Chairman’s corporate governance statement
The Board is committed to maintaining high standards of corporate governance and, with effect from 26th September 2018, the Board adopted the Quoted Companies Alliance’s (QCA) Corporate Governance Code for small and mid-size quoted companies (the “Code”).
The Code was revised in April 2018 to meet the new requirements of AIM Rule 26 and sets out ten broad principles of corporate governance. It states what are considered to be appropriate corporate governance arrangements for growing companies and requires companies to provide an explanation about how they are meeting the principles through certain prescribed disclosures.
The Chairman leads the Board and is responsible for its overall effectiveness in directing the Company. He manages the Board agenda and ensures that all Directors receive accurate, timely and clear information and effectively contribute their various talents and experience in the development and implementation of the Company’s strategy. He ensures that the nature and extent of the significant risks the Company is willing to embrace in the implementation of its strategy are challenged and determined by the Board. The Chairman is responsible for ensuring that the Board implements, maintains and communicates effective corporate governance processes and for promoting a culture of openness and debate designed to foster a positive governance culture throughout the Company.
The Board has considered how each principle is applied and provides below an explanation of the approach taken in relation to each principle and how they support the Company’s medium to long-term success.
The Board agenda is regularly reviewed to ensure that all matters which the Board should consider are addressed. This allows for presentations from senior management so that the Board benefits from their input.
The Company includes a Remuneration Committee Report and a Finance & Audit Committee Report in its Annual Report and Accounts.
The Board carries out a formal review of its effectiveness in January each year, which is reported on below under Principle 7. The evaluation of the Board’s effectiveness due to have been carried out in January 2021 was postponed until January 2022 considering the restructuring of the Board that was carried out in February 2021.
Save in respect of Principle 5 in consideration of the independence of the Non-executive Directors, which is considered in more detail below, the Board considers that it does not depart from any of the principles of the Code.
This information was last updated on 28 April 2021.
PRINCIPLES TO DELIVER GROWTH
PRINCIPLE 1: Establish a strategy and business model which promote long-term value for shareholders
Microsaic’s strategic aim is to capitalise on its strengths in point of need MS detection, and access high-growth and emerging Life Science and Environmental applications, as well as niches in traditional small molecule markets. The Company intends to achieve its strategy with a business model built on customer focus, collaborations, and technology innovation.
The Company derives revenues from the sale of its MS instruments, consumables and spare parts, and service/support income. The Company is evolving from being a simple provider of equipment and consumables, towards delivering solutions to end-users, and is developing a business model that, instead of focusing on capital sales (which depend on lengthy sales cycles),is moving to an annuity based model, increasing the proportion of revenues from Artificial Intelligence (“AI”) and Internet of Things (“IoT”) revenue streams alongside premium services relating to 24/7 operation and support and data analytics, in particular Industry 4.0 smart technology for the bioprocessing industry. Other products will be developed in collaboration with partners and over time the focus will shift towards the integration of analysers to solve specific problems.
Staying relevant with future customer needs
Customer needs evolve rapidly. Future product specifications will be driven by end-user requirements. This will inform Microsaic’s product strategy as its MS detectors move from the customer’s laboratory into production, and front-line operating environments. Microsaic will ensure that its strategic product development will remain focused on meeting demanding bipharmaceutical applications.
Remaining innovative in an advancing technological landscape
Microsaic has successfully developed and implemented advanced technology at the core of its design with over 60 patents to date. This has led to a solid foundation serving scientists in the laboratory in small molecule drug discovery, and increasingly in support of its endeavours in life and environmental science markets.
The Company continues to invest in product development projects which the Board believes will be attractive to the growing market for laboratory-based applications with larger biological molecules, such as peptides and small proteins.
The Company has extended its product capabilities further into Life Science applications, such as bioprocessing, potentially significantly reducing the cost of analysis and the cost of poor quality.
