Corporate Governance Statement

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.

As a Board, we believe that practising good corporate governance is essential for building a successful and sustainable business in the long-term interests of all GBG stakeholders. Our commitment to corporate governance and promoting a culture of honesty, transparency and respect to all members of GBG has let us build a healthy corporate culture throughout the Group.

We are just as committed to responsible and ethical practices when we make any business decisions, whether on the Board or in day-to-day operations. This is particularly important to us as an acquisitive business; as we acquire more global companies, we recognise we need to maintain and monitor our culture.

With that in mind, we work hard to make sure that all of the Group’s businesses (whether newly acquired or longstanding) are in step with our strategy, people processes and internal controls. We do this through strategy workshops and training and by involving managers in our risk assessments and internal control meetings. This approach means our Executive Team can report to the Board on progress and any issues that need addressing. You can find more information on our culture and Group policies in our Corporate Responsibility Statement.

As Chairman, it is my responsibility, working with my Board colleagues, to ensure we follow the highest standards of corporate governance throughout the Group and to manage the Board in the best interests of the Group’s many stakeholders. It is also my responsibility to communicate with shareholders and make sure the Board knows about any shareholder concerns.

New Board members

Last year we reported that we had started the process of searching for an additional Non-Executive Director. I am pleased to report that since then, we have appointed Natalie Gammon as an independent Non-Executive Director with effect from 19 November 2019. There is more information on Natalie’s appointment in the Nomination Committee Report.

Year in summary

The last few weeks of the financial year (and in the weeks since the start of the new financial year to date) have seen the Board focus on the effects of the Covid-19 pandemic on the Group. As a Board, we have adapted our usual working practices to accommodate remote working and have prioritised additional weekly Board meetings to ensure the appropriate attention is given to address the various challenges that have come with the pandemic. The Board already receives its meeting papers electronically using a secure document portal. In addition to maintaining our standards of Corporate Governance and dealing with the effects of Covid-19, we wanted to give some insight into the other areas that the Board has worked on this year. These can be found here.

Annual General Meeting (AGM)

In light of current and anticipated public health guidelines, GBG is asking shareholders to comply with certain unprecedented but urgent measures for this year's AGM. These recommendations are designed to enable participation by shareholders in the business of the AGM, while balancing health and safety considerations.

Under measures imposed by the UK Government in response to the Covid-19 outbreak, there are restrictions on public gatherings. As a result, shareholders will not be permitted to attend the AGM in person. Anyone seeking to attend the meeting in person (beyond the two persons designated by the Board as being necessary to form a quorum) will be refused entry. The Board is taking these measures to safeguard the health of shareholders and other participants and to make the AGM as safe as possible.

Shareholders wishing to vote on any of the matters of business at the AGM are therefore strongly encouraged to submit their votes in advance by proxy using one of the methods referred to in the Notice of AGM. Shareholders should appoint the chair of the AGM as their proxy to ensure that their vote is counted. Further details and instructions are set out in the Notice of AGM.

If shareholders have any questions or matters of concern in connection with the business of the meeting they may email GBG’s Company Secretary (john.constantin@gbgplc.com) and we will endeavour to provide a prompt response.

 

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

 The information contained below was last reviewed on 30 June 2020:

Our vision is to be the leader in identity data intelligence, informing business decisions between people and organisations globally. 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 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, employees 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 business day-to-day.

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 steps to mitigate them and we always look to follow these steps whenever the risks appear. You can find more details of our internal control and risk management process here.

We believe that our AIM listing is still valuable to our shareholders in the long-term. It gives us access to capital markets, flexibility to make acquisitions, the ability to incentivise and reward management through share schemes and a regulatory environment appropriate to the size of the Group.

Our progressive dividend policy and share performance over the last five years are also indicators of long-term value for our shareholders, although the Board took the decision to not declare a final dividend in respect of financial year 2020 due to the Covid-19 pandemic. Further information relating to this can be found in the Chairman’s Statement. You can see total shareholder return here.

