Corporate Governance Statement

Corporate Governance Statement for GB Group plc

(“GBG”, “the Group” or “the Company”)

In September 2018, we adopted the 2018 Quoted Companies Alliance Corporate Governance Code (the ‘QCA Code’) as the basis of our governance framework. Through this statement, we will report how we have complied in full with the QCA Code.

 

GBG’s Statement of Compliance with the QCA Corporate Governance Code

The information contained below was last reviewed on 30 June 2022:

Our vision is to help create a world where everyone can transact online with confidence. Our purpose is to build trust in a digital world. Our strategy is to create and maintain unique online products and services that give our customers added value and are strong enough to let us create new markets and win new business. We achieve this by investing in people, business and product development and applying innovation, quality and excellence in everything we do.

Our strategy, business model and business operations are set out in the Strategic Review. The Executive Team, led by the Chief Executive, is responsible for recommending the Group’s strategy to the Board, based on the interests of our shareholders, customers, team members and other stakeholders. The Board is fully involved in discussing and developing our strategy and business model with the Executive Team before we implement it. The Executive Team is then responsible for putting the strategy into action and managing the day-to-day business.

As they follow our strategy and operational plans, the Executive and Management teams will usually face day-to-day challenges that we see as our principal risks and uncertainties. We have agreed on steps to mitigate them and we always look to follow these steps whenever the risks appear.

We believe that we continue to add long- term value to our shareholders. During the year the Group completed two acquisitions including Acuant Inc in North America and Cloudcheck in New Zealand. Our progressive dividend policy and share performance over the last five years are also indicators of long-term value for our shareholders. As we begin to look beyond Covid-19 and the measures that need to be taken because of it, we expect to continue our tradition of paying strong and consistent final dividends.

The  Directors’ Report contain further information on this financial year’s dividend.

View our total shareholder return graph here.

Communication with shareholders is given high priority by the Board. Chris Clark (CEO), David Ward (CFO) and where appropriate, other members of the Board communicate regularly with institutional investors and sell-side research analysts through press releases, general presentations at the time of the release of the annual and interim results and additional meetings throughout the year. They use these opportunities to provide updates on any changes to our business, strategy, marketplace and acquisition pipeline.

Understanding what investors and sell-side research analysts think about GBG and, in turn, helping them understand our business, is a key consideration as we take strategic decisions and allocate investment to drive the business forward. We tailor our communication based on whether we are speaking with new or longstanding investors and share feedback from these meetings with the Board. The Board considers this information to make sure there is a clear understanding of the views of shareholders.

As part of the acquisition of Acuant, Chris Clark and David Ward conducted an investor roadshow to build an appropriate level of institutional investor interest in participating in the £300 million placing of ordinary shares used to partially finance the acquisition. The roadshow meetings were held throughout the week leading up to the proposed acquisition and equity placing was announced on 19 November 2021. The objective was to provide an opportunity for a number of institutional investors in the UK, Europe and North America to meet with management, understand the transaction’s strategic rationale, provide feedback and raise any questions or concerns they had. These conversations reinforced our understanding of investor expectations and the importance of GBG successfully executing this strategic acquisition. The Board uses the AGM to communicate with private investors and welcomes their participation. All Directors attend the AGM and are available to answer shareholders’ questions formally during the meeting or informally afterwards. Since 2021 GBG has held the AGM as a hybrid meeting to allow shareholders the option to attend in person or join via electronic means. This will give every shareholder better access to and easier communication with the Board of Directors.

Both the Chairman and Liz Catchpole (Senior Independent Director) are available to speak with shareholders to discuss governance or any other topic related to GBG that is important to them. You can send a meeting request to: investor.relations@gbgplc.com to arrange this.

Engaging with our stakeholders strengthens our relationships and helps us make better business decisions that deliver on our commitments. This allows us to create a long-term and sustainable business model. We take our wider stakeholder and social responsibilities seriously. That means maintaining effective working relationships with stakeholders including team members, partners, customers, suppliers and regulatory authorities.

