Investor Highlights

Corporate Governance

Chairman’s opening statement

The Board is focused on developing the Group for the long-term benefit of all shareholders, with well-informed and effective decision making. In 2019 we adopted the QCA Corporate Governance Code and strive to follow its guidance and principles, many of which flow throughout our business via our strategy, our business model and our stakeholder engagement.

I am pleased to share with you the key parts of our governance structure and how they align with the principles of the Code.

Stewart Gilliand
Chairman, September 2021

Principle 1: Establish a strategy and business model which promote long-term value for shareholders

The Group continues to operate under a governance structure, which is designed to be flexible and efficient in creating sustainable long term growth in shareholder value. Our key focus is to continue to drive the Group forward and keep us reaching for the high standards and targets we set ourselves. We do this by leveraging our strengths and the many opportunities to grow in the market.

Further detail on the Group’s strategy and business model, as well as the key challenges faced by the Company in achieving its goals, can be found on pages 6 to 31 of the Annual Report 2021.

Principle 2: Seek to understand and meet shareholder needs and expectations

During the 2021 financial year, the CEO, CFO and Chairman (John Charlton at that time) maintained regular contact with our institutional investors as can be seen in the timeline below:

30 April 2020: Trading Update
28 July 2020 – 14 August 2020: Full Year results announcement followed by investor calls
16 September 2020: RemCom call with investor to discuss LTIP changes
21 September 2020: Annual General Meeting
19 October 2020: Trading Update
24 November – 1 December 2021: Interim results announcement followed by investor calls
16 December 2021: Investor Presentation
11 January 2021: Mello Monday show (statement issued re VCS)
11 January 2021 – 25 January 2021: Various calls and correspondence between Remcom and investors to discuss VCS
25 January 2021: Trading Update

Following investor meetings, the full Board receives feedback on the views and concerns of investors and regularly receives copies of investment reports from analysts.

All our investors are regularly kept up to date with announcements, circulars, videos and reports, all of which are available on the Company’s website.

Nikky Geairns is primarily responsible for shareholder liaison and can be contacted at Contact details for the Company’s PR Advisers, Brokers and Registrars are also set out in the ‘Contact’ section of the Company’s website.

We continue to maintain a strong relationship with our Nomad and Broker, Canaccord Genuity (‘Canaccord’). Canaccord has a wide international reach and is well placed to support the Group’s ambitions for growth in the future.

Further information can be found on pages 46 and 47 of the Annual Report 2021.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success

In addition to our shareholders, all of our stakeholders – our employees, customers, suppliers and communities – are vital to the success of the Group. On pages 46 and 47 of the Annual Report 2021 we set out our Section 172 statement as required by the Companies (Miscellaneous Reporting) Regulations 2018 showing how the needs of these important stakeholders are assessed and considered by the Board when making key decisions.

In the Annual Report 2021 there are many examples of stakeholder engagement:

• Employees – see pages 16 and 34 to 37
• Customers – see pages 9 to 11 and 51
• Communities – see pages 35 to 37
• Suppliers – see pages 37, 40 and 52

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation

The Board has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Group’s risk management systems, policies and procedures are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor the risks and adherence to limits.

Risk management processes are reviewed regularly by the Audit Committee to reflect changes in market conditions and the Group’s activities. The Board’s oversight covers all controls, including financial, operational and compliance controls and general risk management. It is based principally on reviewing reports from management to consider whether significant risks are identified, evaluated, managed and controlled and whether any significant weaknesses are promptly remedied and indicate the need for more extensive monitoring.

Further detail on the risk management framework, the principal risks faced by the Group and the mitigating actions taken in respect of those risks can be found on pages 48 to 53 of the Annual Report 2021.

Principle 5: Maintain the Board as a well‑functioning, balanced team led by the Chair

The Board consists of three Executive Directors and five Non-Executive Directors (including the Chairman). For the biographies of the Board see pages 54 and 55 of the Annual Report 2021 or they are on our website here.

