Our corporate governance statement and information about our policies.
The Board has adopted its own Corporate Governance Code to facilitate and maintain an effective, transparent, entrepreneurial and prudent management structure that is focused on the long-term success of the Company. Our Corporate Governance Code is reflective of the values of the Company and is based on the underlying principal of good governance and accountability.
The Board conducts an annual review of the Company’s Corporate Governance Code to ensure it is reflective of, amongst other things: any recent legislative changes; the UK Corporate Governance Code; the recommendations of the Quoted Companies Alliance; and the economic and social environment within which the Company operates.
A key element of the Company’s Corporate Governance strategy was the creation of the audit and remuneration committees which each fulfil an important role as an independent check and balance to the executive decision making process. Each of these committees are composed of, and chaired by, the independent non-executive directors of the Company.
The key elements of the Company’s corporate governance arrangements are described below.
The Board currently comprises the Chairman, the Chief Executive, the Chief Financial Officer and two Non-Executive Directors; their details are set out in the Board of Directors section.
The Board is responsible for formulating, reviewing and approving the Group’s strategy, budgets and corporate actions.
Each year, the Board holds a number of scheduled meetings. At each meeting the Board received reports from:
- The CEO on health and safety, strategic, operational and business developments, and investor relations;
- The CFO on the financial performance of the business, budget, funding and capital;
- Each of the Board Committees on matters discussed at their meetings.
Matters for review by the Board are communicated in advance of formal meetings. All of the Directors are subject to election by shareholders at the first AGM after their appointment to the Board and to re-election by shareholders at least once every three years. In addition, any non-executive Director who has served on the board for more than nine years will be subject to annual re-election.
The Chairman and non-executive Directors have other third-party commitments including directorships of other companies. The Company is satisfied that these associated commitments have no measurable impact on their ability to discharge their responsibilities effectively. The executive directors have no third-party commitments.
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 followed and that applicable rules and regulations are complied with. In addition, the Company Secretary will ensure that the Directors receive appropriate training where necessary. The appointment and removal of the Company Secretary is a matter for the Board as a whole. All Directors are supplied with information in a timely manner in a form, and of a quality, appropriate to enable them to discharge their duties.
The Company has implemented a formal process of annual performance evaluation for the Board, its Committees and individual Directors.
The intention is that a performance evaluation of the Board, the Board Committees and individual Directors will be conducted annually and the method for such review will continue to be reviewed by the Board in order to optimise the process.
The Company has directors’ and officers’ liability insurance in place.
During the year the Audit Committee comprised Graeme Bissett (Chair), Miriam Greenwood and Willie MacDiarmid. Meetings are also attended, by invitation, by the Chief Financial Officer and Head of Internal Audit.
The Audit Committee meets at least three times in each financial year and has unrestricted access to the Group’s external auditor.
The Company has an internal audit function consisting of full time dedicated members of staff. The Audit Committee will review the effectiveness of the internal audit function and its terms of reference on an annual basis and recommend to the Board any changes required as a result of the review. Reports from internal audit are considered at each meeting and, as part of its deliberations, the Committee will actively engage in selecting areas to be audited.
The Remuneration Committee comprises Miriam Greenwood (Chair), Willie MacDiarmid and Graeme Bissett.
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 service.
The Remuneration Committee also makes recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any employee share option scheme or equity incentive plans in operation from time to time.
The Nomination Committee is chaired by Willie MacDiarmid and also comprises Miriam Greenwood, Graeme Bissett and Alan Foy.
The Nomination Committee considers the selection and re-appointment of Directors. It identifies and nominates candidates to fill Board vacancies and regularly reviews the structure, size and composition (including the skills, knowledge and experience) of the Board and makes recommendations to the Board with regard to any changes.
The Information Technology Committee is chaired by Kelly Olsen and also comprises Willie MacDiarmid, Miriam Greenwood and Graeme Bissett.
The Information Technology Committee ensures that the Company’s technology capabilities are sufficiently monitored and reviewed to ensure the infrastructure of the Company is capable of meeting its demands.
The Board has overall responsibility for the Group’s system of internal control and risk management and for reviewing the effectiveness of this system.
Such a system can only be designed to manage, rather than eliminate, the risk of failure to achieve business objectives and can therefore only provide reasonable and not absolute assurance against material misstatement or loss.
The Company values its dialogue with both institutional and private investors. Effective two-way communication with fund managers, institutional investors and analysts is actively pursued and this encompasses issues such as performance, policy and strategy.
Private investors are encouraged to participate in the Annual General Meeting at which the Chairman presents a review of the results and comments on current business activity. The Chairs of the Audit and Remuneration Committees will be available at the Annual General Meeting to answer any shareholder questions.
We actively seek dialogue with the market as understanding what analysts and investors think about us is a key part of driving our business forward. Discussions with the market provide us with the opportunity to understand analysts’ and investors’ views on the Company’s strategy and performance. The Board receives regular updates on the views of shareholders through briefings and reports from the CFO and our retained advisers. In addition, our Non-executive Directors are available to meet shareholders if they wish to raise any issues separately.
Financial results and other notable news releases such as contract wins and changes to our strategy are published via the London Stock Exchange’s Regulatory News Service (RNS).
Notice of the Annual General Meeting is posted as an enclosure of the Annual Report.
The Directors confirm that, having given consideration to various alternative outcomes of future performance and forecast capital expenditure together with the available bank facilities, they are satisfied that the Company and the Group have adequate resources to continue in business for the foreseeable future.
For this reason, they continue to adopt the going concern basis in preparing the financial statements.
On behalf of the Board
21 March 2017