Principles of Corporate Governance

The Company is committed to high standards of corporate governance to enhance and protect shareholder value. The Company has improved its adoption of good corporate governance as far as the Company considers appropriate. The Company is complying where appropriate with the requirements of the Corporate Governance Guidelines for Small and Mid-Size Quote Companies of the Quoted Companies Alliance (“Guide”). As the Company is listed on AIM it is not required to adopt the provisions of the UK Corporate Governance Code 2016 (“the Code”) although the Company strives where possible to work towards the Code’s best practice to ensure that a meaningful corporate governance policy can be maintained. The Company is subject to the UK City Code on Takeovers and Mergers. 

Summary of Corporate Governance

The Board of Directors holds scheduled Board meetings approximately twelve times per year plus such other ad hoc meetings as are deemed necessary to deal with urgent business matters.

The Board is responsible for leading and controlling the Company, for creating value for shareholders and in particular for formulating, reviewing and approving the Company’s strategy, budget, significant items of capital expenditure, acquisitions and senior personnel appointments. Additionally the Board is responsible for ensuring the Company has the appropriate people, financial resources and controls in place to deliver its strategy and long-term objectives. The Company has established subcommittees of the Board, comprising an Audit Committee, Nominations and Governance Committee, Remuneration Committee and Technical and Operations Sub-Committee.

The directors believe that the Board and its committees have the appropriate balance of skills, experience, independence and knowledge of the Company to enable them to discharge their respective duties and responsibilities effectively. The Board is responsible for creating value for shareholders, determining strategy, investment policy, approving significant items of expenditure and consideration of significant financing, risk, and legal matters.

The Board and Committee agendas are shaped to ensure that discussion is focused on the Company’s strategic priorities and more immediate activities, as well as reviews of significant issues arising during the year. The Board and committees are provided with all the necessary high quality information, including regular management information, the Company’s ongoing financial and strategic performance, Health and Safety updates and Technological and Operations updates in a timely manner. The Board also maintains regular communication with shareholders, stakeholders and customers, to facilitate proper assessment of matters requiring decision or insight and to enable them to effectively discharge their duties.

Board of Directors

The Board comprises the Non-Executive Chairman, the Senior Independent Director, the Chief Executive Officer, Chief Finance Officer, the Chief Technology Officer and three Non-Executive Directors. The Board considers that the Senior Independent Director and the Non-Executive Directors are independent in character and judgement and meet the criteria for independence set out in the Code. It is noted that one of the Non-Executive Directors is independent although he represents a significant shareholder.

The Company’s articles of association require that all Directors are subject to election by shareholders at the first Annual General Meeting (‘AGM’) following their initial appointment, and at each AGM one-third of the Directors retire by rotation and offer themselves for re-election.

The Company maintains directors’ and officers’ liability insurance cover, the level of which is reviewed annually.

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Roles and Responsibilities

The Chairman

Alan Aubrey is the Company’s Chairman appointed in December 2012. The role of the Chairman is to lead and manage the business of the Board to provide direction and focus, while ensuring that there is a clear structure for the effective operation of the Board and its Committees. He sets the agenda for Board discussions to promote effective and constructive debate and to support a sound decision-making process, ensuring that the Board receives accurate, timely and clear information, in particular about the Company’s performance.

The Chairman and the Chairmen of the Board committees communicate regularly with the CEO and other Board and committee members. The Company is very clear that there is a division of responsibilities between the role of Chairman and the CEO.

The Chief Executive Officer

Phil Caldwell is the Company’s CEO appointed in September 2013. The CEO is responsible for the executive management of the Company’s operations in charge of the management team and to whom all other executive managers’ report. The CEO is answerable to the Board for the way the business is run and its performance. 

The Senior Independent Director

Stephen Callaghan was appointed Senior Independent Director (SID) with effect from March 2014. He also chairs the Remuneration Committee and is the Point of Contact for whistle-blowers in the Company. 

