The Board remains committed to maintaining high standards of corporate governance and to pursuing an approach which is appropriate to the size, nature and complexity of the Group’s activities and which ensures that the Group conducts and operates its businesses in an ethical, responsible and sustainable manner, delivers on its strategic goals and achieves long-term success for the benefit of its shareholders and other stakeholders.
In determining its approach to corporate governance, the Board has taken note of the provisions of the UK Corporate Governance Code issued by the Financial Reporting Council (the “UK Code”), the recommendations incorporated in the Corporate Governance Code for Small and Mid-size Companies issued by the Quoted Companies Alliance (the “QCA Guidelines”) and the guidelines on corporate governance in Finland and has applied them where appropriate after taking due account of the Group’s size, complexity and resources.
The Board of Directors
The role of the Board is to create long-term value for shareholders by establishing clear strategic goals and providing effective leadership. It is the Board’s responsibility to ensure that the management, financial and other resources necessary to deliver the Group’s strategic objectives are available and that appropriate and effective controls are in place to manage business and other risks.
The Board has adopted a schedule of matters specifically reserved for its approval. The principal matters reserved to the Board include:
- Determination of the Group’s strategy
- Approval of annual operating and capital expenditure budgets
- Review of the Group’s performance against budget, business plans and strategy
- Review of health and safety performance and environmental compliance
- Approval of major capital investments, acquisitions or divestments
- Approval of material contracts
- Review of the Group’s system of financial control and risk management
- Senior management development and succession planning
- Remuneration and terms of service of the executive directors
- Appointment of directors and composition of the Board
- Appointment of the auditor and other key advisers
- Maintenance of a dialogue with shareholders and other key stakeholders
Board responsibilities are undertaken in conjunction with the senior executive management who are responsible for the day-to-day conduct of the Group’s operations. Senior management reports directly to the Board on items of significance and on progress against achievement of objectives.
The Board meets regularly during the year as well as on an ad-hoc basis as required.
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Composition of the Board and appointment of Directors
The Board currently consists of seven directors, including a Chairman, two executive directors and four non-executive directors. Three of the non-executive directors are independent directors, one of whom is designated as the Senior Independent Director.
The Chairman is primarily responsible for the workings of the Board and for the strategic development of the Group. Save for matters reserved for decision by the Board, the Chief Executive is responsible for the running of the Group’s businesses, carrying out the agreed strategy adopted by the Board and implementing specific decisions of the Board relating to the operation of the Group.
The role of the independent non-executive directors is to ensure that independent judgement is brought to Board deliberations and decisions. The Board considers each of its independent non-executive directors to be independent in character and judgement and there are no relationships or circumstances which are likely to affect (or could appear to affect) this independence.
Each of the directors is appointed on an annual basis by the Annual General Meeting of shareholders for a term of office that ends at the closure of the next Annual General Meeting. The Directors do not have service contracts and do not have any contractual entitlement to a notice period or compensation for loss of office. Certain of the directors are also engaged by the Group in an executive capacity and further details of their terms and conditions of employment are provided in the Annual Report.
Committees of the Board
In relation to non-reserved matters, the Board is assisted by a number of committees with delegated authority, namely the audit, nomination and remuneration committees. The terms of reference of each committee are available on request from the Company Secretary.
The Audit Committee has primary responsibility for monitoring the quality of the Group’s operating procedures, controls and systems, ensuring that the financial performance of the Group is properly measured and reported on and for reviewing reports from the Group’s external auditor relating to the Group’s accounting and internal controls. The Audit Committee also makes recommendations to the Board with regard to the appointment, independence, fees and terms of engagement of the Group’s auditor.
The principal role of the Nomination Committee is to consider the size, structure and composition of the Board and to identify and propose the appointment of suitable candidates to fill any vacancy that has arisen. The Nomination Committee also directs the Board effectiveness review and reviews training and succession planning arrangements for executive directors and senior management.
The Remuneration Committee is responsible for determining the terms and conditions of service and remuneration of each director including, where appropriate, fees, salaries, bonuses, incentive payments and share option awards. The Remuneration Committee also reviews and approves the performance criteria and methods underlying the performance related pay and share options schemes operated by the Group for the benefit of its senior executive managers.
Risk and uncertainties
The Board has overall responsibility for ensuring that the Group maintains a system of internal procedures and controls which is appropriate to the nature and scale of the Group’s activities and for ensuring that appropriate processes and controls are in place to effectively manage and mitigate the operational, financial and other risks that the Group faces.
The Group operates in a variety of sectors and countries and is exposed to a range of risks and uncertainties, from a strategic, operational, compliance, ethical and financial perspective. Further details of the principal risks and uncertainties faced by the Group and actions the taken to mitigate these risks where possible are provided in the Annual Report.