Corporate Governance
This information was last reviewed on 28 October 2024
Since admission to trading on AIM in 2006, the Company has adopted the UK Corporate Governance Code and at its Board meeting on 27 June 2018, the Board of the Company resolved to apply the UK Corporate Governance Code, published by the Financial Reporting Council, as revised in July 2018 (the “Code”).
The Code sets standards for good practice in relation to board leadership and effectiveness, remuneration, accountability and relations with shareholders. The provisions of the Code (the 2018 version of which the Board has resolved to adopt prior to it taking effect for Premium Listed Main Market Companies on 1 January 2019) which apply to Quadrise PLC are set out below.
Principles of the UK Corporate Governance Code
Group Compliance Docs
| File Name | Size | Download |
|---|---|---|
| UK MoJ Bribery Act 2010 Guidance | 390 KB | |
| QFI Group Compliance Policy, Practices & Procedures 2011 | 190 KB | |
| Gender Equality Policy | 83 KB |
Application of the Code
In accordance with AIM Rule 26, the following describes how the Company complies with the Code and where it departs from the Code together with an explanation of the reasons for doing so.
Board Leadership and Company Purpose
Effective and entrepreneurial board promoting sustainable success, generating value for shareholders and contributing to wider society.
Disclosure:
The Quadrise Board met formally on 14 occasions during the year ending 30 June 2024 in its endeavours to progress the announced relationships and potential projects more fully described above. In addition, the non-executive directors meet monthly with the executive team to re-assess the Company’s risk status and project progress.
Given the progress outlined in the Chair and Chief Executives’ statements, the opportunity for the Company to generate future value for shareholders remains sound in our view. Refer to further information under Provisions 1 and 14, and Principles F, G and H (Board effectiveness, Independence).
MSAR® and bioMSAR™ technology has many environmental benefits as reported elsewhere, on the Company’s website https://www.quadrise.com/esg/environmental/ and in the Company’s annual Sustainability Report, and in this way has considerable potential to contribute to wider society.
Establish the Company’s purpose, values & strategy. Directors to act with integrity and promote the desired culture.
Disclosure:
Our strategic focus on the decarbonisation of shipping and the Valkor, Moroccan and South-East Asia projects are intended to generate “points of presence”. These will enable us to better serve the shipping sector and prepare ourselves for the scaling of our business to meet demand. In this regard we intend to be the leading emulsion-based energy solutions provider to benefit the environment and create value for our stakeholders. We aim to provide the best available technology, solutions, services and MSAR® and bioMSAR™ synthetic fuel oil products for our major, market-leading customers.
Our strategy is to work with global and regional companies in the shipping, refining and industrial markets to develop, simultaneously, the capacity to both produce and consume MSAR® and bioMSAR™ emulsion fuels on a commercial scale and world-wide.
The Quadrise team of nine employees and directors are highly cohesive and motivated with a driven sense of purpose. The Company is privileged to have a highly experienced Board, setting values and strategy in our annual Business Plan, and adopting the highest standards of integrity whilst promoting a hands-on, friendly but professional culture. For further information refer to Provisions 2 and 8.
Ensure necessary resources to meet objectives and measure performance. Establish framework of controls which enable risk to be assessed and managed.
Disclosure:
We continuously review opportunities to increase efficiency, which will enhance our strategic intent and ability to deliver our business development plans, including the essential research and development support. This includes changes to the executive structure where appropriate.
Refer to Provisions 28: Assessment of Risks, and 29: Internal Controls, as well as the disclosures under Principles I and O.
Ensure effective engagement with and encourage participation from shareholders and stakeholders.
Disclosure:
Our AGM held on 27 November 2023 was an in-person event that was also streamed via the Investor Meet Company (“IMC”) platform and was followed by an investor presentation given in person and on the IMC platform. In total the AGM and investor presentation was attended by 34 shareholders and other types of attendees in person with a further 191 attendees online. Through investor conference calls (12 July 2023, 26 March 2024) with an average of 206 shareholders on each call, media interviews, presentations and regular updates to the Company website, the executive team has endeavoured to keep shareholders fully informed (within the usual disclosure constraints) on the Company’s strategic development plans. Refer to Provisions 4, 5, 6 and 7 for further information.