PRINCIPLE 2: Seek to understand and meet shareholder needs and expectations
The Company’s aim is to maintain and enhance good relations with its shareholders. The Company’s interim and annual reports are supplemented by capital market presentations to analysts and shareholder groups. The Company is available to meet with shareholders outside these times if required. The Company keeps shareholders up to date with the latest developments through its website, social media and regulatory news service announcements on technological, commercial and financial progress.
The Chief Executive Officer and the Financial Director are primarily responsible for maintaining dialogue with shareholders, supported by the Company’s broker and financial PR advisers. The Chief Executive Officer and Finance Director hold one-to-one and sometimes group meetings with key shareholders and analysts following the announcement of the annual and interim results. The Chairman will also attend a number of these group meetings. Following these meetings, the Company’s brokers provide independent feedback to the Board on shareholders’ views and concerns.
The AGM is the principal forum for dialogue with private shareholders, and we encourage all shareholders to attend and participate (subject to COVID-19 restrictions that may apply). The Chairman, Chief Executive Officer and Finance Director, together with other directors whenever possible, attend the AGM and are available to answer questions raised by shareholders. The Finance Director contacts larger shareholders before AGM’s and general meetings to ensure they have submitted their proxy voting forms, and this also provides an opportunity to hear any concerns.
Where feedback is received directly from shareholders or shareholder advisory groups, for example relating to voting intentions on general meeting motions, this is brought to the attention of and discussed by the Board.
Chief Executive Officer
tel: (0) 1483 751 577
Finance Director & Company Secretary
tel:(0) 1483 751 577
PRINCIPLE 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success
Our ability to implement the long-term strategy is heavily dependent on hiring and retaining specialist technical and commercial staff.
Reason for engagement:
High quality communications with staff is a key requirement for high levels of engagement, fostering a culture of innovation.
How we engage:
- Regular staff briefings where there is a two-way dialogue where staff are updated on the progress of the business and the longer term strategy.
- Share options are granted to all staff, which link shareholder goals to longer term company performance.
- The Company is mindful of the importance of work-life balance for employees and their families and within the constraints of a small organisation offers flexible working hours and home working where-ever possible.
- Where-ever possible the Company offers training and career development opportunities which are very important in retaining staff.
- The Company provides a supportive work environment where dialogue is open and honest and where all staff are treated equally.
- Science is a creative discipline, and diversity of thought fundamentally underpins successful outcomes. The Company has an active Diversity and Inclusion program, initiated, promoted, and supported by the Chief Executive Officer directly.
Our success and competitive advantage are dependent upon fulfilling client requirements, both in the short term (shipping product), and in the longer-term (customised R&D specific to that customer).
Reason for engagement:
Understanding current and emerging requirements of clients enables the Company to develop new and enhanced product specification and application areas.
How we engage:
- We specifically seek customer requirements during business development meetings with new and existing clients.
- Obtain fulfilment metrics employed by clients to measure on-going performance.
- Provide robust and reliable products which meet our rigorous quality standards. The Company is ISO 9001 2015 compliant.
- Ensure warranty terms on units are in line with industry standards.
This has led to an increase in new business development opportunities and collaborations, bringing to market products that customers have specifically asked for, and on-going improvements in our products and service.
Our outsourced manufacturing partner is a key stakeholder.
Reason for engagement:
We outsource our manufacturing and assembly to a specialist high-technology manufacturing facility in the UK.
How we engage:
- We have documented all assembly and sub-assembly processes, with a view to simplifying outsource and removing subjective communications.
- We co-invest in supplier set-up and infrastructure.
- We invest in regular supplier training.
- We operate systems to ensure supplier quality, which are discussed on a regular basis.
- We pay our suppliers in accordance with their terms.
This has resulted in a long-term relationship, founded on a large body of data, metrics and mutual trust.
As a public company we provide transparent, easy-to-understand and balanced information to ensure support and confidence.
Reason for engagement:
Meeting regulatory requirements and understanding shareholder sentiments on the business, its prospects and performance of management.
How we engage:
- Regulatory news releases. In accordance with the Market Abuse Regulation, where regulatory announcements include inside information this is indicated in the announcement itself.
