Ensuring effective, efficient and ethical decision-making at every level to maximise opportunities, reduce risk and deliver long-term value to all of InfraStrata’s stakeholders
The Board recognises the importance of good corporate governance and have chosen to apply the QCA Code. The QCA Code was developed by the Quoted Companies Alliance (the “QCA”), the independent membership organisation that champions the interests of small to mid-size quoted companies, in consultation with a number of significant institutional small company investors, as a suitable corporate governance code applicable to AIM companies.
As stated by the QCA, good corporate governance is about “having the right people (in the right roles), working together, and doing the right things to deliver value for shareholders as a whole over the medium to long-term”. This is achieved through a series of decisions made by the Board, which needs to be kept dynamic, diverse and engender a consistent corporate culture throughout the InfraStrata plc group of companies (the “Group”).
Our values are based on “Doing the right thing” for our people, suppliers, shareholders and other stakeholders. The Board believes this is vital to creating a sustainable, growing business and is a key responsibility of the Group. This culture supports the Group’s objectives to grow the business through acquiring and retaining customers. It is the Board’s job to ensure that the Group is managed for the long-term benefit of all shareholders, with effective and efficient decision-making. Corporate governance is an important part of that job, reducing risk and adding value to our business.
The Board has adopted the QCA Code in line with the London Stock Exchange’s recent changes to the AIM Rules requiring all AIM-quoted issuers to adopt and comply with a recognised corporate governance code. To see how we address the key governance principles defined in the QCA Code please refer to the below table. Further information on compliance with the QCA Code will be provided in the Group’s next annual report.
Graham Lyon
Non-Executive Chairman
Deliver Growth
| QCA Code Principle | Application | What we do and why |
|---|---|---|
| 1. Establish a strategy and business model which promote long-term value for shareholders | The board must be able to express a shared view of the company’s purpose, business model and strategy. It should go beyond the simple description of products and corporate structures and set out how the company intends to deliver shareholder value in the medium to long-term. It should demonstrate that the delivery of long-term growth is underpinned by a clear set of values aimed at protecting the company from unnecessary risk and securing its long-term future. | The Group’s strategy is explained fully within our Strategic Report section on pages 3 to 8 of our Annual Report & Accounts for the year ended 31 July 2017 (the “2017 Annual Report”). Our strategy is principally focused around four key areas: (i) identification of opportunities, primarily in the energy infrastructure sector; (ii) development of projects using the skills and experience of the Company’s management team; (iii) monetisation of projects to deliver shareholder value; and (iv) identifying future energy-related projects, to ensure we have a balanced portfolio of projects at various stages of completion. The key challenges to the business and how these are mitigated are detailed on pages 7 to 8 of the 2017 Annual Report. |
| 2. Seek to understand and meet shareholder needs and expectations | Directors must develop a good understanding of the needs and expectations of all elements of the company’s shareholder base. The board must manage shareholders’ expectations and should seek to understand the motivations behind shareholder voting decisions. | The Company remains committed to listening and communicating openly with its shareholders to ensure that its strategy, business model and performance are clearly understood. Understanding what analysts and investors think about us and, in turn, helping these audiences understand our business, is a key part of driving our business forward and we actively seek dialogue with the market. We do so via investor roadshows, attending conferences and our regular reporting. The Board recognises the AGM as an important opportunity to meet shareholders. The Directors are available to listen to the views of shareholders informally immediately following the AGM. The AGM is the main forum for dialogue with retail shareholders and the Board. The notice of AGM is sent to shareholders at least 21 days before the meeting. The chairman and the Executive Directors attend the AGM and are available to answer questions raised by shareholders. For each vote, the number of proxy votes received for, against and withheld is announced at the meeting. The results of the AGM are subsequently published on this website. Our investor relations strategy is explained on page 12 of the 2017 Annual Report. The person at the Company with principal responsibility for liaising with shareholders is: John Wood. |
