These are as follows:
(a) the likely consequences of any decision in the long term,
(b) the interests of the company's employees,
(c) the need to foster the company's business relationships with suppliers, customers and others,
(d) the impact of the company's operations on the community and the environment,
(e) the desirability of the company maintaining a reputation for high standards of business conduct, and
(f) the need to act fairly as between members of the company.
The consideration given to each of these matters for Specsavers’ large UK companies is set out below.
In the below discussion, Specsavers means the group's ultimate parent and all its subsidiaries. The board of each company is responsible for fulfilling the company's legal and fiduciary responsibilities. It is assisted by two other bodies: the Specsavers Executive Committee (SEC) which is the main decision-making body for Specsavers, the majority of whom are also board members of the group's ultimate parent; and the UK operating boards, of which there is one for each of the main services lines - optics, audiology and domiciliary. The latter are internal committees, not linked to any one specific company within the organisation, but are responsible for the delivery of the Specsavers strategy within the UK context. The SEC directs the overall strategic development of Specsavers globally; determines risk appetite and control measures; promotes professional standards, corporate responsibility and regulatory compliance; and upholds high customer service standards.
Long term decision making
The SEC had previously created the long term framework which underpinned all strategic decisions taken by the
board and was used to deliver the success seen in the financial year under review. However, as a result of the impact of Covid-19 on the business and on the UK economy, the SEC took the decision to stop the long term framework ambitions and focus on a short term framework to recover and rebuild, with the ambition to emerge stronger by 2022 to provide a platform for long term growth. That pivot into a short term framework from a long term framework has not changed the overall vision of changing lives through better sight and hearing, making a positive difference to the lives of all and using our compassion and expertise to help people feel good; cared for; and smart.
Consideration of employee interests
Specsavers’ ethos is to offer inspiring development and fantastic opportunities to our store, support office and other colleagues.
Specsavers recognises the benefits of embracing a diverse and inclusive workforce, in terms of better business performance, more engaged employees, enhanced employer brand and greater innovation. The key focus has been to build a shared basic understanding around diversity and inclusion across the support offices and manufacturing and distribution sites - raising awareness of unconscious bias and encouraging everyone to challenge their own behaviours.
For store colleagues, recognising the importance of convenience and making learning easy to access, Specsavers consolidated our product training content and worked on ways to digitally improve our offering. The result was a mobile-friendly Product Learning Hub and proved that easily accessible, bite-size learning is key to helping our teams offer great service to customers.
Nurturing business relationships with suppliers, customers and partners
Specsavers is passionate about our customers, the lifeblood of our business. It is no secret that our success lies in our unrelenting passion to make a difference for our customers worldwide. Offering the best possible experience, value and choice in eyecare and hearing care ultimately enables us to help our customers live a better quality of life.
Our game-changing app - Frame Styler - enjoyed continued success in the UK, where customers use the exclusive virtual try-on technology. We continue to use the Specsavers Confidence Scale, which revealed that 20 million Brits wish they had a better sense of style. The research identified that customers often found the big choice of glasses on offer daunting. Frame Styler can give specs-wearers the confidence to find the right pair of glasses by analysing face shape, examining purchase history and marrying the results with latest trends.
Our online appointment system in the UK and Republic of Ireland makes it easy for customers to find their nearest store and book an eye or hearing test at their convenience.
Our focus on enhanced optical services (EOS) - those that fall outside the standard eye test - has continued and in 2019/20 more than 760,000 customers across the UK (2018/19: more than 570,000) were able to benefit from the availability of this service: a 33% increase on the previous year (2018/19: 37%). Most were assessed and treated for minor eye conditions such as red eye or sticky eye, for which they would otherwise have had to go to their GP or to the local hospital A&E.
Our customer eye health is at the forefront of our priorities at Specsavers and our UK stores have invested over £16.4m in optical coherence tomography (OCT) hardware. An OCT scan allows an ophthalmologist to examine the eye in more detail than ever before: the OCT scan will help identify early signs of various eye conditions such as age related macular degeneration and glaucoma earlier than by traditional methods alone. In the year under review more than 1,370,000 scans have been performed.
Specsavers is passionate about partnership, which is at the heart of everything we do. The strength of the Specsavers partnership is paramount to our success. Supporting our partners (store director-owners) to lead their teams in making a difference to people’s lives is what sets us apart. Our global programme of partner events, which includes communication meetings, seminars, webcasts and forums, not only provides fantastic networking opportunities but also the chance to launch and obtain feedback on initiatives, provide updates on plans and priorities and tackle business challenges together.
As part of our ongoing support for newly-appointed partners, we offered a bespoke programme in the UK designed to upskill existing partners in mentoring techniques. Specsavers also organises informal meetings between partners to share knowledge, experience and advice. This has helped to create more partner communities, providing valuable support networks to address common challenges and share successes across many of our markets. The group is now looking at new and different ways of continuing this engagement in places where travel restrictions are likely to be in place for a long period due to COVID-19.
Wherever possible, we develop strong, long-term relationships with our suppliers so that we can work together towards our mission of passionately providing best value optometry, audiology and other healthcare services to everybody, simply, clearly and consistently - exceeding expectations every time.