- Keeping the investor relations section of the website up to date.
- Annual and half-year reports and presentations provided to analysts and key shareholders.
- The AGM gives shareholders the ability to ask questions of the Board (subject to COVID-19 restrictions).
- Social media. The Company is increasing its social media presence to better engage with shareholders and other stakeholders.
- Capital market events.
Stakeholder: Industry bodies
The services we provide must meet certain requirements.
Reason for engagement:
The membership of certain industry groups, including certain regulatory standards (e.g. CE marking, ISO) are influential in the way the group is perceived by new and existing clients.
How we engage:
- Ongoing product certification is central to our product development.
As a company dealing with a complex range of raw and processed materials, we must ensure that our business is conducted sustainably.
Reason for engagement:
Whilst not of substantial impact compared with many other manufacturing businesses, the Company recognises its activities have an impact on the environment and acknowledges its responsibility to ensure this is minimised.
How we engage:
- In accordance with the requirements of the Waste Electrical and Electronic Equipment Regulations (WEEE), the Company is registered with the UK Environment Agency as a Small WEEE Producer and disposes of electrical equipment waste responsibly.
- The Company reviews the substances it uses within its design and manufacturing processes with the aim of using environmentally friendly products commensurate with producing high quality products and the RoHS directive (Restriction of the use of certain hazardous substances).
- Where possible, products are recycled within the Company.
- Paper, cardboard, batteries and printer cartridge recycling collection facilities are in place and are regularly used in the Company’s offices.
- Redundant computer equipment is disposed of in accordance with good practice.
Stakeholder: Health and Safety
As a Company we believe our employees have the right to come home safe and well from their job.
Reason for engagement:
It is our mission to prevent work related accidents, ill health and keep our employees safe.
How we engage:
- Assessing the risk to the health and safety of employees and others who may be affected and identifying what measures are needed to comply with its health and safety obligations.
- Providing and maintaining locations, equipment, protective clothing and systems of work that are safe and without risks to health.
- Ensuring that all necessary safety devices are installed and maintained on equipment.
- Providing information, instruction, training and supervision in safe working methods and procedures.
- Promoting the co-operation of employees to ensure safe and healthy conditions.
- Establishing a safety committee, safety representatives and accident investigations where applicable.
- Establishing emergency procedures as required.
- Monitoring and reviewing the management of health and safety at work.
PRINCIPLE 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation
The Board aims to ensure that the Company’s risk management framework identifies and addresses all relevant risks in order to execute and deliver the strategy.
The Directors recognise their responsibility for the Company’s system of internal control and have established systems to ensure that an appropriate and reasonable level of oversight and control is provided. The Company’s systems of internal control are designed to help the Company meet its business objectives by appropriately managing, rather than eliminating, the risks to those objectives. The controls can only provide reasonable, not absolute, assurance against material misstatement or loss.
The Company’s Management team, who report into the Executive, meets with the Executive at least quarterly to review commercial, operational and financial risks facing the business. These risks are assessed according to their nature and magnitude and given a score based on the seriousness of the risk and the likelihood of the risk occurring. The effectiveness of the controls implemented to minimise the risks are also reviewed. The aim of these reviews is to provide reasonable assurance that material risks are identified and appropriate action is taken at an early stage. From this review the Company maintains its internal risk register which on an annual basis is reviewed and updated by the Finance & Audit Committee and the Board.
The Company has a system called PACE (Product and Cycle Time Excellence) as a key part of its evaluation and monitoring of R&D projects. PACE identifies the risks facing each of the Company’s projects and how to mitigate each risk.
The annual budget is reviewed and approved by the Board. Financial results, with comparisons to budget and latest forecasts are reported monthly to the Board together with a report on operational achievements, objectives and issues encountered. Significant variances from plan are discussed at Board meetings and actions set in place to address them.