| 3. Take into account wider stakeholder and social responsibilities and their implications for long-term success | Long-term success relies upon good relations with a range of different stakeholder groups both internal (workforce) and external (suppliers, customers, regulators and others). The board needs to identify the company’s stakeholders and understand their needs, interests and expectations. Where matters that relate to the company’s impact on society, the communities within which it operates or the environment have the potential to affect the company’s ability to deliver shareholder value over the medium to long-term, then those matters must be integrated into the company’s strategy and business model. Feedback is an essential part of all control mechanisms. Systems need to be in place to solicit, consider and act on feedback from all stakeholder groups. | Engaging with our stakeholders strengthens our relationships and helps us make better business decisions to deliver on our commitments. The Board stays abreast of stakeholder insights into the issues that matter most to them and our business, which enables the Board to understand and consider these issues in decision-making. Aside from our shareholders and suppliers, our core management team is one of our most important stakeholder groups and the Board closely monitors any feedback it receives from members of the team to ensure alignment of interests. For more information please see our Strategic Report principal risks and uncertainties section on pages 7 to 8 of the 2017 Annual Report. The Group encourages feedback from all those organisations which it works or otherwise engages with. |
| 4. Embed effective risk management, considering both opportunities and threats, throughout the organisation | The board needs to ensure that the company’s risk management framework identifies and addresses all relevant risks in order to execute and deliver strategy; companies need to consider their extended business, including the company’s supply chain, from key suppliers to end-customer. Setting strategy includes determining the extent of exposure to the identified risks that the company is able to bear and willing to take (risk tolerance and risk appetite). | The principal risks and uncertainties faced by the Group are detailed on pages 7 to 8 of the 2017 Annual Report. We detail the risks to the business, how these are mitigated and the change in the identified risk over the last reporting period. The Board considers risk to the business at Board meetings (which are scheduled to take place at least quarterly). Due to the recent changes at Board and management team level, Board meetings have taken place with increased frequency. Management are usually invited to attend the Board meetings, but are asked to leave any meetings when the Board wishes to discuss and/or otherwise resolve any Board-specific, confidential or sensitive matters. The Company formally reviews and documents the principal risks to the business at least bi-annually. The Board and management team are responsible for reviewing and evaluating risk and the Executive Directors meet at monthly intervals to review ongoing trading performance, discuss budgets and forecasts, and new risks associated with ongoing trading and projects. A risk committee has been recently established by the Board (further details of which are contained in Principle 5 below). |
Maintain a Dynamic Management Framework
| QCA Code Principle | Application | What we do and why |
|---|---|---|
| 5. Maintain the board as a well- functioning, balanced team led by the chair | The board members have a collective responsibility and legal obligation to promote the interests of the company, and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the chair of the board. The board (and any committees) should be provided with high quality information in a timely manner to facilitate proper assessment of the matters requiring a decision or insight. The board should have an appropriate balance between executive and non-executive directors and should have at least two independent non- executive directors. Independence is a board judgement. The board should be supported by committees (e.g. audit, remuneration, nomination) that have the necessary skills and knowledge to discharge their duties and responsibilities effectively. Directors must commit the time necessary to fulfil their roles. | The Board comprises the Non-Executive Chairman, one Executive Director and two Non-Executive Directors. Whilst the Company has not appointed an independent non-executive director and whilst the Company has not referred to him as an independent, the Board believes that Arun Raman satisfies the independence requirements. Furthermore, the Board considers the Non-Executive Directors bring an independent judgment to bear. The Board is satisfied that it has a suitable balance between independence on the one hand, and knowledge of the Company on the other, to enable it to discharge its duties and responsibilities effectively. All Directors are encouraged to use their independent judgement and to challenge all matters, whether strategic or operational. The Board intend to continue to assess and monitor the Company’s requirements in this regard, and expect to review the situation on an ongoing basis. All Directors receive regular and timely information relating to the Group’s operational and financial performance. Relevant information is circulated to the Directors in advance of meetings. In addition, minutes of the meetings of the Directors are circulated to the Board for approval. The Board has a formal schedule of matters reserved to it and is supported by the Audit and Remuneration Committee. The