The Board is committed to the highest level of corporate governance and has regard to the provisions of the UK Corporate Governance Code 2010. The directors aim to exercise affirmative control over the Group and its activities while recognising their responsibility to shareholders and other interested parties. The procedures implemented for applying these principles within the Group are set out below.
Board composition
The composition of the Board provides an appropriate blend of experience and qualifications. The Board meets formally 4 times a year, with its decisions implemented by the executive directors.
The re-appointment of directors is not intended to be automatic. Prior to each director offering himself to the members for re-election, his reappointment will have to be confirmed by the Chairman in consultation with the remainder of the Board.
The Board is supplied with timely and relevant information regarding the business, by regular and ad hoc reports, and this is supplemented by site visits and by meetings with members of the management team. Where appropriate, the company provides the resources to enable directors to update and upgrade their knowledge.
Risk management
The Board recognises that it has overall responsibility for the identification and mitigation of risks and the development and maintenance of an appropriate system of internal control. Accordingly, as part of the annual strategic review process, a topdown risk assessment will be undertaken.
The Board believes that, although some issues are outside its control, it requires clear strategies for identifying, dealing with and mitigating the impact of each of the identified risks.
Internal control
The directors keep under review the effectiveness of the system of internal control.
The Group's key internal controls are centred on:
- Comprehensive monthly reporting from all activities.
- Detailed annual budgets, plus revised trading and cash flow forecasts for the year prepared on a regular basis.
- A management structure with clearly defined responsibilities and authority limits.
- An ongoing process of risk assessment as noted above.
- Appraisal and authorisation procedures for capital expenditure.
There is established a formal schedule of matters, including major investment and development decisions and strategic matters, that are reserved for Board approval. Formal policies and procedures are in place covering operations, all elements of employment, health and safety and IT.
Internal control, by its nature, provides only reasonable and not absolute assurance against material misstatement or loss. The directors do, however, strive to ensure that internal control and risk management are further embedded into the operations of the business by dealing with areas for improvement as they are identified.
The Board believes that given the company's current size, where close control over operations will be exercised by the executive directors, the benefits likely to be gained from an internal audit function would be outweighed by the costs of establishing such a function. The Board will keep this requirement under review in relation to the ongoing size and complexity of the business.
Shareholder relations
The company places considerable importance on communication with its shareholders.
The executive directors already have a programme of meetings with the main shareholder. Meetings with institutional shareholders are arranged by request and at these meetings the company's strategy and most recently reported performance are explained.
The company's Annual General Meeting is also used as an opportunity to communicate with private investors. In addition, a period for questions will be made available for shareholders at the Annual General Meeting.
Business standards
The company does not condone any form of corrupt behaviour in business dealings and has disciplinary procedures in place to deal with any illegal or inappropriate activities by employees.
