Verizon UK Financing Limited - Section 172 Statement for the financial year ending 31 December 2020
Verizon’s culture, strategies and policies are identified and continually reviewed at group level by the senior executives of Verizon. Verizon management believes that Verizon and its group of companies (“Verizon Group”) must effectively address and balance the interests of all of its stakeholders, including its shareholders, employees, customers, communities, suppliers and others, in order to put itself in the best position to serve its customers, provide critical services to the community and grow profitably over the long term. This belief is reflected in the breadth and aspiration of the Verizon Group’s corporate purpose to “create the networks that move the world forward”. It is also reflected in the Verizon Group’s values underlying all of the Verizon Group’s decisions: integrity, respect, performance excellence, accountability and social responsibility.
As a holding and financing company for certain subsidiaries in the Verizon Group, the Company’s principal activity remains closely aligned with the Verizon Group, and the directors of the Company continue to be guided by the Verizon Group’s culture, policies and strategies. The directors of the Company however recognise that their statutory duties are owed to the Company and believe when taking board decisions during the year ended 31 December 2020 that they have acted in a way that they consider, in good faith, would be most likely to promote the success of the Company, having regard to those matters set out in section 172 of the Companies Act 2006 (“CA 2006”). Because the Company is a holding and financing company with no employees, third party suppliers or customers, the directors do not consider the factors listed in sections 172(1)(b), interests of employees, 172(1)(c), relationships with suppliers and customers, or 172(1)(d), impact of operations on the community and environment, to be relevant to the proper discharge of their duties pursuant to section 172 of the CA 2006.
In their capacity as executives of the Verizon Group, the directors receive a broad range of training pertaining to their functional roles and more broadly relating to leadership and other personal skills. To better enable the directors to discharge their duties pursuant to section 172 of the CA 2006, the directors are briefed specifically on their duties as directors of the Company, in particular when reviewing transactions that require careful analysis of their duties such as those related to solvency.
The nature of the Company’s activities were aligned with the broader Verizon Group, which has strategies and policies in place which have guided the directors when considering the likely long-term consequences of their decisions. Meetings of board directors were held on a regular basis to enable the directors to consider a range of topics and to receive reports and updates from the business including, but not limited to, those pertaining to financial performance, tax, treasury and statutory audit matters, and Brexit and associated business continuity issues. In 2020, an additional meeting of board directors was held to enable key internal stakeholders to brief the directors on the impacts of the Covid-19 pandemic, how Covid-19 risks were being managed by the relevant functions and how stakeholders were being cared for in the context of the pandemic.
During the year, the directors both at board meetings and in the course of their day to day management of the Company continued to be supported by a number of corporate functions, including Legal, Accounting, Treasury and Tax.
Key Decisions
Specific examples of how the directors have had regard to the matters set out in section 172 when discharging their duties during the year are set out below.
- On 19 February 2020, the directors approved: (i) the allotment of one ordinary share of $1.00 in its issued share capital to Verizon UK Holding Limited (Allotment) for a subscription price of $49,100,000 to be satisfied in cash; and (ii) the subsequent contribution of the cash received on the Allotment to its wholly-owned subsidiary, Verizon Business International Holdings B.V. (VBIH) (Contribution), to enable VBIH in turn to contribute that cash to its wholly-owned subsidiary, Verizon European Holdings Limited, which would then lend the cash to affiliated operating companies in the EMEA region, where it would be used to finance annual incentive payments to the employees of the operating companies. By approving the Allotment and the Contribution, the directors facilitated the provision of finance to the wider Verizon Group, which was in line with the Company’s long-term strategy. The directors considered the financial position of the Company and the long-established practice of the Verizon Group to ensure that each member of the group, including the Company, has sufficient funds available to meet its debts as they fall due.
- On 25 March 2020, the directors approved the payment of an interim dividend of $635,611.65, in aggregate, in settlement of accrued but unpaid dividends on the preference shares held by affiliates of the Voya Financial Group, to be satisfied in cash on 31 March 2020 (Dividend). The directors considered a range of factors including the right of the holders of the preference shares, pursuant to the Company's articles of association and subject to the Company having distributable reserves, to a fixed cumulative dividend, the strength of the Company's balance sheet and the financial effect of the Dividend.
In relation to the above examples, there were no specific conflicting interests between the Company’s stakeholders that the directors were required to balance.