As an AIM listed company Redcentric plc is not required to comply with the principles and provisions of the UK Corporate Governance Code published by the Financial Reporting Council in September 2012. The Board of Redcentric plc is committed to the principles of good corporate governance and follows, so far as is practicable and appropriate in view of the Group’s size, stage of development and the nature of the Company the provisions of the UK Corporate Governance Code and complies with the provisions of the QCA Guidelines.
The Board of Directors
The Board comprises the non-executive Chairman, Chris Cole, the Chief Executive Officer, Fraser Fisher, non-executive Directors Stephen Puckett and Tony Weaver and Senior Independent non-executive Director David Payne. The business and management of the Company and its subsidiaries are the collective responsibility of the Board. At each meeting, the Board considers and reviews the trading performance of the business. The Board has a formal written schedule of matters reserved for its review and approval. These include the approval of the annual budget, major capital expenditure, investment proposals, the interim and annual results, and a review of the overall system of internal control and risk management. There are three standing Board Committees: Audit, Nominations and Remuneration. Each of these Committees acts within defined terms of reference. Additional information is set out in the latest Annual Report and also in the Directors’ Remuneration Report in respect of the Remuneration Committee.
Authority for the execution of the approved policies, business plan and daily running of the business is delegated to the executive Directors.
The Company’s Articles of Association require that Directors appointed by the Board during the year must seek re-appointment at the next Annual General Meeting. All Directors have access to the advice and services of the Company Secretary who is responsible for ensuring that Board procedures and applicable rules and regulations are observed. The Board has a procedure whereby any Director may seek, through the office of the Company Secretary, independent professional advice, at the Company’s expense, in furtherance of his duties. Formal agendas and reports are provided to the Board on a timely basis for Board and Committee meetings and the Chairman ensures that all Directors are properly briefed on issues to be discussed at Board meetings. Directors are able to obtain further advice or seek clarity on issues raised at the meetings from within the Company or from external sources. All Directors are subject to appraisal by the Board. The non-executive Directors are responsible for the evaluation of the Chairman.
The Nominations Committee consists of David Payne (Chairman) and Stephen Puckett. For nominations, the Committee meets as and when necessary to consider the appointment of new executive and non-executive Directors. A process is in place for the appointment of new Directors involving, if felt appropriate, the use of external consultants followed by meetings with both the Committee and subsequently with the Board as a whole. This ensures that the selection process is both formal and objective. The Committee has formal terms of reference (available on request from the Company Secretary) and meets at least once a year to review succession planning at both Board and senior management level across the Group.
The Remuneration Committee consists of David Payne (Chairman) and Stephen Puckett. Details of the Committee and its policies are set out in the latest Annual Report. The Committee has formal terms of reference (available on request from the Company Secretary).
The Audit Committee consists of Stephen Puckett (Chairman) and David Payne. The Committee has formal terms of reference (available on request from the Company Secretary). These include the recommendation of, appointment, re-appointment and removal of the external auditors, the review of the scope and results of the interim review and external annual audit by the auditors, their cost effectiveness, independence and objectivity. The Committee also reviews the nature and extent of any non-audit services provided by the external auditors. In addition, the Committee reviews the effectiveness of internal controls, considers the need for an internal audit function and considers any major accounting issues and reports on such matters to the Board. The Committee reviews the integrity of the financial statements and formal announcements. A whistle-blowing arrangement exists whereby matters can be confidentially reported to the Committee. The executive Directors are not members of the Committee but attend the meetings by invitation, as necessary, to facilitate its business.
The Chief Financial Officer monitors the level and nature of non-audit services and specific assignments are flagged for approval by the Audit Committee as appropriate. The Audit Committee reviews non-audit fees and considers implications for the objectivity and independence of the relationship with the external auditors. The Board is satisfied that the Chairman of the Audit Committee has recent and relevant financial experience necessary to meet the requirements of the Combined Code.
The Board has overall responsibility for the Group’s system of internal control and for reviewing its effectiveness. The implementation and maintenance of the risk management and internal control systems are the responsibility of the executive Directors and senior management. The internal control system is designed to manage risk rather than eliminate it and can therefore only provide reasonable and not absolute assurance against material misstatement or loss. In accordance with the guidance set out in the Turnbull Guidance on Internal Control, the Group has an on-going process for identifying, evaluating and managing the significant risks faced by it. The Group is committed to maintaining high standards of business conduct and operates under an established internal control framework covering financial, operational and compliance controls. This is achieved through an organisational structure that has clear reporting lines and delegated authorities. The reporting lines and delegated authorities are clearly defined. The management and monitoring of risk and performance occurs at multiple levels throughout the Group. In addition, the Group maintains written processes to control expenditure, authorisation limits, purchase ordering, sales order intake, project management, inventories and assets. The Board receives monthly financial information which includes key performance and risk indicators and the Chief Executive Officer and the Chief Financial Officer report on significant changes in the business and the external marketplace to the extent they represent significant risk. There is an established budgetary system with an annual budget approved by the Board. The Board reviews the results monthly against budget, forecasts and prior year actual figures together with other business measures. The principal treasury related risks are documented and approved by the Board.
Relations with shareholders and investors
Copies of the Annual Report and Accounts are issued to all shareholders who have requested them and copies are available on the Group’s website. The Half Year Report is also available on the Group’s website. The Group makes full use of its website to provide information to shareholders and other interested parties. The Company Secretary also deals with a number of written or e-mailed enquiries throughout the year.
Shareholders are given the opportunity to raise questions at the Annual General Meeting and the Directors are available both prior to and after the meeting for further discussion with shareholders.
During the year, the Chief Executive Officer and the Chief Financial Officer meet with institutional investors after the announcement of the results. Additional meetings are arranged during the period by the Group’s brokers, finnCap Limited and Numis Securities Limited. Feedback arising from these meetings is communicated to the Board and the Company Secretary also reports to the Board if there is feedback from other shareholders. David Payne, as Senior Independent non-executive Director, is available to shareholders if they wish to raise any matters that contact through the normal channels of non-executive Chairman, Chief Executive, Chief Financial Officer or Company Secretary has failed to resolve or for which such contact is inappropriate.
The Directors are required by the Combined Code to be satisfied that the Group has adequate resources to continue in business for the foreseeable future. A review has been conducted and the Directors have concluded that such resources are available and that the going concern basis is justified in the preparation of the financial statements.