The Board supports the principles of good corporate governance set out in the Financial Reporting Council’s UK Corporate Governance Code. Although the Company is an AIM listed company and is not required to fully comply with the Corporate Governance Code, the Board is committed to a level of compliance appropriate for a smaller public company.
During the first half of the year ended 31 December 2015, the Board consisted of an Executive Director, a Non-Executive Chairman and three Non-Executive Directors. In the second half of the year, Mr. B. Riley assumed the position of Acting Chief Financial Officer and relinquished that position in January 2016 with the appointment of Ms. Erica Boisvert as Chief Financial Officer and Company Secretary.
On joining the Board, all Directors received a full induction and have the opportunity to meet with shareholders at the Annual General Meeting.
Biographies of the Board members appear under About Us. These indicate the high level and range of experience, which enables the Company to be managed effectively.
The Board has established three committees in relation to Directors’ remuneration and audit matters and nominations to the Board.
The membership of all Board Committees is set out below:
- Remuneration Committee: Mr. Hills (Chairman), Mr. Riley and Mr. Wintemute.
- Audit Committee: Mr. Hills (Chairman), and Mr. Reade.
- Nomination Committee: Mr. Reade (Chairman), Dr. Jactel, Mr. Wintemute and Mr. Hills.
The Board is responsible to the shareholders for the proper management of the Company. The Board has adopted a formal schedule of matters specifically reserved for the Board’s decision that covers key areas of the Company’s affairs including: overall responsibility for the business and commercial strategy of the Company, policy on corporate governance issues, review of trading performance and forecasts, the approval of major transactions and the approval of the interim management and financial statements, annual report and financial statements and operating and capital expenditure budgets.
The Non-Executive Chairman leads the Board in the determination of its strategy and in the achievement of its objectives. The Non-Executive Chairman is responsible for organising the business of the Board, ensuring its effectiveness and setting its agenda. The Non-Executive Chairman facilitates the effective contribution of Non-Executive Directors and constructive relations between Executive and Non-Executive Directors, ensuring Directors receive accurate, timely and clear information. The Non-Executive Chairman provides feedback to the Board on issues raised by major shareholders.
The Board delegates the day to day responsibility for managing the Company to the Chief Executive Officer who is accountable to the Board for the financial and operational performance of the Company.
The Company regarded Mr. Hills as an independent Non-Executive Director during the year ended 31 December 2015 and Mr. Riley as independent for the first half of the year. All the Non-Executive Directors constructively challenge and help develop proposals on strategy, and bring strong independent judgment, knowledge and experience to the Board’s deliberations. The Independent and other Non-Executive Directors are of sufficient calibre and number that their views carry significant weight in the Board’s decision making. The Board has four regularly scheduled meetings annually with additional meetings to discuss strategy and other pertinent issues organised as necessary during the year.
Prior to each meeting the Board members receive copies of the management accounts and are furnished with information in a form and quality appropriate for it to discharge its duties concerning the state of the business and performance compared to plan. All directors have access to the services of the Company Secretary and may take independent professional advice at the Company’s expense in the furtherance of their duties.
The Non-Executive Directors meet after each Board meeting without the Chief Executive Officer being present.
Each Director offers himself for re-election as a director for a term of three years on a rotating basis in accordance with the provisions of the Company’s Certificate of Incorporation.
The Remuneration Committee is responsible for establishing and monitoring appropriate levels of remuneration and individual remuneration packages for Executive Directors. No director is involved in deciding his own remuneration. The report of the Remuneration Committee is set out in each Annual Report. The Remuneration Committee meets at least two times per year.
The Company has an Audit Committee, whose responsibilities include reviewing the scope of the audit and audit procedures, the format and content of the audited financial statements and interim reports, including the notes and the accounting principles applied. The Audit Committee also reviews internal control, including internal financial control, in conjunction with the Board. The Audit Committee will also review any proposed change in accounting policies and any recommendations from the Company’s auditors regarding improvements to internal controls and the adequacy of resources within the Company’s finance function. The Audit Committee advises the Board on the appointment of external auditors and on their remuneration both for audit and non-audit work, and discusses the nature, scope and results of the external audit with the external auditors. The Audit Committee keeps under review the cost effectiveness and the independence and objectivity of the external auditors.
All Directors may attend audit committee meetings. At least twice a year representatives of the Company’s auditors have an opportunity to meet the Audit Committee at which time they also have the opportunity to discuss matters without any Executive Director being present.
The Audit Committee monitors fees paid to the auditors for non-audit work and evaluates on a case by case basis whether it should put the requirement for non-audit services out to tender. The Company’s auditors, Grant Thornton LLP, have not been instructed to carry out non-audit work during the year. Other firms of advisors were employed during the year for tax compliance services.
A “whistle blowing” policy has been implemented whereby employees may contact the Chairman of the Audit Committee on a confidential basis.
The Nomination Committee is responsible for considering and making recommendations concerning the composition of the Board, including proposed appointees to the Board, and whether to fill vacancies that may arise or to change the number of Board members. The appointments during the year did not involve open advertising. The Nomination Committee meets at least two times per year.
Internal Control and Risk Management
The Directors acknowledge that they are responsible for establishing and maintaining the Company’s system of internal control and reviewing its effectiveness. The Company is small and the Directors are closely involved in the management of the business. At least once each year, The Board identifies the key risks that the Company faces. The Board also reviews these risks as part of strategic planning exercises, considering the likelihood of the risk occurring and the potential impact on the business. The Board will continue to review and update the risk management process on an ongoing basis. No significant weaknesses or failings in internal control have been identified. However, the internal controls are designed to manage rather than eliminate the risk of failure to achieve business objectives and the Board recognises that any system can only provide reasonable and not absolute assurance against material misstatement or loss.
The Company’s operating procedures include a comprehensive system for reporting financial and non-financial information to the Directors.
The planning system produces a rolling two year operating plan annually. The first year of the plan is a proposed operating budget, phased monthly. These are approved by the Board and forecast updates are carried out quarterly. The financial projections include income statement, balance sheet and cash flows.
The Board reviews the actual financial results versus budget and forecast together with other management reports containing non-financial information.
Schedules of financial authority limits detailing management authority limits for commitments in respect of sales orders, capital and operating expenditure are circulated to relevant employees and updated at least annually.
The Non-Executive Chairman ensures that Directors may take independent professional advice as required at the Company’s expense in appropriate circumstances and all members of the Board have access to the advice of the Company Secretary.
The Company does not have an internal audit function. However, the Audit Committee reviews annually the need for such a function and has done so during the year. The current conclusion of the Board is that it is not necessary given the modest scale and lack of complexity of the Company’s activities.
It is the Company’s policy to involve its shareholders in the affairs of the Company and to give them the opportunity at the Annual General Meeting to ask questions about the Company’s activities. This process enables the views of shareholders to be communicated to the Board. In addition, any direct enquiries are dealt with by the Company Secretary and communicated as appropriate to the Board. Other than in exceptional circumstances, all Directors, including those newly appointed, attend the Annual General Meeting of the Company, and make themselves available for introductions and answering shareholders’ questions. Established procedures ensure the timely release of price sensitive information and the publication of financial results and regulatory financial statements. The Company also maintains a website, www.tyratech.com, which incorporates corporate, financial, product information and news.