Corporate Governance
The Board supports the principles of corporate governance advocated by The Principles of Good Governance and Code of Best Practice (the ‘ Combined Code’) issued by the Financial Services Authority. The Company is moving towards applying the principles of the Combined Code as indicated below.
The Board
The Group’s business is managed by the Board of Directors. The full Board meets regularly. A discussion of current and future performance and strategy is included on the agenda for each meeting. In addition, terms of reference for full Board approval are in place, which includes, inter alia, the approval of annual and interim results, significant transactions, major capital expenditures, the yearly business plan and budget, the Group’s long term commercial strategy, establishing financial authority limits, litigation, and executive remuneration and appointments.
Each Board member receives monthly management accounts including a review and analysis of performance against budget and other forecasts. Directors are sent an agenda and a full set of Board papers for each agenda item to be discussed at the meeting. Additional information is provided as appropriate.
The Board currently consists of six directors, three of whom are non-executive. The Company has an Executive Chairman. Steve Ludlow and Keith Lough are considered by the board to be free from any business or other relationship that could materially impact their independent judgement. The non –executive directors receive a fixed fee for their services and all non –executive directors receive the reimbursement of reasonable expenses incurred in attending meetings.
There is an agreed procedure for directors to take independent professional advice at the Company’s expense. In addition, every director has direct access to the impartial advice of the Company Secretary. The Company Secretary is responsible for ensuring that Board procedures and applicable rules and regulations are followed.
While the Board retains overall responsibility for the Company, the day to day management of the business is conducted by the executive directors. In addition, in accordance with best practice, the Board has established Audit, Nomination and Remuneration Committees with written terms of reference for each that set out their duties and authority.
Committees of the Board
Audit Committee
The members of the committee comprise Keith Lough (Chairman), Steve Ludlow and Thierry Le Roux and as noted above both Keith Lough and Steve Ludlow are considered to be independent non-executive directors. The Committee’s terms of reference are principally concerned with accounting matters, financial reporting and internal controls. The Committee will meet not less than three times a year (two meetings have been held to date which had a 100% attendance) to review all significant judgements made in the preparation of the half-yearly and annual accounts, before they are submitted to the Board. It agrees with the auditors the nature and scope of their work and discusses with them the results thereof. The Committee has the power to seek external advice as and when required. In addition the Audit Committee makes recommendations to the Board regarding the appointment of the external auditors, reviews their independence and objectivity and is also responsible for agreeing the level of audit fees and monitoring the provision of non audit services provided by the Group’s Auditors.
Remuneration Committee
The Remuneration Committee meets as and when required. It comprises Steve Ludlow (Chairman), Keith Lough and Thierry Le Roux and as noted above both Keith Lough and Steve Ludlow are considered to be independent non-executive directors. The Committee’s objective is to develop remuneration packages for executive directors that enable the Group to attract, retain and motivate executives of the appropriate calibre without paying more than is necessary. No director is involved in deciding his or her remuneration. The Board’s policy on executive remuneration and the details of executive director’s individual remuneration packages are fixed by the Committee or the Board.
Nomination Committee
The Nomination Committee meets as and when required. It considers the appointment of both executive and non-executive directors and makes recommendations to the Board. It comprises Dave Pratt (Chairman), Keith Lough, Thierry Le Roux and Steve Ludlow and as noted above both Keith Lough and Steve Ludlow are considered to be independent non-executive directors. All directors are required to submit themselves for re-election by the shareholders at the Company’s Annual General Meeting following their first appointment and thereafter at least every three years. Notwithstanding this, at least one third of all the directors must submit themselves for re-election each year.
Internal Control
The Board is responsible for establishing and monitoring internal control systems, and for reviewing the effectiveness of these systems. The Board views the effective operation of a rigorous system of internal control as critical to the success of the Group, however it recognises that such systems can provide only reasonable and not absolute assurance against material misstatement or loss. The key elements of the Group’s internal control system are as follows:
Control environment
The Group has a clear organisational structure with defined responsibilities and accountabilities. It adopts the highest values surrounding quality, integrity and ethics, and these values are documented and communicated clearly throughout the whole organisation.
Identification and evaluation of risks
The Board actively identifies and evaluates the risks inherent in the business, and ensures that appropriate controls and procedures are in place to manage these risks.
Control procedures
Detailed written policies and procedures have been established covering key financial operating and compliance risk areas. These will be reviewed and updated at least annually by the Board. Due to the nature of the Group’s operations and its size, the Board considers that there is no current requirement for an internal audit function, although it will continue to review the requirement for such a function on a periodic basis.
Performance Evaluation
The performance of the Executive Chairman and each director will be formally evaluated on an annual basis. The non-executives will meet annually, and whenever deemed necessary, to appraise the Executive Chairman’s performance in the absence of the Executive Chairman. The performance of non-executive directors, will be reviewed by the Executive Chairman and executive directors on an annual basis. The performance of executive directors will be reviewed by the Board, as deemed necessary, in the absence of the executive director under review.
Relations with shareholders
The Company is committed to constructive dialogue with its shareholders. The Company uses the Annual General Meeting as an opportunity to communicate with its shareholders. In line with the Combined Code the notice of the AGM is sent to shareholders at least 20 working days before the meeting. Details of the resolutions and explanatory notes thereon are included with the Notice along with a proxy form for members of the Company unable to attend.
The Group’s website (www.OHMsurveys.com) is the primary source of information on the Group. This includes an overview of the activities of the Group, and details of all recent Group announcements.
Statement of compliance
The directors are satisfied that, with the exception of those areas indicated above, the Company is complying with the Code provisions set out in section 1 of the Combined Code.
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