In our operations and working methods, we balance the needs of all of these stakeholder groups while still ensuring our success. We promote a culture of honesty, integrity, trust and respect. We expect all members of our team to operate in an ethical way, whether they are dealing with people inside or outside the business.

Our customers and suppliers are mainly long-term partners, so an important part of our culture is to establish and maintain relationships of trust. Our priority is to create a positive customer experience across our whole business, including our product experience, customer success management, professional services and helpdesk.

As part of our commitment to continually improve the GBG Customer Experience, we listen to customers across all business areas. Each year we welcome direct feedback from all our customers and in the last 12 months we have received over 2,000 pieces of feedback. As part of our Voice of the Customer programme, we use this feedback to drive material improvements that are evidenced in key metrics over time. We continue to use the feedback we receive to inform our strategy, product roadmap and customer interactions across all parts of the customer journey, making sure that the customer experience develops to meet the needs and requirements of all our customer base.

Risk management and controls

The Board has overall responsibility for our approach to assessing risk, systems of internal control and our risk appetite. The Audit & Risk Committee is responsible for monitoring and reviewing how effective these systems are. These systems are designed to manage risks rather than eliminate them. They provide reasonable but not absolute assurance against material misstatement or loss and flag any new material risks to the Board.

The Board believes risk assessment and control, with an acceptable risk/reward profile, are fundamental to achieving our corporate objectives. We confirm that there is an ongoing process to identify, evaluate and manage the significant risks the Group faces and the effectiveness of related controls.

Budgets

For the FY23 financial year, GBG completed its annual, comprehensive budgeting process which the Board has reviewed, challenged and approved. The Executive Directors will provide regular updates on performance against this Budget and any updates to the forecast results, ensuring communication of vital information that may have an impact on forecast.

The Board has conducted a rigorous and in-depth assessment of GBG’s financial position and outlook and has adopted the going concern principle in preparing these financial statements.

Insurance

Each year, we carry out an extensive insurance renewal programme across the Group. This allows us to review the sums we insure and what type of cover we have, assessing whether current cover is still suitable for a company of our size operating in our current industry. We consider the insurance we have to be comprehensive against claims or action that could be taken against either GBG or its Directors because of their roles.

As at 31 March 2022, the Board was made up of the Non-Executive Chairman David Rasche, three Executive Directors, Chris Clark, David Ward and Nick Brown, plus three Non-Executive Directors, Liz Catchpole, Natalie Gammon and Bhav Singh.

In compliance with the QCA Code, the Board determines independence. In the Board’s opinion, Liz, Natalie and Bhav are independent in both character and judgement, in addition, they have all served less than 10 years. The Board have considered David Rasche’s length of service and remain confident that he is still independent in character and judgement, in line with best practice he has been subject to annual re-election since his tenure reached nine years. Further to the announcement that GBG will be appointing a new Chair, who will be joining the Board on 1 September 2022, this will be David’s last annual re-election. Information about the process for selecting a new Chair can be found in the Nomination Committee Report on pages 90 to 91 of the Annual report.

The Executive Directors all work full time for the Group. We also ensure that our Non-Executive Directors do not have an excessive number of directorships so they can contribute an appropriate amount of time to GBG. The Non-Executive Directors are expected to commit a minimum of 20 days per year to Company activities.

In accordance with our Articles of Association all Directors retire by rotation and are subject to re-election by shareholders at least once every three years. Non-Executive Directors who have served on the Board for nine years or more, will be subject to annual re-election. Currently this only applies to David Rasche.  To see which Directors have been put forward for re-election at the 2022 AGM, please go to the Directors’ Report on pages 94 to 96 and the Notice of AGM. The service agreements for each of the Directors are available from our registered office in Chester and on our website.

The Board has a formal schedule of matters reserved for it to decide on, which is available on our website.

The Non-Executive Directors have also met during the year without the Executive Directors and Chair being present.

