section 172 statement
the company is a wholly owned subsidiary of Tapestry, Inc. (together with its subsidiaries will be referred to as the “Tapestry Group” or “Tapestry” throughout this report), a company listed on the New York Stock Exchange under ticker ‘TPR.’ Tapestry is a leading New York-based house of modern luxury accessories and lifestyle brands. Tapestry is powered by optimism, innovation and inclusivity.
the Tapestry Board oversees the management of Tapestry Group’s business, including, but not limited to, setting strategic priorities, assessing major risks facing the Company and reviewing options for mitigating these risks and, along with the support of its committees, overseeing the compensation programs and policies.
under section 172(1) of the Companies Act 2006 (“section 172”), the directors are required to act in a way that they consider, in good faith, would most likely promote the success of the Company. this success must be for the benefit of the Company’s shareholder but also for all other stakeholders (for example, including employees). the directors of the Company are also members of Tapestry’s Executive Committee and are heavily involved in the development and execution of the Tapestry Group’s strategy and purpose. the directors are able to assess and, where necessary, challenge the appropriateness of the strategy for the Company - they act in the best interest of the Company notwithstanding their role in the Group. the directors are able to ensure decisions taken by the Company are consistent with the Group’s overall strategy and purpose. the Company believes that the Board’s leadership structure provides appropriate oversight of the Company’s activities.
the requirement for the directors to demonstrate that their actions were in good faith and would most likely promote the success of the Company could not have been more pertinent than during the COVID-19 pandemic. the Company was, and continues to be, focused on driving meaningful positive change for the betterment of its employees, business partners, and communities, and for a safe and sustainable planet. for example, the Company pursued subsidies offered by the UK government (in response to the COVID-19 pandemic) during FY20 to ensure the employment security for our retail teams (topping up furloughed employee salaries to 100%). furthermore, Tapestry did not allow the volatility of 2020 to change its long-term objectives - rather it was a catalyst to accelerate the Group’s strategic agenda. In August 2020, Tapestry announced its Acceleration Program to transform the Group into a more consumer centric organization that is more agile and data-driven with a digital-first mindset. Tapestry believes these initiatives will create stronger connections with its customers, fueling accelerated growth and profitability for Tapestry and each of its brands. More details on the Acceleration Program can be found at www.tapestry.com/investors. the Group’s response in 2020, driven by the Board and Executive Committee, and how the Company treats and interacts with its stakeholders, demonstrates how seriously the directors takes their responsibilities under section 172.
the engagement of customers and nurturing customer relationships is at the core of Tapestry’s business. The guiding principle of Tapestry’s Acceleration Program is to better meet the needs of each of its brands’ unique customers by sharpening its focus on the consumer, leveraging data and leading with a digital-first mindset and transforming into a leaner and more responsive organization. For the Tapestry Group, evolving customer preferences require close cooperation to understand their needs and anticipate market trends. Customers are increasingly concerned about the consequences of climate change and are looking to Tapestry for more sustainable solutions. To reduce the impact of our business on the environment and drive positive impact across our value chain, the Group launched bold 2025 sustainability goals in April 2019. Our 2025 strategy sets measurable goals for reducing our greenhouse gas emissions, decreasing waste and water use, and sourcing our materials in an ethical and responsible manner. More information on our 2025 goals can be found at www.tapestry.com/responsibility.
The Tapestry Group recognizes the importance of its relationships with its suppliers globally. We work closely with contractors to mitigate risks and improve practices, ensuring our suppliers abide by our Supplier Code of Conduct (please refer to https://www.tapestry.com/investors/ for a copy of this document), which enforces compliance with our rigorous operational and compliance requirements. Our 2025 goal of achieving 95% traceability is part of our long-term corporate responsibility strategy to achieve greater transparency across our supply chain, and to uphold high standards pertaining to both environmental and social compliance. Developing new and maintaining existing relationships with our suppliers is essential to meeting this goal.
our employees are vital to the success of our business. Tapestry is made up of many stories, backgrounds and perspectives, each playing an important part in creating the Tapestry that we believe in and our culture of belonging; and is paramount to our long-term success. We want Tapestry to be a place where our employees love to work, where they feel recognized and rewarded for all that they do.
