Find YourNMBS QCA Code Adoption
Date: 9 July 2025
Preamble
The Board of NMBS has adopted the Quoted Companies Alliance Corporate Governance Code (the QCA Code). It is the Board’s responsibility to ensure that NMBS is managed in the best interests of the NMBS members as a whole. This requires an efficient, effective and dynamic management framework and should be accompanied by good communication which helps to promote confidence and trust.
The Board considers the QCA Code provides the most appropriate governance framework for an entity of NMBS’ size and nature. The QCA has identified 10 principles that focus on the pursuit of medium to long-term growth in value for shareholders without stifling the entrepreneurial spirit in which a company was created.
Deliver growth
Principle 1: Establish a strategy and business model which promote long-term value for shareholders
• NMBS strives to enable members to get the best possible deal from suppliers through exclusive supplier offers and terms to independents via centralised purchasing, marketing and event activities.
• NMBS has a 3-to-5-year strategy which is revisited each year.
• Information on the business model and strategy, as well as the key challenges faced by the business, are set out in the annual report and also communicated at industry events held by the Society (e.g., NMBS Conference, Exhibition Gala Dinner, Supplier Lunch).
• NMBS published its first sustainability report in 2024, which also provides information on the purpose, mission and vision of the society.
• There is an annual presentation to all staff, outlining future plans and historic performance.
• The strategy is reviewed, assessed, and revised at the board’s annual strategy days and is an agenda item for discussion and update at every board meeting. This strategy is then filtered down to the internal management team so that departments can be managed with a view to achieving the strategy.
Principle 2: Seek to understand and meet shareholder needs and expectations
• NMBS seeks to understand the needs and expectations of all of its stakeholders by means of internal and external communications and meetings.
• NMBS’ directors participate in industry events throughout the year, representing NMBS at these events.
• The CEO and Executive Directors meet with existing members throughout the year.
• A materiality assessment obtained input from 123 stakeholders, including 33 NMBS members, in order to incorporate their expectations into the NMBS sustainability strategy.
• NMBS is currently in the process of improving its social media presence which seeks to keep all stakeholder groups informed on the Group’s progress.
• To further understand and meet shareholder needs and expectations the Society retains a Public Relations partner.
• NMBS employs an independent company to carry out an NPS Score Survey of its members on an annual basis.
Principle 3: Take into account wider stakeholder and social responsibilities, and their implications for long-term success
• NMBS has identified its stakeholders, both internal and external
• NMBS regularly revisits its identified stakeholders to consider any additions or changes
• The Board is updated on wider stakeholder issues as they arise. As well as our members, the Board considers the employees and suppliers to be critical to the long-term success of the Society.
• In 2024, the Board nominated a director with responsibility for sustainability.
• The Annual Report includes a section on stakeholder engagement and stakeholders were consulted as part of the Society’s materiality assessment.
• The Society’s first Sustainability Report, published in 2024, includes further information on stakeholder interests, our approach to stakeholder engagement and how stakeholder interests are reflected in our sustainability approach.
Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation
• The Group’s approach to risk management together with the principal risks and uncertainties applicable to NMBS are set out in the Group’s annual report.
• NMBS’ Executive, in conjunction with the Board, reviews, evaluates and prioritises risks to ensure that appropriate measures are in place to effectively manage and mitigate those identified.
• A risk register is maintained, which is reviewed regularly by the executive and presented to the Board at each meeting. In 2024, Evelyn Partners were appointed to assess the current risk management framework and risk register, with a focus on the relative maturity of the approach taken, whether the risks identified could be evolved/developed, and whether there is appropriate scoring, management and mitigations. The results of this external review will be reported to the Board in 2025 and improvement actions agreed as appropriate.
• During 2024, the Board considered the introduction of an internal audit function and appointed Evelyn Partners to provide internal audit services. The programme of internal audits will be agreed by the Audit & Risk Committee following completion of the risk management review summarised above.
• As a major provider of credit cover in the merchanting industry, NMBS strictly adheres to its Credit Policy, the operation of which is independently audited twice a year. These audits are evidence of NMBS going above and beyond what is required.
• Any changes to the Credit Policy are placed before the Audit and Risk Committee, whose remit is evolving to encompass not just financial risks but the Group’s overall risk framework.
• The managing, processing handling and storage of significant quantities of data is a core function of NMBS. As such, the Group takes the threat to cyber security very seriously. It has recently appointed a Cyber Security Manager whose role it is to ensure the integrity and security of all systems.
