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Close Brothers Vehicle Hire Limited: Section 172 Statement

Section 172(1) statement and statement of engagement with other stakeholders

The directors provide the following statement pursuant to the Companies Act 2006 (as amended by Companies (Miscellaneous Reporting) Regulations 2018) (the “Act”) to describe how they have acted in accordance with their duty under Section 172 of the Act (“Section 172”) to promote the success of the Company for the benefit of its member(s) as a whole, and in so doing, how they have had regard to those factors set out in Section 172, (1) (a) to (f) during the financial year.

Furthermore, in compliance with the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended by the Companies (Miscellaneous Reporting) Regulations 2018), the directors provide the statement which follows to describe how they have engaged with employees, and how they have had regard to employee interests and the need to foster the Company’s business relationships with suppliers, customers and others, and in each case, the effect of that regard, including on the principal decisions taken by the Company during the financial year.

Section 172 requires a director to have regard to the following matters, among others, when discharging their duty:

  • the likely consequences of any decision in the long term;
  • the interests of the Company’s employees;
  • the need to foster the Company’s business relationships with suppliers, customers and others;
  • the impact of the Company’s operations on the community and the environment;
  • the desirability of the Company maintaining a reputation for high standards of business conduct; and
  • the need to act fairly as between members of the Company.

The board directors of the Company (“the Board”) is collectively responsible for managing the affairs of the Company to achieve its long-term prosperity by making important decisions, monitoring the underlying performance of the Company, as well as being a means for establishing ethical standards.  Understanding the interests of key stakeholders is an important part of the Company’s strategy and helps inform the directors’ decision making throughout the year.

Board meetings are held as required where the directors will consider the Company’s principal activities and make decisions. Meetings are scheduled to provide adequate time for consideration and discussion by the directors of the interests of stakeholders, and for the directors to seek further information from management, as required.  As a part of those meetings, the directors receive information in a range of different formats to assist them in discharging their responsibilities under Section 172 when making relevant decisions.  This information may include, among other things, reports and presentations on financial and operational performance, business updates, budget planning and forecasts, HR matters, as well as specific areas of engagement, such as employee opinion surveys. When making decisions, the Board seeks to understand the impact on each of its stakeholders, including the likely consequences of a decision in the long term, whilst acknowledging that a decision will not necessarily be favourable for all stakeholders, as there may be competing interests between them. 

The Company is part of the wider CBG, and as such it follows a range of group-wide policies in place to protect employees and provide a safe working environment, to ensure compliance with all regulatory requirements and adherence to the highest professional and ethical standards in dealing with customers, suppliers and colleagues, as well as ensuring that it continues to be  cognisant of its social and environmental responsibilities. In doing so, and by balancing the interests of the Company’s stakeholders when making decisions, the Board seeks to maintain a reputation for high standards of business conduct. Further information on these group-wide policies can be found in the annual report and accounts of CBG.

The directors seek to engage directly with stakeholders wherever possible on certain issues, though the size of the CBG means that stakeholder engagement often takes place at an operational or CBG level. This approach creates greater efficiency and facilitates a greater positive impact on environmental, social and other issues than may be possible at an individual company level, as well as ensuring consistency of approach across CBG. Where engagement has taken place at operational level, the outcome of that engagement has been brought to the Board for its consideration where relevant throughout the year. During the financial year, engagement with stakeholders has been modified in response to the Covid-19 regulations and government guidance, and has taken place virtually where appropriate. Additional details on engagement at CBG level with stakeholders, including employees, suppliers, customers, the community and environment can be found in the Strategic Report section of the annual report and accounts of CBG.

The following table and case studies set out further examples of the ways in which the board of the Company and CBG have engaged directly and indirectly with stakeholders during the financial year, as well as detailing how the directors have had regard to employee interests and the need to foster the Company’s business relationships with suppliers, customers and others, and the effect of that regard, including on principal decisions taken throughout the year, as well as matters set out in Section 172 (1)(a)-(f) when discharging their duties under Section 172.

Our Stakeholders


Our stakeholders and why we focus on them:

The Board recognises the importance of the contribution made by our employees, who deliver the highest levels of service for our customers and clients

Engagement with employees helps to attract, build and retain a high calibre talent pool and ensure that our employees remain enthusiastic about their work and their organisation. Regularly listening to employees’ feedback ensures they feel valued with their views recognised and acted upon.

Stakeholders' key priorities:

  • A safe working environment


  • A fair, supportive, diverse and inclusive culture where employee feedback is valued


  • A commitment to invest in training and development


  • Ensuring appropriate rewards for their contributions

How we engage with them:

Engagement with our colleagues takes place daily through line managers, with senior management regularly speaking at Town Halls and other business-wide forums. Regular employee opinion surveys are undertaken and closely monitored and management frequently hold employment engagement activities to provide updates on business performance and gather real time feedback, which is listened to and acted upon. Training and mentoring programmes are in place to support the development of all employees.

