The Board recognises that the application of sound corporate governance is essential in the Group’s ongoing success. We have therefore adopted the principal provisions of the QCA Corporate Governance Code for Small and Mid-Size Quoted Companies (“QCA guidelines”).
The Company is managed by a board of directors and they consider that they have the necessary skills and experience to operate and control the business effectively. There are seven directors of whom four are non-executive. The Board is responsible to the shareholders and sets the Group’s strategy for achieving long-term success. It is also ultimately responsible for the management, governance, controls, risk management, direction and performance of the Group.
Under the QCA guidelines, companies below the FTSE 350 should have least two independent directors. The Company currently has one independent Non-Executive Director, Charles Holroyd, but the other Non-Executive Directors are not considered independent by virtue of their tenure, as they have served more than nine years from the date of their first election or were previously an Executive Director of the Company. At the same time, the Company considers that all Non-Executive Directors act independently of the Executive management and that the value of their long association with the Company together with their deep understanding of the Group’s business model ensures that they are best placed to appropriately police adherence to the Group’s strategy, which continues to provide shareholders with long-term market-beating performance.
The main Board meets monthly (except in August) in addition to any ad hoc Board meetings that may be required during the year. Non-Executive Directors communicate directly with Executive Directors between formal Board meetings as required.
Directors are expected to attend all meetings of the Board, and the Committees on which they sit, and to devote sufficient time to the Company’s affairs to enable them to fulfil their duties as Directors. In the event that Directors are unable to attend a meeting in person they will endeavour to attend via phone, skype or similar arrangement. Where they cannot attend, their comments on papers to be considered at the meeting will be discussed in advance with the Chairman so that their contribution can be included in the wider Board discussion.
The Board is responsible for taking all major strategic decisions and addressing any significant operational matters. In addition, the Board reviews the risk profile of the Company 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 and to discharge their duties properly.
The Audit Committee is chaired by Ralph Elman and the other members are Ralph Cohen and Charles Holroyd. The Audit Committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Group is properly measured and reported on. It receives and reviews information and reports from the Group’s management and Auditor relating to the annual accounts and the accounting and internal control systems in use throughout the Group. It also advises the Board on the appointment of the Auditor, reviews their fees and discusses the nature, scope and results of the audit with the Auditor. The Audit Committee meets at least twice a year and has unrestricted access to the Group’s Auditor. The Executive Directors and the Chairman attend the Committee meetings by invitation as required.
The Remuneration Committee is chaired by Alex Hambro. The other members of this Committee are Ralph Cohen and Charles Holroyd. The Remuneration Committee reviews the performance of the Executive Directors and makes recommendations to the Board on matters relating to their remuneration and terms of employment. The Remuneration Committee also makes recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any share option scheme or equity incentive scheme in operation from time to time. The remuneration and terms and conditions of appointment of the non-executive Directors of the Company are set by the Board. The Chief Executive and Group Finance Director are invited to attend for some parts of the Committee meetings where their input is required although they do not take part in any discussion on their own benefits and remuneration. The Remuneration Committee meets at least once per year.
The Company does not have a nomination committee; the Board does not consider it necessary to establish one at this stage of the Company's development. Decisions regarding the appointment of new directors are taken by the Board as a whole, following a thorough assessment of a potential candidate's skills and suitability for the role.
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 Company. Two 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.
Further information is available in the formal Corporate Governance Statement, Audit Committee report and Remuneration report within the Group's 2017 annual report. Please click here to access this annual report.