Corporate Governance
Introduction
The board is committed to ensuring that high standards of corporate governance are maintained by the Group.
Board structure
The board comprises David Hussey (Non-executive Chairman) and three executive directors, Greg MacLeod (Chief Restructuring Officer), Andrew Morriss (CEO-Stadco Division) and Steve Kynaston (Group Finance Director).
The Chairman is responsible for ensuring that the members of the board receive accurate, timely and clear information in relation to the Group and its business to enable the directors to make sound decisions and fulfil their statutory duties. The Chairman ensures effective communication with shareholders, and makes their views known to the board to ensure that they are considered effectively. The Chief Restructuring Officer and the CEO of the Stadco division are responsible for overall management of the Group's business, the development of the Group's strategic direction, implementation and delivery of the annual business plan and the effective leadership, co-ordination and performance of the executive team. The Chairman and the executive directors ensure that the Group’s strategies, plans and major developments are effectively communicated to shareholders and the Chairman maintains strong relationships with key external stakeholders in order to understand any concerns they may have regarding the Company and communicates these back to the board.
The board appointed Mick Hayhurst as Company Secretary in April 2009 in order to take responsibility for the Group’s Secretariat. The Chairman and Company Secretary meet on a regular basis to discuss corporate governance and other issues including, inter alia, information flows and the induction and training programmes for directors and senior management. All directors have access to the advice and services of the Company Secretary and also to independent professional advice where required.
Upon their appointments to the main board executive directors received induction programmes which included detailed background information about the Group and its activities and details of the board procedures and governance policies, including procedures for dealing in the Company’s shares. As part of their induction, meetings were arranged with all board members and with senior management, together with some of the Company’s advisors.
The board has established a formal policy of delegated authorities setting out matters which require its express approval and the authorities delegated to the executive directors. The board receives a board pack in advance of each monthly meeting containing a report from the executive directors, management accounts and any other material deemed necessary for the board to discharge its duties. The board has responsibility for formulating, reviewing and approving the Group’s strategy, budgets, major items of capital expenditure, corporate transactions, risk management policies, treasury policies, succession planning, appointments to the board, material investments and disposals and reporting to shareholders.
The Company maintains adequate insurance cover in respect of legal actions against directors and officers as well as against material loss or claims against the Group.
Under the Company’s articles of association all directors are subject to election by shareholders at the first AGM following appointment and thereafter to re-election at least every three years. David Hussey offered himself and was re-elected as a director at the last AGM.
The board conducts an assessment of the balance, skills and experience of the board and its individual members each year and also assesses the performance of its committees (discussed below).
Board Committees
The board has appointed three committees, Audit, Remuneration and Nomination, each having written terms of delegated responsibilities which are summarised below.
Audit Committee
Following the Company’s de-listing from AIM on 30 June 2009 the functions previously carried out by the Audit Committee will in future be carried out by the board as a whole. The board is responsible for ensuring that appropriate financial procedures and controls are properly maintained and reported on and for monitoring the external auditors and internal control systems. The board has ultimate responsibility for reviewing and approving the annual report and accounts. The board also assesses annually the cost effectiveness, objectivity and independence of the external auditors.
Relationships with PricewaterhouseCoopers LLP (“PwC”), the Company’s external auditor, are dealt with largely through the Group Finance Director. In addition, PwC meet will meet with the board at least annually. They also have direct access to senior employees including directors.
The Group uses PwC for non-audit services such as taxation advice. When appointing advisors for non-audit work the Group considers the experience and objectivity required. The board is satisfied that PwC carefully consider each piece of non-audit work offered, in order to ensure that acceptance would not impair independence and they report annually on this issue to the board. The report for the year under review, which was accepted by the board, concluded that PwC were independent and that their objectivity was not impaired.
Remuneration Committee
The Remuneration Committee is chaired by David Hussey and its other member is Greg MacLeod. The committee is responsible for reviewing the performance of the executive directors and other senior executives and for determining appropriate levels of remuneration and benefits, including bonuses. The board is responsible for setting the remuneration of non-executive directors. Fees for the services of Greg MacLeod are paid to MPC Partners LLP and as such are agreed by the other members of the board and not the Remuneration Committee.
Nomination Committee
The board will appoint members to the Nomination Committee to make recommendations on new board appointments when required.
Shareholder Relations
The Company recognises the importance of maintaining strong relationships with its shareholders. The Company uses its website to encourage communication with private, existing and prospective shareholders and welcomes feedback from investors on its published reports and website. Please address your feedback to Mick Hayhurst, Company Secretary by e-mail to info@acertec.com or in writing to Acertec Ltd, Harlescott Lane, Shrewsbury SY1 3AS.
The Company has established a policy and share dealing code related to dealing in the Company’s shares by directors, employees and connected persons.
The Company also recognises that the AGM provides an important forum for communicating with investors and provides an opportunity for all shareholders to meet the board.
Internal Control and Risk Management
The board is responsible for the Company’s system of internal controls and for reviewing the effectiveness of such systems.
The internal control system is designed to manage rather than eliminate the risk of failure to achieve business objectives. The board is responsible for the system of internal control and for reviewing its effectiveness. It can provide reasonable, but not absolute, assurance against material misstatement or loss.
The board conducts a review, at least annually, of the Group’s system of internal controls. Such a review examines material controls, including financial, operational and compliance controls and risk management systems.
Formal risk registers are now established in the Stadco and ACPL divisions. These registers will form the basis for regular monitoring and review of Group risk.
Whistle Blowing Policy
The Company has established, operates and has published within the Group a Whistle Blowing Policy. This provides the necessary access for, and the protection of, employees wishing to bring matters that they suspect of being malpractice or impropriety to the attention of the relevant person. Any incidents reported are fully investigated and the results are reported to the board.
|