The Board met on 13 occasions during the financial year. Following the easing of government restrictions in the UK, these have been held both virtually and in person. A summary of attendance is shown in the table below. In addition, with regards to the transaction formalities for both of the acquisitions made during the year, meetings were held by a transaction committee, being a sub-committee of the Board consisting of four Board members. These meetings have not been included in the Board attendance figures, and a total of four transaction committee meetings were held during the financial year.

In the year to 31 March 2022, the Board met virtually on twenty-four occasions. A summary of their attendance is as below.

 
Board Meeting Attendance

David Rasche

13/13

Chris Clark

13/13

David Ward*

10/10

Nick Brown

13/13

Dave Wilson**

3/3

Liz Catchpole*** 12/13

Natalie Gammon

13/13

Bhav Singh**** 5/5

*  David Ward was appointed to the Board on 1 July 2021; his attendance is based on the number of meetings he has attended since his appointment as Director. Prior to his appointment David observed a number of Board meetings to ensure an orderly succession.
**   Dave Wilson resigned from the Board effective 30 June 20201 and his attendance is calculated against the number of meetings he was eligible to attend prior to his resignation.
***  Due to the bereavement of an immediate family member Liz Catchpole was unable to attend one unscheduled Board meeting. In line with Board policy on unscheduled meetings, Liz reviewed the papers and provided her comments in advance of the meeting.
****  Bhav Singh was appointed to the Board on 1 November 2021, his attendance is based on the number of meetings he has attended since his appointment as Director.

The Directors’ biographies can be found here: https://www.gbgplc.com/en/investors/who-we-are/our-board/.  These outline their experience and skills, along with their Committee memberships. The Board and Nomination Committee are satisfied that the Board composition currently has the right balance of experience, skills, independence and expertise to deliver the Company’s strategy. In terms of diversity, the Board are satisfied that positive steps have been taken in recent years to address this, with the Board including two female members and five male members as well as welcoming its first Director from a minority ethnic background.

Gender and diversity of ethnicity are important considerations as we attempt to create a cognitively diverse Board, appointed on merit and reflective of our business model and key stakeholders.

New Directors receive an induction on their appointment to the Board which covers the activities of the Group; and its key business and financial risks, the Terms of Reference of the Board, its Committees and the latest financial information about the Group. The Board ensures that they keep their skills up to date, which includes (but is not limited to) roles and experience with other boards and organisations as well as formal training. They are made aware of accounting, governance and regulatory changes via papers and presentations to the Board. An annual review of compliance with the AIM Rules is also provided by GBG’s Nominated Advisor (NOMAD). All Directors have full access to the advice and services of the Company Secretary, who is responsible to the Board for ensuring that Board procedures are followed and that applicable rules and regulations are complied with. In addition, the Company Secretary will ensure that the Directors are supplied with information in a timely manner in a form and of a quality appropriate to enable them to discharge their duties.

Throughout the year, Board members receive regular business updates and have full access to the Company Secretary and external advisors. Each member of the Board is accountable for maintaining their skills and furthering their knowledge and experience,

Liz Catchpole holds the Senior Independent Director role (the ‘SID’) to support the Chairman in his role; to act as an intermediary for other Non-Executive Directors when necessary and to give shareholders another channel of communication to the Board. All Directors are able to seek independent professional advice on the Group’s affairs, at the Group’s expense, though no Director did so this year. Led by the SID, the Non-Executive Directors meet without the Chair at least once a year to appraise the Chair’s performance

Evaluations

This year, we carried out an external review of the GBG Board, utilising the services of BoardClic, who conducted a full and thorough independent evaluation which included both an online questionnaire and individually tailored interviews with each Board member. It provided the Board with the opportunity to provide their own feedback on a number of areas such as Board structure, functionality, objectives, meetings (including the quality of information presented at such meetings) administration and the Committees. The Directors and Company Secretary were first asked to complete an online questionnaire, evaluating the effectiveness of the Board, its Committees, and the Chairman.

