Corporate Governance

Corporate Governance

Updated: 25 September 2018


The Board is fully committed to investing in the management systems and appropriate controls to ensure that the Group's high standard of corporate governance is reflective of the quality of its operations and service.

The Directors recognise the importance of sound corporate governance commensurate with the size and nature of the Company and the interests of its shareholders.

The Quoted Companies Alliance has published a corporate governance code for small and mid-sized quoted companies, which includes a standard of minimum best practice for AIM companies, and recommendations for reporting corporate governance matters (the “QCA Code”). Bilby has adopted the QCA Code.


Corporate governance report

The QCA Code sets out 10 principles which should be applied. These are listed below together with a short explanation of how the Group applies each of the principles. Where the Group does not fully comply with each principle an explanation as to why has also been provided:


Principle One

Business Model and Strategy

The Board has a adopted a strategy for each business activity as outlined in the section. Please click here for more information on our strategy.


Principle Two

Understanding Shareholder Needs and Expectations

The Board is committed to maintaining good communication and having constructive dialogue with its shareholders on a regular basis. Institutional shareholders and analysts have the opportunity to discuss issues and provide feedback at meetings with the Company. In addition, all shareholders are encouraged to attend the Company’s Annual General Meeting and any other General Meetings that are held throughout the year. Investors also have access to current information on the Company though its website, www.bilbyplc.com.


Principle Three

Stakeholder Responsibilities

The Board recognises that the long term success of the Group is reliant upon the efforts of the employees of the Group and its contractors, suppliers and regulators. The Board has put in place a range of processes and systems to ensure that there is close Board oversight and contact with its key resources and relationships. For example, all employees of the Group participate in a structured Group-wide annual assessment process which is designed to ensure that there is an open and confidential dialogue with each person in the Group to help ensure successful two way communication with agreement on goals, targets and aspirations of the employee and the Group. This appraisal process helps to ensure that the Group can respond to new issues and opportunities that arise to further the success of employees and the Group. In addition the Board ensures that all key relationships with, for example, customers and suppliers are the responsibility of, or are closely supervised by, one of the Directors or the Finance Director.


Principle Four

Risk Management

In addition to its other roles and responsibilities the Audit Committee is responsible to the Board for ensuring that procedures are in place, and are being effectively implemented to identify, evaluate and manage the significant risks faced by the Group. Please click here for more information on the risk analysis.

Whistleblowing

The Company has established procedures by which employees may, in confidence, raise concerns relating to danger, fraud, or other illegal or unethical conduct in the workplace. The whistleblowing policy applies to all employees of the Group, consultants, casual workers and agency workers.

The Audit Committee is responsible for monitoring the Group’s arrangements and the policy is reviewed periodically by the Board.


Principle Five

A Well-Functioning Board of Directors

The time commitment formally required by the Group is an overriding principal that each Director will devote as much time as is required to carry out the roles and responsibilities that the Director has agreed to take on. Biographical details of the current Directors can be reviewed here. Executive and Non-Executive Directors are subject to re-election intervals as prescribed in the Company’s Articles of Association.

The Executive Directors are employed under service contracts requiring six months’ notice by either party. Non-Executive Directors and the Chairman receive payments under appointment letters.

The Non-Executive Chairman receives a fee for her services as a Director which is approved by the Board, being mindful of the time commitment and responsibilities of their roles and of current market rates for comparable organisations and appointments.

The Board encourages the ownership of shares in the Company by Executive and Non-Executive Directors alike and in normal circumstances does not expect Directors to undertake dealings of a short-term nature.

The Board considers ownership of Company shares by Non-Executive Directors as a positive alignment of their interest with shareholders. The Board will periodically review the shareholdings of the Non-Executive Directors and will seek guidance from its advisors if, at any time, it is concerned that the shareholding of any Non-Executive Director may, or could appear to, conflict with their duties as an independent Non-Executive Director of the Company or their independence itself. Directors’ emoluments, including Directors’ interest in share options over the Group’s share capital, are set out in the table below:




The Board has established an Audit Committee and a Remuneration Committee, particulars of which appear hereafter. The Board agreed that appointments to the Board are made by the Board as a whole and so has, thus far, not created a Nomination Committee.