Measures continue to be taken to review and improve internal controls and risk management procedures. The Company has a Financial Procedures Manual which includes approval levels for authorisation of expenditure, potential fraud scenarios, payment approval process, expenses guidelines etc. This is updated on a regular basis.
The Company’s auditors are encouraged to raise comments on internal control in their management letter following the annual audit. The points raised and actions arising are monitored through to completion by the Finance & Audit Committee.
PRINCIPLES TO MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK
PRINCIPLE 5: Maintain the Board as a well-functioning, balanced team led by the Chair
The Board currently consists of two Executive Directors and two Non-Executive Directors. The Board meets at least once per month but more regularly where the need arises.
The Company has an equal opportunity policy to recruitment at Board level and within the Company at large and seeks diversity as opportunities arise, within the framework of selecting the most suitable person, based on relevant skills, abilities, experience and location, as required for the role.
The principal role of the Chairman of the Board is to manage and to provide leadership to the Board of Directors of the Company. The Chairman is accountable to the Board and acts as a direct liaison between the Board and the management of the Company, through the Chief Executive Officer. The Chairman acts as the communicator for Board decisions where appropriate.
The Chairman is responsible for the effective leadership, operation and governance of the Board and its Committees. He ensures that all Directors contribute effectively to the development and implementation of the Company’s strategy, while ensuring that the nature and extent of the significant risks the Company is willing to embrace in the implementation of its strategy are determined and challenged.
The Chief Executive Officer is responsible for the management of the Company, providing executive leadership and for implementing the Company’s strategy.
The Board believes that the advice, behaviour and character of its Chairman and Non-executive Director are always in the best interests of the Company and its shareholders. In addition, the skills and business judgement which they possess and regularly exercise contributes to the efficient and effective running of the Company.
The Company appreciates that circumstances which might or might appear to affect a Director’s judgement may well include financial dependence on the Company and whether the Director is, or represents, a major shareholder. The Non-executive Chairman and Non-executive Director are financially independent of the Company as they have other sources of income. Mr Brandon and Dr Burton do not represent significant shareholders, however, they do have a material interest in share warrants of the Company as detailed below.They are also Directors of DeepVerge plc which, although not a shareholder of the Company, is strategically important to the future success of Microsaic. Under the QCA Guidelines the independence of the Chairman and Non-executive Director could be challenged under the following areas, but in all cases the Board believes that the Chairman and Non-executive Director always act in an independent manner and where a conflict of interest could arise or be perceived to arise, they abstain from voting:
|Holds a material interest of 250M share warrants in the Company.
Director of DeepVerge plc
|Dr Nigel Burton
|Holds a material interest of 200 million share warrants in the Company.
Director of DeepVerge plc
The Board recognises the importance of good governance arrangements. Currently, the Board does not include two independent Non-executive Directors. As previously stated, it is the Board’s intention to initiate a process to identify and appoint an independent Non-executive Director ideally within 6 months following the February 2021 fundraising and reorganisation of the Company, subject to finding an appropriate candidate with relevant experience. Further consideration will be given to appointing a second independent Non-executive Director before the Company’s 2022 annual general meeting.
The Board has an established Finance & Audit Committee, and Remuneration Committee. The Company believes it is currently too small to have a separate Nominations Committee, so this role is taken on by the Board of Directors as a whole.
Details and links to the terms of reference of the Finance & Audit Committee and Remuneration Committee are set out under Principle 9 below.
The number of Board and committee meetings and attendance records of directors is set out in the Annual Report and Accounts and under Principle 9 below.
PRINCIPLE 6: Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities
Gerard Brandon, Non-executive Chairman
Term of office: Appointed a Director on 5 February 2021. Gerard is also a member of the Finance & Audit Committee and the Remuneration Committee.