BoardClic used their responses to create a personalised interview for each participant, which then probed more deeply into certain areas. After the results of the interview were collected, BoardClic created a report for the Chairman which was then discussed by the Board as a whole.

Feedback from BoardClic’s evaluation of the GBG Board was positive, it highlighted:

  • GBG’s excellence in maintaining a well- functioning Board
  • trust between the Board and senior management
  • a clear vision of what is expected from stakeholders and effective engagement mechanisms between the Board and the wider GBG family

The Board has used the results to develop an action plan to further improve and monitor these developments throughout the year.

The Chair also regularly meets with the Chief Executive Officer and the other Directors outside of the Board meetings to discuss progress and performance of the Group and the Board. In addition to this, the Board as a whole maintain ongoing communications throughout the year, between formal meetings.

Appointments to the Board

The Nomination Committee is responsible for evaluating candidates and recommending appointments considering the right balance of skills, knowledge and experience. We assess whether or not to use recruitment consultants on a case- by-case basis. New Directors receive a formal induction covering guidance about the workings of the Board and its Committees. New Directors also meet with senior managers of the Group for detailed information and presentations on Group strategy, products and services.

The Board embraces its role in setting the high standard for corporate culture at GBG which focuses on ensuring the delivery of long-term value to shareholders whilst stressing the vital importance of engaging effectively with relevant stakeholders.

GBG’s vision is to build trust in a digital world; we make life easy for people who have good intentions and difficult for those that don’t. Recruiting and retaining the best and most engaged team members, who understand the needs of all of our stakeholders is vital to our success.

Our culture is about how we choose to behave and the way we are encouraged to behave. The GBG culture is created by the actions of over 1,200 people every day. Our culture lives in how we show up and the environment that we create together.

It shines through everyone from the members of Board to the very latest team member to arrive. Our culture is a shared view of what we stand for as a company and a mutual commitment to each other, expressed in every action we take. To manage GBG effectively, we need a positive, effective culture. GBG’s Executive Team is responsible for establishing, communicating and promoting a culture that aligns with GBG’s strategy and objectives. Team members are expected to be open and candid when discussing issues, to take ownership and do the right thing for our customers, shareholders, and one another.

We expect all members of our team to operate in an ethical way, whether they are dealing with people inside or outside the business. GBG does not accept behaviour that goes against this, or that could damage our reputation.

Our vision is to have ‘the best and most engaged people’ because we understand the link between highly engaged people and results. We have clear strategies for how to achieve this objective and each year our Annual Report aims to demonstrate what we are doing to make it happen. We run an engagement survey twice a year (the Q12 survey) to give all team members a voice and allow us to identify, listen and respond to any feedback that might affect engagement. Following the Q12 results, all senior managers and Executive Team members must champion action plans in each of their areas for any improvements that need to happen. More information on the results of this year’s Q12 surveys can be found on in our ESG Statement.

The Board and Executive Team communicates with team members regularly to keep them informed about how the business is performing through our global intranet platform ‘be/connected’.

This platform also lets team members share news stories and access learning resources and general information about GBG. Chris Clark, CEO, also hosts bi-weekly virtual live business updates across the Group, ensuring that all team members are kept up to date with how the business is performing and any key changes they need to know about. Team members also have the opportunity to ask the CEO any questions they may have. We believe this approach promotes transparency throughout the Group and encourages engagement which is echoed as part of the feedback we received from our recent Q12. More information on our culture can be found in our ESG Statement.

Our Board believes that good corporate governance is essential for building a successful and sustainable business in the long-term interests of all our stakeholders. The Board has a robust management framework, as illustrated below, with clearly defined responsibilities, it sets the direction for the Group through a formal schedule of matters reserved for it to decide on.