Attendance at Board and Committee Meetings

The time commitment formally required by the Group is an overriding principal that each Director will devote as much time as is required to carry out the roles and responsibilities that the Director has agreed to take on. Biographical details of the current Directors can be reviewed here. Executive and Non-Executive Directors are subject to re-election intervals as prescribed in the Company’s Articles of Association.

Principle Six

AAppropriate Skills and Experience of the Directors and a Group Company Secretary

The Board currently consists of five Directors. The Board recognises that it currently has a limited diversity and this will form a part of any future recruitment consideration if the Board concludes that replacement or additional Directors are required.

The Company acknowledges that the guidance in the QCA Code is for a company to have at least two independent Non-Executive Directors. The Directors are satisfied that the Company's Board composition is appropriate given the Company's size and stage of development. The Board will keep this matter under regular review and to the extent additional independence is felt to be required on the Board, it shall be sought.

All Directors have access to the Company Secretary who is responsible for ensuring that Board procedures and applicable rules and regulations are observed.


Principle Seven

Evaluation of Board Performance

Internal evaluation of the Board, the Committee and individual Directors is seen as an important next step in the development of the Board and one that will be addressed during the remainder of 2018. The aim is that this will be undertaken on annual basis in the form of peer appraisal, questionnaires and discussions to determine the effectiveness and performance in various areas as well as the Directors’ continued independence.


Principle Eight

Corporate Culture

The Board recognises that their decisions regarding strategy and risk will impact the corporate culture of the Group as a whole and that this will impact the performance of the Group. The Board is very aware that the tone and culture set by the Board will greatly impact all aspects of the Group as a whole and the way that employees behave. A large part of the Group’s activities is centered upon addressing customer and market needs. Therefore, the importance of sound ethical values and behaviours is crucial to the ability of the Group to successfully achieve its corporate objectives. The Board places great importance on this aspect of corporate life and seeks to ensure that this flows through all that the Group does. The Board assessment of the culture within the Group at the present time is one where there is respect for all individuals, there is open dialogue within the Group and there is a commitment to provide the best service possible to all the Group’s customers.

The Company has adopted a code for Directors’ and employees’ dealings in securities which is appropriate for a company whose securities are traded on AIM, and is in accordance with Rule 21 of the AIM rules and the Market Abuse Regulation.


Principle Nine

Maintenance of Governance Structures and Processes

Ultimate authority for all aspects of the Group’s activities rests with the Board, the respective responsibilities of the Chairman and the Executive Board members arising as a consequence of delegation by the Board. The Board has adopted two statements; the first sets out matters which are reserved to the Board and the second establishes the division of responsibilities between the Chairman and the Executive Board members. The Chairman is responsible for the effectiveness of the Board, while management of the Group’s business and primary contact with shareholders has been delegated by the Board to the Executive Board members.

There are two main elements of the remuneration package for Executive Directors and staff: 1. Basic salaries and benefits in kind: Basic salaries are recommended to the Board by the Remuneration Committee, taking into account the performance of the individual and the rates for similar positions in comparable companies. Certain benefits in kind are available to certain senior staff and Executive Directors.

Salaries and benefits were last reviewed in March 2018. Future reviews will be held in March each year for implementation from 1 April to enable the Group’s performance over the preceding year and the strategy for the forthcoming year to be considered.

2. Share options: The Company operates approved and unapproved share option schemes for Executive Directors and other employees to motivate those individuals through equity participation. Exercise of share options under the schemes is subject to specified exercise periods and compliance with the AIM Rules. The schemes are overseen by the Remuneration Committee which recommends to the Board all grants of share options based on the Remuneration Committee’s assessment of personal performance and specifying the terms under which eligible individuals may be invited to participate. It is intended that the performance related elements of remuneration form a significant proportion of the total remuneration package of Executive Directors and be designed to align their interests with those of shareholders. In this development phase of the Group the Remuneration Committee currently considers that the best alignment of these interests is through the continued use of incentives for performance through the award of share options.

