The Company complies with the recommendations of the Combined Code on Corporate Governance in so far as these are practical having regard to the size and nature of the Group.
The board comprises three executive and two non-executive directors. In accordance with the articles of association, all directors submit themselves for election by shareholders following their appointment by the board. Furthermore, one third of directors also retire by rotation each year and are therefore subject to re-election at least every three years.
The two non-executive directors on the board are Martin Baldwin who serves as chairman of the board and Richard Hall. Martin Baldwin has a letter of engagement relating to his appointment as non-executive chairman which can be terminated by either party on three months notice. The company has entered into a consultancy agreement with Richard Hall.
The board is satisfied that the two non-executive directors are considered independent under the Higgs review.
The board has responsibility for formulating, reviewing and approving the company's strategy, budgets, risk assessment, major items of capital expenditure, acquisitions and senior personnel appointments. The board meets on a regular basis and has a formal schedule of matters reserved for its decision.
The Audit Committee has been established in accordance with the recommendations of the Smith Guidance. Its principal responsibilities are to assist the board in reviewing and approving the company's financial statements including any significant financial judgements contained therein, monitoring the company's internal financial control and risk management systems and making recommendations to the board with regard to the appointment and remuneration of the external auditors. The board is also responsible for ensuring that the engagement of the external auditors on non-audit services does not impair their independence.
The Audit Committee, which comprises the two non-executive directors and is chaired by Martin Baldwin, meets at least three times a year. The external auditors normally attend meetings and the executive directors may attend if the Audit Committee deems it appropriate or necessary for them to do so. In practice the finance director usually attends meetings.
The Remuneration Committee comprises Martin Baldwin (non-executive chairman) and Richard Hall (non-executive director). Its role is to review the performance of the executive directors and set the scale and structure of their remuneration and the basis of their service agreements with due regard to the interests of the shareholders.
The Remuneration Committee prepares an annual report on the company's remuneration policy which is contained with the company's Annual Report and Accounts.
The board is responsible for maintaining a system of internal controls to safeguard shareholders' investment and the company’s assets. The systems have been established to provide reasonable assurance of effective and efficient operations, financial monitoring, the prevention and detection of errors and irregularities and compliance with laws and regulations. A system cannot however give absolute assurance against material misstatement or loss.
The board regularly review the effectiveness of the company’s system of internal control including financial, operational and risk management. The company does not currently have an internal audit function. However the Audit Committee review this on an annual basis in the light of changes to the company’s circumstances.
The company has an investor relations programme designed to maintain effective relationships with all our shareholders. This includes regular one-to-one meetings with major shareholders and analysts.