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The Company is committed to applying the highest principles of corporate governance.
The Board is accountable to the Company’s shareholders for good corporate governance. This report and the Directors’ Remuneration Report describe how the Company complies with the provisions of the Combined Code (2003) (the “Code”).
Compliance
The Company has complied throughout the year with the Code provisions set out in Section 1 of the Combined Code (2003).
Application of the principles
The Board consists of six executive directors who hold the key operational positions in the Company and four non-executive directors, who bring a breadth of experience and knowledge to their roles. This provides a balance whereby the Board’s decision making cannot be dominated by an individual or small group.
Chairman and Chief Executive
The Chairman of the Board is Giles Weaver. The Company’s business is run by Michael Slade, the Chief Executive.
Board balance and independence
As noted above the six executive directors are balanced by four non-executive directors (following John Southwell’s retirement at the 2006 AGM). The Chairman, Giles Weaver, has been a non-executive director of Helical since 1993. In the Company’s view, the experience gained as a chairman or director of several listed companies in the financial sector provides him with the necessary skills of leadership and guidance that the role of Chairman of this Company requires. These skills together with his detachment from day-to-day issues within the Company, and his robustly independent approach to the role of Chairman provide the Board with the necessary comfort that despite his time as a non-executive director he could properly be regarded as independent at the time of his appointment as Chairman.
The Chairman of the Company, Giles Weaver, is also Chairman of the Remuneration Committee because the Company regards the setting of remuneration policy to be an integral and critical function of the Board in a small, people-orientated business such as Helical.
The senior independent director is Antony Beevor. The remaining non-executive directors are Wilf Weeks and Andrew Gulliford. The breadth of experience provided by the non-executive directors allied to the management information provided by the Company enable the non-executive Board members to assess and advise the full Board on the major risks faced by the Company. In view of this we continue to believe that all the non-executive directors are independent and for the purposes of this report are referred to below as independent directors.
The Board of Directors
The Company supports the concept of an effective Board leading and controlling the Company. The Board provides entrepreneurial leadership of the Group within a framework of prudent and effective controls which enables risk to be assessed and managed. The Board sets the Group’s strategic aims, ensures that the necessary financial and human resources are in place for the Group to meet its objectives and reviews management performance. The Board sets the Group’s values and standards and ensures that the Company’s obligations to its shareholders and others are understood and met.
The members of the Board, and the roles of each director are provided under Board of Directors in the Company Profile section of this website.
All directors take decisions objectively in the interests of the Company.
As part of their role as members of the Board, non-executive directors constructively challenge and help develop proposals on strategy. Non-executive directors scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance. They satisfy themselves on the integrity of financial information and that financial controls and systems of risk management are robust and defensible. They are responsible for determining appropriate levels of remuneration of executive directors and have a prime role in appointing, and where necessary removing, executive directors, and in succession planning.
In addition to ad hoc meetings arranged to discuss particular transactions and events and the 2006 AGM, the full Board met on six occasions during 2006/07. The attendance record of the directors in the year 2006/07 is shown in the table below.
| Meetings |
Mr. C.G.H. Weaver |
Mr. M.E. Slade |
Mr. N.G. McNair Scott |
Mr. G.A. Kaye |
Mr. P.M. Brown |
Mr. J.P. Southwell* |
Mr. A.R. Beevor |
Mr. W. Weeks |
Mr. A. Gulliford |
| Full board |
6 |
5 |
5 |
6 |
6 |
2 |
6 |
6 |
5 |
| Audit Committee |
n/a |
n/a |
n/a |
n/a |
n/a |
n/a |
3 |
3 |
2 |
| Remuneration Committee |
6 |
n/a |
n/a |
n/a |
n/a |
n/a |
6 |
6 |
5 |
| Nominations and Appointments Committee |
1 |
n/a |
n/a |
n/a |
n/a |
n/a |
1 |
1 |
1 |
* John Southwell retired from the Board at the 2006 AGM on 20 July 2006.
