Corporate Governance Statement

 

Corporate Governance Statement for GB Group plc

(“GBG”, “the Group” or “the Company”)

As Chairman, it is my responsibility to work with my fellow Board members to ensure that the Group embraces the highest standards of corporate governance and to manage the Board in the best interests of our many stakeholders. With these responsibilities in mind, this year we have assessed the corporate governance code most appropriate for the Group.

Up until 2018, we modelled our corporate governance on the UK Corporate Governance Code, even though we were not required to do so under the AIM rules. We did this as far as practicable for an AIM company of our size.

On 8 March 2018, the London Stock Exchange issued the revised Rule 26 for AIM companies. With effect from 28 September 2018, it was a requirement for all AIM companies to disclose details of the recognised corporate governance code it had adopted, to confirm how it complies with its chosen code, where it departs from it and why. 

I am pleased to confirm that we have chosen to adopt the 2018 Quoted Companies Alliance Corporate Governance Code (the ’QCA Code’). We will report our full compliance with the QCA Code through our website and in areas of our Annual Report.

We have set out our Corporate Governance Statement on pages 45 to 49 of the 2019 Annual Report under the ten principles of the QCA Code. You can find an extract of the statement here. The QCA Code identifies these as the ten principles that companies should follow to deliver growth in the medium-to-long term and create shareholder value. We believe that applying these ten principles will help support the Group’s medium- to-long term success.

Good governance is good business

As we have said in previous years, as a Board we believe that practising good corporate governance is essential for building a successful and sustainable business. Our commitment to corporate governance has allowed us to build a healthy corporate culture throughout the Group. We promote a culture of honesty, transparency and respect to all members of GBG. We promote Group policies such as our Code of Conduct, which embodies our wider Group policies and clearly sets out how team members of GBG are expected to behave in their internal and external dealings.

We apply the same commitment to responsible and ethical business practices when we make any business decisions, at both Board and operational levels. This is particularly important to us as an acquisitive business; as we acquire more global companies, our culture is something that we need to maintain and closely monitor.

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

As always, my fellow Board members and I will be available at this year’s Annual General Meeting (‘AGM’) to answer any shareholder queries regarding the work of our Board and its Committees. The AGM will take place on Thursday 25th July 2019, 1.00.pm at our Chester office. I would like to encourage all of our shareholders to participate in the AGM.

David Rasche

Chairman

 

 

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

GBG adopts the ten principles of the QCA Code and the sections below set out the ways in which GBG applies these principles in support of GBG’s medium to long-term success. The information contained below was last reviewed on 28 June 2019:

The strategy, business model and business operations of GBG are set out in the Strategic Review of the 2019 Annual Report on pages 14 to 31 and can be found here. The Executive Team, led by the Chief Executive Officer, is responsible for recommending to the Board the strategy for the Group taking into account the interests of its shareholders, customers, employees and other stakeholders. The Board is fully involved in discussing and developing GBG’s strategy and business model with the Executive Team before it is implemented. GBG’s Executive Team is then responsible for implementing the strategy and managing the business at an operational level.

GBG’s vision is to be the leader in identity data intelligence, informing business decisions between people and organisations globally. GBG’s strategy is to create and maintain unique online products and services which provide additional value for customers and are of sufficient strength to enable GBG to create new markets and consistently win new business against its competition. GBG achieves this through its investment in people, business and product development opportunities and the application of innovation, quality and excellence in everything it does.

In executing its strategy and operational plans, GBG’s Executive and Management teams will typically confront a range of day-to-day challenges, which GBG identifies as its principal risks and uncertainties. GBG continuously seeks to deploy the identified mitigation steps to manage these risks as they manifest themselves.  Further details of GBG’s internal control and risk management process can be found on pages 32 to 36 of the 2019 Annual Report here.

GBG’s progressive dividend policy and share performance over the last five years are also indicators of long-term value for GBG’s shareholders. Information on our historic dividends can be found here. Our total shareholder return can also be viewed in the graph on page 63 of the 2019 Annual Report here.

 We believe that being listed on AIM is currently of long-term value to our shareholders as it offers a combination of 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.

GBG seeks to maintain a regular dialogue with both existing and potential new shareholders in order to communicate strategy and progress as well as understanding the needs and expectations of shareholders.

The Chief Executive Officer, Chief Finance & Operating Officer and, where appropriate, other members of the Board meet regularly with investors and analysts to provide updates on GBG’s business and to obtain feedback regarding the Market’s expectations for GBG. Understanding what analysts and investors think about GBG and, in turn, helping these audiences understand GBG’s business, is a key part of driving the business forward. A copy of our latest investor presentation can be found here.

