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The LLP Group Board (the Board) recognises the benefits of a modern and efficient governance structure. High governance standards provide clarity and rigour, but also enable speed and efficiency in the decision-making processes of the Group. The Group’s parent, DAC Beachcroft LLP (the LLP) is a partnership, but the Group governance framework has voluntarily been modelled, where appropriate and applicable, on the FRC’s UK Corporate Governance Code. Not being a listed Group, the governance description that follows has been set out against the Wates Principles.
Our governance has been approved by the equity partners (Members) of the LLP and is set out in the Group’s constitutional documentation. Whilst a small number of decisions remain reserved to the Members, the Board has responsibility for the management of the Group. Anything that is not reserved to Members, the Board, or its committees is a matter for the Managing Partner who is supported by the Group Executive (the Executive).
Whilst the members of the Board are not statutory directors, there are subsidiary statutory directors within the Group. As a matter of good practice and to ensure an aligned consideration of stakeholder interests across the Group, the duty in s172 of the Companies Act to promote the success of the company has been adapted for use by the Board. The Board recognises the importance of ongoing two-way dialogue with our colleagues and other stakeholders, illustrated by the high levels of stakeholder engagement described below under Principle 6.
Principle 1: Purpose and leadership - an effective board develops and promotes the purpose of a company and ensures that its values, strategy and culture align with that purpose.
The Group’s Purpose, Vision and Cultural Principles have been approved by the Board and published on the Group’s website. The Group’s Purpose is to help our clients and our colleagues succeed, creating sustainable value.
Development of strategy is undertaken by the Executive and Board in alignment with the Purpose, Vision and Cultural Principles, as well as with an embedded consideration of risk. Our Purpose, Vision and Cultural Principles have also been written into the role descriptions of all Board members and they have been embedded across the organisation via training, visual reminders and an ongoing recognition of good practice.
We recognise colleagues’ contributions to the support of each other, clients and the community through the Group’s ‘Our Purpose Awards’; every award illustrates how we are achieving ‘Our Purpose’, helping our colleagues and clients to succeed and bringing our values to life. Nominations are put forward by colleagues and awards are made, culminating in an overall award in each category that is presented by the Senior Partner and Managing Partner.
Serving as a protection of our values there is a whistleblowing procedure in place through which colleagues can raise concerns and report any misconduct, wrongdoing, breaches of law or regulations and unethical practice. The Board oversees the management of the reputation of the Group. The strength of the Purpose, Vision and Cultural Principles underpins this together with an embedded consideration of reputational risks in matters considered by the Executive and the Board.
Principle 2: Board composition - effective board composition requires an effective chair and a balance of skills, backgrounds, experience and knowledge, with individual directors having sufficient capacity to make a valuable contribution. The size of a board should be guided by the scale and complexity of the company.
The Board has ten members:
During 2020, both the Senior Partner and Managing Partner were re-elected to serve for second five-year terms.
The Senior Partner, Managing Partner and elected Board members are all Members. The non-executive roles are appointed by the Board. Whilst the selection of most of the Board members is by election by the Members, the Remuneration & Nomination Committee and the Board do consider the particular skills needed on the Board in advance of elections and communicate these to the Members.
Equity, Diversity & Inclusion (ED&I) is a fundamental element of our People Strategy and the Group firmly believes that diversity of experience, perspective and thinking is critical to its ability to create sustainable value and this is reflected in the current Board. To measure the outcomes of our ED&I strategy, an internal voluntary target has been set at 40% for female representation across the senior leadership team in our business by 2025. In support of this, attention will be given to addressing any factors within our control that make it more difficult for our female colleagues to progress on merit at the same pace as men. The gender balance on the Board itself as at 30 April 2022 was 50% female (30 April 2021: 40%). The five elected Board members represent a mix of Sectors and legal services in the business.
The NEDs bring independent judgement and their own expertise, one being an accountant and financial expert, and the other an expert in organisational change and leadership. Both devote sufficient time to make a valuable contribution.
Principle 3: Director responsibilities - the board and individual directors should have a clear understanding of their accountability and responsibilities.