Background and suitability for the role: Gerard Brandon is Chief Executive Officer of both DeepVerge plc and Cellulac plc. In 1996 he became founder and CEO of Alltracel Pharmaceuticals plc (“Alltracel”), where he built a team which oversaw numerous patents granted on refined cellulose. Alltracel was admitted to trading on AIM in 2001. In 2004, he was appointed as a Managing Partner for Farmabrand Private Equity. In March 2020, he was appointed as a Non-executive Chairman to Modern Water plc, which was subsequently acquired by DeepVerge plc (formerly Integumen plc) in November 2020. Gerard is a Fellow of the Ryan Academy of Entrepreneurs in Dublin.
Current external appointments: In addition to the above directorships Gerard is a Director of:
Innovenn UK Ltd, Pursuit Marine Drive Ltd, Cellulac Trading Ltd, Rinocloud Ltd, Parity Group plc, Integumen Ltd, LifescienceHub UK Limited, AER Sustainable Energy Limited, LifescienceHub Ireland Limited, Integumen Ireland Limited, Stoer Ireland Limited.
Glenn Tracey, Chief Executive Officer
Term of office: Joined March 2015 as Chief Operating Officer. Appointed to the Board December 2015, and appointed as Chief Executive Officer in September 2017. Glenn’s most recent re-election as Director was on 14 May 2019 at the Company’s AGM, when he retired per Article 81.1 (b) of the Articles of Association.
Background and suitability for the role: Glenn has more than 20 years’ experience leading operations, marketing and high technology collaboration, and research and development for small and large companies in sensing and detection instrumentation, across applications in human and environmental health. Glenn specialises in scaling new technology into emerging markets, especially transitioning contemporary high-end detection laboratory technologies to point of need or field-based sensing across a number of markets such as food, air, water and pharmaceuticals.
Glenn holds a BSc in Applied Chemistry from Salford University and an MBA from the Open university, and is a member of the Royal Society of Chemistry.
Glenn has no external appointments.
Bevan Metcalf, Finance Director and Company Secretary
Term of office: Appointed to the role of Finance Director on 18 December 2015 and Company Secretary on 16 May 2019. Bevan Metcalf is employed for 13 days per month. Any additional days are paid on an agreed day rate on a quarterly basis. Bevan Metcalf has the flexibility to increase his time during busy periods as Microsaic is his only role. Bevan’s most recent re-appointment as a Director of the Company was on 25 June 2020, at the Company’s AGM, when he retired per Article 81.1 (c) of the Articles of Association.
Background and suitability for the role: Bevan has a Business Management Degree from the University of Waikato, Hamilton, New Zealand where he majored in Accounting. He is also an ACA Member of the Chartered Accountants of Australia and New Zealand.
Bevan has more than 35 years’ of financial management experience with international companies primarily in the mining, technology and pharmaceuticals sectors, including Orion Corporation and GlaxoSmithKline. In the past 16 years he has been involved with companies listed on the AIM market of the London Stock Exchange.
Bevan’s 20 years’ experience in the Pharmaceutical Industry is very relevant to the strategy of the Company which is targeting the pharmaceutical industry for its miniaturised mass spectrometers.
Bevan keeps his accounting skills up to date through his membership of the Chartered Accountants of Australia and New Zealand where he accesses their library of resources and receives journals and other reading materials on a regular basis.
Bevan has no external appointments.
Dr Nigel Burton, Non-executive Director
Term of office: Appointed a Director on 5 February 2021 at a General Meeting of the Company. Dr Burton is also Chairman of the Finance & Audit Committee and the Remuneration Committee.
Background and suitability for the role: Nigel spent over 14 years as an investment banker at leading City institutions including UBS Warburg and Deutsche Bank, including as the Managing Director responsible for the energy and utilities industries. Nigel also spent 15 years as Chief Financial Officer or Chief Executive Officer of a number of private and public companies.
Current external appointments: Nigel is currently a Non-executive Director of LSE Main Market listed BlackRock Throgmorton Trust plc, AIM quoted companies eEnergy Group plc, Mobile Streams plc and DeepVerge plc. Other Directorships held include:
Wasdale Head Limited, Wasdale Head Inn Limited, SenseToys Limited, ASD Visual Aids Limited, Tau Capital plc, eEnergy Group plc, Streams Data Limited, Mobile Streams Inc, Modern Water plc, eEnergy Holdings Limited.
