# Dear shareholders

_Source: `DeepSeekOCR_Ardian_pruned_1k/consumer-cyclical-auto-parts/LSE_ABDP.L_2022/LSE_ABDP.L_2022.mmd` · pages 61-67_

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Dear shareholders,

I am pleased to introduce our Corporate governance report for the year ended 31 August 2022.

## Board effectiveness and evaluation

Good governance is underpinned by an environment of constructive challenge and the open sharing of views at Board level. Establishing and nurturing this within the Board has been an important personal responsibility and I was pleased to see this positively reflected in a more detailed independent review of Board performance commissioned by the Board.

Our external evaluation found that our Board and Committee meetings are collaborative, with a good level of constructive challenge and awareness of both our achievements and our challenges. The evaluation found an effective Board that demonstrates a commitment to continuous development. I am pleased by this outcome and in this spirit of continuous improvement we have started to implement our development points and we will report on our progress next year. The Board remains uncomplacent as we continue to lead the Group's journey to continued growth.

## Growth and scale

As we welcome the employees of Ansible Motion into our group of businesses, we are ensuring that they understand our governance values and best practices as they are integrated into our new market-facing business unit, AB Simulation. These are further steps in the growth of the Group into a multinational business with 22 legal entities.

It continues to be essential to scale our governance structures to meet these increased demands of our Group today and allow for future growth whether organically or by acquisition. The Board has maintained a strong focus during the year on the Group's short, medium and long-term strategic objectives, including the integration of recent acquisitions, with the Board monitoring the performance of the acquired businesses.

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## Chairman's introduction to
corporate governance continued

## Growth and scale continued

With regulation, risk and responsibilities for directors around the management of legal entities all increasing, we understand that a strong global subsidiary governance framework can both enhance our value and prevent costly financial and reputational damage. We operate under a centralised, head office-controlled framework but devolve responsibility for compliance within this framework to operating divisional management, with the aim of global harmonisation around local legislation. This is achieved via a robust business-wide delegation of authority.

## Culture and values

The Board recognises its leading role in establishing the culture and values of the Group and embedding these throughout our Group. The Group benefits from a very high degree of employee engagement, measured in our rolling programme of engagement surveys, and our employees are supported by our HR team, alongside a multifunctional group of colleagues who represent the wide range of expertise from our business units, were active in managing the communication and promotion of our culture and values. Our core values of customers, people, diversity, innovation, excellence and responsibility are reflected in our policies and our business ethics framework. This year, our ESG Committee has updated our Group CSR criteria to deepen our links and involvement with our local communities, as is detailed further in the ESG strategy report on pages 34 to 51.

## Stakeholders

Consideration of the Group's full range of stakeholders, including our people, investors, strategic partners and suppliers, continues to be an integral part of the Board's discussions and decision making. The Section 172 statement on pages 52 to 53 describes how the Board took its wider responsibilities into account, including an overview of the Board's engagement activities with each of our key stakeholder groups.

## AGM

Our AGM will take place on 11 January 2023. You can read more about our plans for the AGM later in this report and in the notice of meeting on pages 129 to 133.

Richard Elsy CBE
Non-Executive Chairman
23 November 2022