Application of principles
Although not formally required to do so, the directors have sought to embrace the principles contained in the UK Corporate Governance Code (the Code) issued by the Financial Reporting Council applicable to fully listed companies, in formulating and applying the Group’s corporate governance policies. These policies are tailored to ensure that they are appropriate to the Group’s circumstances given the size of the Group.
The Company and Group are managed by a Board of directors and they have the necessary skills and experience to effectively operate and control the business. There are nine directors in total, of whom two are Non Executive Directors. Frank Nelson and Jane Earl, the Non Executive Directors, are considered independent and they sit on both the Audit and Remuneration Committees. The Board meets once a month and the directors make every effort to attend all Board meetings. Further details on the Board’s skills and experience are set out within their biographies here.
The Board is responsible for taking all major strategic decisions and also addressing any significant operational matters. In addition, the Board reviews the risk profile of the Group and ensures that an adequate system of internal control is in place. Management information systems are in place to enable the directors to make informed decisions to properly discharge their duties.
The roles of the Chairman and the Chief Executive are separate. The Chairman is responsible for running the Board and he meets regularly and separately with the Chief Executive and the Non Executive Directors to discuss matters for the Board.
As the business has developed, the composition of the Board has been under constant review to ensure that it remains appropriate to the managerial requirements of the Group. One third of the directors retire annually in rotation in accordance with the Company’s articles of association. This enables the shareholders to decide on the election of the Company’s Board.
The Board takes decisions regarding the appointment of new directors as a whole and this is only done following a thorough assessment of a potential candidate’s skills and suitability for the role. New directors are given a full induction to the Group where required so as to ensure that they can properly fulfil their role and meet their responsibilities.
All directors are offered appropriate coaching and training to develop their knowledge and ensure they remain up to date in relevant matters for which they have responsibility as a member of the Board.
The Chairman’s statement and Chief Executive’s review, included in the annual report, give the Board’s current assessment of the Group’s prospects. The directors are responsible for preparing the financial statements as set out in the statement of directors’ responsibilities. The responsibilities of the auditors are set out in the annual report.
Details concerning the composition and meetings of the Remuneration Committee are contained in the directors' remuneration report.
During the period, the Audit Committee, which is chaired by Frank Nelson an independent Non Executive Director, has met three times with the external auditors being in attendance on all occasions. The Non Executive Directors meet separately with the auditors twice a year.
The committee has a responsibility for reviewing the financial statements provided to shareholders. In addition the committee reviews the business and financial risks and internal controls as described below.
The duties of the committee also include ensuring that the auditors provide a cost effective service to the Group and remain objective and independent and to consider from time to time the need for an internal audit function.
Relations with shareholders
The Company has institutional shareholders and is, where practicable, willing to enter into a dialogue with them. The Chief Executive and the Group Financial Director meet regularly with institutional investors within the confines of relevant legislation and guidance.
The Board invites communication from its private investors and encourages participation by them at the Annual General Meeting (AGM). All Board members present at the AGM are available to answer questions from shareholders. Notice of the AGM in excess of 21 clear days is given and the business of the meeting is conducted with separate resolutions, voted on initially by a show of hands and with the result of the voting being clearly indicated.
The Board is responsible for the Group’s system of internal control and for reviewing its effectiveness. Such a system is designed to mitigate the risk of failure to achieve business objectives and can only provide reasonable, but not absolute, assurance against material misstatement or loss.
The Board is of the view that there is an ongoing process for identifying, evaluating and managing the Group’s significant risks and that it has been in place for the period ended 31 March 2017 and up to the date of approval of the annual report and accounts, and that it is regularly reviewed by the Board.
The internal control procedures are delegated to Executive Directors and senior management in the Group, operating within a clearly defined departmental structure. The Board regularly reviews the internal control procedures in the light of the ongoing assessment of the Group’s significant risks.
On a monthly basis, management accounts, including a comprehensive cash flow forecast, are reviewed by the Board in order to provide effective monitoring of financial performance. At the same time the Board considers other significant strategic, organisational and compliance issues to ensure that the Group’s assets are safeguarded and financial information and accounting records can be relied upon. The Board formally monitors monthly progress on each development.
For details of our Tax Strategy please see here.