Corporate Governance

The report below is that given in the 2010 annual report and will be updated annually on the publication of future annual reports.

Principles and management

We aim to conduct our business in a socially responsible manner and actively promote a culture based on four key principles:

• Performance: valuing and rewarding the attainment of business goals
• Integrity: being reliable, ethical, honest and straightforward in our relationships with customers, staff, shareholders and suppliers
• Process-orientation: encouraging a culture where business challenges are resolved constructively and permanently and "fire-fighting" is avoided
• Initiative: encouraging staff to take ownership of business opportunities and to proactively collaborate in their personal development.

These principles are, in turn, reflected in a set of management values, which have been adopted by the Board and senior management of the business as the guide to how we endeavour to run our business:

• We provide a safe working environment
• We aspire to be a motivated, professional team
• We treat everyone with respect
• We invest time and resources to develop each employee to their full potential
• We behave like responsible co-owners of the business
• We care about customers and colleagues alike
• We are easy to do business with
• We deliver on our promises, both operational and financial

 Responsibility for all aspects of Corporate Responsibility rests with the Board, but in order to involve staff fully in the decision-making process, a Corporate and Social Responsibility ("CSR") Forum was established. This forum acts as a steering committee for the organisation, evaluating opportunities and providing direction for CSR activities and awareness campaigns. Engagement with major customers is starting to provide consistent objectives in areas such as energy reduction targeting and CO2 calculators for MEWPS.

Environment

Our principal environmental impacts are the emissions of the vehicles we operate and the energy and water use in our offices and depots.

In 2009, we started a project to measure our controllable emissions and have used external consultants to calculate how these translate into CO2 equivalents. We now capture this data for all Lavendon operating business units. We have set a target for reducing our controllable emissions by 10% over the next two years, based on comparable levels of activity, and will seek to identify greater reduction targets over a longer time horizon once the potential scope if fully established.

We recycle 94% of our waste in the UK, including oil, batteries, paper/cardboard, plastics and glass, and incinerate all hazardous waste.

In 2011 we will implement programmes to reduce the environmental impact of our offices. We will be looking to increase our level of sustainable and recyclable office supplies and reduce electricity use via a 'switch-off' campaign, where, amongst other actions, smart meters will be used to manage electricity consumption and programmed use of appliances, such as air conditioning systems, will be reviewed.

Employees

The safety of our employees is of paramount importance. All serious accidents are reported directly to the Chief Executive, together with mitigation plans to avoid similar accidents in future. We have robust procedures in place across the Group to minimise safety risks and incidents, these include:

• Regular risk assessments of common activities and hazards
• Comprehensive training on safe use of vehicles and equipment for all staff who operate them

In 2009, we initiated a campaign - "Safety Starts with You" in the UK, which has seen quantifiable reductions in accidents and the associated costs associated with them. We engage all our employees through national safety representatives and the completion of Quality, Health and Safety Environmental (QHSE) Diaries. The Diary requires the recording of daily safety-related procedures, which amounts to some 34 hours of proactive 'local' effort every week in each depot. As recognition of this programme, we were awarded a RoSPA Silver Award. In 2010 the award was upgraded to Gold, thus making Lavendon Group plc the only specialist equipment hire company in our sector to be awarded this prestigious status.

Best practice in health, safety and environmental management is built into a Group-wide internal depot accreditation process called TechX. This process automatically qualifies successful locations for ISO 14001 accreditation. We will have delivered this programme across all depots within the Group by 2012.

Our approach to health and safety of our employees includes the increasingly accurate reporting of lost time accidents involving employees from across the Group to the Chief Executive. In 2010 there were 60 incidents (2009: 19 incidents*) that involved employees taking any time off work. Based on an average number of employees in the year of 1,629, a normal working day of 8 hours and working year of 250 days, the average hours worked per incident was around 54,300 hours. (2009: one incident per 179,000 hours*).

*Now that improved reporting has been rolled out across the Group, year-on-year comparisons to 2009 are not on a like-for-like basis.

As reported in the section on strategic goals and objectives our underlying rate of labour turnover is 8% (2009: 9%), meaning that our core workforce has an average tenure of over ten years

Customers and suppliers

A key feature of our business is that we enable people to work safely at height, and consequently we place a high priority in minimising safety risks in the operation of our equipment. To support this aim we;

• Subject all machines to defined, rigorous and documented checks before being allowed to be placed on hire with a customer
• Provide extensive tailored training programmes for customers and/or their contractors in the safe operation of our equipment

We also hold regular meetings of senior engineering staff from across the Group to discuss the safety aspects of individual equipment types, feeding back comments or suggestions to equipment manufacturers, and research alternative methods to improve the safety of working with and handling materials at height.

In 2009, we hosted the industry's first 'Health and Safety Seminar' attended by over 100 customers and RoSPA (Royal Society for the Prevention of Accidents), IPAF (International Powered Access Federation) and the HSE (Health & Safety Executive). We launched a series of initiatives at the event, the most important of which focussed on 'daily operator checks' and 'familiarisation of MEWPS (Mobile Elevated Working Platforms)'. In 2010, this event was repeated but renamed 'Working at Height Best Practice Day'. On this occasion the HSE was joined by customers who had previously partnered with Lavendon on some the most prestigious major projects in the UK. A series of workshops were held during the event and customers volunteered to join 'working parties' set to focus on 'safety-based innovation' and 'training transformation'.

One of our corporate goals is to strive to support our customers in educating their staff on the importance of safe working methods. We therefore request our Chief Executive is notified of accidents involving our customers. In 2010 there were nine accidents reported across the Group (2009: one, UK only).

Community

In 2010 we established a community involvement committee, which formally evaluates and filters requests for support from local community projects and charities. The committee aims to support the communities in which we operate through three principal strands:

• Small grants programme. We make grants to local charities and local branches of national charities. Expenditure under this programme totalled £15,755 (2009: £13,360) in the year
• Personal community involvement. We encourage staff to play active roles in volunteering within their local community. To support this we run a selective fundraising match programme, whereby the Group will add to sums raised by employees for local charities. Additionally Lavendon is involved, through the 2012 Olympic legacy programme, in providing work experience and employment opportunities for young people in less advantaged parts of East London
• Donations and loans of equipment. We make donations or loans of our equipment, where this can make a contribution to the effectiveness of a community programme.