We stay in regular touch with existing and potential new shareholders. The Chief Executive Officer, Chief Finance Officer and Chief Operating Officer and, where appropriate, other members of the Board meet regularly with investors and analysts. Here, they give updates on our business and strategy as well as finding out what shareholders need and expect. Understanding what analysts and investors think about GBG and, in turn, helping them understand our business, is a key part of driving the business forward.

We held our capital markets event in 2019, which focussed on the GBG identity solution area. Here we discussed our strategic direction and highlighted how we are winning in a multi-billion dollar global market.

We unveiled our strategic vision to be the global leader in identity data intelligence by:

  • expanding into new geographies and sectors
  • focussing on the end-to-end customer lifecycle
  • evolving into linked platforms
  • using M&A to enhance capability and reach.

The Annual General Meeting (‘AGM’) is the main forum for dialogue between smaller, private investors and the Board. The chairs of the Board and its Committees, along with all other Directors, go to the AGM and are available to answer questions from shareholders.  The AGM is also a chance to demonstrate our products and services, and explain how they work and how our customers use them. Although, this year, due to the Covid-19 outbreak shareholders are not be permitted to attend the AGM in person. Anyone seeking to attend the meeting in person (beyond the two persons designated by the Board as being necessary to form a quorum) will be refused entry. Instead shareholders will be given the opportunity to dial in to the meeting, further information on this can be found in the Notice of AGM. The Board is taking these measures to safeguard the health of shareholders and other participants and to make the AGM as safe as possible.

The Non-Executive Chairman and Senior Independent Director are available to meet shareholders to discuss governance and anything else that is important to them. You can send a meeting request to the Company Secretary: john.constantin@gbgplc.com 

Engaging with our stakeholders strengthens our relationships and helps us make better business decisions that deliver on our commitments. We take our corporate social responsibilities seriously. That means maintaining effective working relationships with stakeholders including employees, partners, customers, suppliers and regulatory authorities. There is more detail on how we do this in our Corporate Responsibility Statement, Directors Report and through our Section 172 Statement.

In our operations and working methods, we balance the needs of all of these stakeholder groups while still promoting our success.  We promote a culture of honesty, integrity, trust and respect, and 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 help desk. Over the past three years we have listened to what our customers have to say by analysing over 2,500 pieces of direct customer feedback, and we have used this to design and prioritise improvement initiatives. We also use a range of customer experience measures to make sure the changes we make have a positive impact on our customers and over the past three years all our key customer measures have improved.

Risk management and controls

Our main corporate objective is to maximise long-term value to all of our stakeholders. Our Directors recognise that creating this value is the reward for taking business risks. The Board’s policy on risk management covers all significant business risks to the Group, including financial, operational and compliance risks that could be barriers to achieving our business objectives.

We base our regular and exceptional reporting to management and the Board on monitoring risk and control processes across headline risk areas and other business-specific risk areas. We have designed our risk assessment and reporting criteria to give the Board a consistent, Group-wide perspective of the key risks. Regular reports to the Board include an assessment of how likely risks are to materialise and the impact they would have if they did, as well as what steps we are taking to mitigate risk and how effective these are.

The Board has overall responsibility for our approach to assessing risk and systems of internal control and for monitoring how effective they are. Any system of internal control has inherent limitations. The system is designed to manage risks rather than eliminate them. It provides only reasonable and not absolute assurance against material misstatement or loss and flags any new and material risks to the Board.

The Board believes risk assessment and control, with an acceptable risk/reward profile, is 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.

You can see a summary of the principal risks and uncertainties facing the Group, as well as what we do to mitigate them, here.

Budgets
For the 2020 financial year, GBG completed its annual, comprehensive budgeting process which the Board reviewed and approved. During the 2020 financial year the Board received regular reports on our results, compared with both budget and the previous year.

The budgeting process for the 2021 financial year was well progressed by March 2020, however, the events of Covid-19 and the uncertainties this placed on agreeing any meaningful and accurate budget meant that the final review and approval process was postponed. Instead, the Board receives weekly updates from the Executive Directors on the financial performance of the Group (including, but not limited to, revenue, growth and cash) in order to monitor progress, trends and assessment of the Group banking covenants. The Board will commence a budgeting process as soon as circumstances and certainty in our markets improve to support this exercise.