Workforce policies and practices are consistent with the company’s values and support long term sustainable success. Workforce able to raise matters of concern.
Disclosure:
| As a small and cohesive organisation, the Company is quickly alerted to any practices that are inconsistent with our values and determination to achieve long-term sustainable success. The Company nevertheless prides itself in having in place all of the standard procedures of a much larger corporation, together with a wealth of experience on the Board to address any workforce concerns. During the induction programme, new employees are encouraged to bring forward any concerns at any time including use of a Whistleblowing Policy. Refer to further disclosures in Provisions 2, 5 and 6. |
Provision 1: Opportunities and risks to future success.
The CEO’s Statement in the 2024 Annual Report describes the MSAR® and bioMSAR™ market opportunities consistent with the decarbonisation of shipping and associated “points of presence”. The risks associated with our endeavours have been demonstrated historically by the disappointment of the unexpected termination of the marine fuel trial by Maersk. Principal Business Risks are more fully covered on Page 8 in the Annual Report. Notwithstanding the challenges faced in our key markets, the Board firmly believes in the sustainability of the Company’s business model. Progress will not always be smooth, but we are well positioned to capitalise on experience and the significant opportunities that we see going forwards. The Company would not be able to attract the attention of partners of this calibre without clear evidence of its standards of corporate governance.
Provision 2: Monitoring corporate culture
The Company does not formally assess and monitor culture – this being a small organisation, where any deviation from policy, practices and behaviour at odds with the Company’s purpose and values would become quickly apparent to management. The Quadrise team can be described as cohesive and highly professional with a very clear sense of purpose. Team meetings are held weekly where project progress is reviewed, and remedial action taken. The performance of all employees is assessed annually together with a discussion on career development plans. The remuneration scheme for all employees includes the potential award of bonuses and options subject to company and personal performance.
Provision 3: Regular engagement with major shareholders
Refer to Disclosure under Principle D and Provision 7.
Provision 4: Action to be taken in the event there are 20% votes against a resolution
At the Company’s AGM held on 27 November 2023, six ordinary resolutions, including in relation to the directors’ authority to allot shares, were carried with at least 89.21% of votes in favour of the resolutions, save for the resolution to re-appoint Dilip Shah as a Director of the Company that was passed with 67.80% of votes in favour of the resolution. Two special resolutions, concerning the disapplication of pre-emption rights in relation to the issue of shares for cash and for the purposes of financing, were carried with at least 80.93% of votes in favour of the resolutions.
Provision 5: Stakeholder engagement mechanisms
Being a small organisation with 9 employees, the Company can readily consider and respond to views put forward by the workforce and other key stakeholders. In view of this, the Company does not have a director appointed from the workforce, a formal workforce advisory panel or a designated non-executive director to engage with the workforce.
Provision 6: A means for the workforce to raise concerns
During the induction programme and subsequently, employees are encouraged to bring forward any concerns at any time including use of a Whistleblowing Policy. If appropriate the chair of the compensation committee would be asked to investigate and seek external advice should this be necessary.
Provision 7: Identify and manage conflicts of interest
Both executive and non-executive directors meet and consult major shareholders within the usual disclosure constraints to surface and manage any potential conflicts of interest. Any related party transactions are reported in Note 23 to the financial results.
Provision 8: Board Minutes to record issues that cannot be resolved
The Board works hard to resolve any concerns about the management of the company and the operation of the Board. On occasions a director will request that the Board minutes record his divergent opinion from the majority view. A resigning non-executive director would be encouraged to provide a written statement to the chair if his resignation resulted from such a concern.