The SID is available as an additional point of contact for shareholders and leads the non-executive directors who are responsible for assessing the performance of the Chairman, taking into account the views of executive directors. The SID’s role is to act as a sounding board for the Chairman and a trusted intermediary for the other Directors.

The Company Secretary

Caroline Buchan was appointed Company Secretary with effect from October 2016. Under the direction of the Chairman, the Company Secretary’s responsibilities include ensuring good information flows within the Board and its committees and between senior management and non-executive directors, as well as facilitating induction and assisting with professional development as required. The Company Secretary is responsible for advising the Board through the Chairman on all governance matters. All directors have access to the advice and services of the Company Secretary, who is responsible to the Board for ensuring that Board procedures are complied with.

Communication with Shareholders

The Board is accountable to the Company’s shareholders and as such it is important for the Board to maintain effective communications with shareholders. The Company maintains an active dialogue with institutional shareholders through regular briefing meetings and formal presentations by the Executive Directors following the interim and preliminary financial results. During the year, the views of major shareholders are communicated to the Board and Senior Independent Director through briefings by the Company’s brokers and face-to-face meetings with the Chairman. Press releases are issued throughout the year. Press releases, corporate presentations and the Annual Report are available to view on the website. 

The AGM provides an opportunity for communication with all shareholders and the Board encourages the shareholders to attend and welcomes their participation. The Directors attend the AGM and are available to answer questions.

Internal Controls

The Directors acknowledge their responsibility for establishing and maintaining the Group’s systems of internal control. These are designed to safeguard the assets of the Group and to ensure the reliability of financial information for both internal and external use.   The Group prepares detailed budgets and cash flow projections, which are approved annually by the Board and updated regularly throughout the year. Detailed management accounts and working capital cash flow projections are prepared on a monthly basis and compared to budgets and projections to identify any significant variances. The Board reviews, identifies, evaluates and manages the significant risks that face the Group.   Any system of internal control can only provide reasonable, and not absolute, assurance that material financial irregularities will be detected or that risk of failure to achieve business objectives is eliminated. The Directors, having reviewed the effectiveness of the system of internal financial, operational and compliance controls and risk management, consider that the systems of internal control operated effectively throughout the financial year to 30 June 2015 and up to the date that the financial statements were signed.  

Conflicts of Interest

The Companies Act 2006 (“the Act”) sets out directors’ general duties and confirms that a director must avoid a situation where he or she has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the Company’s interests. The Act allows directors of public companies to authorise conflicts of interest and potential conflicts where appropriate, where the articles of association contain a provision to this effect. The Company’s Articles give the directors authority to approve such situations and to include other provisions to allow conflicts of interest to be similarly dealt with.

The Company has in place procedures for the disclosure and review of any conflicts of interest or potential conflicts that the Directors may have and for the authorisation of such conflicts by the Board. First, only directors who have no interest in the matter being considered will be able to take the relevant decision, and secondly, in taking the decision the directors must act in a way they consider, in good faith, will be most likely to promote the Company’s success. The directors will be able to impose limits or conditions when giving authorisation if they think this is appropriate.

The Company monitors attendance at board meetings and ensures early availability of board papers to protect a Director being in breach of duty if a conflict of interest or potential conflict of interest arises. It is the Board’s intention to confirm annually that the authorisation of conflicts are operated effectively and that procedures have been followed.

Role of External and Internal Advisors

The Board is able to utilise the services and call upon the advice of its external advisers including its Nominated advisor and broker (NOMAD), solicitor, auditor, and Communications advisor, details of which are available here . The Board is also able to call upon the internal advice and assistance of the Company Secretary, Senior Independent Director and supporting Chairman.

Board committees are authorised to obtain, at the Company’s expense, professional advice on any matter within their Terms of Reference and to have access to sufficient resources in order to carry out their duties. Committee members have access to the advice and services of the Company Secretary, Company’s legal advisers and its external auditors. The Remuneration Committee have independent remuneration advisory consultants - details of which are available in the Annual Report, to provide recommendations relating to executive remuneration policy and incentive schemes.

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