The board’s policies and procedures should support effective decision making and independent challenge.
Our Governance Handbook establishes clear lines of accountability and responsibility between Members, the Board and its committees, the Senior Partner and Managing Partner/the Executive. Full matters reserved and terms of reference are set out in the Governance Handbook, as well as detailed Board role descriptions and election processes. The roles of the Senior Partner (one of whose responsibilities it to chair the Board) and the Managing Partner, who has executive control over the management of the business, are clearly separated.
The Chair ensures that the right information is supplied to the Board in a timely fashion to support effective decision making, as well as taking care that appropriate time is allocated to key matters under discussion at meetings. Guidance is provided on Board paper provision: papers need to be clear, succinct and among other things highlight any relevant or material stakeholder or ESG impacts considered in proposals coming for Board decision. Papers are subject to the scrutiny of the Chair in advance of circulation and are issued in good time in advance of meetings. The Board meets at least nine times a year and has a regular away day with the Executive.
The Chair ensures that all voices in the boardroom are heard, and fosters a culture of open debate and constructive challenge.
A tailored induction programme, involving reading material and a phased programme of face-to-face meetings, provides all the information and contacts across the business that a new Board member needs to maximise their contribution as early on as possible.
The importance of ongoing Board development is recognised and there are development items planned throughout the year. The opportunities for these have been expanded in recent years via additional breakfast sessions outside the scheduled Board meetings.
The Board is supported by two committees:
Both committees have clear terms of reference and are chaired by the NEDs.
As well as attending the Board and committees, the NEDs meet privately and provide support to the Senior Partner and Managing Partner and other senior members of the leadership team.
The importance of gaining learning and insights from Board evaluation is recognised. An external board evaluation was facilitated in 2021. The findings confirmed the effective functioning of the Board, noting the constructive relationships and clarity of purpose, both within the Board and between the Board, its Committees and the Executive. In response to recommendations a number of enhancements are being implemented, included increasing direct levels of engagement by the Board with the Group’s stakeholders, for example by arranging facilitated discussions directly with the Board.
The appraisals of the Senior Partner and Managing Partner are led by the NED chair of RemCo.
The Chair has regular one-to-one discussions with all the elected Board members providing an opportunity to discuss Board matters.
The Board has the support of the Group Secretary and uses an online portal for access to and security of Board papers.
Principle 4: Opportunity and Risk - a board should promote the long-term sustainable success of the company by identifying opportunities to create and preserve value, and establishing oversight for the identification and mitigation of risks.
The Executive meets monthly and via its composition is alert to the risks that face the Group as well as future opportunities and these come up to the Board for discussion where necessary. As per the Group’s Purpose, sustainable value is a key driver in decisions made.
To support the identification of opportunities to create and preserve value there is a focus on innovation and finding new or alternative ways to continue to service our clients’ needs proactively and effectively. More on our approach to innovation, including some recent examples and award-winning developments can be found here.
The Group has a dedicated Practice Governance & Risk team (PG&R), responsible for dealing with risk management and compliance within the business. PG&R works alongside all Group entities, both in the UK and internationally, in respect of risk and compliance.
Having established clear channels for the identification of risks, an in-depth Group risk register is maintained in PG&R, which has RAG-rated risks across a number of categories and sets out the status of any mitigation. This register is continually reviewed and updated.
Risk is embedded as part of all discussion at the Executive and Board. The Head of PG&R is a member of the Executive, and also attends Board meetings on at least a quarterly basis to discuss the principal risks facing the Group and mitigation required to minimise the Group’s exposure. She also regularly meets and has direct access to each of the Senior Partner, Managing Partner and the NEDs outside the cycle of Executive and Board meetings.
An internal control framework is overseen by the Audit Committee and managed by a combination of PG&R, Finance and IT. Independent assurance is gained from a combination of testing by our external auditors, external assessments (e.g. for Cyber Essentials+ and ISO9001 and 27001 Standards) and client audits.
Principle 5: Remuneration – A board should promote executive remuneration structures aligned to the long-term sustainable success of a company, taking into account pay and condition elsewhere in the company.
