Introduction to Corporate Governance
Strong governance has underpinned the Group’s global response to the pandemic.
The main focus for the Board during 2020 was concentrated on our response to the challenges and uncertainties presented by the COVID-19 pandemic in all our locations across the globe. Due to the serious and unpredictable nature of the pandemic and its duration, the activities and frequency of meetings and other communications of the Board increased, to ensure appropriate governance and oversight was maintained throughout. The Board worked to deliver strong and consistent communications throughout the Group, including clear direction that the safety and well-being of our employees, clients and contractors was paramount, and anchoring our actions to the Group’s strategic objectives and values. The increased intensity and pace of Board activity during this period demonstrates our governance framework in action, and our commitment to safeguarding and promoting the long-term success of the business for all stakeholders.
The primary responsibility of the Chair is to lead the Board effectively and this includes overseeing the adoption, delivery and communication of the Company’s corporate governance model. The Company Secretary assists and reports directly to the Chair on corporate governance matters. The Chair ensures that the Board as a whole plays a full and constructive part in the development and determination of the Company’s strategy and overall commercial objectives. The Board ensures that the Group adopts policies and procedures that the Directors consider appropriate with regard to the Group’s size and activities.
The Board is committed to ensuring that a strong governance framework operates throughout the Group, recognising that good corporate governance is a vital component to support management in their delivery of the Company’s strategic objectives, and to operate a sustainable business for the benefit of all stakeholders. The Board recognises that the process of identifying, developing and maintaining high standards of corporate governance suitable for the Company is ongoing and dynamic to reflect changes in the Company and its business, the composition of the Board and developments in corporate governance.
The QCA Code
The Board considers that the QCA Corporate Governance Code 2018 is most appropriate to the size of the Company, the regulatory framework that applies to AIM companies and is best aligned to the expectations of the Company’s stakeholders. The Board considers that the Company does not depart from any of the principles of the QCA Code and the relevant disclosures and explanations are set out in this Corporate Governance Statement.
The QCA’s Ten Principles of Corporate Governance
1. Establish a strategy and business model which promote long-term value for shareholders.
See pages 10-11 and 13 of our latest Annual Report
2. Seek to understand and meet shareholder needs and expectations.
See pages 37 and 43 of our latest Annual Report
3. Take into account wider stakeholder and social responsibilities and their implications for long‑term success.
See pages 36 to 37 and 43 of our latest Annual Report
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation.
See pages 32 to 35 of our latest Annual Report
Maintain a dynamic management framework
5. Maintain the board as a well-functioning, balanced team led by the chair.
See pages 38 to 45 of our latest Annual Report
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities.
See pages 38 to 45 of our latest Annual Report
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement.
See page 44 of our latest Annual Report
8. Promote a corporate culture that is based on ethical values and behaviours.
See pages 2, 11, 13, 36, 37 and 44 of our latest Annual Report
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board.
See pages 32 to 34 and 36 of our latest Annual Report
10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.
See pages 37 and 43 of our latest Annual Report
Corporate Governance Statement
The role and functioning of the Board
The Board is comprised of a Non-Executive Chair, two Executive Directors and two Non-Executive Directors. The Directors have a balance and depth of skills and experience, together with long-standing knowledge of the Group, which enables them to discharge their respective duties and responsibilities effectively.
The Board is collectively responsible for the long-term success of the Company. The Group’s strategy and business model are developed by the Chief Executive Officer and the senior management team and approved by the Board. The management team, led by the Chief Executive Officer, is responsible for implementing the strategy and managing the business at an operational level. This strategy and business model, designed to promote long-term value for shareholders, is described in the Strategic Report on pages 2 to 37 Company's 2020 Annual Report and in the Investor section of our website.
The Company is controlled through the Board, which has established Committees for Audit, Remuneration and Nominations, to which it delegates clearly defined powers. The terms of reference for the Committees are reviewed annually. During the year, the terms of reference for all the Committees were reviewed and updates considered. The amended terms of reference were adopted by the Board in October 2020 and are available here.
There is a formal schedule of matters reserved for consideration by the Board, which includes responsibility for the following:
approval of overall strategy and objectives;
approval of the annual budget and monitoring progress towards its achievement;
changes to capital structure;
changes to principal activities;
review and approval of annual financial statements;
changes to the senior management structure;
approval of financing arrangements and treasury policy;
approval of material investments and disposals; and
approval of material unbudgeted expenditure.
These reserved matters are reviewed by the Board, at least annually, to ensure they remain appropriate and complete. In tandem, the Board also reviews an approved schedule of operational matters, which are delegated to management of the operating subsidiaries. During the year, the Board considered and adopted updates to both the schedule of reserved matters and the delegated authority.