The Board has undertaken a rigorous and in-depth assessment of GBG’s financial position and outlook and has adopted the going concern principle in preparing these financial statement, as described in note 2.2 of the accounts.

Insurance
We have comprehensive insurance cover against material loss or claims against GBG. We are also covered for actions taken against the Directors because of their roles. Each year, we review the sums we insure and what type of cover we have.

The Board is made up of the Non-Executive Chairman, David Rasche; three Executive Directors, Chris Clark, Dave Wilson and Nick Brown; and three Non-Executive Directors, Liz Catchpole, Charmaine Carmichael and Natalie Gammon. In the Board’s opinion, Liz, Charmaine and Natalie are independent in character and judgement. The Board has considered David Rasche’s length of service and is confident that he is still independent in character and judgement, however, in line with best practice he will be subject to annual re-election.

The Executive Directors all work full-time for the Group. The Non-Executive Directors work part-time, alongside other commitments outside of GBG. A summary of these commitments appears in their biographies. In the Chairman’s opinion, having consulted with the other directors, each member of the Board gives the right amount of time to fulfil their responsibilities.

All the Directors are elected by shareholders at the first AGM after they have been appointed to the Board. They then put themselves up for re-election at least once every three years, in line with our Articles of Association. To see which Directors are looking to be reappointed at the 2020 AGM, see the Directors’ Report and Notice of AGM. The service agreements for each of the Directors are available from our registered office in Chester. 

The Board has a formal schedule of matters reserved for it to decide on, which is available here.  The Board meets regularly to review trading performance, review risks, make sure we have enough funding, set and monitor strategy, examine major business opportunities and report to shareholders.

Our approved annual calendar of Board meetings makes sure the Board meets regularly at scheduled times. Besides these, the Board also meets to deal with urgent business whenever needed and is provided with all relevant information in advance. For example, the full Board has met on weekly basis since the onset of the Covid-19 pandemic. The Non-Executive Directors have also met during the year without the Executive Directors and Chairman. 

In the year to 31 March 2020, the Board met 9 times. The table below shows what proportion of meetings each member attended.

 

Name

Board (9 meetings)

David Rasche

100%

Chris Clark

100%

Dave Wilson

100%

Nick Brown

100%

Charmaine Carmichael

100%

Liz Catchpole

100%

Natalie Gammon*

100%

*Natalie joined GBG in November 2019 and her attendance is based on the number of meetings since her start date.

In response to the Covid-19 pandemic, the Board has been meeting weekly since 24 March 2020 and receives update reports from the Executive Directors on matters relating to our people, financial health, customers, operations and competitors.  There has been full attendance of the directors at these meetings.

The Directors’ biographies show their experience and skills, along with their Committee memberships. The Board is satisfied that it currently has the right balance of experience, skills, independence and expertise for the business. Each member of the Board understands the need to maintain their skills, which includes roles and experience with other boards and organisations as well as formal training.      

The Chairman, with the Company Secretary and Chief Executive Officer:

  • Regularly reviews the make-up of the Board to see that it has the breadth and depth of skills to support the development of GBG. The Board believes that all the Non-Executive Directors have the competence and calibre to add strength and objectivity to GBG’s activities, as well as considerable experience. The Board is also mindful of the need for more gender diversity and is happy to report that three out of the seven Board members are women     
  • Makes sure the Directors stay up to date on key issues and developments that affect us and our operational environment, as well as their own responsibilities as Board members.

Through the year, the Directors get updates from the Company Secretary and from external advisors, including our auditor, NOMAD and remuneration consultants, on corporate governance matters.

We have appointed a Senior Independent Director (SID) to give shareholders another channel of communication and be an intermediary for the other Directors where they need it. The SID can also be a deputy for the Chairman at meetings or events.

Directors’ service contracts or appointment letters say they should get personal advice to help with their duties and responsibilities.

