakeholders be identified, and their interests considered in making decisions. This approach also creates a culture by which the Board takes all appropriate measures to ensure that the way business is done meets the highest standards of corporate conduct. The Board believes that this approach leads to enhanced shareholder value.

Strategic approach

To further ensure the Directors meet their duties as set out in section 172, including the consideration of stakeholder groups, the Board agenda throughout the year includes consideration of five-year Group strategic plans and targets. Regular Board meetings include focus on various aspects of the strategic plan, including both commercial and social outcomes, health and safety, people, industry insights, capital allocation and portfolio performance.

Governance structures

The Board’s Investment Committee, Remuneration Committee and Audit Committee complement the Board’s activities through deeper interrogation and consideration of relevant matters and the associated impact on stakeholders. In addition they provide fora for challenging the Executive Directors on, for example, investment proposals, reward mechanisms and effective risk management.

In addition to the Group Board meetings, the Executive Directors are invited to attend regular portfolio company board meetings. Feedback from those meetings is presented and discussed at the Group Board meetings and considered in the Group Board’s decision-making processes.

An annual meeting consisting of the Company’s shareholders provides an opportunity for the Company to engage with its shareholders, present strategic objectives and receive challenge on performance against social and commercial value creation. This meeting also provides an opportunity to ensure that decision making in the coming year is aligned to shareholder interests and longer-term strategy.

Ultimately Board decisions are taken based on what it considers to be in the best interest of the long-term financial success of the Company, whilst considering all stakeholders including its shareholders, employees, portfolio businesses, co-investors, customers and suppliers. The social and environmental impact of decisions are also actively considered as appropriate.

Stakeholder relationships and engagement

The Board is clear that the Group must maintain a reputation for high standards of business conduct. The Group operates as a values-led business, promoting its core values of integrity, respect and trust all of the time – with employees, co-investors, portfolio companies, customers, suppliers and wider society, helping the Group to continue to earn a strong reputation and enhance its brand.

Enacting long-term success and permanence of positive change requires combined awareness and effort within and across stakeholder groups. The Group encourages the establishment and maintenance of constructive stakeholder relationships in the portfolio companies. It is important that our businesses are conscious and proactive in their relationships with stakeholders, aspiring to be exemplary corporate entities aware of the outcomes of their activities across their stakeholder network. Each operating company in the Group is responsible for managing their key business relationships with suppliers and customers. Policies are set for how relationships should be managed including policies on anti-bribery and corruption, anti-money laundering, the UK Modern Slavery Act and the UK Criminal Finances Act.

All staff are briefed and consistently reminded of the expected values and conduct we seek to uphold.

Social and environmental impact

Our aim is to rethink and help reshape a better food system: one that improves human health, our environment and that enables producers to thrive. The Group has a leadership role to play in harnessing and accelerating these broader outcomes across its operations and investment portfolio. Beyond financial returns, the Group is active in validating its direct impact on natural and social capital. A Wheatsheaf impact framework has been developed which monitors metrics identified as most meaningful to improving the environmental and social impact of the global and agriculture industry.

The Group’s commitment to social capital focuses on fostering employment opportunities and leaving positive marks on communities. Natural capital impact reporting acknowledges the Group’s impact on natural environments whilst advancing solutions to protect, preserve and enhance it. The Wheatsheaf impact framework also allows us to monitor the Group’s contribution towards the UN’s Sustainable Development Goals.

For example, the Group actively pursues opportunities to reduce global food and agriculture emissions. Tackling the detrimental impact of food production and agriculture on the environment is an increasingly important element of a commercially viable business. The Group actively seeks investments that increase both production and distribution efficiency. Carbon emissions data across supply chains is gathered from the portfolio businesses, to assess high potential abatement and sequestration opportunities.

The Group also seeks and invests in opportunities to transition supply chains away from reliance on plastic. Worldwide plastic production is growing annually, the resultant plastic pollution not only causes injuries and deaths in marine species but threatens human food safety and quality, coastal tourism and contributes negatively to climate change. Accelerating the availability of high-quality plastic alternatives and requiring our portfolio companies to execute recycling best practice is one of our priorities.

Approved and authorised for issue by the Board of Directors on 29 June 2021
Group 2