The annual minimum time commitment is 25 days for the Chair and 20 days for other Non-Executive Directors. The Executive Directors are full-time employees.
During the year, there was 100% eligible attendance at all meetings of the Board and Committees. The following table shows the number of meetings held during the year, the attendance of each Director and their full years in office as at the 2021 AGM:
Tony Martin (Chair)
Rhona Driggs (Chief Executive Officer)
Tim Anderson (Chief Financial Officer)
Penny Freer (Non-Executive Director)
Zach Miles (Non-Executive Director)
(1) The Board held eight scheduled meetings in the year which were attended by all Directors. In addition, there were a number of unscheduled Board meetings held throughout the year, each of which was attended by all Directors, primarily to consider items relating to the COVID-19 pandemic.
Prior to the beginning of each year, Board and Committee meetings are scheduled in line with the key financial reporting dates. A Board pack, comprising a full agenda and documents to be tabled, is distributed to all relevant Directors a week prior to each meeting. Any specific actions arising during meetings are agreed by the Board or Committee and a follow-up procedure monitors their completion. Monthly financial and operational reviews are distributed to the Board, irrespective of whether a scheduled meeting is to take place. This assists the Board to keep informed of developments on a regular basis.
All Directors are invited to submit items for discussion for each meeting agenda and time is also allocated at each meeting to discuss any other business, which all Directors are invited by the Chair to raise. All Non-Executive Directors participate in strategy development and decisions required to implement actions to progress towards meeting the objectives of the Company.
The Chair is responsible for the effective running of the Board and for ensuring that all Directors play a full and constructive part in the development and determination of the Group’s strategy and overall commercial objectives. The Chief Executive Officer’s primary role is to deal with the running of the Group’s business and executive management of the Group. There is a clear division of responsibilities between the Chair and Chief Executive Officer, with no one individual having unfettered powers of decision. The Company Secretary, a solicitor since 2001, advises the Board and reports directly to the Chair on Corporate Governance matters, supports the Chair in the effective functioning of the Board and its Committees and facilitates the receipt by the Board of quality information in a timely matter. He also heads up the Group’s in-house legal team and advises the Board on legal and governance matters, helping to make sure that Board procedures and applicable rules and regulations are observed.
The Directors are also able to take independent professional advice in the furtherance of their duties as necessary.
Engagement with shareholders
The Board seeks to engage with shareholders to maintain a mutual understanding of objectives between them and the Company and manage their expectations. Relations with shareholders and potential investors are managed principally by the Executive Directors. Further to COVID-19, the 2021 AGM will again be held as a closed physical meeting, meaning that shareholders will not be permitted to attend the meeting in person in line with government guidance. However, there will be a facility available for shareholders to ask questions remotely and questions can be asked at any time by emailing email@example.com or via the Company’s Financial PR. In line with our commitment to maintaining effective communication structures for all sections of our shareholder base, the Executive Directors delivered online presentations to investors (both existing and potential shareholders), via the Investor Meet Company platform to announce our interim results on 12 August 2020 and our preliminary results presentation on 18 March 2021. This platform allows for questions to be submitted both before and during the live presentation. The annual and interim presentations made to investors, interviews with the Executive Directors and a description of the Company’s investment case, strategic objectives and business model are all made available here. The Company also retains a Financial PR adviser, a house broker and an equity research analyst, who each provide feedback from existing shareholders and potential investors.
Stakeholders and social responsibilities
The Group’s business model relies on developing and maintaining strong relationships with our employees, candidates/temporary workers, clients and regulatory authorities. The Board is conscious of its responsibility towards all stakeholders and believes this is an important consideration for the long-term growth of the business. Stakeholder engagement and feedback is taken seriously throughout the Group. Regular communication is made around the Group companies and employees. The Group places considerable value on the involvement of our employees and keeps them informed on matters affecting them as employees and on the various factors affecting the performance of the Group.This is achieved through formal and informal meetings, information available on the Company’s website and Workplace from Facebook (‘Workplace’). The events of the past year highlighted how critical alternative methods of communications are, with employees and other stakeholders working from home and the cessation of business travel bringing an immediate and lengthy halt to physical meetings. The Group uses social media to engage directly with stakeholders through various channels including Facebook, Workplace, Twitter and LinkedIn. The Group also engages with regulators and government agencies, for example in response to consultations or proposals, both directly and through membership of worldwide trade associations.
