Corporate Governance

 

The Board oversees the Company’s financial reporting, risk management and regulatory compliance functions. It also sets executive remuneration and oversees executive appointments. These roles are fulfilled by the Board and its three committees shown below. The Board and its committees meet regularly, discuss matters by phone when necessary, and circulate minutes and relevant papers in advance of each meeting.

My aim, as Chairman, is to ensure we have a diverse, inclusive and effective Board, which is fully informed about the business and able to provide the executive members with an appropriate balance of challenge and support. To ensure the Board continues to be effective, I plan to run annual Board evaluations to drive improvements in the Board’s and committees’ work.

My relationship with our CEO and our interaction with the non-executive directors is of key importance for a climate of open communication and constructive debate. We hold two formal combined Board (PLC and GEB) meetings each year and there is continual dialogue in the meantime to ensure we are all aware of critical information.

corp.governance1

Rory Curran

Rory Curran: My aim as Chairman is to create a diverse, inclusive and effective Board, which is fully informed about the business and able to provide the executive membership with an appropriate balance of challenge and support.

 

CORPORATE GOVERNANCE STATEMENT

Last updated 28th September 2018 unless otherwise indicated.

StatPro Group is listed on the Alternative Investment Market of the London Stock Exchange (‘AIM’). Rule 26 of the AIM Rules, as revised March 2018, requires all AIM-listed companies, from admission, to disclose on their Company website details of a recognised corporate governance code that the Board of directors of the AIM company has decided to apply, how the company complies with that code, and, where it departs from the chosen code, the reasons for doing so.

The information below is the Corporate Governance Statement for StatPro Group Plc. If there are any areas of the report you feel could be clearer, or more complete – please let us know at [email protected]

The Board has decided to apply the corporate governance code published by the Quoted Companies Alliance, the membership organisation supporting small listed companies. The most recent edition of the QCA Corporate Governance Code was issued on 25 April 2018. 

The Code contains 10 governance principles, and for each principle there is supporting guidance on application. The Code places particular emphasis on disclosure on how the company is exhibiting good governance.

EVALUATION OF CURRENT POLICIES AND DISCLOSURE AGAINST THE QCA CODE

Principle 1:

QCA Code Evaluation of StatPro practice
Principle

Establish a strategy and business model which promote long-term value for shareholders.

The company has a clear strategy and business model. Full details of this can be found in the 2017 Annual Report on pages 7 to 15.

Our key recent strategic initiatives have focused around:

  • Innovation: broadening the functional and technical capabilities of the StatPro Revolution platform;
  • Direction: the cloud is our focus and has been since 2010, and;
  • Growth: of our cloud-based revenue, both organically and by acquisitions.

These are detailed on pages 12 & 13 of the 2017 Annual Report.

The key challenges to the business and how these are mitigated are detailed on pages 26 to 29 of the 2017 Annual Report.

Application

The Board must be able to express a shared view of the company’s purpose, business model and strategy. It should go beyond the simple description of products and corporate structures and set out how the company intends to deliver shareholder value in the medium to long-term. It should demonstrate that the delivery of long-term growth is underpinned by a clear set of values aimed at protecting the company from unnecessary risk and securing its long-term future.

 

Principle 2:

QCA Code Evaluation of StatPro practice
Principle

Seek to understand and meet shareholder needs and expectations.

The Company works hard to ensure it understands the needs and expectations of shareholders. The Chairman talks regularly with the Group’s major shareholders and ensures that their views are communicated fully to the Board.

The Board recognises the AGM as an important opportunity to meet shareholders. The Board and its directors routinely attend the AGM and are able to respond to any questions raised by shareholders.

If voting decisions are not in line with the Company’s expectations, the Board will engage with those shareholders to understand better and address any issues.

We recognise that the annual report and the website could provide more information of the shareholder communication activities in the relevant year and the circumstances in which these took place. In the next annual report, we will provide more information on our shareholder communication and summarise any issues raised by major shareholders and the Company’s consequent actions.

Application

Directors must develop a good understanding of the needs and expectations of all elements of the company’s shareholder base.

The Board must manage shareholders’ expectations and should seek to understand the motivations behind shareholder voting decisions.