Key engagement during the year:

As lockdown restrictions have changed and government guidance on returning to workplaces has evolved, communication with employees has been key. Throughout the year, our focus has been on employee wellbeing and morale, ensuring our employees feel supported and engaged, both at a team and business level, as well as understanding our position in relation to returning to work.

Customers, Clients and Partners

Our stakeholders and why we focus on them:

The needs of our customers, clients and partners are at the heart of our business and are core to our purpose of helping the people and businesses of Britain thrive over the long term.

Putting the interests of our customers, clients and partners at the heart of our business is critical to our success, and the CBG’s purpose to help the people and businesses of Britain thrive over the long-term underlines the Board’s commitment in this area.

Our long-term success depends on the strength of our relationships with customers, clients and partners. As such, central to all decision-making is understanding how our actions can help them and their businesses thrive.

Stakeholders' key priorities:

  • A customer-led proposition
  • A focus on treating customers fairly
  • Strong personal relationships and specialist expertise
  • Consistent and supportive customer service whatever the market conditions

A responsive service with solutions that are flexible and executed with speed.

How we engage with them:

Consistent delivery of high quality service for customers, clients and partners by our specialist, expert teams is core to our business model. We ensure this is built around the needs of our customers, clients and partners and is aligned to our customer principles by conducting extensive research and analysis of feedback, captured through our “Voice of the Customer and Partner” programme. This enables us to improve experiences in the moment as well as plan for changes to our service and proposition into the future.

Key engagement during the year:

Maintaining close contact with our customers, clients and partners throughout the year has been paramount as we continued to support those who have found themselves in difficulty through forbearance and other Covid-19 concessions. We regularly discussed our customers’ positions with them to ensure we were best supporting their needs as they evolved.

Regular reporting and discussion of matters and updates relating to customers, clients and partners.

Ongoing measuring and monitoring of customer experience against key customer principles and conduct risk framework.

Analysis of feedback via customer forums and Voice of the Customer programme.


Our stakeholders and why we focus on them:

Our business is supported by a large number of suppliers, enabling us to provide high standards of service to our customers, clients and partners.

Engagement with our suppliers enables the business to develop and maintain long-term and sustainable relationships. This engagement also helps enable our suppliers to better understand and align to our key policies and procedures and operate responsibly.

Stakeholders' key priorities:

  • Appropriate and clear payment procedures
  • Strong and sustainable relationships with Close Brothers
  • Fair and equitable conduct of business

How we engage with them:

Our key supplier relationships are managed centrally through our dedicated third party management (“TPM”) function, which includes regular meetings, as well as an annual survey to seek feedback on Close Brothers as a client.

Key engagement during the year:

Engagement with key suppliers during the Covid-19 pandemic.

Review and consideration of material contracts with suppliers and ongoing supplier relationship management through TPM.

Established processes for the management of supply chain risks and issues, with escalation to the Board and management as appropriate.

Regulators and Government

Our stakeholders and why we focus on them:

Whilst the Company is not individually regulated, it is part of CBG which in turn values an open and transparent relationship with all our regulators, particularly the Prudential Regulation Authority (“PRA”) and the Financial Conduct Authority (“FCA”), as well as government authorities and trade associations.

It is important we maintain a culture that is focused on retaining and encouraging high standards of business conduct and regulatory compliance and openness. Engaging with the relevant regulators and associations helps to ensure the business is aligned to the evolving regulatory framework.

Stakeholders' key priorities:

  • Fair treatment of customers and clients
  • Compliance with applicable regulation
  • Recognition of the importance of resilience and risk management
  • Provision of high quality information and regulatory reporting
  • Active consideration of risks relating to sustainability and other climate matters

How we engage with them:

We regularly interact with the trade bodies and business associations we are affiliated with to ensure we are engaged with issues impacting our industry.

Regulatory risk and compliance reporting to local Risk and Compliance Committee.

Consideration of the regulatory horizon including via risk and compliance reports.

Consideration of relevant policies and standards that support compliance with regulatory and compliance requirements.

Key engagement during the year:

Participation in broader CBG regulatory initiatives and programmes, including activity to support the ICAAP, RRP and ILAAP processes.

Oversight of training for all employees on applicable regulatory requirements.

Consideration of relevant policies and standards that support compliance with regulatory and compliance requirements.

Communities and Environment

Our stakeholders and why we focus on them:

As part of CBG, the Board is committed to contributing long-term value and making a lasting, positive impact on the society in which we operate and the environment more broadly.

Engaging with local communities helps the board and our employees develop our understanding of our clients, customers and partners so that we can support them and help them to achieve their ambition, whilst also building employee engagement.