Evaluations

Every year, we ask each Board member to complete an online questionnaire as part of our Board evaluation process. This is a chance to comment and suggest improvements. The responses go to the Chairman in a detailed report and actions go to the Board to discuss and take forward.

The Board gets external evaluation of its performance at least every three years.

Last year we reported that Springboard had run an evaluation of the Board in February and March 2019. The process involved detailed questionnaires and observing the Board in action to assess it, as well as the Committees and make sure it is fully equipped to give the Group the support it needs.

The areas they highlighted to focus on were mainly ones the Board had already pinpointed in its development road map, including:

  1. improved visibility of management succession and capacity planning
  2. further use of external advisors and appoint an internal auditor
  3. Board composition and balance.

Since then, we have taken steps to improve our reviews of succession planning from operational and strategic standpoints. Also, we now have a larger panel of advisors for corporate transactions and have appointed BDO LLP as GBG’s internal auditor. We have also strengthened the make-up of the Board with an additional Non-Executive Director. The Board is committed to continual improvement and further development of its processes, policies and procedures. 

As well as evaluating the Board and its Committees, we evaluate individual Directors through peer-group meetings. The Non-Executive and Executive Directors monitor, evaluate and appraise each other’s performance. The Non-Executive Directors also meet at least once a year to appraise the Chair’s performance.

The appraisal process lets the Board see whether a Director is contributing effectively and showing commitment to the role. Under the process, the Chairman or Chief Executive Officer takes up any performance issues with the individual Director and the Chairman assesses whether they need any training and development.

The Chairman 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.

Appointments to the Board

We fill vacancies on the Board after evaluating candidates with 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 and also meet with senior managers of the Group for detailed information and presentations on Group strategy, products and services. We appointed Natalie Gammon as a Non-Executive Director this year and this induction process detailed above was followed.

Information on our corporate culture, values and behaviours is in our Chairman’s Statement and Corporate Responsibility report.

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 Executive Directors have day-to-day responsibility for the operational management of our activities.

 

  • The Non-Executive Directors are responsible for bringing independent and objective judgement to Board decisions.

 

  • The Board 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 Chairman 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 Chairman 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 sticks to rules and regulations.

The Board meets at least nine times a year in line with its meeting calendar. Before the start of each financial year, we arrange this schedule to match the Group’s financial calendar and trading calendar as closely and possible, while also spreading meetings across the financial year as much as we can.  We might hold extra meetings as and when we need to.

Board members get information and an agenda at least five working days before each meeting.

The Board has established Audit & Risk, Remuneration and Nomination Committees with formally delegated duties and responsibilities. The Terms of Reference for each are here.

A summary of the Audit & Risk Committee’s work in the year ended 31 March 2020 is in the Audit & Risk Committee Report.

A summary of the Nomination Committee’s work in the year ended 31 March 2020 is in the Nomination Committee Report.

A summary of the Remuneration Committee’s work in the year ended 31 March 2020 is in the Remuneration Committee Report.

It is the Chairman’s responsibility to:

  • communicate with shareholders and make sure that the Board knows about any concerns
  • make sure members of the Board, particularly the Non-Executive Directors, understand major shareholders’ views about the Group
  • make sure the Board keeps its integrity and effectiveness.

It is very important to us to communicate regularly with our various stakeholder groups in a clear, fair and accurate way. We update our website regularly, particularly the Investors section and users can register for emails about our announcements.

Our main ways of communicating with shareholders are the Annual Report and Accounts, full-year and half-year announcements, the AGM and GBG Investor Roadshows.

You can read our financial reports and AGM Notices for the past five years on our website here.


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 as a result where at least 20 percent of shareholders voted against a resolution.

As part of our programme of keeping investors informed, we also held our capital markets event in 2019, focussing on the GBG Identity solution area. Here, we discussed our strategic direction and highlighted how we are winning in a multi-billion dollar global market by expanding into new geographies and sectors, focussing on the end-to-end customer lifecycle and using M&A to enhance capability and reach. Copies of the video presentation and support material of the event (and past events) can be found on the investor section of our website





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