The Directors acknowledge the importance of the principles set out in the QCA Corporate Governance Code.
The Board is responsible for the governance of the Company, governance being the systems and procedures by which the Company is directed and controlled. A prescribed set of rules does not itself determine good governance or stewardship of a company and, in fulfilling their responsibilities, the Directors believe that they govern the Company in the best interests of the shareholders, whilst having due regard to the interests of other 'stakeholders' in the Group including, in particular, customers, employees and creditors.
The Chair is responsible for making sure that the Board agenda concentrates on the key issues, both operational and financial, with regular reviews of the Company's strategy and its overall implementation. The Chair should ensure that the Board receives accurate, timely and clear information and there should be good information flows within the Board and its committees as well as between the non-executive directors and senior management.
Non-executive directors should be independent to be able to provide appropriate oversight and to perform their role. The non-executive directors of Northcoders Group plc (NCR):
- have a formal appointment process and a structured induction process of not less than four days, to include meetings with key shareholders, site visits to all subsidiaries of the group, meetings with senior and middle management and meetings with the Company’s auditors, legal counsel and nominated advisor;
- are required to commit an appropriate amount of time to the Company of approximately 10-15 days per annum on an ongoing basis, including attendance at approximately five Board meetings per year, and on regular conference calls with the Board, and to be available to shareholders as required;
- are appointed to the Board committees with formal terms of reference;
- satisfy themselves on the integrity of financial information and that financial controls and systems of risk management are robust and defensible;
- are responsible for determining appropriate levels of remuneration of executive directors and have a prime role in appointing and, where necessary, removing senior management and in succession planning;
- uphold high standards of integrity and probity and support the chairperson and executive directors in instilling the appropriate culture, values and behaviours in the Boardroom and beyond;
- will receive high-quality information sufficiently in advance of Board and committee meetings, which is accurate, clear, comprehensive, up-to-date and timely;
- have access to the Chief Executive, the company secretary, the Chief Financial Officer and the Company's advisers;
- are able to call upon independent professional advice at the Company's expense if they consider it necessary to discharge their responsibilities as directors;
- are expected to receive ongoing training and development; and
- will have their performance assessed on a regular basis (along with the executive director).
The standing committees of the Board are the Audit and Remuneration Committees. At the current time it is not felt that a Nominations Committee is appropriate given the size and scope of the company’s operations, with any tasks and responsibilities in respect to nominations being handled by the Remuneration Committee.
The Audit Committee comprises Nick Parker and Sandy Lindsay and is chaired by Nick Parker. The Company's Auditor is normally in attendance. The Audit Committee reviews the external audit activities, monitors compliance with statutory requirements for
financial reporting and reviews the half year and annual financial statements before they are presented to the Board for approval. The Audit Committee also keeps under review the scope and results of the audit and its cost effectiveness and the independence
and objectivity of the Auditor and the effectiveness of the Group's internal control systems.
The Remuneration Committee comprises Sandy Lindsay and Nick Parker, and is chaired by Sandy Lindsay. Although not a member of the Committee, the Committee would normally consult the Chief Executive on proposals relating to the remuneration of members
of the Group's senior management team, though never for matters related to his own remuneration package. The Committee, on behalf of the Board, determines all elements of the remuneration packages of the executive Directors and would also approve
any compensation arrangements resulting from the termination by the Company of a Director's service contract. The Committee also approves the grant of share options.
Principles and Approach
As an AIM listed company, Northcoders Group plc (NCR) has adopted the Quoted Companies Alliance (QCA) Corporate Governance Code (the Code). The Code identifies ten corporate governance principles that AIM companies should follow. Details of how NCR follows these ten principles are set out below.
1. Establish a strategy and business model which promote long term value for the shareholders
The strategy and business model of the Group are set out in the in the Admission Document available on the Company’s website.
The Group’s strategy and business model are developed by the Chief Executive and his team, and approved by the Board. The management team, led by the Chief Executive, is responsible for implementing the strategy and managing the business of the Group.
With respect to the strategic development of the Group, ongoing progress with rolling out new training centres in the north of England together with the favourable economic backdrop in terms of demand for software developers in the UK, offer the prospect of sustainable long term growth. The Board will review potential acquisitions that are brought to its attention, but the Board’s objective is to deliver long term, sustainable growth from the group’s existing businesses, with particular focus on delivering high quality software training for a wide variety of students and organisations.
2. Seek to understand and meet shareholder needs and expectations
The Group seeks to maintain a dialogue with its shareholders in order to communicate the Group’s strategy and results and to understand the needs and expectations of its shareholder base.