Stakeholders' key priorities:

  • A suitable strategy for approaching sustainability issues
  • Support for community initiatives
  • Job creation and social mobility
  • A long-term focus on addressing the impacts of climate change

How we engage with them:

Throughout the year, we undertake various community, social and environmental initiatives, which are coordinated through our sustainability working group. Many of our employees participate in group-wide committees established to drive forward a range of initiatives around diversity and inclusion, helping the environment and charitable and community activities, with our employee volunteers the driving force behind our successful community and charitable events.

Key engagement during the year:

We continued to run our established social mobility programmes, supporting up-and-coming talent in local communities and providing access and opportunities for those from less-advantaged backgrounds.


Our stakeholders and why we focus on them:

The Company is a wholly owned member of the CBG, forming part of the Banking division; as such it operates as part of the broader group in delivering its purpose and strategic objectives, in line with group-wide processes, governance and culture.

Engagement supports the Company’s understanding of, and contribution to, broader CBG activities and strategic aims, and ensures delivery of long-term sustainable value for our shareholder in line with CBG policies and standards.

Stakeholders' key priorities:

  • Focus on broader CBG purpose and strategic aims.
  • Alignment with group-wide risk, governance, compliance and
  • financial priorities.
  • Consistent approach to stakeholder considerations and outcomes

How we engage with them:

Engagement with senior management at a CBG level, including representation on the Board and other governance forums to ensure the Board has a clear understanding of its role and contribution as part of the wider group.

Updates to CBG level committees, including the CBG Board on the operation and performance of the Company.

Key engagement during the year:

We supported CBG during the year in their engagements with our investors through virtual meetings at CBG level. CBG hosted an Investor Event in June 2021, with presentations covering the group and its businesses and providing investors an opportunity to ask questions of the management team and the Company.  CBG also engaged potential and existing fixed income investors during roadshows throughout the year, as well as communicating regularly with credit rating agencies. CBG maintained its regular programme of communication organised by its investor relations team including investor roadshows, analyst presentations and keeping the market up to date in line with regulation.

Furthermore, set out below are some additional detailed examples of the ways in which the board of the Company has engaged directly with key stakeholders during the financial year, how stakeholder interests have been considered in the decision-making of the directors, and how the Directors have had regard to the matters set out in Section 172 (1)(a)-(f) when discharging their duties under Section 172.  The Company is a wholly owned subsidiary of CBL and, as such, the duty of directors to have regard to the need to act fairly as between members of the Company is limited.

Investment in a new Retail Disposal Location

During the year the directors took a considered view based on the growth of the business over recent years, that it required further expansion into new markets. A retail disposal site has been set up next to the main office in Ilkeston, where a module office has been set up to conduct direct customer sales from.  In making this decision, the Board considered its duties under s.172 of the Companies Act 2006 and the interests of its stakeholders, with the investment enabling the Company to generate higher stakeholder returns and opportunities for further growth. To expand this disposal avenue, we have taken on an apprentice to focus on preparing vehicles for retail disposal. We have seen this investment as a success with disposal profits exceeding all expectations. This new location has raised the profile of the business into a new market, whilst driving improved morale with our employees and further strengthening our synergies with other businesses in CBG. 

Covid-19 support to customers and our colleagues

Following the initial impact felt of Covid-19, the business has continued to support customers and suppliers where possible. Covid-19 pandemic has been unprecedented and felt across all areas of the UK economy, over a longer period of time from what we all first expected. This has added to longer financial support required in certain sectors in which the board decided to continue the support to these customers as much as we could.

As part of its decision-making, the board had regard to the different interests of stakeholders but with an overarching focus, as required by section 172(1), on acting in the way that would be most likely to promote the success of the Company. The key decisions made during the pandemic were:

  • Continue to support the short-term liquidity challenges of its customers and extend forbearance to assist customers in prolonged financial distress.
  • Continue to onboard new customers.
  • Provide operational solutions for those customers that did not have the capabilities of resources availability to respond themselves.
  • Protect our staff by running Covid safe environments for them to work in along with continuous engagements. Keeping our employees well and safe whilst ensuring they maintain a high level of customer service has been successfully embedded into the Company.
  • Management of stock availability with supply chain restraints being an issue, ensuring our customers have access to a level of vehicles that they require to keep their operation running effectively. 

The board recognises the uncertainty around Covid-19 and continues to monitor the impact of its decision on the Company and its stakeholders.

The safety and wellbeing of our colleagues is of the utmost importance to us, and we have supported them through flexible working arrangements, seeking regular feedback and making adjustments so that they can conduct their roles safely. A number of our staff have now returned to work on-site or begun to meet customers in person where it is safe to do so, but the majority remain successfully working from home, where our robust systems and technology have enabled them to perform their roles with minimal disruption and to serve our customers and clients effectively. We have not made use of the Coronavirus Job Retention Scheme as none of our employees were furloughed during this period.

Contact us

Close Brothers Vehicle Hire
Lows Lane
Stanton by Dale

T: 03454 600 601

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