During the 2021 financial year, three new Non-Executive Directors joined the board: Stewart Gilliand (who joined as Chair-designate and became Chair on 20 September), Clare Askem and Greg Hodder. Unfortunately, due to personal family reasons, Greg Hodder resigned after four months. The new Directors bring a wealth of experience and skills to complement those already on the Board.

The Board met formally nine times during the 2021 financial year with full attendance at all meetings.

The Audit Committee met four times and the Remuneration Committee met seven times, all were fully attended.

Further information on the independence of the directors can be found on page 58 of the Annual Report 2021.

Principle 6: Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities

The Board is kept informed on a regular basis by the Company Secretary about their duties and any update in relation to legal and governance requirements for the Group.

This year the Board obtained specific external advice from BDO LLP in relation to risk appetite and management, and from Deloitte LLP in relation to the Value Creation Scheme.

In addition, the Board has access to the Deloitte Academy which gives each Director (Executive and Non-Executive) access to a wide-ranging programme of technical briefings, education, bespoke training and peer-to-peer networking opportunities. This is a useful resource to ensure that they keep abreast of market trends in board governance, legislative reform and keep their skills up to date.

The Board has access to external, specialist advice when necessary.

Further information on the directors’ skills and experience can be found on pages 54 and 55 of the Annual Report 2021.

Principle 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

In light of the resignation of John Charlton, the Board evaluation was postponed this year. Subsequently, two new directors (one as Chair) have joined and a further Non-Executive Director recruitment process is currently underway. It is therefore considered appropriate to allow a period of time for the board to embed in before undertaking the next evaluation.

In November 2020 the Remuneration Committee and the Audit Committee conducted a self‑assessment of their performance. The Remuneration Committee used the same questionnaire as last year which incorporated the guidance contained in the QCA Remuneration Committee Guide. Similarly, the Audit Committee used the same questionnaire as its previous self-assessment to enable a clear comparison, but this will be updated in the future to include the QCA guidance contained in the updated QCA Audit Committee Guide. Members were asked to rate the performance of each Committee based on their own perceptions of the Committee as a whole.

Topics covered were:

• roles and responsibilities;
• terms of reference and planning;
• meetings – content and running of;
• skill set of members; and
• shareholder interaction.

Responses were collated, reviewed and compared with the previous year’s results. Following the Remuneration Committee review, the Committee had a discussion on its role in terms of setting policy versus responding to initiatives proposed by the executives and also considered additional training possibilities.

One of the key areas of focus arising out of the Audit Committee review was the need to review the approach to risk management and business assurance. This resulted in a Risk Appetite and Management review being undertaken, facilitated by BDO LLP. BDO helped the Board define its risk appetite for the Group along with revisiting the principal risks and uncertainties. The next steps are to formulate the business assurance programme over the coming years.

Principle 8: Promote a corporate culture that is based on ethical values and behaviours

The Board desires to promote a culture of respect, integrity, openness, honesty and fulfilment within each of the businesses in our Group. We believe strongly in these objectives and we endeavour to practise these in the way that we communicate with our customers, suppliers, shareholders, advisers and of course all our teams employed in the Group.

Feedback from all stakeholders in the business, as set out in Principle 3, allows the Board to assess the state of its corporate culture, as well as performance against the Group’s internal targets.

The Group Values Statement is as follows:

Our Values

• To strive for excellence in all we do
• To behave ethically and with integrity
• To focus on our customers and to ‘go the extra mile’
• To be open to feedback, ideas and to positive change and promote fulfilment and fun
• To be good ‘citizens’ within our communities and take responsibility for our impact on our planet
• To be innovative and entrepreneurial
• To treat everyone with dignity and respect
• To be a team that succeeds together and aims to be an ‘employer of choice’
• In recognising the decentralised structure of our international Group, we do not seek to impose strict guidelines around the adoption of a specific corporate culture but instead allow each business to adapt the principles as is most appropriate to them. For example:

In Australia the corporate culture initiative is called #Be EPIC – Ethical, Passionate, Inspiring and Creative. This is used for the entire employment life cycle from recruitment, performance management to reward and recognition. They include it in the on-boarding process and have developed videos to promote the key aspects of the programme. The plan further expands this by ensuring staff ‘make their mark’ on the organisation. Asking staff to assess how they ‘made their mark’ on the business allows for praise and constructive self reflection and management feedback.

