LLP Group Governance

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 in respect of the year ended 30 April 2024 and is updated annually.

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:

• the Senior Partner (the Chair),
• the Managing Partner,
• the Chief Financial Officer,
• five elected Board members, and
• two independent non-executive Board members (NEDs).

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 and 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 approach, an internal voluntary target was set at 40% for female representation across the senior leadership team in our business by 2025. In support of this, attention has been given to addressing factors within our control that make it more difficult for our female colleagues to progress on merit at the same pace as male colleagues. This 40% target was exceeded in March 2024 and we will be reviewing the target as part of a wider ED&I strategy review with a view to having a new strategy in place for 2026-2030. The gender balance on the Board itself as at 30 April 2024 was 40% female (30 April 2023: 50%). The Board is mainly appointed by election and the change in gender balance was further to a number of terms of office ending on the Board and an election process.  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 is 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 and 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 environmental, social & governance (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 holds an awayday 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 as possible.

The importance of ongoing Board development is recognised and there are development items planned throughout the year. These are usually held at additional breakfast sessions outside the scheduled Board meetings.

The Board is supported by two committees:

the Audit Committee, and

the Remuneration and Nomination Committee (RemCo).

Both committees have clear terms of reference and are chaired by a NED.

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 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, as well as future opportunities that face the Group, 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's Office of the General Counsel (OGC) is responsible for dealing with risk management and compliance within the business. OGC 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, a Group risk register is maintained in OGC which sets out the principal risks facing the Group and other areas of focus. This register is continually reviewed and updated.

Risk is embedded as part of all discussions at the Executive and Board. The General Counsel 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 the Senior Partner, Managing Partner and each of 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 OGC, Finance and IT. Independent assurance is gained from a combination of testing by our external auditors, external assessments (for example, 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 conditions elsewhere in the company.

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:

COLLEAGUE ENGAGEMENT

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.

Our People strategy has four strategic pillars:

• Lead
  • Equipping leaders to lead and manage through change
  • Aligning strategy to embed fully into teams to drive high performance culture
  • Aligning behaviours and our Cultural Principles with leadership style

• Learn
  • Innovating, collaborating and learning from others' experiences
  • Defining clear expectations for each role and supporting frameworks for self-driven development
  • Sharing knowledge with clients and colleagues

• Inclusion/Belonging
  • Creating a sense of belonging in the Group through internal networks and collaboration
  • Recognising the importance of different perspectives and different ways of thinking
  • Seeking to understand and challenge anomalies and remove unwanted barriers to create an inclusive environment

• Celebrate/Reward
  • Aligning with the long-term sustainable success of the Group
  • Attracting, motivating and retaining high calibre people
  • Enhancing and maintaining a high-performance culture.

We have an innovative approach to working, known as Flex Forward which offers three types of dynamic, location-based working – office-focused, hybrid, and fully flex – to provide each colleague with maximum flexibility for their role, subject to some agreed operating principles. Flex Forward includes a more relaxed approach to working hours to support colleagues with their commitments outside of work, including caring and parental responsibilities.  We were named in the list of Top 10 Employers for Working Families in September 2024 by Working Families, the UK’s national work-life balance charity.

The Group was pleased to retain 85% of its trainees in autumn 2023 (2022: 89%) with 17 of the newly qualified lawyers staying on in permanent roles.

Our culture and style of engagement is one of transparency, openness and honesty. Manager dashboards are accessible for people managers to analyse engagement data and discuss with their teams. 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:

• Business updates directly from the Managing Partner to share information on the performance and development of the Group.
• Town Hall meetings hosted by the Senior Partner and Managing Partner to provide updates about the business to all colleagues.
• An internal monthly e-newsletter (DACBspoke), with an opening blog from the Senior Partner or Managing Partner.
• Members’ meetings with the Senior Partner and Managing Partner.
• A network of sector, legal service line, team and location meetings.
• A number of colleague-led diversity networks: ACCESS (racial inclusion), GEN (gender equity), Spectrum (LBGT+), and Parents & Carers.
• Senior Partner Sounding Board which provides a forum for the Senior Partner to benefit from reverse mentoring by colleagues in the early years of their careers.
• Viva Engage, an internal social media platform used by colleagues and as a mechanism for informal updates from members of the senior leadership team. There are a number of communities on Viva Engage in addition to the diversity networks though which colleagues can connect, such as the Great Outdoors, Menopause and AI at DACB.
• Regular colleague surveys using Peakon, a colleague listening tool that helps us better measure engagement. After each survey we discuss the results with our colleagues and action accordingly. Current areas of focus include reward, leadership development, career progression and wellbeing.
• 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.

More detail on the demographics and diversity of the Group’s workforce can be found in the Equity, Diversity & Inclusion section of our website.

CLIENT ENGAGEMENT

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 with the Executive and Board to inform and support the Group’s strategic decisions. We have also held Board client listening sessions to gain valuable insights from our clients on their emerging strategic priorities, expectations of their legal advisers and future needs.