Reward & Recognition are a core element of the Group’s People Strategy. The Group rewards and recognises, at an individual and team level, those outcomes and behaviours which support the achievement of the Group’s Purpose and Vision and the delivery of our strategic objectives.
RemCo plays a significant role, alongside the Executive and Board, carrying out its defined responsibilities relating to Member and senior management remuneration, providing an objective view and working to ensure levels of remuneration take into account Group and individual performance and internal and external benchmarking. Factors beyond financial targets are taken into account including alignment of behaviours with the Cultural Principles, innovation, collaboration and leadership.
Principle 6: Stakeholder relationships and engagement. Directors should foster effective stakeholder relationships aligned to the company’s purpose. The board is responsible for overseeing meaningful engagement with stakeholders, including the workforce, and having regard to their views when taking decisions.
The Group’s Purpose is to help our clients and our colleagues succeed, creating sustainable value. Ongoing dialogue with colleagues, clients and other key stakeholders is considered fundamental to the Group’s success in fulfilling its Purpose.
In all decision making at the Board, when promoting the success of the organisation for the benefit of Members, regard is given to long-term sustainable value, acting fairly between Members and any significant impact on colleagues, clients, suppliers, the community and environment.
We foster effective stakeholder relationships with some of our key stakeholders in the following ways:
The Board recognises the importance of a healthy workplace culture, underpinned by the Group’s Cultural Principles, which is responsive to the needs of our colleagues and the business. Being a people business, the input and feedback from our colleagues is fundamental to how our business is structured, ensuring that individuals are supported to achieve their full potential, with clear routes for progression.
We have a clearly defined People Strategy and are in the process of refreshing the strategy to ensure it reflects the future of work and builds on opportunities that have arisen following the Covid-19 pandemic. Whilst this review is underway, we continue to be guided by the five pillars set out below:
The strategy refresh, which is being shared across the business in autumn 2022 builds on these elements, with particular emphasis on leadership, development and growth, belonging and inclusion and celebrating and rewarding success.
The Group is proud of the levels of engagement with its employees. Our culture and style of engagement is one of transparency, openness and honesty. We are proud to have been awarded:
Although the Group had worked in an agile way for a long time (having in both 2020 and 2021 been named in the ‘Top 30 Employers for Working Families’, announced annually by the charity Working Families) following the experience of the Covid-19 pandemic, and after significant consultation with colleagues and clients, Flex Forward was introduced for the UK and Ireland from June 2021. This approach enables colleagues to create A Life That Works for them by adopting one of three types of dynamic, location-based working – office-focused, hybrid, and fully flex – to offer the maximum flexibility for each colleague’s role. In addition, a more flexible approach to working hours has been introduced, with core hours relaxed and colleagues able to ‘glide’ their time, enabling them to balance more easily professional and personal commitments.
Communicating with our colleagues, keeping them informed on matters of importance to them and developments in our business, and listening to and acting upon feedback from colleagues across the Group are seen as key. This is achieved in a number of ways, including:
Analysis from the various methods used to engage with colleagues outlined above is fed back to the Executive and Board and helps inform and enhance effective decision making and the Group’s People Strategy which is approved by the Board.
More detail on the demographics and diversity of the Group’s workforce can be found in the Equity, Diversity & Inclusion section of our website.
The Group’s Client Engagement Programme is designed to forge effective and sustainable client relationships and in so doing to gain insights enabling us to deliver a supportive, value-added and bespoke service now and in the future.
Via our Client Listening Programme we seek formal feedback from clients at various stages in their relationship with us (tender debriefs, on-boarding reviews, relationship reviews and post-matter reviews). Feedback is considered and actioned at an individual client level after each review supporting a cycle of continual learning and improvement. Aggregated feedback and insights are shared at the Executive and Board to inform and support the Group’s strategic decisions. The results of our Client Listening Programme, published in 2022, were extremely positive, with 95% of clients rating their ease of engaging with the Group as good or excellent.
Our Client Engagement Programme also facilitates regular informal conversations with clients throughout the year and feedback is captured and responded to.