Chair responsible for board effectiveness. Promote a culture of openness and debate, facilitate constructive board relations and contribution of Non-executive Directors.
Ensure accurate, timely and clear information. Appropriate combination of exec and non-exec (particularly independent) directors so that no one individual or group dominates. A clear division between board and company leadership.
Non-exec directors to have sufficient time to meet responsibilities and provide constructive challenge, strategic guidance, specialist advice and hold executive management to account.
Disclosure:
Quadrise is privileged to have a highly qualified and practiced Board of directors of an unusual level of seniority and standing given the Company’s moderate size and still early stage of development. Refer to Director Profiles on page 13 of the Annual Report. The non-executive directors have a level of experience and gravitas that ensures a culture of openness and debate and provide the necessary challenge, guidance and advice. Detailed board papers are prepared a week ahead of meetings. For further information refer to Provision 8: Divergent opinions, Provision 10: Independence, Provision 15: Demands on time, and Provisions 16: Company Secretary.
With a Non-Executive Chair, there is a clear division between board and company leadership. Refer to Provision 9.
Ensure policies, processes, information, time and resources required to function effectively and efficiently.
Disclosure:
The Company has a digital Policies and Procedures Directory comprising some 100 policies in 22 business categories. The Policies and Procedures are intentionally kept short so that these are easy to refer to and update. Of note, each of these is reviewed and signed off by at least one nominated director (executive or non-executive) who is required to have considerable prior experience of the subject matter. Refer to Provision 29. QED has a comprehensive disaster recovery plan which is tested on a regular basis.
Expenditure and other authorities are subject to a tight Authorities Matrix, reviewed regularly by the Audit Committee.
The Company has implemented a GDPR policy and has online training facilities for Bribery and Corruption, GDPR and General Data Protection. Completion of this training is compulsory for all employees and directors.
Provision 9: The roles of chair and chief executive
Addressed under Division of responsibilities above. Jason Miles is the Company’s CEO and Andy Morrison was appointed as Non-Executive Chair on 1 February 2022.
Provision 10: Independence of non-executive directors
The profiles and experience of the non-executive directors are provided on Page 13 of the Annual Report.
Non-Executive Chair Andy Morrison has the appropriate experience as a former VP at Shell plc and holder of senior positions at BG Group plc and BOC Group plc, as well as leadership positions at junior listed companies in both the energy and ESG sectors. He is a shareholder and holds options in the Company. Mr Morrison has clearly indicated that these holdings do not and have not hindered his ability to be independent and after careful consideration the Board concurs with this view and believes him to be independent.
During the past financial year, non-executive director Laurence Mutch was a Director of Laurie Mutch & Associates Limited, which in prior years provided consulting services to the Group. No fees were charged for the 2024 financial year (2023: £nil). He is a shareholder and holds options in the Company and has been a director since 2006. Mr Mutch has clearly indicated that these potential impairments do not and have not hindered his ability to be independent and after careful consideration the Board concurs with this view and believes him to be independent. He was a former group finance director of Royal Dutch Shell, and has current, accounting (through his extensive charity activities) financing, corporate governance and regulatory experience. He thus has the experience to chair the audit and funding committees.
Non-Executive director Vicky Boiten-Lee is a shareholder and was awarded share options in the Company following the period end. Ms Boiten-Lee has clearly indicated that these holdings do not and have not hindered her ability to be independent and after careful consideration the Board concurs with this view and believes her to be independent. She has more than 20 years of international experience in the energy sector, holding several positions covering Europe, North America, China and Asia at Shell plc, where she led organisational transformations accelerating the growth of lower carbon fuels and reducing costs of compliance.
Mr Dilip Shah is closely associated with significant shareholders, he is a shareholder and holds options in the Company and is not considered independent.
In view of their contribution to the Company, non-executive directors have been awarded options in the Company, as more fully detailed on page 14 and Provision 34. In addition, each have shown their support for, and confidence in, the future of the company at fund raisings and accordingly hold shares in the Company – please refer to page 14. Whilst this may question their independence in accordance with the Code, the Board continues to hold the view that this has not and does not impair their ability to act as independent directors.
