INTRODUCTION
Corporate governance is the process by which companies are controlled and directed - a company's board is ultimately responsible for this. The key to good corporate governance is having the right strategy, leadership and control structures in place to produce and sustain the delivery of value to shareholders.
Good corporate governance, and its visibility, gives confidence to all associated with a company that it is being managed well and that value is being created. Our objective in this report is to summarise the key elements of the Company's governance structure and relate this to the principles in the UK 's Combined Code on Corporate Governance – a code of good practice for listed companies.
The Board has adopted a top-level statement on corporate governance, the Board Charter. This details certain governance principles and the principal duties of the Chairman, Chief Executive and Senior Independent Director. Attached to the Board Charter you will also find a schedule of matters reserved for the Board and the terms of reference of various Board committees.
Dick Olver
Chairman
View Board Charter in PDF format (4MB)
Compliance with the Combined Code
THE BOARD
"Every company should be headed by an effective board, which is collectively responsible for the success of the company." Combined Code – Main Principle A.1
- The Board is responsible for the leadership of the Company. It has mandated standards of behaviour and key policies, covering:
- business ethics
- business planning
- risk management
- internal control
- personal behaviour
- Through the Company's Integrated Business Planning process the Board is involved in the development of strategy. The Board approves business plans that are used to implement strategy and monitor the operational performance of the Company.
- The Board has delegated the normal operational management of the Company to the executive directors and other senior managers but certain matters have been reserved for its decision.
CHAIRMAN AND CHIEF EXECUTIVE
"There should be a clear division of responsibilities at the head of the company between the running of the board and the executive responsibility for the running of the company's business. No one individual should have unfettered powers of decision." Combined Code – Main Principle A.2
- The Chairman and Chief Executive have been appointed separately and there is a clear division of responsibilities between these two positions.
- The Chairman, who serves in a non-executive capacity, is responsible for the effective working of the Board. The Chief Executive is responsible to the Board for the normal management of the Company's operations.
- The present Chairman was appointed in 2004. On his appointment the Nominations Committee agreed that he was independent based on the criteria used in the Combined Code.
BOARD BALANCE AND INDEPENDENCE
"The Board should include a balance of executive and non-executive directors (and in particular independent non-executive directors) such not no individual or small group of individuals can dominate the board's decision making." Combined Code – Main Principle A.3
- At present there are twelve directors on the Board. This comprises a non-executive chairman, three executive directors and eight non-executive directors. The Board considers that all the non-executive directors are independent using the criteria in the Combined Code.
APPOINTMENTS TO THE BOARD
"There should be a formal rigorous and transparent procedure for the appointment of new directors to the board." Combined Code - Main Principle A.4
- The Board has appointed a committee, the Nominations Committee, with responsibility for reviewing the composition of the Board on a regular basis and, if deemed necessary, to find suitable candidates for appointment to the Board.
INFORMATION AND PROFESSIONAL DEVELOPMENT
"The Board should be supplied in a timely manner with information in a form and of a quality to enable it to discharge its duties. All Directors should receive induction on joining the board and should regularly update and refresh their skills and knowledge." Combined Code - Main Principle A.5
- The Board has agreed what information it should receive on a regular basis.
- The Chief Executive is responsible for the training and development needs of the executive Directors and the Company Secretary for the non-executive Directors.
