Corporate Governance Statement

 

Corporate Governance Statement for GB Group plc

(“GBG”, “the Group” or “the Company”)

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

I am pleased to confirm that GBG has adopted the 2018 Quoted Companies Alliance Corporate Governance Code (the “QCA Code”) and through this statement, we will report our full compliance 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. The QCA Code identifies ten principles to be followed in order for companies to deliver growth in long-term shareholder value. This is achieved by adopting an efficient, effective and dynamic management framework accompanied by good communication to promote confidence and trust. We believe that GBG’s full application of the ten principles of the QCA Code will support the Group’s medium to long-term success.

As Chairman, it is my responsibility, working with my fellow board colleagues, to ensure that the highest standards of corporate governance are embraced 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 ensure that the Board are made aware of any shareholder concerns;

• take steps to ensure that the members of the Board, in particular the Non-Executive Directors, develop an understanding of the views of major shareholders about the Group; and

• for ensuring the Board’s integrity and effectiveness.

The following statement of compliance sets out the ways in which GBG applies the ten principles of the QCA Code.

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 26 September 2018:

The strategy, business model and business operations of GBG are set out in the Strategic Review of the 2018 Annual Report on pages 14 to 25 and can be found here. The Executive Team, led by the Chief Executive, is responsible for recommending to the Board the strategy for the Group having regard to 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 implementation. 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 28 to 31 of the 2018 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 with total shareholder return shown in the graph on page 56 of the 2018 Annual Report and can be found here.

GBG believes that remaining on AIM is of long-term value to its 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 Financial 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.

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 Statement provides further details and can be found on pages 32 to 35 of GBG’s Annual Report and Accounts 2018, 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 this financial year is 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.

GBG’s corporate objective is to maximise long-term shareholder value. In doing so, the Directors recognise that creating value is the reward for taking business risks. The Board’s policy on risk management encompasses all significant business risks to GBG, including financial, operational and compliance risks, which could undermine the achievement of business objectives.

Regular monitoring of risk and control processes, across headline risk areas and other business-specific risk areas, provides 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 the likelihood and impact of risks materialising, as well as risk mitigation initiatives and their effectiveness.

The Board has overall responsibility for GBG’s approach to assessing risk and systems of internal control and for monitoring their effectiveness. Due to the limitations that are inherent in any system of internal control, such a system is designed to manage rather than eliminate the risks of failure to achieve business objectives and provides only reasonable and not absolute assurance against material misstatement or loss. Any new and material risks are flagged, without delay, to the Board.

The Board considers risk assessment and control to be fundamental to achieving its corporate objectives within an acceptable risk/reward profile and confirms that there is an ongoing process for identifying, evaluating and managing the significant risks faced by GBG and the effectiveness of related controls.

A summary of the principal risks and uncertainties facing GBG, as well as mitigating actions, are set out on pages 28 to 31 of the 2018 Annual Report and can be found here.

A comprehensive budgeting process is completed once a year and is reviewed and approved by the Board. GBG’s results, compared with both budget and previous year, are regularly reported to the Board.

GBG maintains appropriate insurance cover in respect of actions taken against the Directors because of their roles. In addition, GBG maintains a comprehensive insurance portfolio to cover against material loss or claims against GBG. The insured values and type of cover are reviewed annually.

GBG’s Board currently comprises three Non-Executive Directors and three Executive Directors. All of the Directors are subject to election by shareholders at the first AGM after their appointment to the Board and will continue to seek re-election at least once every three years.

Directors’ biographies are set out here and further details about the workings of the Board can be found on pages 40 to 43 of GBG’s Annual Report 2018, here.

The Board considers itself to be sufficiently independent. The QCA Code suggests that a board should have at least two independent Non-Executive Directors. Each of the Non-Executive Directors who currently sit on GBG’s Board is regarded as independent under the QCA Code’s guidance for determining independence.

The Executive Directors all work full time for GBG. The Chairman has a range of business and family interests and the other two Non-Executive Directors have commitments outside GBG. These are summarised in their biographies but the Chairman considers that each of the Non-Executive Directors gives the appropriate amount of time to thoroughly fulfil their responsibilities to GBG..

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.

During the course of the year, the Directors receive updates from the Company Secretary and also from various external advisers (including GBG’s auditor, NOMAD and remuneration consultants) on a number of corporate governance matters.

GBG has appointed a Senior Independent Director (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.

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

The Directors’ biographies are set out here.

Every year each Board member is requested to complete an online questionnaire to personally evaluate the Board, this provides an opportunity to comment and make suggestions for improvements. The responses to the surveys are provided to the Chairman in a detailed report and actions are shared with the Board.

Every three years the evaluation of the Board is externally facilitated. In November 2015 GBG appointed an independent Board Evaluation specialist to evaluate and assess the work of both GBG’s Board and Committees to ensure that the Board was fully equipped to support GBG’s growing needs. The evaluation was carried out through detailed questionnaires, interviews and observing the Board in action. Areas of focus were identified and resulted in an action plan for the Board. GBG’s progress against the areas of focus identified in the 2015 Board Evaluation can be found on page 43 of GBG’s Annual Report 2018, here.

In line with good practice, it is the intention that the evaluation of the Board will be externally facilitated in 2018. 

The Board may utilise the results of the evaluation process when considering the adequacy of the composition of the Board and for succession planning.

In addition to the above, the Chairman regularly meets with the Chief Executive and the other Directors outside of the Board meetings to discuss progress and performance both of the Group and the Board.

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 GBG’s Annual Report and Accounts each year. 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 also provides team members with the means to report regular feedback through GBG’s Global Engagement Ambassador Program.  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.

GBG’s Corporate Social Responsibility Statement can be found 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 [link to webpage].

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 2018) is set out in the Audit & Risk Committee Report on pages 44 to 46 of GBG’s Annual Report 2018 and can be found here.

A summary of the work of the Nomination Committee undertaken (in the year ended 31 March 2018) is set out in the Nomination Committee Report on pages 47 of GBG’s Annual Report 2018 and can be found here.

A summary of the work of the Remuneration Committee undertaken (in the year ended 31 March 2018) is set out in the Remuneration Committee Report on pages 48 to 49 of GBG’s Annual Report 2018 and can be found 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. In future, more detailed analysis of voting at general meetings will be posted to GBG’s 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.

Index – To view the full list of the disclosures required to be published under the QCA Code along with confirmation of where they can be found click here