Provision 12: Appointment of a Senior Independent Director
In view of its size, the Company has not appointed a Senior Independent Director. This will be reviewed as the Company progresses its development plans. To the extent that there are unusual circumstances that may require the duties and role of a Senior Independent Director, Mr Mutch acts in this capacity.
Provision 13: Appointing and Removing Executive Directors
On the appointment of Executive Directors refer to Principle J. As discussed under Provision 41, the Compensation Committee annually reviews the performance of the Company against previously determined corporate performance targets adopted by the Board. Thenon-executive directors meet frequently to discuss any performance concerns.
Provision 14: Meetings of the Board
During the 2023-24 financial year the Board comprised the Chair, Chief Executive Officer and three non-executive Directors. At each Annual General Meeting, one third of the Directors who are subject to retirement by rotation shall retire from office provided that if their number is more than three, but not a multiple thereof, then the number nearest to but not exceeding one-third shall retire. Appropriate Directors’ and Officers’ liability insurance has been arranged by the Company.
The Board met a total of 14 times during the 2023-24 financial year, including four formal quarterly meetings to discuss a scheduled agenda covering key areas of the Group’s affairs including operational and financial performance and monthly management accounts. All relevant information is circulated in good time. The attendance record of each director is shown below:
| Director | Attendance | |
|---|---|---|
| Andy Morrison | 14 | 100% |
| Jason Miles | 13 | 93% |
| Laurence Mutch | 14 | 100% |
| Philip Snaith (resigned 1 October 2023) | 5 | 100% |
| Vicky Boiten-Lee (appointed 2 October 2023) | 9 | 100% |
| Dilip Shah | 7 | 50% |
Provision 15: Demands on Directors’ time
In addition to his role as Non-Executive Chairman, Andy Morrison is currently also a Director of Net Zero Carbon Developments Ltd, a Non-Executive director of Ondo InsurTech Plc, Non-Executive Chair of Hemspan Ltd and Managing Director of Spinnaker Management Resources Ltd. Dilip Shah has other external appointments which have been disclosed to the Board and do not, of themselves, impact the time they need to commit to the Company. Laurie Mutch and Vicky Boiten-Lee have no other external appointments.
Provision 16: Advice from the Company Secretary
In Ian Farrelly the Company has a highly experienced Company Secretary and, for example, both the chairs of the compensation and audit committees are in regular contact to seek his guidance.
A formal, rigorous and transparent procedure to board appointments. Establish a succession plan for board and senior management, based on merit and objective criteria. Promote diversity of gender, social and ethnic backgrounds, cognitive and personal strengths.
Disclosure:
The Board Nominations Committee is chaired by Vicky Boiten-Lee and comprises Andy Morrison, Laurence Mutch and Vicky Boiten-Lee. There is a formal, rigorous and transparent procedure to board appointments with the use of external recruitment advisers as may be necessary. Refer to Provision 20. In view of its small size the Board does not have a formal succession plan, and this will be put in place as the Company progresses its development plans. The Board is keen to promote diversity as the Company develops.
Board and committees to have a combination of skills, experience and knowledge. Review length of service of the board with membership regularly refreshed.
Disclosure:
Refer to Director Profiles in the Annual Report page 13. Each of the members of the Audit Committee has considerable financial experience. The members of the Audit and Compensation Committees formerly held senior executive positions in large organisations. External guidance is used in setting remuneration policy guidelines.
Mr Mutch has been on the Board for 18 years (since listing in April 2006). Whilst this is at odds with regularly refreshing the Board, long experience is highly valued by shareholders when the directors retire by rotation and are then re-elected. Refer to Provisions 18 and 19.
The annual board evaluation to consider its composition, diversity and effective working together. Individual evaluation to demonstrate whether each director continues to contribute effectively.