The Annual General Meeting (“AGM”) is the main forum for dialogue between smaller, private investors and the Board.  The chairs of the Board and all the Board’s committees, together with all other Directors, attend the AGM and are available to answer questions raised by shareholders.  GBG also provides product demonstrations at its AGM which helps to explain more about how GBG’s products and services work and how they are used by GBG’s customers.

The Non-Executive Chairman and Senior Independent Director are available to meet with shareholders to discuss matters of governance and other issues of importance to them. Requests for meetings can be submitted to: investor.relations@gbgplc.com

Engaging with GBG’s stakeholders strengthens GBG’s relationships and helps it to make better business decisions to deliver on its commitments.  GBG takes its corporate social responsibilities seriously and is focused on maintaining effective working relationships across a range of stakeholder groups (employees, partners, customers, suppliers and regulatory authorities).

GBG’s operations and working methodologies take account of the requirement to balance the needs of all of these stakeholder groups while maintaining focus on promoting GBG’s success.  At GBG, a culture of honesty, integrity, trust and respect is promoted and all members of the GBG team are expected to operate in an ethical manner in all of their dealings, whether internal or external.  GBG’s Corporate Social Responsibility Report provides further details and can be found on pages 38 to 41 of the 2019 Annual Report and Accounts here.

GBG’s customers and suppliers are mainly long-term partners and an important part of GBG’s culture is to establish and maintain relationships of trust.  In 2017, GBG recruited a Customer Experience Director and the priority since then has been to drive further improvements in product experience, customer success management and helpdesk, to simplify and streamline the use of GBG’s services.  Using direct feedback received from customers, GBG continuously looks to implement changes that drive the greatest impact on customer success. GBG’s operations programme is extending to: provide a global helpdesk; increasing process automation; and standardising the professional services model across the business. Further information on this can be found on pages 16 to 17 of the Annual Report and Accounts here.

Risk management and controls
Our main corporate objective is to maximise long-term shareholder value. As they work towards this objective, our Directors recognise that creating 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 regularly monitor risk and control processes across headline risk areas and other business-specific risk areas, providing the basis for regular and exception reporting to management and the Board. The risk assessment and reporting criteria are designed to provide the Board with a consistent, group-wide perspective of the key risks. Regular reports to the Board include an assessment of how likely risks are to happen and the impact if they did happen, as well as our risk mitigation initiatives 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. There are limitations inherent in any system of internal control. The system is designed to manage risks rather than eliminate them. It provides only reasonable and not absolute assurance against material misstatement or loss. Any new and material risks are flagged to the Board.

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

You can see a summary of the principal risks and uncertainties facing the Group, as well as mitigating actions, on pages 32 to 36 of the Annual Report here.

Budgets
We complete a comprehensive budgeting process once a year, which is reviewed, challenged and approved by the Board. The Board also receives regular reports on our results, compared with both budget and previous years.

Insurance
GBG maintains appropriate insurance to cover actions taken against the Directors and Officers, to cover the costs of defending themselves in civil proceedings taken against them in their capacity as a Director or Officer of the Group. In addition, we maintain a comprehensive insurance portfolio to cover against material loss, cyber threats and/or claims against the Group. We review the insured values and type of cover annually.

The Board is made up of the Non-Executive Chairman, David Rasche; three Executive Directors, Chris Clark, Dave Wilson and Nick Brown; and two Non-Executive Directors, Liz Catchpole and Charmaine Carmichael. It is the Board’s opinion that Liz Catchpole and Charmaine Carmichael are independent in both character and judgement. The Board has considered David Rasche’s length of service (nine years in September 2019) and is confident that he remains independent in both character and judgement.

The Executive Directors all work full-time for the Group. The Non-Executive Directors work part-time for the Group, with other commitments outside of GBG. These commitments are summarised in their biographies here. It is the opinion of the Chairman that each member of the Board dedicates an appropriate amount of time to fulfil their responsibilities.

All of the Directors are subject to election by shareholders at the first annual general meeting after their appointment to the Board. They will continue to seek reappointment at least once every three years, in accordance with our Articles of Association. Further details of those Directors seeking reappointment at the 2019 AGM can be found on pages 66 to 69 of the 2019 Annual Report here and in the Notice of AGM. The service agreements for each of the Directors are available for inspection at our registered office in Chester. 