There is a clear separation of the roles of Chief Executive Officer and Non- Executive Chairman:

  • The Chair is responsible for overseeing the running of the Board, making sure that no individual or group dominates the Board’s decision-making and seeing that Non-Executive Directors are properly briefed. The Chair is responsible for corporate governance overall and chairs the Nomination Committee
  • The Chief Executive Officer is responsible for implementing the strategy of the Board and managing day-to-day business activities
  • The Company Secretary is responsible for making sure the Board follows its procedures and complies with rules and regulations

We agree on a calendar of Board meetings and key matters for discussion at the beginning of each year. The Board holds ten meetings a year with the caveat that should any urgent business arise, the Board would make themselves available for a meeting.

Board papers are usually circulated securely via our Board Intelligence portal five business days before each meeting. This allows for sufficient reading time and any necessary clarifications ahead of the meeting. The Board will continue with a combination of virtual and in person meetings as we believe a ‘hybrid model’ will prove the most effective system going forward.

The Board has established Audit & Risk, Remuneration and Nomination Committees with formally delegated duties and responsibilities. You can find the Terms of Reference for each on our website. For a summary of their work during the year ended 31 March 2022, please see each individual report.

As mentioned previously, last year we established an ESG Committee, chaired by Natalie Gammon. Our ESG initiatives have also been strengthened by the recent appointment of our ESG Strategist and Programme Manager and the continued development of the be/yourself initiative.

It is the Chair’s responsibility to:

  • communicate with shareholders and make sure that the Board is made aware of any concerns in a timely manner.
  • make sure members of the Board, particularly the Non-Executive Directors, understand major shareholders’ views.
  • make sure the Board keeps its integrity and effectiveness

It is very important for us to communicate regularly with our various stakeholder groups in a clear, fair and accurate way. We do this through regular announcement and update statements to the London Stock Exchange and through our website, particularly the investors section, where you can register for emails about our future announcements. We announce the results of voting on all AGM resolutions shortly after the AGM itself. We also post a more detailed analysis of voting at General Meetings on our website. This includes any actions we would propose to take, in situations where more than 20% of shareholders voted against a resolution. Shareholders are encouraged to arrange meetings with the Board should they wish to address any specific matters.

Our ability to communicate effectively with shareholders can be demonstrated this year with the CFO transition. As part of our commitment to give our investors greater insight into the CFO succession process (that took place during the FY21 financial year) David Ward, prior to being officially appointed as a Director, joined Chris Clark and Dave Wilson (departing CFO & COO) in the full-year investor roadshow in June 2021. This meant that David Ward was introduced to GBG’s largest investors alongside Dave Wilson with assurances on how a smooth handover would be achieved.

In November 2022, we announced the acquisition of Acuant, a leading US Identity Verification and Identity Fraud prevention business. The acquisition involved an equity share placing and as part of the process, Chris Clark (CEO) and David Ward (CFO) conducted a virtual roadshow to engage with 39 new and existing institutional holders on the strategic rationale of the deal ahead of the equity share placing. The Board was also mindful of including private investors within the equity share placing and provided access via a retail offering on the PrimaryBid platform, a practical solution to enable GBG to include private investors despite the short timeline of the process.

Communication with team members has also been greatly enhanced following the Covid-19 pandemic as we have continued the use of our bi-weekly live webinars. These give team members the opportunity to ask our CEO, Chris Clark, any questions they may have as well as allowing the CEO to communicate business updates with all team members effectively and succinctly. For example, the webinar that was held after the acquisition of Acuant allowed Chris to explain the immediate impact of the decision as well as how it fits into the wider GBG strategy.

Conflicts of interest

Under the Articles of Association, the Board has the authority to authorise any matter proposed to it including if there is a direct/indirect conflict of interest. Matters concerning this are subject to a strict adherence to the articles regulating such authorisations, including the exclusion of the Director in question as well as any other interested Director.

Advisors

GBG has regular contact with its advisors in order to ensure the success of its corporate governance regime. Our NOMAD, Numis, helps support the Board’s development as well as providing advice on corporate governance and regulatory matters. We are also supported by Equiniti (registrars), Tulchan (financial PR), Squire Patton Boggs (corporate lawyers) and Ernst & Young (external auditors). All Directors may receive independent professional advice at GBG’s expense.