Disclosure:
| An annual appraisal is undertaken of the performance of each director, and the effectiveness of the Board and its committees. This involves the completion of a confidential director evaluation matrix with 10 contribution attributes, and a detailed questionnaire on board and committee performance together with an opportunity to propose performance improvements to directors, the Board and committees. These are returned to the Company Secretary and a consolidated review is provided to the Chair for review by the Board. The Chair oversees an annual evaluation of all employees with targets set for the following year. The Compensation Committee undertakes an evaluation of the Company’s performance and that of the Chair and CEO. Refer to Provision 41. |
Provision 17: The Nominations Committee
Refer to Principle J.
Provision 18: Re-election of Directors
In accordance with the Company’s Articles of Association, at each Annual General Meeting, one third of the Directors who are subject to retirement by rotation shall retire from office provided that if their number is more than three, but not a multiple thereof, then the number nearest to but not exceeding one-third shall retire.
Provision 19: Nine-year limitation of Chairman
Andy Morrison was appointed Non‐executive Chairman on 1 February 2022.
Provision 20: External search consultant
No external search consultants were appointed during the year.
Provisions 21, 22 and 23: Evaluation of the Board.
Refer to the commentary under Principle L above.
Establish formal and transparent policies and procedures to ensure independence and effectiveness of internal and external audit functions. Satisfy itself on integrity of financial and narrative statements.
Disclosure:
Refer to the Corporate Governance Statement on pages 18-28 in the Annual Report. In view of its size the Company does not have an internal audit function. However, the Audit Committee is closely consulted on the drafting of the Annual Report and of course is integral to the preparation of the annual results. The Committee has considerable governance, control and finance experience. Refer to “The work of the Audit Committee” under Provisions 24, 25 and 26.
Present a fair, balanced and understandable assessment of company’s position and prospects.
Disclosure:
Refer to the Chair’s Statement in the Annual Report, and to Provision 24, 25 and 26: The work of the Audit Committee, Provision 27: Board responsibility in preparing the accounts, Provision 30: Going Concern and Provision 31: The prospects of the Company.
Establish procedures to manage risk, oversee internal controls and determine nature and extent of principal risks in achieving its long-term strategic objectives.
Disclosure:
| The Board performs a structured risk assessment on an annual basis. This involves a review of the probability and impact of adverse events across operational regions and at corporate level. This culminates in the preparation of a risk dashboard and summary report for consideration by the Board. This is followed by a documented risk mitigation strategy that is subsequently incorporated into the annual Business Plan. Refer also to Provision 28: Assessment of the Company’s Risks and Provision 29: Risk Management and Internal Control systems. The risk review process was substantially enhanced during the year, taking into consideration urgency and importance, and appropriate forms of risk response. The relevance of every significant risk to the Company’s projects is reviewed at a monthly joint non-executive director and executive team meeting. |
Provisions 24, 25 and 26: The work of the audit committee
The Audit Committee is chaired by Laurence Mutch and comprises Vicky Boiten-Lee and Laurence Mutch, both of whom have recent and relevant financial experience and considerable competence across all elements of the oil sector. The chair of the committee provides a written or detailed verbal report as necessary of every Audit Committee meeting at the next board meeting. The committee meets at least four times a year and is responsible for monitoring the integrity of the financial statements of the Company, keeping under review the scope and results of the audit, its cost effectiveness and the independence and objectivity of the auditors. The committee provides advice on whether the annual report and accounts are fair, balanced and understandable. Due to the size of the Company, there is currently no internal audit function, although the committee has oversight responsibility for public reporting, overall good governance and the Company’s internal controls. The committee annually assists management in the formal and robust assessment of the Company’s risks. Other members of the Board, the CFO, as well as the auditors, typically attend the Audit Committee meetings.
The performance of the committee is reviewed annually by the Board as more fully described under Principle L above.
