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 2014 (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 December 31, 2015 and to the date of this 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) The Board comprises two Executive Directors and five 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 which are not able to be resolved through normal channels. Two Non-executive Directors, Michael Hartley and Jess Burley are considered by the Board to be independent. Timothy Chadwick and Christopher Mills are not deemed to be independent because of their relationship with Harwood Capital LLP, which was a major shareholder. Bob Morley, who co-founded the Group and previously served as a Director until May 2012, is 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 seven times in 2015. Attendance details are set out below. A formal agenda is prepared for each meeting and all board papers and information are circulated to the Board at least forty-eight hours before the meetings.
d) All of the Directors are subject to re-election by the shareholders at the Annual Meeting. Timothy Chadwick and Christopher Mills will not put themselves forward for re-election at the Annual Meeting. The Board is satisfied to support the re-election of 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 Michael Hartley who is the Committee Chairman, Timothy Chadwick, Jess Burley and Christopher Mills. A separate report with respect to Directors’ remuneration is included on pages 46 to 62. The Committee meets at least twice a year.
f) The Audit Committee is comprised of Michael Hartley who is Committee Chairman, Jess Burley and Christopher Mills. The Board is satisfied that Michael Hartley, together with Jess Burley and Christopher Mills, has appropriate financial experience to fulfil his role. Further details of the Committee’s work can be found on pages 42 to 45.
g) Details of the work of the Nominations Committee during the year are set out in its report on page 63.
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.
A.3.1. – As noted above, the Chairman of the Board was not independent at the date of appointment. Upon his anticipated election at the Annual Meeting as Chairman of the Board, Peter Read will be independent.
B.2.1. – The Nomination Committee is not composed of a majority of independent Non-executive Directors. The Board is however satisfied that its current composition enables the Committee to benefit from a broad range of views and does not inhibit it from following a formal, rigorous and transparent procedure when appointing new directors.
C.2.1. – During the year end, the Directors commenced a robust assessment of the principal business risks including those that would jeopardise its business model, future performance, solvency or liquidity. Since the year end, this assessment has been formally documented in a risk register which also details the effectiveness of the controls in place. 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.
The Directors consider that the annual report and accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group’s performance, business model and strategy.
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
2015 Annual Report
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28 March 2017
28 March 2017
24 March 2017