Maintaining the highest standards of corporate governance.
The Board has been strengthened and continually monitors our governance framework to ensure its effectiveness.
As an AIM-quoted company, the Group is not required to produce a corporate governance report nor comply with the requirements of the UK Corporate Governance Code. However, the Directors are committed to providing information on an open basis and present their corporate governance report as follows:The Board of Directors The Board currently comprises one Non-Executive Chairman; one Non-Executive senior independent Director; three Non-Executive Directors; and three Executive Directors, who are the Chief Executive, the Chief Financial Officer and the Managing Director of Conviviality Direct. The Non-Executive Directors demonstrate a range of experience and sufficient calibre to bring independent judgement on issues of strategy, performance, resources and standards of conduct, which are vital to the success of the Group.
The Board meets at regular intervals and is responsible for setting corporate strategy, approving the annual budget, reviewing financial performance, agreeing the renewal of and any new banking/treasury facilities, approving major items of capital expenditure and reviewing and approving acquisitions. The Board is provided with appropriate information in advance of Board meetings to enable it to discharge its duties effectively. The Chairman ensures that the Directors are able to take independent professional advice as required at the Company’s expense.
During FY17 the Board met 8 times in respect of 8 regular scheduled meetings.
The Remuneration Committee is comprised of David Adams as acting Chairman, Steve Wilson, Martin Newman and Ian Jones. The Committee’s policy and the details of each Director’s remuneration are clearly explained in its report on pages 36 to 41 and in note 5 to the accounts of our Annual Report.
The Committee is comprised of Steve Wilson as Chairman and David Adams. The meetings are also attended, by invitation, by the other Directors. The Audit Committee has met on two occasions during the year and once since year end.
The Committee has primary responsibility for monitoring the quality of internal controls, ensuring that the financial performance of the Group is properly measured and reported on and for reviewing reports from the Group’s auditor relating to the Group’s accounting and financial reporting, in all cases having due regard to the interests of shareholders.
The Committee has established a Risk Committee for which the Chairman is the Group Chief Financial Officer. The Committee identifies, evaluates and manages risks faced by the Group. The Chairman of the Committee reports the outcome of the Risk Committee meetings to the Audit Committee.
The Committee is comprised of David Adams as Chairman, Steve Wilson and Martin Newman. The Committee identifies and nominates for the approval of the Board, candidates to fill Board vacancies when they arise.
The Committee meets at least once a year. At each AGM of the Company, one-third of the Directors (or the number nearest to but not exceeding one-third when the number of Directors is not a multiple of three) shall retire from office. In addition, any Director who has been a Director at each of the preceding two AGMs shall also retire. Each such Director may, if eligible, offer themselves for re-election.
If the Company, at the meeting at which a Director retires, does not fill the vacancy, the retiring Director shall, if willing, be deemed to have been reappointed unless it is expressly resolved not to fill the vacancy or a resolution for the reappointment of the Director is put to the meeting and lost.
The Board is responsible for establishing and maintaining the Group’s system of internal control and for reviewing its effectiveness. The system is designed to manage rather than eliminate the risk of failure to achieve the Group’s strategic objectives and can only provide reasonable and not absolute assurance against material misstatement or loss.
The Board has overall responsibility for the Group and there is a formal schedule of matters specifically reserved for decision by the Board.
Each year the Board approves the annual budget. Key risk areas are identified, reviewed and monitored. Performance is monitored against budget, relevant action is taken throughout the year and quarterly rolling forecasts are prepared. The reports reviewed by the Board include reports on operational as well as financial issues.
Capital and development expenditure is regulated by a budgetary process and authorisation levels. For expenditure beyond specified levels, detailed written proposals have to be submitted to the Board for approval. Reviews are carried out after the purchase is complete. The Board requires management to explain any major deviations from authorised capital proposals and to seek further sanction from the Board. Due diligence work is carried out if a business is to be acquired.
Where the management of operational risk requires outside advice this is sought from expert consultants, and the Group receives this in the areas of employment law and health and safety management.
The Board has reviewed the effectiveness of the Group’s system of internal controls and has considered the need for an internal audit function. At this stage the Board has decided that an internal audit function is not required as the Group’s internal controls system in place is appropriate. The Board will keep this under review. The Board also reviews the Group’s arrangements for its employees raising concerns, in confidence, about possible wrongdoing in financial reporting or other matters. The Board ensures that such arrangements allow for independent investigation and follow-up action.
Relations with shareholders
Communication with shareholders is given high priority. There is regular dialogue with major and/or institutional shareholders, including presentations after the Company’s announcements of the half-year and full-year results in February and July, respectively. Presentations are also made to analysts at those times to present the Group’s results and report on developments. This assists with the promotion of knowledge of the Group in the investment marketplace and with shareholders. The financial statements include a review of the business and future developments. These financial statements and other corporate news relating to the Group are also available on the Group’s website.
Following the half-year and year-end presentations of results, the Executive Directors report to the Board on the feedback received from analysts and shareholders. In addition, the Company’s Nomad produces a feedback report from those meetings which is made available to all Directors. The Executive Directors also report to the Board on any meetings with shareholders or institutional investors that may take place at other times of the year. The Board encourages shareholder participation at its Annual General Meeting, where shareholders can be updated on the Group’s activities and plans.