Section 172 Statement

Section 172 of the Companies Act 2006 sets out a number of general duties that directors owe to a company. These include a general duty requiring directors to act in a way in which they consider, in good faith, will promote the success of the company for the benefit of shareholders as a whole.

Certain companies within the Electrolux Group (public and private UK companies, including subsidiary companies, which qualify as “large companies” under the Companies Act 2006) need to include a statement in the Strategic Report within their Annual Report to help shareholders better understand and explain how directors have had regard to the matters set out in section 172(1).

These section 172(1) statements included within the strategic reports for qualifying subsidiary companies within the Electrolux Group are set out below:

Electrolux PLC – Annual report year ended 31 December 2023

Section 172(1) of the CA 2006 (s172 factors) is intended to help shareholders better understand how directors have discharged their duty to promote the success of the company.

In accordance with Section 172 (1) Companies Act 2006  “ A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of the members as a whole, and in doing so have regard (amongst other matters) to the following factors:

a) the likely consequence 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.

As part of a large group, the directors of the company are drawn from business areas and senior positions within Electrolux and ensure the overall strategy and long term objectives of the company are consistent with Electrolux. The directors fulfil their duties by delegating day to day decision making to employees of the company and recognise that such delegation is only possible because of the robust governance structure in place, which aims at implementing strict norms and efficient processes to ensure that all operations create long-term value for shareholders and other stakeholders. This involves the maintenance of an efficient organisational structure, systems for internal control and enterprise risk management and transparent internal and external reporting. The directors have insight of the performance of the company alongside the European business area results and this gives them the opportunity to assess local management’s implementation of the agreed strategy. The directors consider the main stakeholders of the company to be its employees, customers, suppliers and local community.

Illustrations of how s172 factors have been applied by the board and senior management can be found throughout the report as per below:

  • Electrolux management regularly assess employees’ engagement, leadership and commitment to strategy through either the more detailed Electrolux engagement survey or the Employee Voice survey. The company has again been awarded the Top Employer for 2023. Further details on the employees’ involvement and wellbeing are considered in more detail on pages 7 and 8 of the directors’ report. 
  • Electrolux reputation is built on trust, which means that all actions and decisions must be governed by principles of ethics, integrity, and respect for people and care for the environment. The Electrolux Code of Conduct is mandatory for all employees and dictates the minimum standards required in the area of the environment, health and safety, labour standards and human rights. Training is given regularly to all employees, including Diversity and equality training for all new employees. The company’s human rights commitment is further detailed through a Human Rights Directive.
  • Through driving the better living program, the company continues its long term strategy  to enable better and more sustainable living for all stakeholders; see Environment from page 1 above for more information and www.electroluxgroup.com/sustainability for a copy of the latest sustainability report.

The company fosters business relationships with suppliers, customers and members of the local community. AEG won the Which large kitchen appliance brand of the year. We were also awarded the Best Supporter of Independents at the Euronics 2023 awards. We also continue to support the local foodbank (see also Environment on page 8 and Engagement with Customers, suppliers and other stakeholders on page 9 of the Director’s report).  

Electrolux Investments – Annual report year ended 31 December 2023

Guidance has been introduced to help shareholders better understand how directors have discharged their duty to promote the success of the company, while having regard to the matters set out in section 172 of the CA 2006 (s172 factors).

In accordance with Section 172 (1) Companies Act 2006 “ A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of the members as a whole, and in doing so have regard (amongst other matters) to the following factors:

a) the likely consequence 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.”

 

As a direct subsidiary of the ultimate parent company Electrolux AB (Electrolux), the directors of the company are drawn from business areas and senior positions within Electrolux and ensure the overall strategy and long term objectives of the company are consistent with Electrolux. The company is an investment holding company with no employees, suppliers or customers of its own and so the directors consider that the main stakeholders are aligned with those of its trading subsidiary, Electrolux plc. More information on how s172 factors have been applied by the directors of Electrolux plc can be found in their financial statements available at Companies House.