The Company from time to time uses external advisers.
During 2020, The Board has retained the following advisers:
- N+1 Singer as Nominated Adviser and Joint Broker;
- Turner Pope Investments as Broker;
- Saffery Champness LLP for annual audit;
- Freeths LLP as solicitors for the Company;
- Neville Registrars Ltd; and
- Menzies LLP for ongoing advice on, Corporation tax, VAT and PAYE.
PRINCIPLE 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
Board Evaluation Process
The Board believes that, in addition to dealing with any matters as they arise, it is appropriate to carry out a formal evaluation of the performance of the Board each year. This is intended to ensure that the Board remains effective, well-informed and able to make high quality and timely decisions for the benefit of all stakeholders in the Company.
The evaluation process involves each Director completing an evaluation questionnaire which covers effectiveness from multiple angles including: Board structure and committees; Board arrangements, frequency and time; content of Board meetings; Board culture; Board evaluation and succession; and individual contributions. The completed questionnaires were anonymised and collated independently into a summary, and comments and any areas of concern were highlighted for discussion with the Board.
The last evaluation was carried out in January 2020. Generally, the evaluation confirmed that the Board was effective, the culture is constructive and arrangements for Board meetings were good.
The evaluation of the Board’s effectiveness due to have been carried out in January 2021 has been postponed until January 2022 in light of the restructuring of the Board carried out in February 2021.
Detailed below are the key considerations from the last evaluation of the Board.
|Area for consideration||Outcome|
|Board and committee structure and composition|
|The Board would benefit from having an NED with complementary skills, especially good contacts/knowledge of the Company’s target markets.||The Board decided to consider this further with a view to looking out for a potential NED with the right complementary skills.|
|A more formal process could be introduced for the evaluation of risk.||A more formal process for evaluating risk was not introduced. However, the Board did spend time reviewing the key risks affecting the business including going concern, the Covid-19 pandemic and Brexit.|
As is common with many small AIM listed companies, the Company does not have internal candidates to succeed existing Executive Directors. This will be kept under review, especially when recruiting for senior roles as vacancies arise. However, the Board does not believe it is appropriate to recruit additional Directors or senior personnel solely for the purpose of board succession planning.
Training of Directors
It is recognised that there continues to be more regulation of which Directors need to be aware. The Board will continue to ensure that Directors receive appropriate support to keep up to date.
PRINCIPLE 8: Promote a culture that is based on ethical values and behaviours
The Company is committed to achieving the highest possible ethical standards in conducting its business. The Company expects all employees and Directors to maintain the same high standards. To achieve these ends, Microsaic encourages freedom of expression and speech.
Ethics is based on a set of principles and clear moral and ethical values. The Company takes its principles and values very seriously and when all else fails, expects staff at all levels to look to these principles and values for guidance.
The Board has adopted the following four principles:
- Management must lead by example. Good ethics should be most noticeable at the top. Every employee must be accountable to the same rules.
- Corporate values must be implemented throughout the Company. Every forum and medium should be used to spread the message and, most of all, the Company must practice what it preaches.
- Meetings with staff (both one on one and group) to discuss the values and what they mean to each employee must be undertaken when implementing a value system. This will help to get everyone in the Company on the same page and committed.
- The values of the Company must endure changes in leadership. The longer ethical values last, the more ingrained they will become.
The Company conducts its business around 7 core values:
- Integrity – applying high ethical standards and being honest. The Company will conduct its business with honesty to all stakeholders and will uphold high moral principles.
- Mutual respect, empathy and trust in dealing with others. An environment of mutual respect, empathy and trust is necessary if a Company is to promote integrity. Trust in the workplace is critical to organisational success.
- Innovation – a passion to experiment and deliver new solutions. A focus on research and development is very important to the future success of the Company. The Company is looking to deliver innovative solutions and has a collaborative approach to meeting customer needs.