Tapestry is devoted to being an engaging, innovative, inclusive and diverse workplace. In 2019, we established new goals for reducing gaps in feelings of inclusion by gender and ethnicity across our global employee population. These include (i) enabling all employees to manage both their work and personal life balance by achieving a global core benefit standard for self-care, parental and family care leave policies, and (ii) demonstrating a focus on career progression, development and mobility by filling 60% of leadership roles (VP+) internally. Please refer to our Corporate Social Responsibility report found at www.tapestry.com/responsibility. We place an emphasis on internal mobility and, through various development programs, facilitate opportunities to help our employees acquire the knowledge, skills and confidence necessary to continue their development at every stage of their career. We want to foster an inclusive culture and be a talent engine where talent can thrive. Our People and Organizational team launched several diverse and exciting programs in 2019 designed to develop awareness and understanding for inclusion, people management and design-led thinking. This includes the launch of our European Inclusion Counsel and, through partnering with MindGym, an Inclusion Training Program for people managers focused on how to create a safe work environment for our employees to share their perspectives and bring their authentic selves to work.
employee engagement is integral to the Tapestry Group. Formal and informal processes are used to engage and be transparent with employees. This includes, but is not limited to, global webinars with the Executive Committee on a quarterly basis to discuss the Group’s financial results and other key happenings in the business.
interests of the Group - Global Business Integrity Program
typically in large companies, the Directors fulfil their duties partly through a governance framework that delegates day-to-day decision making to the employees of the company. The Board recognizes that such delegation needs to be part of a robust governance structure, which covers our values, how we engage with our stakeholders and how the Board assures itself that the governance structure and systems of controls continue to be robust. Accordingly, the Tapestry Board expects the Company’s directors, as well as officers and employees, to act ethically at all times and to acknowledge their adherence to the Group’s Code of Conduct and the policies comprising the Group’s Global Business Integrity Program. The Global Business Integrity Program consists of the five published documents described below. Copies of these documents can be found at https://www.tapestry.com/investors/
1. the Code of Conduct is issued to our employees worldwide and outlines the significant legal and ethical issues that frequently arise in the course of business and describes the key responsibilities all employees, directors and officers are expected to uphold and comply with in conjunction with our values and policies.
2. the Global Operating Principles set forth the minimum standards by which we expect each strategic partner will operate and conduct business. These global principles also convey to our employees and all public constituencies our values, commitments and goals.
3. the Supplier Code of Conduct sets forth guidelines and requirements for doing business with us for firms from whom we procure products and services, including contractors, joint venture partners and suppliers of goods and services.
4. the Anti-Corruption Policy describes our commitment to integrity and explains the specific requirements and prohibitions applicable to our operations under anti-corruption laws, including, but not limited to, the U.S. Foreign Corrupt Practices Act of 1977, as amended (“FCPA”).
5. the Animal Welfare Policy sets forth our commitment to principles and practices that require animals in our supply chain to be treated with care and respect.
these principles and philosophies that govern our operations and businesses are based not only on laws and regulations, but are also founded on dignity and respect for the individual, a strong commitment to common sense, fairness, diversity, and ethical business practices and policies. in order to monitor the adherence to these principles, we created a Global Business Standards Committee comprised of senior executives. we also have an Ethics and Compliance Reporting System on which employees and others can report issues with and deviations from our principles and philosophies. we are committed to the promulgation, application, and continued development of these principles at each location where we operate.
employee engagement matters are of strategic importance to the Company and the Group as a whole. an explanation on how the Company engaged with employees and had regard to employees’ interests, including principal decisions taken during the financial year (with particular regard being given to the challenges that the Company and employees faced due to the COVID-19 pandemic), is detailed in the Strategic Report (above).
the Company’s key stakeholders are its customers, suppliers and employees, and the directors always consider their needs when making decisions. as a member of the Tapestry Group, its parent company and other members of the Group are also stakeholders of the Company (more about the Group’s commitments to its stakeholders can be found at https://www.tapestry.com/responsibility/.) The directors’ regard to the need to cultivate business relationships with its stakeholders (including its customers and suppliers) is detailed in the Strategic Report (above). however, it is worth reiterating that:
1. Tapestry partners with suppliers to find sustainable and efficient ways of using resources.
2. the engagement of customers and nurturing customer relationships is at the core of Tapestry’s business. the guiding principle of Tapestry’s Acceleration Program (as explained in the Strategic Report) is to better meet the needs of each of its brands’ unique customers by sharpening our focus on the consumer, leveraging data and leading with a digital-first mindset and transforming into a leaner and more responsive organization.
this statement can also be found in the Company’s audited financial statements for the period ended 27 June 2020.