AIM companies are not required to comply with The UK Corporate Governance Code. Nevertheless, the Board endorses the principles of openness, integrity and accountability which underlie good corporate governance and intends to take into account the provisions of The UK Corporate Governance Code in so far as they are appropriate to the Group’s size and circumstances.
The Group was led and controlled by an effective Board of Directors which comprises Henry Angest (Non-Executive Chairman), Paul Lynam (Chief Executive Officer), Neeraj Kapur (Chief Financial Officer), and three other non-executive directors. Under the Company’s Articles and pursuant to the relationship agreement in place between the Company and Arbuthnot Banking Group PLC (“ABG”), one third of the directors will be appointed by ABG, one third of the directors will be full-time executive directors, and one third of the directors will be independent directors.
The Board meets regularly throughout the year. Substantive agenda items have briefing papers, which are circulated in a timely manner before each meeting. The Board will ensure that it is satisfied that it is supplied with all the information that it requires and requests, in a form and of a quality to enable it to fulfil its duties. The Company Secretary is responsible for ensuring that Board processes and procedures are appropriately followed and support effective decision making. All directors have access to the Company Secretary’s advice and services and there is an agreed procedure for directors to obtain independent professional advice in the course of their duties, if necessary, at the Company’s expense. The Board has delegated certain of its responsibilities to committees, which are summarised below. Each of these committees has written terms of reference.
Membership of the Audit Committee is limited to non-executive directors and the current Audit Committee comprises Paul Marrow as Chairman, Andrew Salmon and Carol Sergeant.
The primary responsibilities of the Audit Committee are to review arrangements established by the directors for compliance with regulatory and financial reporting requirements, monitor the integrity of the Group and subsidiary statutory accounts, oversee the work of the external auditors, monitor and review the scope, results and effectiveness of the Company’s internal audit function and liaise with the Audit Committee of ABG.
The Audit Committee’s responsibilities include reviewing the Group’s system of internal control and the process for evaluating and monitoring risk. The Committee also considers any other matters which might have a financial impact on the Company, including the Group’s arrangement by which staff may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. The Audit Committee has the authority to obtain any information it requires from any employee or external party, and at least once a year will meet with the Company’s external auditors and internal audit function without any executive directors being present.
The Committee also reviews the appointment, terms of engagement and objectivity of the external auditors, including the level of non-audit services provided, and ensures that there is an appropriate audit relationship. The Audit Committee provides a forum for discussing with the Group’s external auditors their report on the annual accounts.
The Risk Committee is chaired by Andrew Salmon. Other members are Paul Lynam and Paul Marrow.
The primary responsibilities of the Risk Committee are to approve specific risk policies for the Company and its subsidiaries, approve trading positions in excess of the limits set by the management of the Group, oversee the development, implementation and maintenance of the Group’s overall risk management framework and its risk appetite, strategy, principles and policies, oversee the Group’s risk exposures, risk/return and proposed improvements to the Group’s risk management framework, oversee adherence to Group risk principles, policies and standards, and at all times act in adherence with and with regard to the risk principles, policies and standards adopted by ABG and keep ABG regularly informed of any risk issues or breaches faced by the Group which may affect the ABG Group.
Details of the Remuneration Committee and directors’ remuneration are set out in the separate Remuneration report.
The Nomination Committee is chaired by Henry Angest and its other members are Paul Marrow and Carol Sergeant.
The primary responsibilities of the Nomination Committee are to review the number of directors and the balance between executive and independent directors, recommend new independent director and executive director appointments to the board and the length of term for which a non-executive director may be expected to serve, and have regard to provisions of the Relationship Agreement when performing its duties. Before a Board appointment is made the skills, knowledge and experience required for a particular appointment are evaluated. The Nomination Committee also follows the ICSA Guidance on Terms of Reference for Nomination Committees.
The Company maintains a regular dialogue with its shareholders and makes full use of the Annual General Meeting and any other General Meetings to communicate with investors.
The Company aims to present a balanced and understandable assessment in all its reports to shareholders, its regulators and the wider public. Key announcements and other information can be found by clicking here.
Internal control and financial reporting
The Board of Directors has overall responsibility for the Group’s system of internal control and for reviewing its effectiveness. Such a system is designed to manage rather than eliminate risk of failure to achieve business objectives and can only provide reasonable but not absolute assurance against the risk of material misstatement or loss.
The directors and senior management of the Group have formally adopted a Group Risk and Controls Policy which sets out the Board’s attitude to risk and internal control. Key risks identified by the directors are formally reviewed and assessed at least once a year by the Board. Key business risks are also identified, evaluated and managed by operating management on an ongoing basis. The Board also receives regular reports on any risk matters that need to be brought to its attention. Significant risks identified in connection with the development of new activities are subject to consideration by the Board.
The effectiveness of the internal control system is reviewed regularly by the Board and the Audit Committee, which also receives reports of reviews undertaken by the internal audit function which is outsourced to EY. The Audit Committee also receives reports from the external auditors, KPMG Audit Plc, which include details of internal control matters that they have identified. Certain aspects of the system of internal control are also subject to regulatory supervision, the results of which are monitored closely by the Board.
From January 2014, the Group has established its own Internal Audit function reflecting the continuing business investment in risk mitigation and compliance processes. EY will continue to be engaged in both an audit and advisory capacity and will provide support in areas requiring specific subject matter expertise.