The Board has a formal schedule of matters reserved for its decision and meets regularly to review trading performance, ensure adequate funding, set and monitor strategy, examine major business opportunities and report to shareholders. You can see the full schedule of matters reserved for the Board here.

The Board follows a pre-approved annual calendar of meetings that allows them to meet regularly for scheduled Board meetings. The Board also meet on an ad-hoc basis to deal with urgent business. The Board has full and timely access to all relevant information. The Non-Executive Directors have also met during the year without the Executive Directors and Chairman being present. 

An overview of each member’s attendance at Board meetings can be found below:

Number of meetings and percentage attendance

 

Percentage attendance

Name

Board (13 meetings)

David Rasche

100%

Chris Clark

100%

Dave Wilson

100%

Nick Brown

100%

Liz Catchpole

100%

Charmaine Carmichael

80%*

*Charmaine was unable to attend two Board meetings during the year due to a family bereavement and another commitment.

We have included the biographies of all the Directors here and on pages 42 to 43 of the Annual Report here. These biographies set out their experience and skills, along with details of their Committee memberships. The Board is satisfied that it currently has an appropriate balance of experience, skills, independence and expertise appropriate to the business. Each member of the Board understands the need to maintain their skill set, which includes roles and experience with other boards and organisations as well as formal training.

During the course of the year, the Directors received business updates and have had full access to the Company Secretary and various external advisers (including GBG’s auditor, NOMAD and remuneration consultants) on a number of corporate governance matters.

GBG has appointed Liz Catchpole as its Senior Independent Director (the ‘SID’) to provide an alternative channel of communications for shareholders and to serve as an intermediary for the other Directors where necessary. The SID is also available to deputise for the Chairman at meetings or events where the Chairman may not be available. In addition, all Directors are entitled to seek independent professional advice concerning the affairs of the Group, at the Group’s expense, although no advice was sought this year.

The Chairman regularly meets with the Chief Executive Officer and other Directors to discuss progress and performance of the Board. With that said, Board member is ultimately responsible for continuing their professional development to maintain an effective level of skills and knowledge.

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

  • Regularly reviews the composition of the Board to ensure that it has the necessary breadth and depth of skills to support the ongoing development of GBG. The Board considers that all of the Non-Executive Directors are of sufficient competence and calibre to add strength and objectivity to GBG’s activities and also bring considerable experience.  The Board is also mindful of the need for greater gender diversity and is happy to report that two out of the six Board members are female; and
  • Ensures that the Directors’ knowledge is kept up to date on key issues and developments pertaining to GBG, its operational environment and to the Directors’ responsibilities as members of the Board.

Directors’ service contracts or appointment letters make provision for a Director to seek personal advice in the furtherance of their duties and responsibilities.

Every year each Board member is asked to complete an online questionnaire to personally evaluate the Board, which provides an opportunity to comment and make suggestions for improvements. The Chairman receives a detailed report which sets out the responses and actions which are shared with the Board.  

The Board is also committed to seeking external evaluation of its performance at least every three years. This review process involves the evaluation and assessment of the work of both our Board and Committees to make sure that the Board is fully equipped to support the Group’s needs. The evaluation is carried out through detailed questionnaires and interviews and by observing the Board in action. The output from the review is a report identifying areas of focus which is then used as an improvement action plan for the Board.

In November 2015 we appointed Springboard Associates Limited (‘Springboard’) which has no other connection with the Group to carry out our first external evaluation project.  We invited Springboard to conduct a further evaluation of the Board in February and March 2019.  We are very happy to report that they did not identify any areas of concern and indeed were complimentary of the progress that we had made since the last review. The areas they identified for ongoing focus were, in the main, areas that the Board had already considered as part of its development road map (such as further improvements in the content and presentation of Board reports including; the increased use of KPI measurements, succession planning, use of external advisers and Board composition). We will be addressing the action plan in the coming year and beyond and will continue in our efforts to implement further improvements not only to accommodate changes in the governance landscape  but also to address challenges and opportunities as GBG grows in size and complexity.

Committee evaluation

The evaluation of the Committees has always been carried out by using an internal questionnaire. It is considered that this continues to be the most effective method for evaluating the Committees.

Director evaluations

Performance evaluations of each of the Directors is carried out through a series of peer-group meetings. The Non-Executive Directors monitor, evaluate and appraise the performance of the Executive Directors. In turn, Executive Directors monitor, evaluate and appraise performance of the Non-Executive Directors. The appraisal process allows the Board to assess whether a Director continues to contribute effectively and whether they demonstrate commitment to the role. If any performance issues arise, the Chairman of the Board or Chief Executive Officer will take these up with the individual Director at the appropriate time and the Chairman will assess any training and development needs.