Significant Issues
The significant issues considered relating to the 2024 financial statements were Going Concern, the Valuation of Intangible Assets, and Management Override of Controls. The subject of Going Concern is covered in the Strategic Report on Page 8 in the Annual Report, in the Auditors Report on Page 29 and in Note 3 to the Financial Statements. The Valuation of Intangible Assets is addressed in the Auditors Report on Page 29 and in Note 12 to the Financial Statements.
No Internal Audit function
An internal audit function is not appropriate at this time given the Company’s current size, and in view of this, the Audit Committee consider the risk of management override of controls a significant issue. In making their assessment the Audit Committee considered specifically the controls over and approval processes covering cash payments and journals, as well as any indication of unusual transactions and any evidence of bias in the estimates made by management. The Audit Committee also considered the quality and frequency of management information provided to the Board. The Audit Committee’s conclusion was that there is no evidence of inappropriate management override of controls.
Assessment and Safeguarding the Independence and Effectiveness of the external audit process
The committee has not identified any issues with regards to integrity, objectivity and independence of the Auditors and therefore considers them to be independent.
Provision 27: Board responsibility in preparing the accounts
The Board is responsible for the direction and overall performance of the Group with emphasis on policy and strategy, financial results and major operational issues. In addition, the Board is responsible for preparing the annual report and accounts, and considers this annual report and accounts, taken as a whole, to be fair, balanced and understandable, and that it provides the information necessary for shareholders to assess the company’s position, performance, business model and strategy.
Provision 28: Assessments of the Company’s Risks
Each year in the second quarter, the Audit Committee assists the Executive Team in a structured zero-based re-assessment of the Company’s emerging and principal risks. The risk level is determined by its probability, impact on the Company, urgency and importance and appropriate risk response. A summary of “Principal Risks and Uncertainties” is reviewed at a Board meeting. Subsequently a Risk Mitigation Strategy and Action Plan is incorporated into the annual Business Planning exercise conducted in June. Refer to Principle O for further information. The nature of the Company’s activity in the fuels sector should be recognised as inherently risky.
Provision 29: Risk Management and Internal Control systems.
The Board is responsible for the effectiveness of the Group’s internal control system and is supplied with information to enable it to discharge its duties. Internal control systems are designed to meet the particular needs of the Group and to manage rather than eliminate the risk of failure to meet business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss.
The Company has a digital Policies and Procedures Directory comprising some 100 policies in 22 business categories. The Policies and Procedures are intentionally kept short so that these are easy to refer to and remain current. Of note, each of these is reviewed and signed off by at least one nominated director (executive or non-executive) who is required to have considerable prior experience of the subject matter. Expenditure and other authorities are subject to a tight Authorities Matrix, reviewed regularly by the Audit Committee. QED has a comprehensive disaster recovery plan which is tested on a regular basis. Refer to Principle I.
The Board has established a Bribery Policy, signed by all Directors and employees, to achieve compliance with the UK Bribery Act 2010, which came into effect on 1 July 2011. Agreements with third parties contain statements that the Company and its associates are required to always adhere to the UK Bribery Act 2010. The Company has implemented a GDPR policy and has online training facilities for Bribery and Corruption, GDPR and General Data Protection. Completion of this training is compulsory for all employees and directors.
Provision 30: Going Concern and Longer-Term Viability
The subject of Going Concern is covered in the Strategic Report on Page 8 of the Annual Report, in the Auditors Report on Page 29 and in Note 3 to the Financial Statements. The Group’s longer-term viability as a revenue and profit generating entity is covered in the Chairman’s statement and CEO’s statements on pages 2-7 and in the Strategic Report on Page 8.
Provision 31: The prospects of the Company
The Outlook for the Company is addressed as part of the CEO’s Statement on Page 7 of the Annual Report.
Policies and practices designed to support strategy and promote long-term sustainable success. Executive remuneration aligned to purpose and values and clearly linked to successful delivery of company’s long-term strategy.