 

Principle 3:

QCA Code Evaluation of StatPro practice
Principle

Take into account wider stakeholder and social responsibilities and their implications for long-term success.

NB Since publication of the QCA code, the Government has issued new disclosure regulations. Compliance with these will be adequate to meet the requirement of the QCA code for employee and other stakeholder engagement. These regulations require:

A statement in the strategic report of how directors have complied with their duty to have regard to the matters in S172 (1) (a)-(f) of the Companies Act 2006 (attention to stakeholders, including suppliers and customers);

A statement in the directors’ report summarising how directors have engaged with employees and taken account of their interests.

The Group maintains regular lines of communication with customers and suppliers in order to survey their opinions and needs. Client conferences and other hosted events, are held regularly to determine how our products and services can be improved. Clients also use our help desk to provide us with useful feedback.

The Group regularly reviews the opinions and attitudes of employees. Every six months, we survey all staff on a range of topics using the Happiness Index®  to ensure that any issues relating to staff morale and communication are addressed promptly.  We have also set up a specific communication channel within the Group’s collaboration tool to update employees after every Executive Board meeting on key decisions and their rationale. In the coming year the Board will continue to review the processes we use to inform and consult employees on the business and how they are affected

 

 

 

 

 

 

 

 

 

 

 

Application

Long-term success relies upon good relations with a range of different stakeholder groups both internal (workforce) and external (suppliers, customers, regulators and others). The Board needs to identify the company’s stakeholders and understand their needs, interests and expectations.

Where matters that relate to the company’s impact on society, the communities within which it operates, or the environment have the potential to affect the company’s ability to deliver shareholder value over the medium to long-term, then those matters must be integrated into the company’s strategy and business model.

Feedback is an essential part of all control mechanisms. Systems need to be in place to solicit, consider and act on feedback from all stakeholder groups.

 

Principle 4:

QCA Code Evaluation of StatPro practice
Principle

Embed effective risk management, considering both opportunities and threats, throughout the organisation

The 2017 Annual Report (pages 26 to 29 of the report) provides a full analysis of principal risks and uncertainties in the business including the top six risks identified by the Board, and how the Board manages the risk.

Risk management is embedded in our Board and management processes. We will continue to review the disclosure of risk management in the annual report to see if we can improve how this is disclosed.

 

 

 

Application

The Board needs to ensure that the company’s risk management framework identifies and addresses all relevant risks in order to execute and deliver strategy; companies need to consider their extended business, including the company’s supply chain, from key suppliers to end-customer.

Setting strategy includes determining the extent of exposure to the identified risks that the company is able to bear and willing to take (risk tolerance and risk appetite).

 

Principle 5:

QCA Code Evaluation of StatPro practice
Principle

Maintain the Board as a well-functioning, balanced team led by the Chair.

The Board is comprised of the Chairman, the Group Chief Executive, the Group Finance Director and three other non-executive directors, one of whom acts as the Senior Independent Director. The Board is responsible to shareholders for the proper management of the Company.

All directors have access to the Company Secretary, Andrew Fabian, who is responsible for Company secretarial matters and compliance with relevant statutory obligations. To enable the Board to discharge its duties, all directors have full and timely access to all relevant information.

The annual governance report provides full information on the workings of the Board and its committees (2017 Annual Report pages 32 to 35). Information is also provided on this website

Six scheduled board meetings were held in 2017. During the year, there were three audit committee meetings, four remuneration committee meetings and there was one nominations committee meeting. The number of scheduled board meetings and sub-committee meetings attended by each director during the year are shown in the attendance table on page 34 of the 2017 Annual Report.

 

Application

The Board members have a collective responsibility and legal obligation to promote the interests of the company and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the chair of the board.

The Board (and any committees) should be provided with high quality information in a timely manner to facilitate proper assessment of the matter requiring a decision or insight.

The Board should have an appropriate balance between executive and non-executive directors and should have at least two independent directors.  Independence is a board judgement.

The Board should be supported by committees (e.g. audit, remuneration, nomination) that have the necessary skills and knowledge to discharge their duties and responsibilities effectively.

Directors must commit the time necessary to fulfil their roles.