In the UK, the team have developed their ‘4 Ps’ framework: Purpose, Pace, Passion and People. These core principles guide the way they do business and help define what the UK business stands for as the company grows and develops. The ‘4 Ps’ have been incorporated into the behavioural competencies to be factored into the online team appraisal system.

Our performance management systems and processes are designed to direct and influence behaviours.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

The Chairman is primarily responsible for the effective working of the Board in conjunction with management, and the CEO is responsible for the operational management of the business and for the implementation of the strategy agreed by the Board.

The Board is responsible for setting the vision and strategy for the Group, working closely with the executive management team to deliver a successful business model for our shareholders and other stakeholders.

The Group Delegation of Authority policy sets out the matters that are reserved to the Board for approval. These include:

• matters relating to the Company’s legal purpose and position and its status as a public listed company;
• changes in governance, strategy and significant changes in internal controls; and
• significant financial or contractual commitments and decisions.

The Board has three committees – Remuneration, Audit and Nomination. Each of these committees has a Non-Executive Director as Chair. Composition is as follows (updated on 1st January 2022):

Remuneration: Clare Askem (chair), Stewart Gilliland, Mark Tentori.
Audit: Mark Tentori (chair) and Stewart Gilliland
Nomination: Stewart Gilliland (chair), Mark Tentori and Clare Askem

The Nomination Committee is responsible for filling Board vacancies, reviewing the Board composition and the roles of Board members.

The Audit Committee satisfies itself on the integrity of financial information and that controls and risk management systems within our businesses are robust and defensible. The Committee meets as required during the year and at least twice with the Group’s external auditor. Its role is to review the interim and final financial statements for approval by the Board, to ensure that operational and financial controls are functioning properly, and to provide the forum through which the Group’s external auditor reports to the Board. Further details about the activities undertaken by the Audit Committee this year can be found on pages 60 to 63 of the Annual Report 2021.

The Remuneration Committee determines appropriate levels of remuneration and compensation for Executive Directors. The Committee meets as required during the year and is closely involved in agreeing the positions within our senior management team that should participate in our Long Term Incentive Plan (‘LTIP’), together with the level of awards. The Remuneration Committee is also responsible for agreeing the performance criteria for annual bonuses and LTIP for Executive Directors and senior management. Further details about the activities undertaken by the Remuneration Committee this year can be found on pages 64 to 69 of the Annual Report 2021.

The Terms of Reference for each committee are reviewed annually and can be found here (Remuneration Committee), here (Audit Committee) and here (Nomination Committee).

The Board keeps all aspects of corporate governance under review, with the governance framework developing further as the Group continues to grow.

Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

During 2021, the Board (itself or via the Board committees) worked hard to strike that essential balance between achieving the Group’s short term objectives and longer term growth and development. Key activities included:

• monitoring and review of the financial performance of the Group on an ongoing basis including acquisitions, capital expenditure and significant projects;
• review of the interim and annual results including supplementary papers;
• review of the effectiveness of the Group’s internal financial controls, general internal controls and risk management systems;
• monitoring and review of the effectiveness of the Business Assurance function;
• overseeing the relationship with the external auditor;
• approval of the strategy, plans and budget;
• review of the Group risk register including assessing the Board’s risk appetite.
• approval of changes to remuneration for the Chairman, CEO and CEO direct reports;
• approval of the Value Creation Scheme;
• approval of annual bonus targets for the following financial year;

The Annual Report is a key tool for demonstrating to shareholders how the Group is governed and provides an overview of core activities over the past financial year.

Our historical Annual Reports and notices of general meeting, along with all other documents sent to shareholders, can be found here.