FBLU028 Accounting and Finance

The company

Travis Perkins Plc

Travis Perkins plc is a UK-built dealer with headquarters in Northampton and a home renovation retailer. It is included in the London Bourses and is an integral part of the FTSE 250 index. This Group comprises several of the industry's leading brands, such Travis Perkins, Wickes, Keyline, City Plumbing Supplies, CCF, Benchmarx, Toolstation, City Heating Spares, BSS, DHS - Direct Heating Spares, Primaflow F&P, Underfloor Heating Store, PTS, National Shower Spares. The group has almost 2000 outlets in the country (Travis Perkins PLC, 2021).

Explanation of business model

The Group focuses on servicing business clients through advantages on competitive markets in order to provide best-in-class services which will simplify the Group to minimise uncertainty and boost shareholder return growth.

The group primarily focuses on the trade by developing companies that are well placed to capitalize

• Commerce is the core of the Group
• The margins are harder
• A more stable trade cycle
• DIY clients transferred to DIFM

Digital is an untapped marketing tool – exchange bridges the difference.

The company operates using three famous business models such as “Retailer model” where it supplies building materials to other local retails followed by a “Distribution model” where it supplies building materials to other builders and lastly operates in a “Leasing model” as well where it gives tools to the technicians on hire.

Shareholders

How corporate governance is connected to the generation of long-term shareholder wealth

Corporate scams or frauds have rattled consumer confidence in corporate administration in recent years. The need for corporate governance is thus indispensable to revitalise the interest of investors in the corporate sector in the economic growth of society. Corporate governance is very much connected to the generation of long-term value for the shareholders. A proper and robust corporate governance structure ensures that all the proper rules and regulations of the business organisation are followed and hence the company gets governed or operated as desired without allowing any loss of property or wealth of the shareholders. The stock exchanges set up an ideal code of corporate governance for all the business enterprises listed in it such as the LSE or FTSE for the UK which all business organisations are bound to follow. Following such effective corporate governance codes ensures that the company performs as desired and there is no loss of property and wealth invested by the shareholders and they get timely returns and their value is enhanced over time especially in the long-term. A consistent separation of duties within the Board is set by Travis Perkins' governance structure. The Board accept a formal agreement on the distinction between the Chairman and the Chief Executive Officer of key duties and a declaration on the position of the senior Independent Director. These are checked every year. And in December 2019 they were last revised. The enterprise promotes two-way communication with both parties and it provides timely responses to all inquiries submitted from institutional and private investors (Naciti, 2019).   As primary touch with customers and shareholders, the Group has the Independent Senior Director.

The benefits and harms that the company has brought to stakeholders

In-depth collaboration with a broad range of partners identified the content priority areas of the Group's sustainability programme. In 2019, the appraisal of materiality was conducted and included a variety of colleagues, group management teams, clients, vendors and investors. Competent, supply chain associates and executives from other sectors are being benchmarked on the Group's strategy (Travis Perkins PLC, 2021). The Group assists engaged members in sharing innovations, informing strategies, listening to input and seeking opinions. The shareholders are invited to attend the annual meeting, to understand the results, difficulties and opportunities of the Group and to ask questions. Every company's management team makes long-term decisions that are consistent with Group policies and highest standards of behaviour. The managers of each company and of the group itself take into account the potential impact on all members of the decisions and activities they take in order to perform their duties. ‘

In making decisions, in linking with different stakeholders during the year and in particular in making strategic decisions, the Committee takes into account the opinions of its players. Stakeholder groups such as analysts, investors, partners, clients, vendors and associates, not only to communicate the potential strategies, but also to receive input on the execution and realisation of those plans were all included in relation to the Group's strategic leadership.

How and if the company has “contributed to wider society” (UK CG Code, 2018, pp. 4).

Travis Perkins has exported a lot of his trucks with a bunch of liver representatives supporting Mind, Prostate Cancer and the Alzheimer's Society through his Living Livery campaign which won the Livery of the Year Award at the 2019 Motor Transit Awards and educated its drivers to be ambassadors of these charities for raising awareness of the most important questions. In addition to educating the general public on certain topics, this initiative also aims at key communities, including employees in hundreds of building sites it delivers to every day. In 2020, the Group's approach to proposals and deliveries on social value will be examined in order to distinguish support for the client and enhance its social benefits (Travis Perkins PLC, 2021). 

The board of directors

The role of the board of directors in corporate governance

Corporate governance relates to the management and management of the company by the board, taking care of the effect on staff, clients, vendors, societies and shareholders of decisions. The Board supervises the administration of the enterprise. Corporate laws allow managers to assign to corporate officers like the CEO or the CFO those powers. The Board assigns the daily business of the organisation to the managers. It is to be noted that it is the BOD who prepares the corporate governance strategies for a business enterprise. The Board is also responsible for looking after the implementation process of the developed corporate governance strategies where if the proper strategies are not implemented then they urge the CEO to make such proper implementation. Therefore, the Board of Director are of utmost importance for developing as well as implementing the corporate governance strategies throughout the business organisation.

The Committee may also have subcommittees on audit and compensation. The committee members will be Board subsets and will report technical concerns to the Board of Directors. Many tasks and obligations of corporate boards needs to be reviewed by the board of directors. The committees examine problems in depth and also rely on experts to support them. Daily updates on issues that are the responsibility of the committees are sent to the Council. In the early stages of growth, boards start to appear differently. In the early stage, one or two creators are usually included. In the early stages, boards are usually smaller and five or seven board directors with different fields of experience.  The Boards usually rise in size and also are linked to the company's needs and to the industry's standard activities. The Boards generally include the CEO with a position while investors acquire (Travis Perkins PLC, 2021). Any investors would also demand a spot on the board, so that their contributions can be visibly monitored. Investors have also controlled the recruitment of independent directors who have a growing impact on the board and the business.

Conclusion

On a concluding note, The Organization developed a positive relationship with its partners and the company that helped them to grow quickly. This research shows that the Company has a better corporate governance and stable operational profit margin which has helped it to massively increase its profits.

References

Bhagat, S., & Bolton, B. (2019). Corporate governance and firm performance: The sequel. Journal of Corporate Finance, 58, 142-168.

Travis Perkins PLC. (2021). UK's Largest Distributor of Building Materials | Travis Perkins PLC. Retrieved 9 April 2021, from https://www.travisperkinsplc.co.uk/

Harvey, C., Maclean, M., & Price, M. (2020). Executive remuneration and the limits of disclosure as an instrument of corporate governance. Critical Perspectives on Accounting, 69, 102089.

Naciti, V. (2019). Corporate governance and board of directors: The effect of a board composition on firm sustainability performance. Journal of Cleaner Production, 237, 117727.

Nikolić, J., & Zlatanović, D. (2018). Corporate governance and corporate social responsibility synergies: A systemic approach. Naše gospodarstvo/Our economy, 64(3), 36-46.

Are you looking for custom writing help? Then you have come to the right place. We have handpicked the best subject matter experts to help you with your academic tasks. Whether you need help with an academic poster or you need a ghostwriter, we have got your back. Our essay writing service has garnered immense popularity from all over the world. This is mainly due to the client-centric services and reasonable prices we offer. We also provide online exam help to students and help them score good grades on the paper hassle-free. Get paper help from PhD-qualified experts and boost your grades like never before.