Non-Executive Directors

The Board has adopted guidelines for the appointment of Non-Executive Directors which have been in place and which have been observed throughout the year. These provide for the orderly and constructive succession and rotation of the Chairman and Non-Executive Directors insofar as both the Chairman and Non-Executive Directors will be appointed for an initial term of three years and may, at the Board’s discretion believing it to be in the best interests of the Company, be appointed for subsequent terms. The Chairman may serve as a Non-Executive Director before commencing a first term as Chairman. In accordance with the Companies Act 2006, the Board complies with: a duty to act within their powers; a duty to promote the success of the Company; a duty to exercise independent judgement; a duty to exercise reasonable care, skill and diligence; a duty to avoid conflicts of interest; a duty not to accept benefits from third parties and a duty to declare any interest in a proposed transaction or arrangement.

Share Dealing Code

The Company has adopted a share dealing code for the Directors and applicable employees of the Group for the purpose of ensuring compliance by such persons with the provisions of the AIM rules relating to dealings in the Company’s securities. This particularly applies to the provisions of Rule 21 of the AIM Rules and the Market Abuse Regulation. The Directors consider the share dealing code is appropriate for a company whose shares are admitted to trading on AIM.

Board Effectiveness

The Board comprises the Non-Executive Chairman, one other Non-executive Director and three Executive Directors.

There is a clear separation of the roles of the Chairman and the Executive Directors to ensure an appropriate balance of power and authority:

  • providing entrepreneurial leadership of the Company within the framework of prudent and effective controls which enable risks to be assessed and managed;
  • setting the Company’s strategic aims, objectives, strategy and policies, and ensuring that the necessary financial and human resources are in place for the Company to meet its objectives;
  • reviewing management performance;
  • setting the Company’s values and standards and ensuring that the Company’s obligations to its shareholders and others are understood and met;
  • approving substantial transactions, contracts and commitments;
  • reviewing the performance of the Company; undertaking risk assessments; and
  • scrutinising and approving senior appointments to the management team.
  • Timings

The key procedures which exist to provide effective internal control are as follows

  • holding regular Board, Audit and Remuneration Committee meetings;
  • clear limits to authority;
  • annual profit and loss and cash flow forecasts, with a quarterly reforecast procedure;
  • review of management information; financial controls and procedures; and review of risks and internal controls.

Executive Directors are responsible for the implementation of strategy and policies and for the day-to-day decision making and administration of the Company.

The Non-Executive Directors bring additional experience and knowledge and are independent of management. This provides a balance whereby an individual or small group.

Audit Committee

The Audit Committee is of Sangita Shah (Chair) and David Johnson. Meetings are also attended, by invitation, by the Finance Director.

The Audit Committee is responsible for monitoring the quality of internal controls and ensuring that the financial performance of the Group is properly managed and reported on. It receives and reviews reports from the Group’s management and external auditor relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Group.

The Audit Committee meets at least three times in each financial year and has unrestricted access to the Group’s external auditor.

Remuneration Committee

The Remuneration Committee is comprised of Sangita Shah (Chair) and David Johnson. The Remuneration Committee reviews the performance of the Executive Directors and makes recommendations to the Board on matters relating to their remuneration and terms of service. The Remuneration Committee also makes recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any employee share option scheme or equity incentive plans in operation from time to time. The Remuneration Committee meets at least annually. In exercising this role, the Directors have regard to the recommendations put forward by the QCA Guidelines and, where appropriate, the Corporate Governance Code guidelines.

Targeting under-represented Groups

The Bilby Group is fully committed to a structured approach to target groups that are under-represented in our sector, such as females, black and minority groups (BME) and those with disabilities. We give full and fair consideration to all applications. Through our extensive apprenticeship programmes we encourage training and career development to enhance promotion opportunities.


Principle Ten

Shareholder Communication

At present the Board does not have a social media policy however the Board is considering implementing one.

AAll shareholders are encouraged to attend the Company’s Annual General Meeting and any other General Meetings that are held throughout the year as the Board. Investors also have access to current information on the Company though its website, www.bilbyplc.com