Composition of the Board
The Board is responsible for setting and approving the Group’s long term objectives and overall strategy as well as monitoring performance. The Board currently consists of two Executive Directors and five Non-Executive Directors.
Four out of Five of the Non-Executive Directors are considered to be independent. They all bring significant and diverse commercial experience to the Board and their views carry considerable weight in the decision making process.
There is a clear division of responsibility between the roles of the Chairman and the Chief Executive. The Chairman is responsible for the leadership of the Board, building its composition as well as ensuring a clear structure for the effective management of Board Committees. The Chief Executive is responsible for executing the business strategy once agreed by the Board.
The Board is supported in its role by three key committees which have written terms of reference and consist of the five Non-Executive Directors.
The aim of the Remuneration Committee is to ensure that shareholder and management interests are aligned. In doing so we also aim to make the schemes more transparent, easier to communicate and simpler to operate.
Remuneration Committee members and meetings
The Remuneration Committee consists of the Chairman and the other four Non-Executive Directors. It is chaired by Ian Harding and meets as required during the year. The Committee determines the remuneration and benefit of the Executive Directors. The Executive Directors have rolling one-year contracts subject to one year’s notice on either side.
The remuneration of Non-Executive Directors is determined by the Board within the limits set by the Company’s Articles of Association. They have letters of appointment, with the Company and their appointments are terminable on three months written notice on either side.
The Chief Executive Officer and Chief Financial Officer are invited to attend meetings of the Committee but no Director is involved in any decisions relating to their own remuneration.
None of the members of the Committee have any personal financial interest (other than as shareholders), conflicts of interests arising from cross directorships, or day-to-day involvement in running the business.
The Committee is responsible for setting the framework and policy for the remuneration of the Executive Directors and designated senior managers. It determines specific elements of their remuneration, their contractual terms and, where necessary, compensation arrangements.
The Committee keeps itself informed of all relevant developments and best practice in the field of remuneration and seeks advice from external advisers when it considers it appropriate.
The Group’s remuneration policy is designed to ensure that the remuneration packages attract, motivate and retain all employees of high calibre and to reward them for enhancing value to shareholders. The Company’s policy is that a substantial proportion of the total potential remuneration of the Executive Directors should be performance-related and aligned to performance measures that benefit all shareholders and promote the long-term success of the Company. The performance measurement of the Executive Directors and the determination of their annual remuneration package, including performance targets, are undertaken by the Remuneration Committee.
There are five main elements of the remuneration package for Executive Directors and other senior management:
- Basic annual salary
- Annual bonus payments
- Long-term incentives
- Pension arrangements
The remuneration of the Non-Executive Directors comprises only Directors’ fees and is determined by the Executive Directors.
Terms of Reference:
The objective of the Committee is to provide oversight and governance to the Group’s financial reports, its internal controls and processes in place, its risk management systems and the appointment of and relationship with the external auditor.
- Monitor the integrity of the financial statements of the Group, reviewing any significant reporting issues and judgements they contain.
- Advise on the clarity of disclosure and information contained in the Annual Report and Accounts.
- Ensure compliance with applicable accounting standards and review the consistency of methodology applied.
- Review the adequacy and effectiveness of the internal control and risk management systems.
- Oversee the relationship with the external auditor, reviewing performance and advising the Board on their appointment and remuneration.
- To keep under review the need for an internal audit function and make recommendations to the Board.
Membership and meetings:
The Audit Committee is chaired by David Stead, who is a Chartered Accountant, and consists of the other three Non-Executive Directors. The Executive Directors attend by invitation. It meets a minimum of three times per year and at least twice a year with the external auditors present.
Its role is to monitor the integrity of the financial statements, including the Annual and Interim Reports, review the significant accounting policies and financial reporting judgements contained therein and provide updates and recommendations to the Board. It is also responsible for reviewing and evaluating the adequacy of internal control and risk management processes.
Terms of Reference:
The primary purposes of the Committee is to lead the process for Board appointments and to make recommendations for maintaining an appropriate balance of skills on the Board.
Nomination Committee members and meetings
The Nomination Committee is chaired by the Chairman, and consists of the other five Non-Executive Directors. The Committee shall meet as necessary to fulfil its responsibilities and meet its objective.
- Reviewing the structure, size and composition (including the skills, knowledge, experience and diversity) of the Board on a regular basis and making recommendations to the Board with regard to any changes;
- Considering succession planning, taking into account the challenges and opportunities facing the Group and the skills and expertise needed on the Board in the future;
- Reviewing the leadership needs of the organisation, both executive and non-executive, with a view to ensuring the continued ability of the organisation to compete effectively in the marketplace;
- Identifying and nominating for the approval of the Board, candidates to fill Board vacancies as and when they arise;
- Evaluating the balance of skills, knowledge, experience and diversity on the Board and, in the light of this evaluation, preparing a description of the role and capabilities required for a particular appointment;
- Ensuring that, on appointment to the Board, non-executive directors receive a formal letter of appointment setting out clearly what is expected of them in terms of time commitment, committee service and involvement outside Board meetings; and
- Reviewing annually the time required from a non-executive director.