Corporate Governance

This statement was last updated on 1st October 2020

 

Introduction
As an AIM company, from 28 September 2018, the Company is required to maintain on its website details of a recognised corporate governance code, how the Company complies with this code, and an explanation of any departure from the code.

The information will need to be reviewed annually and the website should include the date on which the information was last reviewed. The Directors generally undertake this review at the same time as the Annual Report and Accounts are prepared.

The board of directors (“the Board”) of Conduity Capital PLC (“CCAP’ or “the Company”) recognises the importance of good corporate governance and has elected to apply the QCA Corporate Governance Code that was published on 25 April 2018 (“QCA Code”) as its corporate governance code, as the Board believes that this is now the most appropriate corporate governance code for the Company.

The QCA Code has ten principles of corporate governance that the Company has committed to apply within the foundations of the business. These principles are:

 

1. Establish a strategy and business model which promote long-term value for shareholders;
2. Seek to understand and meet shareholder needs and expectations;
3. Take into account wider stakeholder and social responsibilities and their implications for long tern success;
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation;
5. Maintain the board as a well-functioning balanced team led by the Chair;
6. Ensure that between them the directors have the necessary up to date experience, skills and capabilities;
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement;
8. Promote a corporate culture that is based on ethical values and behaviours;
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board; and
10. Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders. I, in my capacity as Chairman, have assumed responsibility for leading the Board effectively and ensuring that the Company has appropriate corporate governance standards in place and that these standards are observed and applied within the Company as a whole.

The corporate governance arrangements that the Board has adopted are intended to ensure that the Company delivers medium and long term value to its shareholders. The Board maintains a regular dialogue with its investors, providing them with such information on the Company’s progress as is permitted by the AIM rules, MAR and the requirements of the relevant legislation.

The Board currently consists of two Independent Non-Executives, including the Chairman.

Gregory Collier
Non-Executive Chairman

The QCA Code sets out 10 principles that should be applied. These are listed below with a short
explanation of how the Company applies each of the principles.

Principle 1 – Business Model and Strategy

Conduity Capital PLC is a is an AIM Rule 15 cash shell and as such will be required to make an acquisition or acquisitions which constitutes a reverse takeover under AIM Rule 14 (including seeking re-admission as an investing company (as defined under the AIM Rules)) on or before the date falling six months from 1st October 2020 or be re-admitted to trading on AIM as an investing company under the AIM Rules (which requires the raising of at least £6 million), less the consideration received failing which, the Company’s Ordinary Shares would then be suspended from trading on AIM pursuant to AIM Rule 40. Admission to trading on AIM would be cancelled six months from the date of suspension should the reason for the suspension not have been rectified.

For further information on the market, the future strategy of the Company and the risks the Board consider to be the most significant for potential investors, Shareholders are referred to Strategic Report in the latest Annual Report and Accounts (which is available on our website).

Principle 2 – Understanding Shareholder’s Needs and Expectations

Communication with shareholders is co-ordinated and led between the Chairman who is the Company’s principal spokesperson with investors and other interested parties.

The Company is in dialogue with, and holds meetings with, shareholders and brokers representing private shareholders as required, providing them with such information on the Company’s progress as is permitted within the AIM rules, MAR and requirements of relevant legislation.

The Company regularly updates its website and releases news flow and operational updates. Communications are also provided through the Company’s Annual and Interim Reports.

Shareholders are encouraged to attend the Annual General Meeting, which the Board believes is a good opportunity to communicate directly with shareholders.

The Company discloses contact details on its website and on all announcements released via RNS, should shareholders wish to communicate with the Board.

Principle 3 – Consider Wider Stakeholder and Social Responsibilities

The Board believes that its stakeholders (other than shareholders) are its employees, customers, suppliers and their funders.

The Board recognises that the long-term success of the Company is reliant upon the efforts of the Company, advisers and these stakeholders.

The Board makes every effort to communicate effectively with all stakeholders, to ensure that the Company complies with contractual terms.

Principle 4 – Risk Management

The Board has overall responsibility for the determination of the Company’s risk management objectives and policies and recognises the need for an effective and well-defined risk management process. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Company’s
competitiveness and flexibility. The Board is responsible for the monitoring of financial performance against budget and forecast and the formulation of the Company’s risk appetite including the identification, assessment and monitoring of the Company’s principal risks.

For further information on the risks the Board consider to be the most significant for potential investors, Shareholders are referred to the Strategic and Directors’ Report contained in the latest Report and Accounts which are available on the Company’s website.

The Board has delegated certain authorities to committees, each with formal terms of reference, such as the Audit & Risk Committee (ARC) and the AIM Compliance Committee. The Terms of Reference for these committees, and the Remuneration & Nomination Committee (RNC), are set out in the Company’s Corporate Governance Statement in the Report and Accounts and in Principle 9 below.