 

Principle 6:

QCA Code Evaluation of StatPro practice
Principle

Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities

Directors’ biographies appear on pages 36 to 37 of the 2017 Annual Report and demonstrate their range of relevant experience, bringing independent judgement to bear on issues of strategy, performance, resources, industry knowledge and standards of conduct. The Board recognises that with only one female director on the main board and none on the Group Executive Board, there is a gender imbalance at board level. The Board actively discusses this issue and aims to take steps to redress it. 

The Directors are planning to invest in management training in 2019 and are preparing a programme to address this.

The Board occasionally takes external advice on a range of matters and where the directors believe that this is appropriate in order to reduce risks. 

 

 

Application

The Board must have an appropriate balance of sector, financial and public market skills and experience, as well as an appropriate balance of personal qualities and capabilities. The Board should understand and challenge its own diversity, including gender balance, as part of its composition.

The Board should not be dominated by one person or a group of people. Strong personal bonds can be important but can also divide a board.

As companies evolve, the mix of skills and experience required on the board will change, and board composition will need to evolve to reflect this change.

 

Principle 7:

QCA Code Evaluation of StatPro practice
Principle

Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

The Chairman is reviewing the processes and criteria the Board uses for collective and individual evaluation. This review is expected to be completed in time for the production of the Board Governance report next year.

At every AGM one third of the directors retire by rotation and may stand for re-election.

 

 

 

 

 

Application

The Board should regularly review the effectiveness of it performance as a unit, as well as that of its committees and the individual directors.

The Board performance review may be carried out internally or, ideally, externally facilitated from time to time. The review should identify development or mentoring needs of individual directors or the wider senior management team.

It is healthy for membership of the Board to be periodically refreshed. Succession planning is a vital task for boards. No member of the Board should become indispensable.

 

Principle 8:

QCA Code Evaluation of StatPro practice
Principle

Promote a corporate culture that is based on ethical values and behaviours.

The Board aims to ensure the highest level of ethical behaviour within the business by all directors and staff in their dealings with all stakeholders. As part of this, a management training programme is planned for 2019 which will include improving general management skills and dealing with corporate culture and ethical issues and related matters such as discrimination.There is a whistle-blower policy in place which encourages any employee to report to the senior independent director any behaviours or matters which are cause for concern and which the employee does not wish to address with their line manager.

The Company operates with an open communication culture and has an annual Away Day for employees within each office to encourage openness of communication by all.  The Company holds regular office communication meetings providing feedback on initiatives and developments from the Board and local teams to ensure that relevant information and knowledge is shared. There are also social events outside office hours which promote team work. The Board believes that if people enjoy their work and have a good team spirit they operate more effectively.

The people and culture section of our strategic report on pages 24 to 25 of the 2017 Annual Report details the ethical values and behaviours of StatPro.

 

 

 

 

 

Application

The Board should embody and promote a corporate culture that is based on sound ethical values and behaviours and use it as an asset and a source of competitive advantage.

The policy set by the Board should be visible in the actions and decision of the chief executive and the rest of the management team. Corporate values should guide the objectives and strategy of the company.

The culture should be visible in every aspect of the business, including recruitment, nominations, training and engagement.  The performance and reward system should endorse the desired ethical behaviours across all levels of the company.

The corporate culture should be recognisable throughout the disclosures in the annual report, website and any other statements issued by the company.

 

Principle 9:

QCA Code Evaluation of StatPro practice
Principle

Maintain governance structures and processes that are fit for purpose and support good decision making by the Board.

The corporate governance statement on pages 32 to 35 of the 2017 annual report details the company’s governance structures and why they are appropriate and suitable for the Company. The Company’s approach to corporate governance and the structure of its committees is also shown here.

 

 

 

 

 

 

 

 

Application

The company should maintain governance structures and processes in line with its corporate culture and appropriate to its:

  • size and complexity
  • capacity, appetite and tolerance for risk

The governance structures should evolve over time in parallel with its objectives, strategy and business model to reflect the development of the company

 

Principle 10:

QCA Code Evaluation of StatPro practice
Principle

Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.