Note 1: Matthew Bonning-Snook and Jack Pitman were appointed on 1 August 2007
The Board has a schedule of matters specifically reserved to it for decision. The Board controls the business but delegates day-to-day responsibility to the executive management. However, there are a number of matters which are required to be or, in the interests of the Company, should only be decided by the Board of Directors as a whole. A summary of the decisions reserved for the Board is set out below:
Schedule of matters reserved for the Board:
- Strategy and management – responsibility for the overall management of the Group; approval of the Group’s long-term objectives and commercial strategy; approval of annual administration budgets; oversight of the Group’s operations; extension of the Group’s activities into new business areas; any decision to cease to operate all or any material part of the Group’s business.
- Structure and capital – changes to the Group’s capital structure; major changes to the Group’s corporate structure; changes to the Group’s management and control structure; changes to the Company’s listing or plc status.
- Financial reporting and controls – approval of interim and preliminary announcements; approval of annual report and accounts, including the corporate governance statement and the directors’ remuneration report; approval of dividend policy; approval of significant changes in accounting policies or practices; approval of treasury policies.
- Internal controls – ensuring maintenance of a sound system of internal control and risk management.
- Communication – approval of resolutions and documentation to be put to shareholders in general meeting; approval of press releases concerning matters decided by the Board.
- Board membership and other appointments to senior management.
- Both the appointment and removal of the Company Secretary.
- Corporate governance matters including directors’ performance evaluations.
- Approval of policies including code of conduct; share dealing code; health and safety policy; environmental and corporate social responsibility policy and equal opportunity policy.
Nominations and Appointments Committee
The terms of reference of the Nominations and Appointments Committee are available by request and are included on this website.
The membership of the Committee is as follows:
Giles Weaver (Chairman)
Antony Beevor
Wilf Weeks
Andrew Gulliford
Directors – appointments to the Board
Appointments are made on merit and against objective criteria. Care is taken to ensure that appointees have enough time available to devote to the job.
The Nominations Committee controls the process for Board appointments and makes recommendations to the Board. A majority of the Committee are independent non-executive Directors.
The work of the Nomination Committee in 2006/07
The committee met once during the year 2006/07. During the meeting the Committee resolved that Giles Weaver, Andrew Gulliford, Antony Beevor, Michael Slade and Nigel McNair Scott be recommended to shareholders for re-appointment as directors at the 2006 AGM.
Directors – information and professional development
The Board is supplied in a timely manner with information in a form and of a quality appropriate to enable it to discharge its duties and its directors are free to seek any further information they consider necessary.
Under the direction of the Chairman, the Company Secretary’s responsibilities include ensuring good information flows within the Board and its Committees and between senior management and non executive directors, as well as facilitating induction and assisting with professional development as required. The Company Secretary is responsible for advising the Board through the Chairman on all governance matters.
The Board ensures that directors, especially non-executive directors, have access to independent professional advice at the Company’s expense where they judge it necessary to discharge their responsibilities as directors. Training is available for new directors and other directors as necessary.
All directors have access to the advice and services of the Company Secretary, who is responsible to the Board for ensuring that board procedures are complied with.
The Company has arranged appropriate insurance cover in case of legal action against its directors.
Directors – performance evaluation
The Board undertook a formal evaluation of its own performance and that of its Committees and individual directors in the period.
The Chairman is responsible for the annual evaluation process, and will act on its outcome. This process involves each director submitting an appraisal to the Chairman in respect of the performance of the main Board, and in respect of each Board Committee of which they are a member.
The non-executive directors, led by the senior independent non-executive director, are responsible for performance evaluation of the Chairman, taking into account views of executive directors. Each director completed an evaluation of the Chairman’s performance and provided this evaluation to the senior independent non-executive director.
There were no significant matters arising out of the annual evaluation process which required action by the Board.
Directors re–election
All directors are subject to re-election, after receiving the recommendation of the Nominations and Appointments Committee, every three years and, on appointment, at the first AGM after appointment. The Nominations and Appointments Committee recommended the re-appointment of the following directors at the 2007 AGM:
–Giles Weaver has served more than nine years on the Board and in accordance with the Code offered himself for re-election;
–Gerald Kaye was due to retire by rotation and offered himself for re-election; and,
–Michael Brown was due to retire by rotation and offered himself for re-election.