In response to client needs, we constantly review our investment in technology and where we can automate the legal process to drive efficiencies, enhance the direct access of clients to our work and provide useful resources to save them time. Recent innovations and investments in response to client needs include the following:
Client views have also been taken into account in the development of the Group’s ESG Strategy, described in more detail below.
We are proud to have been awarded:
at the 2021 HealthInvestor Awards in both the Public and Private categories and a consecutive win in the Public category at the June 2022 awards.
Fostering strong relationships with supply chain partners is of great importance to helping support our wider engagement activities and deliver one of the principal objectives of the Group strategy: operational excellence. Executive-level engagement is part of the supplier relationship framework, with Board oversight on matters and relationships of strategic importance.
We have a dedicated procurement team and have invested in technology to help manage our supplier relationships, contract compliance and early identification of risks (including sanctions, financial and cyber security). Our procurement colleagues have completed an ethical procurement certification “Corporate Ethical Procurement & Supply” from the Chartered Institute of Procurement & Supply which is renewed annually.
A robust procurement process is followed at on-boarding and throughout the supplier relationship. The Procurement team work in collaboration with PG&R to ensure early clarity on the required commercial terms for a mutually beneficial relationship and the protection of both parties as well as detailed due diligence around supplier practices. Such due diligence seeks assurance on a wide range of commercial and other considerations, including modern slavery, diversity, sustainability and payment of the Living Wage. Our Modern Slavery Act statement is available here.
Supplier relationships are managed through regular governance meetings, providing opportunities for both parties to feedback on the relationship and discuss innovations and developments in the products and services available. Critical relationships are subject to annual revalidation, with plans to broaden such activities in due course to provide greater assurance surrounding supplier relationships at all levels.
Analysis of the sustainability and resilience of the supply chain is undertaken by Procurement and PG&R, who assess the suitability of suppliers, with any significant risks or issues elevated to the Executive and the Board.
As required our payment practices for our English entities are published on a half-yearly basis on the Government’s online facility. We pride ourselves on our reputation for prompt payment within payment terms.
ENGAGEMENT WITH OUR REGULATORS
In making strategic decisions, due consideration is given to the relevant regulatory environment in the jurisdictions in which we operate to ensure we are compliant with local legislation and regulation. For those entities within the Group based in England and Wales there is regular dialogue with the Law Society, our representative body, and the SRA as our regulator. We work with them in respect of changes and initiatives impacting the profession and the community.
Horizon scanning is undertaken to check for changes to other law and regulation which impact the Group to ensure that compliance is maintained through effective planning, response and implementation.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) AND RESPONSIBLE BUSINESS: STAKEHOLDER ENGAGEMENT
The Group has developed a Responsible Business Strategy with wider sustainability objectives, in recognition of our role in society. The Board is updated on progress at least once a year and the Head of Responsible Business reports directly into the Chief Operations Officer.
Our Responsible Business activities are reflected in the way we recruit and look after our people, the way we do business with clients and suppliers, our impact on local communities, and our environmental footprint.
The Group’s Responsible Business programme is delivered through four work streams: social mobility and inclusion, sustainable procurement, community investment and environmental sustainability. More information on these work streams can be found in the Responsible Business section of the website.
In July 2022 we launched our ESG Strategy, which identifies our ESG commitments as a business and what our key sectors are doing to support clients on their own ESG journeys. The strategy, which is hosted on a new ESG microsite, is the culmination of a project to identify what the Group and its clients want to see action on. As part of the project, we engaged with clients and colleagues to uncover priority themes and with input from a steering committee of senior leaders within the Group and the help of an external consultancy, created a strategy that is focused on a series of commitments around climate change, talent & leadership, wellbeing, and equity, diversity & inclusion.
Developments which illustrate our engagement with stakeholders relating to the community and the environment include the following:
There are many opportunities for our colleagues to get involved and volunteer. Where possible, we survey the community beneficiaries of our volunteering activities to ensure we are making a positive impact.
In FY22, almost a quarter of our employees volunteered for one of our Responsible Business programmes.
The Group’s energy and carbon report can be found in the Group report and accounts.