 

 

 

 

 

 

 

The Group carries out the following processes to ensure this vital communication is complete:

  •  Communication of strategy and response to shareholder questions at the Company’s Annual General Meeting;
  • Presentation of the Company’s annual result and interim results to major shareholders, market analysts and financial journalists; and
  • Close liaison with advisers (corporate broker and NOMAD, PR advisers, lawyers, auditors) prior to any major transactions or strategic initiatives.

The Board recognises the AGM as an important opportunity to meet shareholders. The Board and its directors routinely attend the AGM and are able to respond to any questions raised by shareholders.

Communication practices with shareholders are described on page 35 of the 2017 annual report. In the next annual report, we will provide more information on our shareholder communication.

Application

A healthy dialogue should exist between the Board and all of its stakeholders, including shareholders, to enable all interested parties to come to informed decisions about the company.

In particular, appropriate communication and reporting structures should exist between the Board and all constituent parts of its shareholder base.  This will assist:

  • the communication of shareholders’ views to the Board; and
  • the shareholders’ understanding of the unique circumstances and constraints faced by the company.

It should be clear where these communication practices are described (Annual Report or website).

 

 

BOARD MEETINGS

The Board meets at least four times a year and has a formal schedule of corporate matters over which it has the final decision, thus ensuring that it exercises control over appropriate strategic, financial, operational and compliance issues. At its meetings the Board reviews trading performance, ensures adequate financing, sets and monitors strategy, examines investment and acquisition opportunities and discusses reports to shareholders. The directors can also take independent professional advice as appropriate at the Company’s expense. The Chairman meets at least once a year with the non-executive directors without the executive directors present.

Audit Committee

The Audit Committee is chaired by Jane Tozer. The Audit Committee also comprises the Chairman (Rory Curran), Mark Adorian, David Courtley and Carl Bacon (until his resignation in November 2017), and meets at least three times annually. The Audit Committee receives reports from the Group’s external auditors and its meetings are also attended, by invitation, by the Group Finance Director.

THE WORKINGS OF THE BOARD AND ITS COMMITTEES

The Audit Committee reviews the Company’s financial matters, as set out in written terms of reference, including the interim results and the Annual Report and Accounts, before their submission to the Board. It monitors the controls in force to ensure the integrity of financial information reported to shareholders.

The Board

The Board is comprised of the Chairman, the Group Chief Executive, the Group Finance Director and three other non-executive directors. In November 2017, Carl Bacon resigned from the Board as non-executive director and Chairman and Rory Curran was appointed as Chairman. The Board is responsible to shareholders for the proper management of the Company. Directors’ biographies appear on pages 36 to 37 of the 2017 Annual Report and demonstrate their range of relevant experience, bringing independent judgement to bear on issues of strategy, performance, resources, industry knowledge and standards of conduct. The performance of the executive directors is reviewed annually by the non-executive directors. On resignation from the Board a non-executive director would be invited to provide a written statement to the Chairman for circulation to the Board, if he or she were to have any unresolved concerns about the running of the Company. The overall effectiveness of the Board and its sub-committees is reviewed by the Board as a whole through annual completion and discussion of a questionnaire. During 2017, the Audit Committee considered a number of matters but the key issues related to the financial statements were:

• revenue recognition
• developments costs
• acquisition accounting on Delta

The Audit Committee reviews the appointment of external auditors, discusses the nature and scope of the audit and reviews the external auditor’s remuneration, both for audit and non-audit work. The Audit Committee assesses annually the qualification, expertise and resources, the independence of the external auditors, and the effectiveness of the audit process. The Board believes that the level of sales consulting to promote StatPro Revolution provided by Mark Adorian in recent years, in addition to his substantial shareholding, means that he may no longer be considered independent under the UK Corporate Governance Code, although the Board believes that Mark Adorian is independent of mind and continues to act in the interests of all shareholders. All directors have access to the Company Secretary, Andrew Fabian, who is responsible for Company secretarial matters and compliance with relevant statutory obligations. All directors have access to training to enable them to comply with their duties as a director. The Audit Committee reviews the whistleblower policy and process for staff and receives reports on all issues raised through this process. To enable the Board to discharge its duties, all directors have full and timely access to all relevant information. Jane Tozer is the Senior Independent Director and is available to the shareholders for any concerns which have not been resolved by contact with the Chairman, Chief Executive or other executives, or for which such contact is inappropriate.