Our Client Listening Programme measures the overall satisfaction of our clients with the Group. Our satisfaction rate in 2024 was 93% with a recommendation rate of 95%.

Our Client Engagement Programme also facilitates regular informal conversations with clients throughout the year and feedback is captured and responded to.

To better support and service our clients, we have accelerated the pace of our international expansion, opening offices in Italy, and establishing a presence Argentina in 2023 and opening in Peru and Hong Kong in 2024. We have more international projects in the pipeline in 2025.

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. The Group's AI committee is a senior steering committee, sponsored by a Group Executive member and focussed on AI strategy formulation.

Recent innovations and investments in response to client needs include the following:

• Continued use and development of AiDAN by the Group's Claims Solutions Group (CSG), AiDAN is a unique automated solution for property recovery triage. Using state of the art AI technology, AiDAN assesses potential claims and sets up new instructions. It combines our extensive expertise in property claims with advanced digital tools to facilitate swift claims processing.
• The launch of DACB Nexus, an innovative solution to assist clients with supply chain management. The platform provides organisations with lifecycle contract management and visibility across the supply chain. Powered by Albany Group’s advanced regulatory platform, ConectTM, and combined with DACB's expert legal services, it provides a single location to monitor, mitigate and manage counter-party risk. The tool can be applied to any relationship, asset or issue.
• The launch in CSG of a new credit hire automation tool, called Nightingale. Developed in association with Bridgetech Automotive, Nightingale enables claims handlers to process credit hire claims up to an hour faster than with a manual process. It also assists with reducing avoidable litigation and improves indemnity savings.
• The launch of FoReCast, a digital forecasting costs tool to help insurers' claims teams accurately calculate legal costs permutations under the newly extended Fixed Recoverable Costs (FRC) rules. From 1 October 2023, the new FRC rules have applied to claims valued at up to £100,000. The new tool is the latest addition to the Group's growing support package of interactive training materials, precedent documents and Q&As, accessed via a bespoke microsite that explain the new FRC rules and their implications.
• Thought leadership in the health sector with the issue of Health Adviser on the theme of 'NextGen Health: Tomorrow’s Care, Today’s Innovations'. Joining forces with important voices from across the sector, it addresses the challenges that health leaders must overcome to create a NextGen health system that is built on collaboration and innovation. Topics include social care across generations, healthcare real estate, the health tech scaling challenge and mental health.
• A new collection of thought leadership for the global insurance market on ESG and creating sustainable value. The lead article considers the importance of integrating ESG strategies and the role of governance. Four further articles take a deeper dive into climate change litigation, biodiversity risk, geopolitical risk in Latin America and cyber risks resulting from the digital revolution in shipping.
• Regular publication of our Lawcast podcast, examining legal topics across the full range of business sectors to address questions and challenges faced by business professionals in the UK and internationally. The business sectors include insurance, cyber risks, health regulation and NHS policy, real estate, commercial law and employment law. There has been a recent series on NHS estates.
• An ongoing two-year partnership with the Association of British HealthTech Industries (ABHI), under which the firm co-sponsors the ABHI US Accelerator programme, supporting a cohort of UK healthtech organisations looking to upscale their US businesses.
• Informed Insurance: thought leadership for the global insurance market via the 2024 publication of predictions across the full spectrum of insurance risks, identifying key opportunities and challenges that the global insurance industry may face in the year ahead. The 160 predictions are broken down by service line, theme and region to provide a more bespoke approach. The themes are class actions, climate change, global risk, modernising the workplace, regulation and technology and AI.
• The Real Estate Group has been trialling Litera's Contract Companion product to assist with engrossment checks and general quality control, reducing the risk of errors.
• The launch of the DACB Trust Hub which can give clients and colleagues instant access to due diligence information about the Group, including in relation to our innovative products, the security we apply to protect client data, and information on our adoption of AI.
• Ongoing client collaboration around innovation, including AI.

We are proud to have received a number of awards over the last year, including:

• Two awards at the Insider North West Residential Property Awards in Manchester: Law Firm of the Year and Deal of the Year, the latter category in collaboration with Savills and Vistry, for the landmark acquisition of Peel Hall, Warrington.
• The Outstanding Social Impact Award at the British Legal Awards 2023 for the Group's partnership with Change Please, the social enterprise which helps lift people out of homelessness by providing therapy, training, support with housing, and employment as coffee baristas.
• The Fraud Intelligence Team of the Year award at the 2023 Insurance Post Claims & Fraud Awards for work in raising awareness in the insurance market of the risks posed from fraudulent 'shallowfake' documents, or digitally tampered documents which promote falsehoods, and developing a comprehensive training programme for insurers to help them detect and prevent shallowfake fraud.
• Insurance Law Firm of the Year in Italy in the Legal Community Litigation Awards.
• Legal Advisors of the Year in both the public and private categories at the HealthInvestor Awards. The Group won the public award for the third successive year, acknowledging its continued high-quality legal support to the NHS, local authorities, regulators and other public sector organisations. The Group also collected the private award for the second time in three years in recognition of its work for independent health and social care clients.
• The Safety, Health & Environment (SHE) team in Newcastle has been named Team of the Year – Crime/Regulatory at the Northern Law Awards for the second consecutive year. DACB's expansive national team comprises over 25 specialist lawyers dedicated to advising clients on Safety, Health and Environment matters.

