Annual Report and Accounts 2012

Chairman’s Introduction

Dear Shareholders,

I am pleased to present Halma’s Corporate Governance report on behalf of our Board. The report deals with how the Board and its committees discharged their governance duties which I hope provides you with a clear and meaningful explanation of how we apply the principles of good governance enshrined in the UK Corporate Governance Code (the Code).

The Board is committed to maintaining very high standards of corporate governance and ensuring values and behaviours are consistent across the business. We have sought to manage the affairs of the Company not by merely following regimented rules, but by promoting open and transparent discussion, constructive challenge and support in the Board and across the Group. I continue to be pleased with the progress Halma has made. We continually seek to ensure best practice is maintained and that governance is integral to our strategy and decision-making processes for the benefit of our shareholders.

As I indicated in last year’s Annual Report, after ten years of exemplary service, Richard Stone stepped down from the Board in July 2011. We strengthened and refreshed the composition of our Board with the appointment of Daniela Barone Soares in November 2011, who together with our existing Board members form a committed and diverse team.

I have always maintained that a key part of my role involves ensuring that there is a sufficient cadre of individuals being nurtured throughout the Group to enable effective succession planning. The promotions of Rob Randelman and Philippe Felten to the Executive Board, in April 2011 and April 2012 respectively, demonstrate the importance the Group places on developing in-house talent. Reviews of management capabilities and potential are performed on a routine basis and I am satisfied that sufficient resources exist within the Group, and that talent continues to be developed through programmes such as the Halma Executive Development Programme which itself evolves to meet the changing needs of the Group. Whenever we identify a need for improvement to management resources we take action to ensure full strength is attained as soon as practicable.

Lastly, I would like to encourage all shareholders to find the time to attend our AGM on 24 July 2012. It is an excellent opportunity to meet the Board, the Executive Board and a selection of the managing directors from our operating companies.

Geoff Unwin


14 June 2012