- Teamwork – drives high performance. A team approach is more efficient, faster, benefits from multi-skills especially in problem solving, increases learning opportunities and encourages a sense of belonging, which often translates to a greater sense of ownership and accountability for the work.
- Quality – we take pride in everything we do. The Company is strongly focused on quality from the products it produces to the processes it operates. The Company is ISO9001-2015 compliant. Focusing on the quality of our people, products and services will ultimately create a quality image for the Company.
- Customer focus – go the extra mile for our customers. The Company assigns highest priority to customer satisfaction. We listen to our customers’ needs and create solutions for unmet customer needs.
- Shareholder value – striving to deliver value to shareholders. The key objective of the Company is achieving sustainable profitability. Every employee should understand how he or she fits into the profitability picture. Everyone’s common goal should be to build a strong, profitable Company that will endure and provide a reasonable returns to shareholders.
PRINCIPLE 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board
In 2020 the Board of Directors held 39 meetings to deal with the serious issues facing the Company. The agenda for Board meetings is prepared by the Executive Directors and agreed with the Chairman.
The Executive Directors prepare regular reports for each Board Meeting, typically this includes a: Chief Executive Officers Report, Health and Safety Report, Finance Report and other papers to support matters for consideration e.g. budget papers etc., which allow the Board to assess the Company’s activities and review its performance. The reports are submitted at least seven working days before the meeting. Non-executive Directors are able to have discussions with other employees where they feel it is appropriate. Non-executive Directors also have the authority (following discussions with the Chairman) to seek external independent advice as they think fit at the expense of the Company.
The attendance of the Directors at the regular Board Meetings and Committee Meetings during the year ended 31 December 2020 were as follows:
|Name||Position||Regular Board Meetings||Finance & Audit Committee||Remuneration Committee|
|Peter Grant||Non-Executive Chairman||39 (39)||3 (3)||1 (1)|
|Glenn Tracey||Chief Executive Officer||39 (39)||n/a||n/a|
|Bevan Metcalf||Finance Director||39 (39)||n/a||n/a|
|Eric Yeatman||Non-executive Director||38 (39)||3 (3)||1 (1)|
* Resigned – 28 July 2020
Numbers in brackets denote the total number of meetings that each Director was eligible to attend during the year.
Conflict of Interest
The Directors must keep the Board advised of any interest that could potentially conflict with those of the Company. At any time when a Director believes that there may be a conflict, this should be disclosed to the Chairman and Chief Executive Officer without delay and at the start of the next Board meeting to the Board as a whole. Where a material conflict exists, the Director concerned must not participate in discussions or vote on that subject matter.
Finance & Audit Committee
The remit of the Finance & Audit Committee is documented in its terms of reference which have been adopted by the Board of Directors.
The purpose of the Committee is to assist the Board in the effective discharge of its responsibilities for corporate governance, financial reporting, corporate control and risk management. The Committee normally meets at least twice a year and, amongst other things, reviews the annual report and accounts with the external auditors and interim statements.
The Committee also approves external auditors’ fees and ensures auditors’ independence as well as focusing on compliance with legal requirements and accounting standards. The ultimate responsibility for reviewing and approving the annual financial statements and interim financial statements remains with the Board.
The members of the Finance & Audit Committee are Dr Burton and Mr Brandon. Dr Burton is the Chair of the Committee. The external auditors, Chief Executive Officer, Finance Director and other executives may be invited to attend Committee meetings at the discretion of the Committee.
The terms of reference can be found here.
The remit of the Remuneration Committee is documented in its terms of reference which have been adopted by the Board of Directors.
The Remuneration Committee meets as required and at least twice a year. Its responsibilities include reviewing the performance of the Executive Directors, setting their remuneration levels, determining the payment of bonuses (if applicable) and other benefits and considering the grant of options under the Company share option schemes.
The members of the Remuneration Committee are Dr Burton (Chair) and Mr Brandon.
The terms of reference can be found here.