The Board is aware of the need to protect the interests of minority shareholders, and balancing those interests with those of any more substantial shareholders.
Beyond the Annual General Meeting, the Chief Executive and the Chief Financial Officer offer to meet with all significant shareholders after the release of the half year and full year results. The Chief Executive and the Chair are the primary points of contact for the shareholders and are available to answer queries over the phone or via email from shareholders throughout the year.
3. Take into account wider stakeholder and social responsibilities and their implications for long-term success
The Directors are aware of the impact that its business activities have on the communities in which the Group's businesses operate, and is aware of its corporate responsibilities to its stakeholders including staff, suppliers, customers and the wider society. The Group endeavours to take into account feedback received from stakeholders, by making amendments to its business plans and operations as appropriate.
The environmental impact of the Group's activities is carefully considered and the maintenance of high environmental standards is a key priority.
As an AIM listed company with a relatively small head office function, the Company is also reliant on its legal and professional advisors for updates to requirements of social responsibility legislation, such as the Social Media Policy recommended to be in place at all AIM listed companies.
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation
The Board has overall responsibility for the systems of risk management and internal control and for reviewing their effectiveness. The internal controls are designed to manage rather than eliminate risk and provide reasonable but not absolute assurance against material misstatement or loss.
The Board has established Audit and Remuneration Committees a summary of which is set out above, and in this Corporate Governance section.
The Company receives regular feedback from its external auditors on the state of its internal controls and has established an internal audit function led by the Chief Financial Officer, reporting to the Chair and Chief Executive, to systematically review each area of its business to monitor the effectiveness of internal control.
The more significant risks to the Group’s operations and the management of these have been disclosed in some detail in the Admission Document.
The Group maintains appropriate insurance cover in respect of actions taken against the Directors, as well as against material loss or claims against the Group. The insurance cover in place is reviewed on a periodic basis.
5. Maintain the Board as a well-functioning, balanced team led by the Chair
The Board considers itself sufficiently independent. The QCA Code suggests that a board should have at least two independent non-executive directors. The Board have considered each non-executive directors’ length of service and interests in the share capital of the Group and consider that Sandy Lindsay and Nick Parker are independent of the executive management and free from any undue extraneous influences which might otherwise affect their judgement. All board members are fully aware of their fiduciary duty under company law and consequently seek at all times to act in the best interests of the Company as a whole.
Whilst the Company is guided by the provisions of the Code in respect of the independence of directors, it gives regard to the overall effectiveness and independence of the contribution made by directors to the Board in considering their independence, and does not consider a director’s period of service in isolation to determine this independence.
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
Directors who have been appointed to the Company have been chosen because of the skills and experience they offer and their personal qualities and capabilities. Full biographical details of the Directors are included under “the Board” section of the website which give an indication of their breadth of skills and experience.
The Board regularly reviews the composition of the Board to ensure that it has the necessary breadth and depth of skills to support the ongoing strategy of the Group.
The Chair and the Company Secretary ensure each director’s skillset is kept up to date. During the course of the year, the Directors received updates from the Company Secretary in relation to corporate governance matters. Each Director takes responsibility for maintaining his skill set, which includes roles and experience with other boards and organisations as well as formal training and seminars.
Non-executive directors have a contractual right to external advice, at the Company's expense, when necessary.
7. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
The non-executive directors monitor the personal and corporate performance of the Chief Executive, including asking the Company’s senior management, auditors, and other advisors to report on his performance.
The Chief Executive participates in an annual performance related bonus arrangement. As soon as reasonably practicable after the announcement of the preliminary results or the publication of the accounts of the Company for each financial year, the Remuneration Committee considers the performance of the Company and the Chief Executive in that year against relevant targets and then, in its absolute discretion, determines the value of any bonus to be received by the Chief Executive in respect of that year. This bonus shall not exceed 100 per cent of his base salary. None of the non-executive directors receive any share options or any performance related bonuses.
The Board considers the need for the periodic refreshing of its membership. The Chair was appointed in July 2021, and a new non-executive director was appointed in July 2021.
Succession planning is considered by the entire Board.
The Chair will conduct an effectiveness review by means of a questionnaire, with comment on the Chair passed to the Senior Independent Director. Comments will also be made on non-executive directors and the Committees’ effectiveness. The results of this exercise will be reviewed and individual feedback will be provided for each of the Directors, and the Board as a whole. Feedback will be provided by the Chair in respect of assessments of each of the other Directors and the Board as a whole, and by the Senior Independent Director to the Chair himself.