A formal and transparent procedure for developing policy on executive remuneration should be established. No director involved in deciding their own remuneration.
Directors to exercise independent judgement and discretion when authorising remuneration outcomes, taking account of company and individual performance and wider circumstances.
Disclosure:
| Refer to the Report on Directors’ Remuneration on page 17. With reference to Provision 41, the Compensation Committee reviews remuneration policy on an annual basis to assess its effectiveness, and on behalf of the Board conducts performance appraisals of the Company, the Chairman and CEO each year. External guidance is sought as necessary in setting the terms of senior executive compensation. Refer to Provision 35: Remuneration Consultant. In consultation with the Chairman, and CEO, the committee prepares corporate targets for formal adoption by the Board and proposals to determine the award of bonuses and / or options. These are clearly linked to the delivery of long-term objectives and corporate strategy. Refer also to Provision 37: Compensation Committee discretion. |
Provision 32: Appointment of the Compensation Committee
The Compensation Committee is chaired by Vicky Boiten-Lee and comprises Vicky Boiten-Lee and Laurence Mutch. The chair of the committee provides a written or detailed verbal report as necessary of every compensation committee meeting at the next Board Meeting.
Provision 33: Remuneration Policy
Refer to Provision 41.
Provision 34: Remuneration of Non-executive Directors
The Board determines the remuneration of the non-executive directors, and no Director participates in discussions about his own remuneration. Each of the non-executive directors have been awarded share options in prior years. Provision 34 of the Code states that remuneration for non-executive directors should not include share options or other performance-related elements. However as stated above, the Company’s Non-executive Directors are of an unusual level of seniority and standing given the Company’s moderate size and still early stage of development. The Company has a small full-time team and therefore the non-executive directors are more closely engaged in the strategic development of the Company than is normally the case, and their fee compensation is low given their seniority.
Provision 35: Remuneration Consultant
At this time the committee does not make use of a remuneration consultant, but the committee does make use of independent remuneration surveys when these become readily available.
Provision 36: The award of share options to Executive Directors
Options are granted by Board resolution in line with one or more of the three QED Share Option Schemes, a Schedule 5 Enterprise Management Incentive Plan (“EMIP”), a Schedule 4 Company Share Option Plan (“CSOP”) and an Unapproved Share Option Plan (“USOP”). The award of options is tightly linked to the delivery of long-term objectives and corporate strategy. The views of shareholders are taken into consideration.
Provision 37: Compensation Committee discretion
The committee retains an attitude of applying discretion when this is applicable regarding outstanding individual performance.
Provision 38: Only basic salary to be pensionable
Only basic salary is pensionable and pension contribution rates for executive directors are in line with those for other staff.
Provision 39: Contract periods and no reward for disappointing performance
The contracts for Executive Directors have no fixed end date. Bonuses to Executive Directors are proposed by the Compensation Committee with the amount determined by a formula which factors in both Company and individual performance.
Provision 40: Remuneration Policy Principles
Refer to Provision 41.
Provision 41: The work of the Compensation Committee
The committee works within the framework of a regularly reviewed compensation policy approved by the Board. It meets at least twice a year and conducts performance appraisals of the Company against previously determined corporate performance targets adopted by the Board. External guidance is sought as necessary in setting the terms of senior executive compensation including the award of bonuses and / or options.
In determining Executive Director compensation, the committee places considerable importance on proportionality, clearly linking remuneration to the delivery of long-term objectives and corporate strategy. In designing remuneration policy, the committee has endeavoured to incorporate the principles of clarity, simplicity, and predictability. As an external measure, the committee refers to remuneration surveys of AIM companies of similar size and complexity, when these are readily available. Shareholder views on compensation have been expressed at the AGM and in other meetings, and the committee has taken these and the Company’s performance into account in its deliberations.
The Report on Directors’ Remuneration is on Page 17.
The performance of the committee is reviewed annually by the board at large as more fully described under Principle L above.