Principle 5 – A Well-functioning Board of Directors

The Board is responsible for the management of the business of the Company, setting the strategic direction of the Company and establishing the policies of the Company. It is the Board’s responsibility to oversee the financial position of the Company and monitor the business and affairs of the Company on behalf of Shareholders, to whom the Directors are accountable. The primary duty of the Board is to act in the best interests of the Company at all times. The Board also addresses issues relating to internal control and the Company’s approach to risk management.

The Board now consists of two Non-Executive Directors, both of whom are considered to be independent. All the Directors are expected to devote as
much time to the affairs of the Company as may be necessary to fulfil their roles.

Gregory Collier chairs the Board. The Non-Executive Directors have accounting, fund management, technical, public market experience.

At formal meetings, the Board receives reports on the overall performance since the previous Board meeting. They are followed by reports on other matters, particularly progress with development projects. Minutes of Board Committee
meetings held since the preceding formal Board meeting are received and decisions made by those committees are submitted for ratification where such is needed.

There is a formal schedule of matters reserved for the Board. This includes the setting of high-level targets, approval of budgets, strategy, funding, capital expenditure, license agreements and incentive schemes.
Specific authority levels for expenditure are delegated to individual executives or management committees according to a schedule agreed by the Board.

Whilst the bulk of the formulation of budgets and strategy is undertaken by senior management, this is done against a framework set by the whole Board, challenged by it in detail and finally approved by it.

Financial information submitted regularly to the Board includes monthly balance sheets and profit & loss accounts; together with analyses of movements in cash, trade debtors and creditors, and fixed assets.

There are three Board Committees; each with terms of reference set by the Board. These are the combined Remuneration and Nomination Committee (RNC), the Audit & Risk Committee (ARC) and the AIM Compliance Committee (ACC). The Company’s Nomad is present at meetings of the ACC and provides advice that is passed on to the main board as necessary.

In the normal course, Board Committees make recommendations to the board but also have certain limited powers delegated to them. Minutes of Committee meetings are made available to the board as a whole but may be redacted at the discretion of the Chairman of the Committee, if appropriate in consultation with the Company Chairman. Where it is urgent that a recommendation of a Committee needs to be accepted by the board, this is done by a directors’ resolution in writing.

Certain other high level decisions that cannot await the convening of a formal Board meeting may be agreed by way of written resolutions. In such cases supporting papers are submitted to the directors and they are given the opportunity to discuss the matter with other directors and executive management. Written resolutions are deemed passed only if all directors vote in favour.

Principle 6 – Appropriate Skills and Experience of the Directors
The Company believes that the current balance of skills within the Board as a whole reflects a broad and appropriate range of commercial, technical and professional skills relevant to the business and its status as an AIM quoted company.

Biographical details of each of the Directors and officers are set out below:

Gregory Collier (‘Greg’ aged 59)

Non-executive Chairman 

Greg has more than 30 years of financial and commercial experience, having been involved in running businesses in contract cleaning, leisure, restaurant, property, and toy distribution. He is also presently on the board of Early Equity PLC quoted on Aquis Growth Market and a number of private limited companies. Greg brings to the board of Conduity Capital substantial UK corporate finance experience. The company benefits from Greg’s extensive network in the London capital markets and his experience as a director of many quoted companies.

Nicholas Lee (‘Nick’ aged 57)

Non-Executive Director

Nick Lee has over 30 years of experience in international investment banking and working as a company director. He qualified as a chartered accountant with Coopers & Lybrand and has a degree in engineering from St John’s College, Cambridge. He worked for Dresdner Kleinwort and its antecedent firms from 1988 to 2009, rising to Managing Director, Head of Banking, Hedge Fund Solutions Group. During this period, he advised leading companies from a number of different industries. Since then he has been actively involved in AIM as a director of a number of listed companies.

The Directors have access to the Company’s external advisers e.g. NOMAD, lawyers and auditors as and when required and are able to obtain advice from other external advisers when necessary. All Directors have access to independent legal advice at the Company’s expense. The Board will seek to take into account Board imbalances for future nominations, with areas to take into account including gender balance.

Principle 7 – Evaluation of Board Performance

Evaluation of the performance of the Company’s Board has historically been implemented in an informal manner. From 2018 however, the Board formally review and consider the performance of each director at or around the time of publication of the company’s annual report.

On an ongoing basis, board members maintain a watching brief to identify relevant internal and external candidates who may be suitable additions to or backup for current board members.

The Company undertakes annual monitoring of personal and corporate performance Responsibility for assessing and monitoring the performance of the executive directors lies with the independent non-executive director.

Agreed personal objectives and targets including financial and non-financial metrics are set each year for the executive directors and performance measured against these metrics.