The outcome of the appraisal is to assess if the Board has been effective in discharging its duties during the year and it will be formally discussed at a Board meeting, with conclusions in the areas of major shareholder representation in the Board, how the NEDs interact with the Board, the development of strategy and the presentation of recommendations to the Board.
8. Promote a corporate culture that is based on ethical values and behaviours
NCR has no formal values statement but the business is still driven by a guiding set of principles or ways of behaving and doing business. The Group is focused on principled performance, and transparent reporting from the businesses to the Board, and from the Board to the Shareholders and advisors through regular meetings, presentations, the Annual Report and at the Annual General Meeting.
Senior management are encouraged to take personal responsibility for achieving the Group’s objectives and to act with openness, integrity and trust. Staff are encouraged to ask for help, admit to their mistakes and put things right. The Group does not operate a blame culture. The non-executive members of the Board are encouraged to have open dialogues with senior management around the Group about their opinions and concerns.
Senior management across the organisation are comfortable coming forward with legal, compliance, and ethics questions and concerns without fear of retaliation at the frequent subsidiary level Board meetings, which are all attended by the Chief Executive and the Group’s Chief Financial Officer.
The Group recruits and screens employees based on integrity, as well as competence. Employees are well-treated when they leave or retire.
The Group has in place an anti-bribery policy and an anti-slavery policy which are both reviewed at appropriate intervals.
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board
The Board has overall responsibility for the strategic direction and performance of the Group. The executive directors have day-to-day responsibility for the operation of the Group’s businesses and implementing the strategy of the Board.
The Board meets at least five times per year. The Board is provided with detailed financial reports of the Group's financial performance on a regular monthly basis with more frequent updates if required. Detailed written reports are provided one week prior to the Company's Board meetings. Written recommendations from the executive directors are delivered in a timely manner with supporting documentation, supplemented as required by reports from external professional advisers so that the Board can constructively challenge recommendations before making decisions.
The Company’s auditors report on the financial controls in detail at the Audit Committee meeting held in May.
The Chief Executive Officer and the Chair are the primary points of contact for the shareholders and are available to answer queries over the phone or via email from shareholders throughout the year.
The Group has an Audit and Remuneration committee. The Audit Committee comprises Nick Parker and Sandy Lindsay and is chaired by Nick Parker. The Remuneration Committee comprises Sandy Lindsay and Nick Parker, and is chaired by Sandy Lindsay.
Formal terms of reference have been agreed for both Board Committees. The responsibilities of each of these have been summarised below:
- To meet at least twice a year and otherwise as required, with the external auditor in attendance
- Appointment of external auditors
- To agree the nature and scope of the audit with the external auditors
- To review the effectiveness of Company's internal control framework,
- To review effectiveness of the Company's risk management framework
- To review the annual financial statements, and challenge where necessary, the actions and judgements of management in relation to these; and
- To attend the Annual General Meeting to answer any shareholder queries
- To set the remuneration for the Board including basic pay, any bonus basis and awards and participation in share incentive schemes.
- To agree the terms of employment of all Board members, including those on cessation of employment, ensuring all payments are fair to both the employee and the Company.
- To continue to review the appropriateness of the remuneration policies, with reference to the conditions across the Group and up-to-date information in other companies.
- To ensure that all requirements on the disclosure of remuneration are fulfilled
- To meet at least twice a year and otherwise as required
- To attend the Annual General Meeting to answer any shareholder questions on the Committee's activities
10. Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
The Chief Executive and the Chief Financial Officer offer to meet with all significant shareholders after the release of the half year and full year results, and encourage all shareholders to attend and ask questions of the Board as a whole at the Annual General Meeting.
The Chief Executive and the Chair are the primary points of contact for the shareholders and are available to answer queries over the phone or via email from shareholders throughout the year.
There is a strong focus on transparent reporting in the half year interim results and annual report, including the challenges faced by the Group both in the reporting periods and in the future.
The Group’s website is regularly updated. The Group’s financial reports and Annual Reports can be located under the “Financial Results and Reports” section of the website. Notices of the General Meetings of the Company can be located under the “Shareholder Circulars” section of the website.
The results of voting on all resolutions at future general meetings will be posted to the Group’s website, including any actions to be taken as a result of resolutions of which votes against have been received by a significant proportion of votes.
The Group intends to include a remuneration committee report and audit committee report in its next Annual Report.
Page last updated: 10 August 2021