• In 2023, NMBS appointed KPMG to carry out a cyber maturity assessment, the results of which were reported to the Board and actions taken to implement recommendations. Work has continued in 2024, with KPMG appointed to support the Group in carrying out a cyber breach simulation and to introduce data loss prevention tooling.
• The Group holds a Cyber Essentials accreditation and also certification for Cyber Essentials Plus, with 100% completion of monthly mandatory Cyber Security training.
Maintain a dynamic management framework
Principle 5: Maintaining the board as a well-functioning, balanced team led by the chair
• The Statement of Board’s Responsibilities, part of NMBS’ Annual Report, details the composition of its Board and Committees.
• At the heart of all successful businesses are balanced teams. NMBS’ Board comprises a Non-executive Chair, four Executive and eight Non-executive Directors, the latter being selected from the Group’s member organisations.
• All the Non-executive Directors are considered to be independent by NMBS as they are not deemed to have a material relationship with the company that would reasonably be expected to impair the objectivity of the person’s judgment when participating in their role on the board and are neither part of its executive team nor involved in the day-to-day operations of the company.
• All Non-executive Directors retire by rotation in accordance with the Society’s rules. The Board will continue to consider whether members should be provided with the opportunity to vote annually on re-election of all individual directors as required by the QCA Code.
• Matters Reserved for the Board have been agreed and are reviewed by the Board annually.
• The Board and Committees are reminded at each meeting of the requirement to adhere to the requirements of the Competitions Act 1998 and the Enterprise Act 2002.
• On joining the Board, Non-executive Directors receive a formal appointment letter, which identifies the estimated time commitment expected of them.
• The number of meetings attended by each director during the year is set out in the corporate governance section of the annual report.
Principle 6: Ensure that between them the directors have the necessary up-to-date experience, skills, and capabilities
• A Board skills audit was conducted in 2024, facilitated by Odgers Berndtson. The skills audit identified board strengths and areas where board capability could be enhanced.
• The Governance & Remuneration Committee regularly reviews the composition of the Board.
• All Board members have access to the advice and services of the Society’s Secretary and the Board also obtains advice from professional advisers as and when required.
• Biographies of the executive directors are available on the NMBS website. The Board will give further consideration to the inclusion of biographies for Non-executive Directors in the annual report.
Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
• The Statement of Board’s Responsibilities section of the Annual Report describes the function of the Board and its Committees.
• A Strategic Review was undertaken by BDO in 2021 its results were considered carefully by the Board. Key recommendations were published in the 2021 Annual Report.
• The Board will give further consideration to the introduction of an annual board performance review.
• In 2025, the Board will introduce individual performance reviews for the Chair and Non-executive Directors.
• Board succession planning is undertaken by the Governance & Remuneration Committee. In 2024, the Board established a Succession Committee to consider matters relating to executive succession.
Principle 8: Promote a corporate culture that is based on ethical values and behaviours
• NMBS holds an Investors in People Gold accreditation.
• The ethics of the business are communicated internally to all staff, setting out NMBS’ purpose, values and culture.
• During 2024, NMBS launched a simple precis of the values and culture of NMBS – the “NMBS Way”. The three key aspects of this are: (1) strong relationships; (2) we aim to constantly approve and (3) we seek to grow sustainably. This culture and values play an important part in how we deal with each other and with our customers.
• NMBS is a founding member of the Construction Inclusion Coalition. In 2023, NMBS achieved its target of recruiting 60 apprenticeships into the industry in the 60th anniversary year, and continues to support independent merchants through the process of placing apprentices.
• A Modern Slavery and Anti-Trafficking Policy has been published, and NMBS has worked with suppliers to ensure they have an up to date, published and compliant Modern Slavery Statement. Modern Slavery due diligence has been incorporated into supplier onboarding and awareness training provided to employees.
Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board
• The Board has a formal schedule of matters reserved for its attention and meets at least six times each year, with each meeting minuted. Papers are circulated in advance of meetings.
• The Board is supported by the Audit & Risk Committee and the Governance & Remuneration Committee in discharging its responsibilities. Each of the Committees has access to information and external advice, as necessary, to enable the Committees to fulfil their duties.
• The Statement of Board’s Responsibilities section of the Annual Report describes the function of the Board and its Committees. The roles of Committees are described in the Annual Report, along with their terms of reference and matters reserved by the Board for its consideration.
Principle 10: Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
• The Statement of Board’s Responsibilities section of the Annual Report describes the function of the Board and its Committees
• The NMBS website contains regular updates of the performance of the Society and key personnel
• The Society communicates with members through the Buyers Guide, OnePlace, the Annual Report, website and at events throughout the year.
• The Society also communicates with suppliers, local communities, industry groups and employees.