The Board as a whole is mindful of the need for considering succession planning.

Principle 8 – Corporate Culture
The Board believes that the promotion a corporate culture based on sound ethical values and behaviours is essential to maximise shareholder value in the medium to long-term. The Company recognises the importance of promoting an ethical corporate culture, interacting responsibly with all stakeholders and the communities in which the Company operates.

The Company maintains and annually reviews a handbook that includes clear guidance on what is expected of every employee and officer of the company. Adherence of these standards is a key factor in the evaluation of performance within the company, including during annual performance reviews.

Guided by the Company’s core values of simplicity, empowerment, passion, innovation and authenticity, the Company seeks to promote a culture where its people can thrive. This means promoting strong business ethics and putting in place policies and programmes to build trust with employees.

As a first priority, The Company seeks to uphold individual human rights in its operations and expects the same from all partners. The Company’s policies outline the behaviours expected from employees and suppliers at all times and set out the Company’s zero tolerance approach towards any form of modern slavery, discrimination or unethical behaviour relating to bribery, corruption or business conduct.

To support its people, the Company makes development opportunities available to all employees through access to one of the largest online libraries of e-learning courses in the world for technical, personal and leadership skills development, as well as role-specific training and access to Instructor-Led Training. This training is aligned to personal development initiatives such as quarterly manager ‘check ins’ and real-time coaching.

The CCAP diversity policy outlines the Company’s commitment to building an inclusive culture, where people feel able to be their best at work, irrespective of age, race, sexual orientation, religion, national origin or gender.

Principle 9 – Maintenance of Governance Structures and Processes
The Board provides strategic leadership for the Company and operates within the scope of a robust corporate governance framework. Its purpose is to ensure the delivery of long-term shareholder value, which involves setting the culture, values and practices that operate throughout the business, and defining the strategic goals that the Company implements in its business plans.

The Board meets regularly to determine the policy and business strategy of the Company and has adopted a schedule of matters that are reserved as the responsibility of the Board. The Board currently consists of two Non-executive Directors.

The Board’s members have a wide range of expertise and experience and it is felt that concerns may be addressed to the Non-executive Directors.

The Board has delegated certain authorities to committees, each with formal terms of reference and as detailed above.

The Board has considered mechanisms by which the business and the financial risks facing the Company are managed and reported to the Board. The principal business and financial risks have been identified and control procedures implemented. The Board acknowledges its responsibility for reviewing the effectiveness of the systems that are in place to manage risk and to provide reasonable but not absolute assurance with regard to the safeguarding of the Company’s assets against misstatement or loss.

Internal controls
The Board has ultimate responsibility for the Company’s system of internal control and for reviewing its effectiveness. However, any such system of internal control can provide only reasonable, but not absolute, assurance against material misstatement or loss. The Board considers that the internal controls in place are appropriate for the size, complexity and risk profile of the Company. The principal elements of the Company’s internal control system include:

 

• Close management of the day to day activities of the Company by the executive Directors;
• An organisational structure with defined levels of responsibility, which promotes entrepreneurial decision
• making and rapid implementation whilst minimising risks;
• A comprehensive annual budgeting process producing a detailed integrated profit and loss, balance sheet
• and cash flow, which is approved by the Board;
• Detailed monthly reporting of performance against budget; and
• Central control over key areas such as capital expenditure authorisation and banking facilities.

The Company continues to review its system of internal control to ensure compliance with best practice, whilst also having regard to its size and the resources available. The Board considers that the introduction of an internal audit function is not appropriate at this juncture.

The Board has approved terms of reference for its Audit & Risk, AIM Compliance and Remuneration &Nomination Committees to which certain responsibilities are delegated. The chair of each committee reports to the Board on the activities of that committee. These terms are set out in full in on Pages 11/12 of the 2018 Annual Report & Accounts which is also available on our website.

The Chairman has overall responsibility for corporate governance and in promoting high standards throughout the Company. He leads and chairs the Board, ensuring that committees are properly structured and operate with appropriate terms of reference, ensures that performance of individual Directors, the Board and its committees are reviewed on a regular basis, leads in the development of strategy and setting objectives, and oversees communication between the Company and its shareholders.

The Independent Non-Executive Directors contribute independent thinking and judgement through the application of their external experience and knowledge, scrutinise the performance of management, provide constructive challenge to the Executive Directors and ensure that the Company is operating within the governance and risk framework approved by the Board.

The Board reviews annually the effectiveness of its corporate governance structures and processes.

The primary duty of the Board is to act in the best interests of the Company at all times. The Board also addresses issues relating to internal control and the Company’s approach to risk management.