We aim for a very high level of payment compliance to suppliers in accordance with our payment terms. Notwithstanding this, we constantly review our finance processes to improve them on an ongoing basis and work with our suppliers and partners collaboratively to resolve any issues which may arise. In this event, we firstly identify any primary causes of failure to pay and secondly set out actions to remedy and address the causes. At time of writing, our ability to do this is being specifically enhanced by implementation of a new Accounts Payable system, Basware, which we expect to be completed in 2021 as part of our financial process improvement plan. As part of this same plan we maintain a mechanism for and commitment to regular reporting on progress to those third parties who maybe entitled to such transparency.
Community and environmental impact
At Specsavers, we are passionate about giving back to and working with our local communities, wherever in the world we operate. We support many local, national and international causes, and are committed to supporting eyecare and hearing care projects in developing countries. In the financial year 2019/20, we have donated more than £2.6m to charities and good causes globally.
Some of the UK highlights of our charitable activity were:
- Our stores and support offices raised more than £1.4m for various good causes, including Vision Aid Overseas, Guide Dogs for the Blind, Blind Veterans UK, Hearing Dogs for Deaf People, and Sound Seekers.
- Our Spectacle Wearer of the Year Awards campaign supported anti-bullying charity, Kidscape, with donations, ticket sales and a raffle raising £100,000 for their helpline.
- We supported Red Nose Day for the third year by selling jester-themed novelty glasses in our stores, resulting in a donation of more than £334,000 to Comic Relief, which aims to tackle poverty and social injustice.
Specsavers is committed to taking responsibility for the impact our business has on the environment and has adopted a risk-based approach to understanding, minimising and mitigating this impact. This is conducted in line with our values and the responsibilities we have to our customers and our people, as well as our obligations in the countries in which we operate.
Our environmental programme is an important element of our corporate responsibility approach. We understand that both global and local environmental issues can have a wide-reaching and long-term effect on our society, now and in the future. We also require our suppliers to take the necessary steps to protect the environment.
We recognise that the consumption of energy, the use of non-renewable resources, water, plastics and packaging, and waste creation are all things we need to monitor and reduce in every part of our business:
- Our 1,900-plus stores account for the largest share of our carbon footprint through the direct and indirect emission of greenhouse gases related to energy use.
- Our manufacturing and distribution sites have a significant carbon impact through energy use, with the additional elements of water, packaging and waste.
- Our support offices also contribute to our carbon impact by using energy for administration and IT infrastructure.
In the current year we:
- Made substantial progress in the installation of improved water recycling and upgraded filtration for 80% of our UK in-store labs.
- Continued to review the installation of smart metering and brought in a new partner and platform for energy data collection and analysis, with the capability of push reporting and alarm reporting.
- Featured dedicated responsible and sustainable business issues in our annual store partner conference, to help us build a better understanding of the requirements of our partners as stakeholders in our environmental stewardship.
In 2020/21 Specsavers will, amongst other activities:
- Monitor legislative progress towards and continue to plan for the introduction of the proposed UK plastic packaging tax in 2022
- Finalise the data collection and reporting methodology required for compliance under Streamlined Energy & Carbon Reporting (SECR) mandatory greenhouse gas (GHG) reporting for 2020/21
- Monitor legislative progress towards the Extended Producer Responsibility (EPR) system for packaging due for introduction in the UK in 2023, and better understand the environmental impact of our packaging use, and impact of changes to the legislation
Specsavers has had in place since 2008 a supplier ethical trading code of conduct, which enshrines the key requirements of: obeying all applicable laws, treating people with dignity and respect, protecting the environment and complying with anti-bribery and corruption policies.
Trading ethically is integral to the way we operate. We work to ensure the people who make our products have safe and healthy workplaces, where human and civil rights are protected.
We are committed to our global ethical trading policy and ensure regular, independent audits of all our major suppliers who do not operate in globally-recognised regulatory environments.
Primarily our products come from globally-recognised regulatory environments or factories situated in low and medium-risk countries. We continue to monitor activity in these countries to ensure that slavery and human trafficking does not exist in our supply chain.
Tax payments make a vital contribution to sustaining social welfare, enabling the UK government to fund policies that help people avoid economic hardship. We recognise our responsibility to pay the amount of tax legally due in the country in which that liability arises and to comply with the applicable rules and regulations in each of the countries in which we operate. Our tax strategy in relation to UK activities is published on our website at https://www.specsavers.co.uk/news-and-information/uk-tax-strategy.
Governments, regulators, and consumers have increasing expectations of brands to act in a socially and environmentally responsible manner. To respond to these expectations, and as a result of the ongoing COVID-19 pandemic, Specsavers is making a number of changes to the way it manages ethical trading risks.
In 2020/21, Specsavers will:
- Enhance the way we manage ethical trading compliance in our supply chain and across our global estate.
- Focus primarily on supply chain risks associated with employment standards, working environments, business practices, and environmental impacts.
- Deliver new policies, processes, and training to stakeholders to effectively manage these risks.
- Identify and address any key ethical trading risks in our current supply chain.
Treating all shareholders fairly
Specsavers’ large UK companies are 100% owned by Specsavers Optical Group, and Specsavers is jointly owned by DJD and ML Perkins.
A proportion of shares in the store subsidiaries is held by the store partners. In order that the respective rights and responsibilities of the group and partners are clearly and fairly established, a detailed written joint venture agreement is entered into by both parties.