Certificate in Corporate Governance Assignment Brief : Aston Martin Case Study

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Assignment Question

Case Study Content

Aston Martin Lagonda Holdings Plc (“Aston Martin”) is a UK company that manufactures luxury sports cars and operates a Formula 1 racing team. The company is listed on the main market of the London Stock Exchange and is a constituent of the FTSE 350 index. As such, it is required under the Listing Rules to report on its compliance with the UK Corporate Governance Code.

The corporate governance statement in Aston Martin’s 2024 Annual Report and Accounts* – covering the financial year ending 31 December 2024 – will reveal, yet again, that Aston Martin:

1. does not comply with several provisions of the UK Corporate Governance Code regarding the composition of the board of directors; and
2. does not meet the targets set by the FTSE Women Leaders Review for the percentage of women on boards and senior management positions.

Notwithstanding these “governance failures”, every resolution put forward at the company’s 2024 AGM (apart from the advisory vote on the directors’ remuneration report), was passed by a majority of over 95%, with over 70% of the company’s shareholders participating in the vote.

* Please note that Aston Martin is expected to publish its 2024 Accounts towards the end of March. In the meantime, should you wish to do so, you can read about the areas in which it is non-compliant in its 2023 Accounts. However, you should not base your answer solely on the 2023 Accounts as the company has recently appointed a woman as a replacement for one of the male independent non-executive directors.

Question

Bearing in mind the company’s own explanations for non-compliance in its corporate governance statement and other information in its 2024 Annual Report and Accounts, in particular about its shareholder structure:

1. analyse and explain the reasons for Aston Martin’s non-compliance with the various Code provisions and its failure to meet gender diversity targets for the board;
2. explain what practical steps the company would need to take in order to become fully compliant in these areas;
3. explain what actions shareholders opposed to the company’s practices could take to put pressure on it to make changes and why these are unlikely to succeed in the foreseeable future.

Recommend four ways in which the corporate governance disclosures on Aston Martin’s website and in its Annual Report and Accounts could be improved, making reference to examples of good practice from other companies and examples of good practice from the FRC’s Annual Reviews of Corporate Governance Reporting (2024 Review and 2023 Review). [At least one of your recommendations should relate to Aston’s website disclosures and at least two should relate to its Annual Report and Accounts. You are not required to analyse Aston Martin’s corporate governance practices for the purposes of this question, but the way in which it makes disclosures].

What further changes will Aston Martin need to make to its corporate governance practices and disclosures in order to implement the changes made to the 2024 UK Corporate Governance Code? [The key changes to the 2024 Code for these purposes are summarised in the Additional Materials for this course. As part of your answer, you should summarise any Code changes that you think Aston Martin has already implemented and include references to its website or 2024 Annual Report in support of your view].