Compliance with Corporate Governance Code
ULS Technology plc and its subsidiaries are committed to high standards of corporate governance. The Directors recognise the importance of sound corporate governance and confirm that they aim to comply with best practice appropriate for a company of its nature and scale.
Taking this into account, the Board have chosen to comply with the QCA Corporate Governance Code. Below we outline how we have applied each of the principles of the code and how its application supports the Group’s medium to long-term success.
Principle 1: Establish a strategy and business model which promote long-term value for shareholders
The Group strategy is to grow market share and value through focusing on continual improvement, innovation and quality. We will also endeavour to acquire complementary businesses to ULS where appropriate to do so.
The Group’s strategy and business model are communicated to shareholders through the Annual Report. Our strategy is discussed on pages 12 and 13 and the business model on page 8.
Principle 2: Seek to understand and meet shareholder needs and expectations
The Group seeks to maintain a regular dialogue with both existing and potential new shareholders to communicate the Group’s strategy and progress and to understand the needs and expectations of its shareholders.
The Board communicates with its shareholders in a number of ways. Principal ways are through regulatory announcements, the Annual Report and the Annual General Meeting. In addition, the CEO and the FD regularly meet with a large range of existing and potential institutional investors and private client fund managers throughout the UK. The CEO and FD have also hosted a presentation evening for private investors.
Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success
The Group has a range of stakeholders. The benefits we bring to the various parties in our business model are illustrated on page 9 of the Annual Report. Making sure that all stakeholders in the model benefit from it helps ensure the long-term viability of the model.
Chief among the Group’s stakeholders are its staff. While there is the usual day-to-day communication, the Group also holds regular ‘town hall’ meetings for staff. A high percentage of staff hold share options to enable them to share in the success of the Group.
The Group also encourages staff participation in charitable activities through time and fund matching. An example of this can be seen on page 20 of the Annual Report.
Principle 4: Risk Management
The principal risks and uncertainties affecting the Group are set out on page 18 of the Annual Report along with the potential impact and how these risks are mitigated.
The risk management committee owns and manages all risk registers for the Group. The risk management committee meets once a month to identify, assess and manage the risks faced by the Group. The risk management committee reports back to the Board their findings and the Board will assess to ensure the control systems in place are effective.
The Board and risk committee follow the following risk management cycle:
- Identify risk (Opportunities and threats)
- Assess scale of risk (Potential likelihood and impact)
- Develop risk response strategy (Transfer, Accept, Reduce, Avoid)
- Implement strategy and allocate responsibilities
- Implementation and monitoring of controls
Review and refine process and repeat the process
Principle 5: Maintain the Board as a well-functioning, balanced team led by the Chair
The Group’s Board is currently comprised of 2 Non-Executive Directors and 3 Executive Directors. The Chairman is responsible for the effective management of the Board.
All of the Board Directors are subject to election by shareholders at the first Annual General Meeting after their appointment to the Board and will continue to seek re-election at least once every three years.
The Board considers both Geoff Wicks, Chairman, and Elaine Bucknor, Non-Executive Director to be independent and consider this to be sufficient for the size and complexity of the Group. However, the Board are actively seeking a third independent Non-Executive member of the Board to increase the breadth of expertise and to assist with succession planning.
Non-Executive Directors receive their fees through payroll and are not part of any share incentive plan or bonus scheme. Geoff Wicks has purchased shares and these are disclosed in the Annual Report on page 24. The Board does not regard this holding as material or impacting his independence.
Principle 6: Ensure that between them, the Directors have the necessary up-to-date experience, skills and capabilities
The Board considers that all of the Board Directors are of sufficient competence and calibre and, together, have the range of skills necessary to run and monitor the Group successfully.
A summary of the experience, skills and capabilities of each of the Board of Directors is set out here.
The Board 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 the Group. The Board was delighted that Elaine Bucknor joined the Board in June 2018. As a growing technology group, it was felt that it was important to add additional expertise with specific technology skills and experience to the Board.
In recent years there have been some other changes to the composition of the Board. Firstly, Geoff Wicks moved from Non-Executive Director to Non-Executive Chairman and, more recently, Steve Goodall moved from a non-Group position of MD to Group CEO and a place on the Group Board. By being in a position to manage both changes internally, minimal disruption was caused.
For more details, please see page 6 of the Annual Report.
Principle 7: Evaluation Board performance based on clear and relevant objectives, seeking continuous improvement
The Board considers that the size of the Group does not justify the use of third parties to evaluate the performance of the Board on an annual basis. Nevertheless, review of the Executive Directors by the Non-Executive Directors takes place regularly throughout the year.
Should the size of the Group increase, the Board will consider whether it is appropriate to put in place a more prescribed evaluation process.
Principle 8: Promote a corporate culture that is based on ethical values and behaviours
The Board seeks to maintain the highest standards of integrity and probity in the conduct of the Group’s operations. These values are enshrined in the written policies and working practices adopted by all employees in the Group.
The Board understands that their decisions regarding strategy and risk will impact the corporate culture of the Group and that this in turn will impact the performance of the Group.
The Board is aware that the control environment set will greatly impact all aspects of the company and the way that employees behave and perform.
The Board believes that sound ethical values and behaviours set out in the ULS Ethics policy are vital to enable the company to achieve is corporate objectives. The Group places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting the performance of the Group. This is achieved through informal discussions between Group management, operating company management and employees as well as regular ‘town hall’ meetings.
Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board
The Board has overall responsibility for promoting the success of the Group. The Executive Directors have day-to-day responsibility for the operational management of the Group’s activities. The Non-Executive Directors are responsible for bringing independent and objective judgment to Board decisions.
Ten Board meetings are held each year where all Board Directors are expected to attend. The Non-Executive Directors will additionally meet with the Executive Directors on a regular basis. In particular, the Chairman will meet with the CEO monthly. The Non-Executive Directors time commitment to the Group is at least two days per month.
The Board has established Audit, Remuneration and Nominations Committees. Details of these Committees can be found here.
Principle 10: Communicate how the Group is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
How the Group and the Board communicates with its shareholders and other stakeholders is outlined above, in particular, under principles 2 and 3.
The Annual Report, notice of AGMs and results of previous AGMs can be found on the website. Whilst we have not disclosed the actual voting at each AGM in the past, just whether motions have been carried or not, we will look to disclose more details in the future.
Date of last review: 28/09/18