The Company has also implemented a code for Directors´ and employees´ dealings in securities which is appropriate for a company whose securities are traded on AIM and is in accordance with the requirements of the Market Abuse Regulation which came into effect in 2016.

Principle 10 – Shareholder Communication

The Board is committed to maintaining good communication with its shareholders and investors, providing them with such information on the Company’s progress as is permitted by the AIM rules, MAR and the requirements of the relevant legislation.

The Board believes that the Company’s Annual Report and Accounts, and its Interim Report published after the half year, play an important part in presenting all shareholders with an assessment of the Company’s position and prospects.

The Annual General Meeting is the principal opportunity for private shareholders to meet and discuss the Company’s business with the Directors. There is an open question and answer session during which shareholders may ask questions both about the resolutions being proposed and the business in general. The Directors are also available after the meeting for an informal discussion with shareholders.

Results of shareholder meetings and details of votes cast will be publicly announced through RNS and displayed on the Company’s website with suitable explanations of any actions undertaken as a result of any significant votes against resolutions.

All reports and press releases are published on the Company’s website: conduitycapital.co.uk and the Company will continue to keep its website up to date, participate in investor presentations, attend conferences and release news flow and operational updates as appropriate.

The Company also includes a Corporate Governance Report in its Annual Report and Accounts.

Directors
Gregory Collier (Non-executive Chairman)

Nicholas Lee (Non-executive Director)

Secretary and Registered Office
International Registrars Limited Finsgate
5-7 Cranwood Street
London
EC1V 9EE

Financial and Nominated Adviser
SPARK Advisory Partners Limited
5 St. Johns Lane
London
EC1M 4BH

Stockbroker
Peterhouse Capital Ltd
New Liverpool House
80 Cheapside
London EC2V 6EE

Solicitors
Bracher Rawlins
77 Kingsway
London
WC2B 6SR

Auditors
Jeffreys Henry LLP
Chartered Accountants & Registered Auditors Finsgate
5-7 Cranwood Street
London EC1V 9EE

Registrars
Link Group
34 Beckenham Road Beckenham
Kent
BR3 47U

The Role of the Board
Minutes of board Committee meetings held since the previous formal board meeting are received and decisions made by those committees are submitted for ratification where such is needed. There is a formal schedule of matters reserved for the board. This includes the setting of high-level targets, approval of budgets, strategy, funding, capital expenditure, license agreements and incentive schemes. Specific authority levels for expenditure are delegated to individual executives or management committees
according to a schedule agreed by the board. Whilst the bulk of the formulation of budgets and strategy is undertaken by executive directors, this is done against a framework set by the whole board, challenged by it in detail and finally approved by it. Financial information submitted regularly to the board includes monthly balance sheets and profit & loss accounts; together with analyses of movements in cash, trade debtors and creditors, and fixed assets.
There are three board Committees; each with terms of reference set by the board. These are the combined Remuneration and Nomination Committee (RNC), the Audit & Risk Committee (ARC) and the AIM Compliance Committee (ACC). The Company’s Nomad is present at meetings of the ACC and provides advice that is passed on to the main board as necessary. In the normal course, board Committees make recommendations to the board but also have certain limited powers delegated to them. Minutes of Committee meetings are made available to the board as a whole but may be redacted at the discretion of the Chairman of the Committee, if appropriate in consultation with the Company Chairman. Where it is urgent that a recommendation of a Committee needs to be accepted by the board, this is done by a directors’ resolution in writing. Certain other high-level decisions that cannot await the convening of a formal board meeting may be agreed by way of written resolutions. In such cases supporting papers are submitted to the directors and they are given the opportunity to discuss the matter with other directors and executive
management. Written resolutions are deemed passed only if all directors vote in favour.

The Audit and Risk Committee

The Audit and Risk Committee has Gregory Collier as Chairman, and has primary responsibility for monitoring the quality of internal controls ensuring that the financial performance of the Company is properly measured and reported on and reviewing reports from the Company’s auditors relating to the Company’s accounting and internal controls, in all cases having due regard to the interests of Shareholders. The Audit and Risk Committee meets at least twice a year. Nicholas Lee is the other member of this Committee.

The Remuneration and Nomination Committee 

The Remuneration and Nomination Committee has Nicholas Lee as Chairman, and will review the performance of the executive directors and determine their terms and conditions of service, including their remuneration and the grant of options, having due regard to the interests of Shareholders. The Remuneration and Nomination Committee meets no less than once every year. Gregory Collier is the other members of this Committee.

The AIM Compliance Committee

The AIM Compliance Committee has Gregory Collier as Chairman and will meet twice a year to consider the Company’s compliance with the AIM Rules and any changes to the AIM Rules since the last meeting. The Company’s Nominated Adviser will be invited to attend each meeting of the AIM Compliance Committee. Nicholas Lee is the other member of this Committee.