Committees’ Terms of Reference are available below this table. The primary tasks of the CEO are as follows: (i) leads the development and execution of long-term corporate strategy; (ii) responsible for all day-to-day management decisions and implementing corporate long and short-term plans; (iii) acts as direct liaison between the Board and management team; and (iv) communicates on behalf of the Company to internal and external stakeholders. The primary tasks of the CFO are as follows: (i) overseeing the administrative, financial, and risk management operations of the Company (ii) developing financial and operational strategy, including the metrics linked to strategy; (iii) ongoing development and monitoring of control systems designed to preserve Company assets; and (iv) reporting accurate financial results. The primary tasks of the Chairman are as follows: (i) leads the Board and ensures its effective operation; (ii) providing support and supervision to the management team; and (iii) monitoring and upholding corporate governance standards. The Board’s role is to oversee and manage the Group, in as a responsible and efficient manner as possible. Broadly, the Board focuses on four key areas: (1) establishing vision, mission and values; (2) setting strategy and structure; (3) delegating to management; and (4) exercising accountability to shareholders and being responsible to relevant stakeholders. The Company has the following committees: (i) Audit Committee; (ii) Remuneration, Nomination and Corporate Governance Committee; and (iii) Risk Committee. The members of the Audit Committee are: Arun Raman (Chair), Graham Lyon and Matthew Beardmore. The members of the Remuneration, Nomination and Corporate Governance Committee are: Graham Lyon (Chair), Matthew Beardmore and Arun Raman. The members of the Risk Committee are: Graham Lyon (Chair), John Wood, Matthew Beardmore and Arun Raman. Further information on the roles of the committees are contained on page 12 of the 2017 Annual Report (excluding the Risk Committee, which was formed after the publication of the Report). |
| 6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities | The board must have an appropriate balance of sector, financial and public markets skills and experience, as well as an appropriate balance of personal qualities and capabilities. The board should understand and challenge its own diversity, including gender balance, as part of its composition. The board should not be dominated by one person or a group of people. Strong personal bonds can be important but can also divide a board. As companies evolve, the mix of skills and experience required on the board will change, and board composition will need to evolve to reflect this change. | The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and experience, including in the areas of energy, engineering, finance, capital markets, innovation and international trade. All Directors receive regular and timely information on the Group’s operational and financial performance. Relevant information is circulated to the Directors in advance of meetings. The Directors’ service contracts are available for inspection at the Company’s registered office and at each AGM. All Directors retire by rotation at regular intervals in accordance with the Company’s Articles of Association. Appointment, removal and re-election of Directors The Board makes decisions regarding the appointment and removal of Directors, and there is a formal, rigorous and transparent procedure for appointments. The Company’s Articles of Association require that one-third of the Directors must stand for re-election by shareholders annually in rotation; that all Directors must stand for re-election at least once every three years; and that any new Directors appointed during the year must stand for election at the AGM immediately following their appointment. Independent advice All Directors are able to take independent professional advice in the furtherance of their duties, if necessary, at the Company’s expense. In addition, the Directors have direct access to the advice and services of the Chief Financial Officer and Company Secretary. |
| 7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement | The board should regularly review the effectiveness of its performance as a unit, as well as that of its committees and the individual directors. The board performance review may be carried out internally or, ideally, externally facilitated from time to time. The review should identify development or mentoring needs of individual directors or the wider senior management team. It is healthy for membership of the board to be periodically refreshed. Succession planning is a vital task for boards. No member of the board should become indispensable. | The individual contributions of each of the members of the Board are regularly assessed to ensure that: (i) their contribution is relevant and effective; (ii) that they are committed; and (iii) where relevant, they have maintained their independence. The Board intends to review the performance of the team as a unit to ensure that the members of the Board collectively function in an efficient and productive manner. One-third of the Directors must stand for re-election by shareholders annually in rotation and all Directors must stand for re-election at least once every three years. For more information please see our Strategic Report principal risks and uncertainties section on pages 7 to 8 of the 2017 Annual Report. The Group encourages feedback from all those organisations which it works or otherwise engages with. |