Risk management remains the responsibility of the Board. The Audit Committee has delegated responsibility to keep under review the adequacy and effectiveness of the Company’s internal financial controls and the internal control and risk management system. Risk management is reviewed at Board meetings as part of the formal Board process. The Board has identified and evaluated the significant risks faced by the Group for the delivery of the Group’s strategy. The Board has agreed how each risk is to be addressed and the necessary actions to be taken. Details of the principal risks identified are set out on pages 32 to 35 of the Company's 2020 Annual Report.
The Audit Committee meets specifically to review the effectiveness of the Group’s risk management and internal control systems and to review the risks identified and progress of actions taken to manage the risks. Following the review, progress and actions are reported to the Board.
Experience, skills and capabilities
The Nomination Committee meets at least once a year to monitor and review the structure, size and composition of the Board. It considers succession planning and makes recommendations to the Board for any appointments, to ensure that the right skills and expertise are maintained by the Company for effective management. All members of the Board participate in the recruitment of members to the Board. The Directors determine the training requirements appropriate to their role and the needs of the Group. Directors attend relevant industry conferences and workshops throughout the year. The members of the Committees refresh their skills and knowledge by attending briefings and seminars and reviewing publications provided by various professional services firms and by audit and other regulatory bodies.
Formal Executive Director performance evaluations are conducted annually in preparation for the review and approval of annual remuneration packages. Each Non-Executive Director’s performance is evaluated as an outcome of the formal performance evaluations of the Committee(s) of which they are a member. Performance evaluations identify and record achievements, training requirements and areas for improvement in relation to annual objectives and performance of their respective roles, in order to consider effectiveness. Objectives for the forthcoming year are defined along with identification of how achievements will be met, target dates and details of resource constraints or issues to ensure that actions are planned and taken as a result of the evaluation process.
Promotion of corporate culture
Increasing engagement with our teams across the globe has been a core focus in 2020, and has been vital during a global pandemic when our top priority was to ensure that our employees were safe. At the end of 2019 we launched a new internal communications tool which has enabled communication between individuals and teams across the Group for the first time and helped us to develop a shared culture and embed our ICARE values.
The Company actively promotes integrity in its dealings with our employees, candidates/temporary workers, shareholders, clients and suppliers, and the authorities of the countries in which our subsidiaries operate. The Board recognises that the reputations of our Group companies are valuable assets gained over a long period and must be protected. The Group has a number of policies, including those for dealing with bribery, gifts, hospitality, corruption, fraud, tax evasion, modern slavery and inside information. The Board requires that all Group companies and employees adhere to the Empresaria . Code of Conduct.
All employees must comply with the laws and regulations of the countries in which they operate and those responsible for the management of each operating subsidiary confirm to the Board annually their compliance with these and with the Group’s policies and Code of Conduct. The Group’s whistleblowing policy is publicised to all employees and an established anonymous whistleblowing system is in place. There are a number of methods by which employees may ask questions of and provide feedback directly to members of the Company’s senior management and the Board.
Our operating subsidiaries are required to ensure that advertising and public communications avoid untruths or overstatements. They are also expected to build relationships with suppliers based on mutual trust and endeavour to pay suppliers on time and in accordance with agreed terms of business.
Further details on corporate social responsibility are set out on pages 36 to 37 of the Company's 2020 Annual Report.
The independence of all Non-Executive Directors is reviewed annually, with reference to their independence of character and judgement and whether any circumstances or relationships exist that could affect their judgement. As a significant shareholder in the Company, the Chair is not considered to be independent. The independence of Penny Freer and Zach Miles is considered frequently by the Board, in particular having regard to their periods of tenure. The Board assesses what would be the most desirable number of Non-Executive Directors for the Board, having regard to the size of the Group, the scope of its operations and the efficient functioning of the Board. The Board looks at the manner in which the component parts of the Board function together, the skills and external experiences of the Non-Executive Directors, their involvement and insight in Board and Committee meetings and their ability to objectively challenge management. Having regard to all such considerations, the Board is of the view that the number of Non-Executive Directors is appropriate and that Penny Freer and Zach Miles remain independent, notwithstanding their periods of tenure.
In accordance with the Companies Act 2006 and the Company’s Articles of Association, each of the Directors has a duty to avoid a situation where they have, or might have, a direct or indirect interest that conflicts, or potentially may conflict, with the Company’s interests. The Company has established procedures for the disclosure by Directors of any such conflicts for the Board to consider and, if appropriate, authorise. If such a conflict exists, the relevant Director is excused from consideration of the relevant matter. All additional external responsibilities taken on by Directors during the year were considered by the Board for any actual or potential conflicts that may arise. The Board is satisfied that the independence of the Directors who have additional external responsibilities is not compromised.
Approved on 22 March 2021