At this stage, it is not considered appropriate for the Company to have a formally constituted Nominations Committee, however, this will be kept under review. Board appointments are considered by the Board as a whole.
Matters Reserved for the Board
The matters reserved for the Board are detailed below:
Responsibilities of the Board
The Board has approved the following list of areas and matters for which it has reserved responsibility (together with its committees).
Management structure and appointments
- Senior management responsibilities
- Board and other senior management appointments or removals
- Board senior management succession, training, development and appraisal
- Appointment or removal of Company Secretary
- Appointment or removal of internal auditor
- Remuneration, contracts, grants of options and incentive arrangements for senior management
- Delegation of the Board’s powers
- Agreeing membership terms of reference of Board committees and task forces
- Establishment of managerial authority limits for smaller transactions
- Matters referred to the Board by the Board committees.
Strategic / Policy considerations
- Business strategy
- Diversification/retrenchment policy
- Specific risk management policies including insurance, hedging, borrowing limits, treasury policy and corporate security
- Agreement of codes and ethics and business practices
- Receipt and Review of regular reports on internal controls
- Annual assessment of significant risks and effectiveness of internal controls
- Calling of shareholders’ meetings
- Avoidance of wrongful or fraudulent trading
- Acquisitions and disposals of subsidiaries or other assets over £25,000
- Investment and other capital projects over £25,000
- Substantial commitments including:
- Pension funding
- Contracts in excess of one year’s duration
- Giving security over significant group assets (including mortgages and charges over the groups’ property)
- Contracts not in the ordinary course of business
- Actions or transactions where there may be doubt over propriety
- Approval of certain announcements, prospectuses, circulars and similar documents
- Disclosure of Directors’ interests
- Transactions with Directors or other related parties.
- Raising new capital and confirmation of major financing facilities
- Treasury policies including foreign currency and interest exposure
- Discussion of any proposed qualification to the accounts
- Final approval or annual and interim reports and accounts and accounting policies
- Appointment/proposal of auditors
- Charitable and political donations
- Approval and recommendations of dividends (currently not applicable)
- Approval of budgets for the year and periodic review during the year.
The Board is ultimately responsible for the Company’s system of internal control and for reviewing its effectiveness. This includes financial, operational and compliance controls and risk-management systems. Internal control systems are designed to meet the Company’s particular needs and the risks to which it is exposed. The internal control systems are designed to minimise rather than eliminate the risk of failure to achieve business objectives and by their nature can only provide reasonable and not absolute assurance against misstatement and loss.
- Governance of Company Pension Scheme
- Allotment, calls or forfeiture of shares
- Approval of Health and Safety policy
- Anti-Bribery policy.
PRINCIPLE TO BUILD TRUST
PRINCIPLE 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
Remuneration Committee Report
This report is included in the Annual Report which can be found under Documents in the Investors section of the website.
Finance & Audit Commitee Report
This Report is included in the Annual Report.
Disclose voting at the AGM
The AGM was held on 25 June 2020. Under normal circumstances the Board values the opportunity to meet shareholders. However, due to the Covid-19 pandemic and to comply with measures regarding travel restrictions, limited gatherings etc., introduced by the government, only the chairman of the meeting (FD) and the CEO both entitled to vote, attended the meeting. The Notice of AGM is always printed in the back of the Annual Report.
All resolutions were passed on a poll at the 2020 AGM. The outcome of the proxy voting is as follows:
|Chairman of the meeting||Chairman of the meeting|
|Ordinary Resolution 1||329,369,671||0||500|
|Ordinary Resolution 2||329,176,504||193,667||0|
|Ordinary Resolution 3||329,370,171||0||0|
|Ordinary Resolution 4||329,176,504||193,667||0|
|Special Resolution 5||328,461,504||908,667||0|
|MAXIMUM VOTES WHICH MAY BE CAST 456,365,146|
Interim Results and Annual Reports
These can be found on the Company’s website going back to 2010.
Other Governance Related Material
Other materials such as AGM Notices, our 2011 Admission Document and Circulars when raising funds can also be found at: