Volex plc (the "Company") is committed to maintaining the highest standards of corporate governance throughout its operations and to ensuring that all of its practices are conducted transparently, ethically and efficiently. The Company believes that scrutinising all aspects of its business and reflecting, analysing and improving its procedures will result in the continued success of the Company and improve shareholder value. The Company has chosen to formalise its governance policies by complying, with some exceptions, with the UK's Quoted Companies Alliance Corporate Governance Guidelines for Small and Mid-Size Quoted Companies (the "QCA Code").
Accordingly, the Company has established specific committees and implemented certain policies, to ensure that:
· it is led by an effective Board which is collectively responsible for the long-term success of the Company;
· the Board and the committees have the appropriate balance of skills, experience, independence and knowledge of the Company to enable them to discharge their respective duties and responsibilities effectively;
· the Board establishes a formal and transparent arrangement for considering how it applies the corporate reporting, risk management and internal control principles and for maintaining an appropriate relationship with the Company's auditors; and
· there is a dialogue with shareholders based on the mutual understanding of objectives.
In addition, the Company has adopted policies in relation to:
· anti-corruption and bribery;
· health and safety;
· environment and community; and
· IT, communications and systems,
so that all aspects of the Company are run in a robust and responsible way.
The Board of Directors
The Board of Directors is responsible for the proper management of the Company by formulating, reviewing and approving the Company's strategy, budgets, and corporate actions. In order to achieve its objectives, the Board adopts the ten principles of the QCA Code. Through successfully implementing these principles, the Company is able to deliver long-term growth for shareholders and maintain a flexible, efficient and effective management framework within an entrepreneurial environment.
It is important that the Board itself contains the right mix of skills and experience in order to deliver the strategy of the Company. As such, the Board is comprised of:
· an Executive Chairman, whose primary responsibility is the delivery of the Company's corporate governance model. The Chairman has a clear separation from the day-to-day operational business and management of the Company, which is run by the Chief Operating Officer and the Chief Financial Officer, allowing him to make independent decisions;
· two Executive Directors (including the Chairman);
· one Senior Non-Executive Director; and
· one other Non-Executive Director.
The Company Secretary provides advice and guidance to the extent required by the Board on the legal and regulatory environment.
Each Director serves on the Board until the Annual General Meeting on the third anniversary of his or her election or appointment, and the Board meets at least three times a year.
Volex measures itself against the QCA Code. With the exception of the combined roles of Chairman and Chief Executive Officer, the Group has aimed to follow the guidance within the Code. However, Volex’s Executive Chairman position is well documented and known to the shareholder base. As the Executive Chairman’s interests are closely aligned with other shareholders, and the Company’s progress to date has been encouraging, the Board continues to believe that it is in the best interests of the business for this arrangement to continue.
The Chief Financial Officer also acts as Company Secretary, but reports directly to the Chairman on governance matters, and receives advice from a legally qualified Assistant Company Secretary. The Board has established appropriate committees to assist in governance matters.
The purpose of the Audit Committee is to monitor the integrity of the financial statements of the Company.
Some of the Audit Committee's duties include:
· reviewing the Company's accounting policies and reports produced by internal and external audit functions;
· considering whether the Company has followed appropriate accounting standards and made appropriate estimates and judgments, taking into account the views of the external auditor;
· reporting its views to the Board of Directors if it is not satisfied with any aspect of the proposed financial reporting by the Company;
· reviewing the adequacy and effectiveness of the Company’s internal financial controls and internal control and risk management systems;
· reviewing the adequacy and effectiveness of the Company's anti-money laundering systems and controls for the prevention of bribery and receiving reports on non-compliance; and
· overseeing the appointment of and the relationship with the external auditor.
The Audit Committee has two members, each of whom is an independent Non-Executive Director. At least one member has recent and relevant financial experience. The current members of the committee are Dean Moore (Chairman), a qualified chartered accountant, and Adrian Chamberlain.
The purpose of the Remuneration Committee is to determine and agree with the Board the framework or broad policy for the remuneration of the Company’s Executive Chairman and the other Executive Director.
Some of the Remuneration Committee's duties include:
· reviewing the pay and employment conditions across the Company, including the Board of Directors;
· approving targets and performance related pay schemes operated by the Company and all share incentive plans and pension arrangements;
The Remuneration Committee has two members, each of whom is an independent Non-Executive Director. The current members of the committee are Adrian Chamberlain (Chairman) and Dean Moore.
The purpose of the Nominations Committee is to review the size and composition of the Board, including:
· whether the balance of executive Directors and Non-Executive Directors continues to be appropriate);
· succession planning and recommending suitable candidates for membership.
The Nominations Committee has three members: Nathaniel Rothschild (Chairman), Dean Moore and Adrian Chamberlain.
Evaluating Board Performance
Board member performance is discussed at meetings between the Executive Chairman and Non-Executive Directors without the CFO present, between the CFO and Non-Executive Directors without the Executive Chairman present, and between the acting Senior Independent Director and other Non-Executive Director without the Executive Chairman or CFO present.
An external review of board skills and behaviours was recently carried out by an external consultant, Dobson Lyle. The findings were provided to the Board, and members have worked to address any concerns.
All new Directors receive an induction programme tailored to their background and experience. Individual Directors, with the support of the Company Secretary, are also expected to take responsibility for identifying their own training needs.
Promoting Ethical Values and Behaviours
The Board is committed to the Group having a positive impact on the environment and society. The Board considers the Group’s strategy on matters including health and safety, diversity, and compliance with ethical trading practices. In addition, the Group has a formal anti-bribery and anti-corruption policy and a share dealing policy.
Anti-Bribery and Anti-Corruption Policy
The Group has a robust anti-bribery and anti-corruption policy which applies to the Board, all employees of the Group and persons associated with the Group (such as consultants, contractors or agency staff), requiring them to observe and uphold a zero tolerance position on bribery and corruption, as well as providing guidance on how to recognise and deal with bribery and corruption issues and their potential consequences, while preserving acceptable boundaries of corporate hospitality and entertainment. The Company expects all employees and persons associated with the Group to conduct their day-to-day business activities in a fair, honest and ethical manner, to be aware of and refer to this policy in all of their business activities worldwide, and to conduct business on the Group’s behalf in compliance with it. Management at all levels are responsible for ensuring that those reporting to them, internally and externally, are made aware of and understand this policy.
Share Dealing Code
The Company has adopted a share dealing code to ensure Directors and certain employees do not abuse, and do not place themselves under suspicion of abusing, inside information of which they are in possession and to comply with its obligations under the Market Abuse Regulation ("MAR"), which applies to the Company by virtue of its shares being traded on AIM. Furthermore, the Company's share dealing code is compliant with the AIM Rules for Companies published by the London Stock Exchange (as amended from time to time).
Shareholder and Stakeholder Engagement
The Board engages in regular dialogue with shareholders, brokers and analysts, with the Executive Chairman and CFO leading these relationships. The Board takes steps to understand the views of major shareholders of the Company, including receiving feedback from shareholder meetings at each Board meeting and analyst/broker briefings. The Executive Chairman and CFO are available to meet with major and prospective shareholders. The SID and the other Non-Executive Director are available to attend shareholder meetings as necessary.
The Company will communicate with shareholders and the market generally using a Regulatory Information Service provider for regulatory news releases which, in accordance with AIM Rule 26, will be available on the Company’s website along with interim and annual accounts, shareholder notifications and other corporate governance material for at least the last five years. Shareholder votes will be notified and kept on the website in a clear and transparent manner.
The commitment, enthusiasm and skill of our people are critical if we are to successfully continue the transformation of Volex. The Executive Directors and the wider senior management team undertake regular communication with customers, suppliers and employees to ensure all stakeholders are aware of the developments in the business. The Board believes that other than shareholders, the Group’s key stakeholders are the Group’s staff and customers. Given the size of the Group, all matters relating to customers and key employees are dealt with at Board level.
For more information on Volex plc, please complete our Contact Us form.
The UK City Code on Takeovers and Mergers applies to the Company.
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Date on which this information was last reviewed: 14 January 2019