Section 172 statement

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Unless otherwise stated, defined terms have the meaning assigned to them in the Corporate Governance Statement. References to “Wates, Principle…” are references to the relevant sections of the Corporate Governance Statement.

The Board has had regard to the factors set out in section 172(1)(a)-(f) of the Companies Act 2006 (‘s172’). In 2019, further to the Review , changes were made to the Matters Reserved (see Wates, Principle 3). Additionally, the Company has identified its key stakeholder groups (set out below , together with the 2019 engagement and outcomes with such key stakeholders).

As set out in Wates, Principle 6, proposals for the Core or DCS Boards to consider Principal Decisions are to be accompanied with a ‘key stakeholder engagement’ document setting out the short- and long-term impact of the proposal to relevant key stakeholder groups, in order to facilitate the respective Boards in their discharge of s172 duties. Internally, the ‘key stakeholder engagement policy’ (see Wates Principle 6) also includes information about ‘second tier factors’ (operations, security, tax / legal / finance / regulatory compliance), the short- and long-term impact of which should be included in Principal Decision proposals to the Board, where necessary.

These ‘second tier’ areas were identified by the Company, as the risks associated with these areas are under regular review by the AuditCo. Key stakeholder engagement, as well as an overview of Principal Decisions, will be added to the AuditCo’s agenda as an annual item.

The engagement with and impact on key stakeholder groups (both long- and short-term), in light of Colt pursuing its strategy, will be monitored by owners from the ELT and DCS SMT for Core and DCS respectively. The Review noted that the engagement in most of these areas, including the consideration of the short and long-term impact to the Company being regularly reported to, and considered by, the Board, was very healthy. The areas, which require a slightly more formal engagement approach, will be actioned by the respective ELT and DCS SMT owners.

With reference to the Company’s approach to its reputation and business conduct, the oversight from the Board and governance in this area is very well-established and no changes to the Company’s approach have been initiated in 2019 (see Wates, Principle 2).

In 2019, the Board did not make any Principal Decisions (as set out in Corporate Governance Statement, Wates, Principle 2), as it focused on the ongoing progress of various projects. The outcome of key stakeholder engagement, and how the Directors have had regard to these factors is set out in the key stakeholder engagement table overleaf.

The key stakeholder groups for the Company and their significance are set out below :

  • Core and/or DCS area of the business. The Core and DCS parts of the business offer materially different services to customers, have a slightly different supplier base; and are organised differently to reflect both the different types of services and that DCS have a significantly smaller workforce. Accordingly, the impact to each of Core and DCS can be quite different, and the impact to each part of the Group should be carefully considered.
  • Customers. The company’s vision is heavily focused on customers and being a customer-oriented business, and the potential impact to customers is a key consideration for the Group to achieve its vision.
  • Suppliers. Successful relationships with suppliers is critical for the day-to-day running of Colt’s business, as w ell as for its long-term success. The nature of services for both Core and DCS is closely connected with its supplier relationships.
  • Employees. The engagement and two-way dialogue with the entire workforce (employees or otherwise) is very important for the Company’s purpose and vision to be achieved.
  • Community and Environment. Existing business, but particularly network and data centre expansions to newer regions, can have a significant impact on environment and community. Across all regions, the Company is aware of its impact to the environment and carbon emissions and is committed to taking steps to minimise this impact.
Area of business: Core or DCS Regular ELT and DCS SMT meetings have been held during the year, to consider the requirements and progress of each ELT or DCS SMT member’s function, both as a w hole and against specific projects. These management teams have also had strategy days or offsite meetings during 2019. The outcomes from ELT and DCS SMT meetings have been shared with their respective functions and, where required, across Colt. The Core and DCS Boards receive regular updates from the ELT and DCS SMT, respectively, including the identification of new opportunities and emerging risks. The Core and DCS Boards also provide each other with minutes of their respective meetings.
Customer Customer engagement has been both formal and informal during 2019. Various customers have been invited to local Colt offices, to consult with them about Colt’s progress and service offering. Colt has also undertaken a number of in-person interviews with customers, in order to obtain not only quantitative but also qualitative feedback on their customer experience. In response to this, Colt has made internal changes to the scope of its customer-facing teams, aimed at creating a more seamless experience for its customers. Colt’s steps to create a better customer experience have resulted in an NPS score of 64, well ahead of industry averages for business-to-business service providers. Colt has also evaluated customer feedback, to ascertain if Colt’s existing service offering and regions meet their requirements. This feedback has been regularly reported to the Core and DCS Boards, together with the NPS score – which was an important goal for the Company. During 2019, the Board has continued its focus on completing network and DCS expansion projects into new locations and territories. The Board remains keen to explore opportunities to further expand its Core and DCS businesses, as well as to explore acquisition opportunities.
Suppliers The focus in 2019 has been to nurture strategic supplier relationships and to consolidate and renegotiate with certain suppliers. There is also work underway to monitor the potential impact of Brexit to the supply chain. The Company is taking steps to ensure business continuity in the event of delays at the border and changing import/export regulations, as a potential result of Brexit, although the uncertainty in this area has created some challenges to planning: the Board has been kept updated about planning as well as the challenge of uncertainty. Major supplier relationships have been communicated with the Board, with certain material renewals being Matters Reserved for their approval. There has been some internal transformation of our Procurement function in Q4 2019, and the focus for 2020 will be key supplier management and streamlining the supply chain.
Employees Employee engagement has been both formal and informal, both Colt-wide as well as per country. The European and National Works Councils have been consulted or notified of material matters at various points throughout the year. The Colt Ambassador and Country Management programmes have continued to provide a forum to engage with the workforce and help ensure a two-way dialogue. Informal employee engagement has been led by the executive management team, with the Group CEO running a monthly ‘Chat with us’ call, our CCO launching a Monday briefing to the global sales community, and each country was visited by an executive sponsor over the course of the year. The results from the 2018 employee survey were announced in late 2018, and each executive (and where applicable, their VPs) took additional feedback from their functions to identify the best ways to address the feedback during 2019. The 2019 employee survey results for the Group were announced in late 2019, and in early 2020, each executive is analysing the results, and agreeing actions with their management team to address the feedback. In 2020, Colt will be launching other, smaller employee surveys at periodic intervals. These surveys will focus on specific areas, and are aimed at ensuring a consistent anonymous feedback avenue for all employees throughout the year. During 2019, Network 25 (promoting gender equality in the workplace) grew in membership and started chapters in new offices; Pride Matters (aimed at promoting LGBT+ awareness in the workplace) was launched; and a new Inclusion and Diversity role reporting directly to the ELT was created.
Environment and Comunity There has been some specific environment-related investigations undertaken by the Company in relation to specific expansion projects. The focus, how ever, has been on engaging with the DCS and Real Estate teams in preparation for carbon emissions reporting in 2020. The Company is currently reporting on its carbon emissions in the UK, and is making good progress to prepare itself for its extended carbons emissions reporting in respect of the next financial year. In addition, the DCS senior management team receives reports about the environmental impact of new and existing sites, and considers the viability of making changes e.g. increasing the use of green energy at specific sites. Colt also regularly raises awareness on environmental and community issues by hosting CSR events, such as the “No child in trash” and “2019 Dalian International Walking CSR Event on 19 May”. Colt also sponsors a range of charities, selected by the local employees in each country, and each office runs its own CSR events over the course of each year. Every year, Colt arranges a charity bike ride between two Colt locations, which is attended by employees from Colt locations all over the world. Attendees raise money for their local charity/ies: in 2019, the bike ride was between Munich, Germany and Vienna, Austria.