SUPPLIER ENGAGEMENT

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 continued to invest 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 duration of the supplier relationship. The Procurement team works in collaboration with OGC 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, with revalidation processes in place to ensure continued compliance with agreed standards. ESG-related requirements have been introduced into our standard supplier agreements and suppliers are expected to have appropriate ESG-related policies and procedures in place. The due diligence process seeks assurance on a wide range of commercial and other considerations, including modern slavery, diversity, sustainability and payment of the UK National Living Wage.

Our Modern Slavery Act statement is available here.

Supplier relationships are managed through regular governance meetings and via risk monitoring tools. Work has been undertaken to expand the scope and accessibility of our annual revalidation actions, with focus on providing greater assurance surrounding supplier relationships at all levels. Opportunities are provided for both parties to feed back on the relationship and discuss innovation and development in the products and services available.

Analysis of the sustainability and resilience of the supply chain is undertaken by Procurement and OGC. They assess the suitability of suppliers, and any significant risks or issues are raised with appropriate senior colleagues and, where necessary, escalated to the Executive and the Board.

As required, payment practices for our English entities are published on a half-yearly basis on the Government’s online facility.

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. We also work with other representative bodies, such as the Bar Council, on select pieces of strategic work for the legal sector.

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 Senior Partner.

The strategy connects directly to our Purpose as a firm, which is focused on creating sustainable value for our clients, our people and our communities. 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 workstreams: social mobility and inclusion, sustainable procurement, community investment, and environmental sustainability. More information on these workstreams can be found in the Responsible Business section of the website.

In September 2023 the Group published a Sustainability Report on the website which as well as covering the Responsible Business Strategy, discusses the Group's approach to ED&I, environmental sustainability, community investment, national programmes, volunteering and pro bono.

The Group's ESG Strategy identifies our ESG commitments as a business and what our key sectors are doing to support clients on their own ESG journeys. The strategy is hosted on an ESG microsite, and is the culmination of a project to identify what the Group and its clients consider as key areas of focus. 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 ED&I.  In 2023 and 2024 our Head of Responsible Business was seconded to the charitable foundation of our largest client. The purpose of the secondment was to support their global ESG initiatives and in particular increasing awareness of the work of the foundation within the client.

For several years we have reported on our carbon emissions through the Legal Sustainability Alliance and we deploy a number of carbon reduction initiatives, including e-signature document production and renewable energy procurement policies. Our Carbon Reduction Plan was first published in April 2022. We have now committed to more ambitious carbon reduction measures, expanding the scope of our environmental reporting to enable submission to the Science Based Targets Initiative (SBTi), the world-leading framework for setting targets which are aligned with the Paris Agreement. Our new commitments submitted to the SBTi are to reduce Scope 1 & 2 by 42% by 2030 and Scope 3 by 25% by 2030, aiming for Net Zero by 2050.

Our latest ED&I report is on our website which is based on diversity data from colleagues in the UK & Ireland as at July 2023 and outlines the key elements of our ED&I Strategy FY21 - FY25. Analysing the composition of our workforce in this way helps to inform our People Strategy so that we make sure that people from all backgrounds and with the widest possible range of experiences bring their views and knowledge to our business.  Our latest gender pay gap report can be found here. On ED&I, developments in the year included:

• Roundtable discussions held with female salaried partners to inform planning around female leadership development.
• For those returning from maternity leave we have in place access to a refreshed network of Back to Work mentors, being colleagues who have experienced the challenges of transitioning back into work.
• We remain a signatory of the Wellbeing of Women's Menopause Workplace Pledge.

Developments which illustrate our engagement with stakeholders relating to the community include the following:

• Our ongoing corporate partnership with Action Tutoring, which involves a multi-year grant to fund the project's expansion. A significant number of colleagues volunteer as tutors to provide support to disadvantaged pupils in English and mathematics.
• The Group's volunteering programme with Change Please, a social enterprise which helps homeless people through its coffee business. As part of the programme our volunteers have helped 40 people through six employability workshops, with 85 per cent going into onward employment.
• The sponsorship in Newcastle of an art trail sculpture to benefit St. Oswald's Hospice. The sculpture was one of 45 super-sized sculptures inspired by Shaun the Sheep that took over Newcastle as part of the Tyne Art Trail in the summer of 2023. Each sculpture had been designed by talented artists from across the UK.

In FY24 more than a quarter of our colleagues volunteered for one of our Responsible Business programmes.

The Group’s energy and carbon report can be found in the Group report and accounts.