The Company is committed to high standards of corporate governance and supports the principles laid down in the UK Corporate Governance Code issued by the Financial Reporting Council in 2016 (the ‘Code’). The Board considers that the Company has been in compliance with the principles and provisions of the Code, with the exception of those outlined below, throughout the year ended 31 December, 2016 and to the publication date of the 2016 Annual Report.
a) The Board of Directors represents the shareholders’ interests in maintaining and growing a successful business including optimising consistent long-term financial returns.
b) As at 31 December 2016, the Board comprised two Executive Directors and three Non-executive Directors. The Chairman is responsible for the leadership of the Board and ensuring its effectiveness. The different roles of the Chairman and Chief Executive Officer are acknowledged. The senior independent Non-executive Director is Michael Hartley who is available to shareholders, if they have concerns that are not able to be resolved through normal channels. Three Non-executive Directors, Peter Read, Michael Hartley and Jess Burley are considered by the Board to be independent. During the year. Timothy Chadwick (resigned 24 May 2016) and Christopher Mills (resigned 24 May 2016) were not deemed to be independent because of their relationship with Harwood Capital LLP, which was a major shareholder. Bob Morley, (resigned 31 March 2016), who co- founded the Group and previously served as a Director until May 2012, was also not deemed independent.
There are a number of standing Committees of the Board to which various matters are delegated. They all have formal terms of reference approved by the Board which are available on the Company’s website (www.quarto.com).
c) The Board met eight times in 2016. Attendance details are set out above. A formal agenda is prepared for each meeting and all board papers and information are circulated to the Board at least a week before the meetings.
d) All of the Directors are subject to re-election by the shareholders at the Annual Meeting. The Board is satisfied to support the re-election of Peter Read, Mike Hartley and Jess Burley as non-executive Directors as they have individually produced excellent performance in their duties and have shown a high level of commitment to their roles.
e) The remuneration of the Executive Directors is recommended by the Remuneration Committee, comprising Jess Burley, who is the Committee Chairman, Michael Hartley and Peter Read. A separate report with respect to Directors’ remuneration is included on pages 55 to 61. The Committee meets at least three times a year. At year end 31 December 2016 the Committee had met four times.
f) The Audit Committee is comprised of Michael Hartley, who is Committee Chairman, and Jess Burley. The Board is satisfied that Michael Hartley, together with Jess Burley, has appropriate financial experience to fulfil their role. Further details of the Committee’s work can be found on pages 43 to 45.
g) The Nominations Committee is comprised of Peter Read, who is Committee Chairman, Michael Hartley, Jess Burley and Marcus Leaver. Details of the work of the Nominations Committee during the year are set out in its report on page 42.
h) A formal review of the performance of the Board, its Committees and the Directors was carried out before the year end, led by the Chairman and assisted by the Company Secretary. A questionnaire was used as part of the process and individual performance was reviewed by the Chairman. The Chairman’s own performance was subject to a review led by the Senior Independent Director. The output from the appraisal confirmed that the Board and its Committees were operating effectively.
i) The Chief Executive Officer and Chief Financial Officer are responsible for investor relations. They meet with major shareholders during the course of the year to ensure that they develop an understanding of their views, which are communicated to the rest of the Board at Board meetings. The Non-executive Chairman and Senior Independent Director meet with major shareholders from time to time. Shareholders are invited to attend the Annual Meeting at least twenty-one days in advance of the meeting. All Directors attend the meeting which is used to communicate with shareholders.
j) The Board has a procedure for Directors to take independent professional advice at the Company’s expense, if required.
k) All Directors have access to the advice and services of the Company Secretary.
l) Quarto has arranged appropriate insurance cover in respect of legal action against the Directors.
m) The Company has an established whistle-blowing policy.
The Board will continue to review its corporate governance arrangements, in the light of the Code, as the Group develops and grows, and in particular will review those provisions that are not currently complied with.
Remuneration Committee Terms of Reference
The Terms of Reference for the Remuneration Committee can be downloaded here: Remuneration Committee Terms of Reference
Nomination Committee Terms of Reference
The Terms of Reference for the Nomination Committee can be downloaded here: Nomination Committee Terms of Reference
Audit Committee Terms of Reference
The Terms of Reference for the Audit Committee can be downloaded here: Audit Committee Terms of Reference
Schedule of Matters Reserved for the Board
The Schedule of Matters Reserved for the Board can be downloaded here: Matters Reserved for the Board
2016 Annual Report
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23 June 2017
23 June 2017
19 June 2017