| 8. Promote a corporate culture that is based on ethical values and behaviours | The board should embody and promote a corporate culture that is based on sound ethical values and behaviours and use it as an asset and a source of competitive advantage. The policy set by the board should be visible in the actions and decisions of the chief executive and the rest of the management team. Corporate values should guide the objectives and strategy of the company. The culture should be visible in every aspect of the business, including recruitment, nominations, training and engagement. The performance and reward system should endorse the desired ethical behaviours across all levels of the company. The corporate culture should be recognisable throughout the disclosures in the annual report, website and any other statements issued by the company. | Page 8 of the 2017 Annual Report details the environmental values of the Group, where we outline our commitments to act in a socially responsible manner and maintain good local community relations. We have appointed Judith Tweed, who is the persona principally responsible for managing and maintaining local community relations in Islandmagee, Northern Ireland, to the board of directors of the Group subsidiary Islandmagee Storage Limited. The Board sees this as important for ensuring that the local community we work realise how important we view our relations with the local community. The Group supports the growing awareness of social, environmental and ethical matters when considering business practices. |
| 9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board | The company should maintain governance structures and processes in line with its corporate culture and appropriate to its: • size and complexity; and • capacity, appetite and tolerance for risk. The governance structures should evolve over time in parallel with its objectives, strategy and business model to reflect the development of the company. | As well as the information contained in this matrix, which identifies the Group’s commitment to and application of the QCA Code, the Corporate Governance Statement on pages 12 to 13 of the 2017 Annual Report details the Company’s governance structures and why they are appropriate and suitable for it. |
Build Trust
| QCA Code Principle | Application | What we do and why |
|---|---|---|
| 10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders. | A healthy dialogue should exist between the board and all of its stakeholders, including shareholders, to enable all interested parties to come to informed decisions about the company. In particular, appropriate communication and reporting structure should exist between the board and all constituent parts of its shareholder base. This will assist: • the communication of shareholders’ views to the board; and • the shareholders’ understanding of the unique circumstances and constraints faced by the company. It should be clear where these communication practices are described (annual report or website). | The Company encourages two-way communication with its shareholders and responds quickly to all queries received. The Chairman talks regularly with the Group’s major shareholders and ensures that their views are communicated fully to the Board. The Board recognises the AGM as an important opportunity to meet private shareholders. The Directors are available to listen to the views of shareholders informally immediately following the AGM. |
Last reviewed 24th October 2018
Audit Committee
The role of the Audit Committee includes, but is not limited to:
- Consideration of the appointment of the external auditor and the audit fee.
- Reviewing the nature, scope and results of the external audit.
- Monitoring the integrity of the financial statements and interim report.
- Discussing with the auditors any problems and reservations arising from the interim and final results.
Remuneration, Nomination and Corporate Governance Committee
The role of the Remuneration, Nomination and Corporate Governance Committee includes, but is not limited to:
- Determining and reviewing the terms and conditions of service (including remuneration) and termination of employment of the Executive Management team and Directors.
- Reviewing the design of share incentive plans for approval by the Board and determining the annual award policy to the Executive Management team and Directors under existing plans.
- Developing and maintaining a formal, rigorous and transparent procedure for making recommendations on appointments and re-appointments to the Board.
- Recommending to the Board with respect to the Board composition, procedures and committees.
- Developing and recommending to the Chief Executive Officer and the Board an appropriate set of corporate governance guidelines and monitoring such governance guidelines.
Risk Committee
The role of the Risk Committee includes, but is not limited to:
- Establishing and maintaining a robust process for identifying, managing, and monitoring critical risks.
- Providing timely input to executive management on critical risk issues.
- Engaging management in a dialogue on ongoing risk management as conditions and circumstances change.