Vacancies on the Board are filled following rigorous evaluation of suitable candidates who have an appropriate balance of skills, knowledge and experience. We consider whether or not to use recruitment consultants on a case-by-case basis.  New Directors receive formal guidance about the workings of the Board and its Committees.  In addition, shortly after their appointment, they meet with the Senior Management of the Group and receive detailed information and presentations on Group strategy, products and services.  

Overall employee experience is really important at GBG across all areas, from traditional HR and talent management practices to business ethics and the environment, through to internal communications and GBG’s physical office spaces.  GBG promotes a culture of honesty, integrity, trust and respect and all members of the GBG team are expected to operate in an ethical manner in all of their dealings, whether internal or external. GBG does not tolerate behaviour which goes against this or which could result in reputational damage to the business.

GBG’s vision is to have ‘the best and most engaged people’ because GBG understands the link between high employee engagement and results. GBG has clear strategies for how it achieves this objective and the initiatives which contribute towards this are detailed in the 2019 Annual Report.

In order that all team members have a voice within GBG and that the business is able to respond to any issues which might impact engagement, the business undertakes twice yearly engagement surveys (the Q12 survey). On the back of the Q12 results, all Senior Managers and Executive Team members are required to champion action plans within each of their areas to drive improvements, should they need to be made.

The Board and Executive Team communicates with team members on a regular basis to keep them informed of business performance. This is achieved through regular, live CEO webinars and annual workshop style events at all of GBG’s locations. Senior members of GBG’s team are encouraged to visit GBG’s international sites regularly. GBG has a global Intranet platform called ‘be/connected’. Providing all team members with access to the platform has vastly improved collaboration and communication channels across the entire business. The platform allows team members to share news stories, access learning resources and general information about GBG.

Further information on our policies, culture, values and behaviours can be found in the Chairman’s introduction to this page and in our Corporate Social Responsibility Report here.

GBG’s Board of Directors believes that practising good corporate governance is essential for building a successful and sustainable business in the long-term interests of all GBG stakeholders.

  • The Executive Directors have day-to-day responsibility for the operational management of GBG’s activities
  • The Non-Executive Directors are responsible for bringing independent and objective judgment to Board decisions.
  • The Board sets the direction for the Group through a formal schedule of matters reserved for its decision. The schedule of matters reserved for the Board can be found here.

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, ensuring that no individual or group dominates the Board’s decision-making and ensuring the Non-Executive Directors are properly briefed on matters. The Chairman has overall responsibility for corporate governance matters and chairs the Nomination Committee.
  • The Chief Executive Officer has the responsibility for implementing the strategy of the Board and managing the day-to-day business activities.
  • The Company Secretary is responsible for ensuring that Board procedures are followed and applicable rules and regulations are complied with.

The Board meets at least nine times each year in accordance with its scheduled meeting calendar. Prior to the start of each financial year, a schedule of dates for that year’s Board meetings is compiled to align as far as reasonably practicable with the Group’s financial calendar on the one hand and its trading calendar on the other, while also ensuring an appropriate spread of meetings across the financial year.  This may be supplemented by additional meetings as and when required.

The Board receives appropriate and timely information prior to each meeting; a formal agenda is produced for each meeting and papers are distributed at least 5 working days before meetings take place.

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

A summary of the work of the Audit & Risk Committee undertaken (in the year ended 31 March 2019) is set out in the Audit & Risk Committee Report on pages 50 to 53 of the 2019 Annual Report here.

A summary of the work of the Nomination Committee undertaken (in the year ended 31 March 2019) is set out in the Nomination Committee Report on page 65 of the 2019 Annual Report here.

GBG places a high priority on regular communications with its various stakeholder groups and aims to ensure that all communications concerning GBG’s activities are clear, fair and accurate. GBG’s website and in particular ‘the Investor Section’ is regularly updated and users can register to receive emails when announcements are released.

GBG’s main form of communication with shareholders is through the Annual Report and Accounts, full year and half-year announcements, the AGM and GBG Investor Roadshows.

GBG’s financial reports and AGM Notices (for the past five years) can be found here.

The results of voting on all resolutions at the AGM are announced shortly after the conclusion of the AGM.  A detailed analysis of voting at general meetings will be posted to our website including any actions to be taken as a result of resolutions for which votes against have been received from at least 20 per cent of shareholders. You will be able to access this information here shortly after our AGM.