Biographical details of the directors are provided under the Board of Directors in the Company profile section of this website.
Relations with shareholders
The Company values the views of its shareholders and recognises their interest in the Company’s strategy and performance, Board membership and quality of management. It therefore holds regular meetings with, and presentations to, its institutional shareholders to discuss its objectives. The Board also regularly meets, with the help of its brokers, institutions that do not currently hold shares in the Company to inform them of its objectives.
The AGM is used to communicate with private investors and they are encouraged to participate. The members of the Audit, Remuneration and Nominations and Appointments Committees are available to answer questions. Separate resolutions are proposed on each issue so that they can be given proper consideration and there is a resolution to consider the annual report and accounts. The Company counts all proxy votes and will indicate the level of proxies lodged on each resolution, after it has been dealt with by a show of hands.
The Company communicates with all shareholders through the issue of regular press releases and through this website. The Company receives regular reports from sector analysts and its investor relations advisors on how it is viewed by its shareholders.
Accountability and audit
Financial reporting
The Board presents a balanced and understandable assessment of the Company’s position and prospects. It seeks to do so in all published information and in particular in interim and preliminary announcements and other price-sensitive reports and reports to regulators as well as in the information required to be presented by statutory requirements.
Going concern
After making enquiries, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial statements.
Audit Committee and auditors
The terms of reference of the Audit Committee are available by request and are included on the Company’s website at www.helical.co.uk.
The membership of the Committee is as follows:
Antony Beevor (Chairman)
Wilf Weeks
Andrew Gulliford
The Committee endorses the principles set out in the Smith Guidance for Audit Committees.
The Board has formal and transparent arrangements for considering how it applies the financial reporting and internal control principles and for maintaining an appropriate relationship with the Company’s auditors.
Whilst all directors have a duty to act in the interests of the Company, the Audit Committee has a particular role, acting independently from the executive, to ensure that the interests of shareholders are properly protected in relation to financial reporting and internal control.
Appointments to the Audit Committee are made by the Board on the recommendation of the Nominations and Appointments Committee in consultation with the Audit Committee Chairman.
The work of the Audit Committee in 2006/07
The Audit Committee met three times during the year 2006/07. The Audit Committee met the external auditors twice to discuss matters arising from the annual and interim audits. In addition to matters discussed in relation to the annual and interim audits.
In addition to matters discussed in relation to the annual and interim audits, the Committee reviewed the Company’s system of internal control following receipt of the auditors’ review of the design effectiveness of internal controls in March 2006. The key findings and recommendations of this report, which cover governance, operational controls and financial reporting were considered and, where appropriate, were implemented in the year. Those recommendations not immediately implemented will continue to be kept under consideration in future years.
Internal control
The Board is responsible for maintaining a sound system of internal control to safeguard shareholders’ investment and the Company’s assets. Such a system is designed to manage, but cannot eliminate, the risk of failure to achieve business objectives. There are inherent limitations in any control system and, accordingly, even the most effective system can provide only reasonable, and not absolute, assurance against material misstatement or loss.
The key features of the Company’s system of internal control are as follows:
- clearly defined organisational responsibilities and limits of authority. The day-to-day involvement of the executive directors in the running of the business ensures that these responsibilities and limits are adhered to;
- financial controls and review procedures;
- financial information systems including cash flow, profit and capital expenditure forecasts. The Board receive regular and comprehensive reports on the day-to-day running of the business;
- an Audit Committee which meets with the auditors and deals with any significant internal control matter. In the year under review the Committee met with the Auditors on three occasions.
Internal audit
The Board reviewed its position during 2006/07 and reaffirmed its stance that in view of the relatively small size of the Company it does not consider that an Internal Audit function would provide any significant additional assistance in maintaining a system of internal controls.
Audit independence
A policy of reviewing audit independence has been adopted whereby non-audit services undertaken by the auditors is approved prior to work being carried out. During the year under review non-audit services comprised VAT and other taxation advice and accounting, financial reporting and IT advice.
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