As Chairman, my role includes upholding the highest levels of corporate governance throughout the Company, particularly at Board level. It therefore gives me great pleasure to introduce our Governance Statement.
The Principles of Corporate Governance
As a Board we recognise the importance of high standards of corporate governance and its importance and support to our strategic goals and long-term success. The Company is listed on AIM and is therefore required from September 2018 to provide details of a recognised corporate governance code that the Board of Directors has decided to apply. We have therefore, during the year, reviewed our corporate governance framework in response to these changes. In previous years the Company has set out how it applies the principles of the UK Corporate Governance Code 2016 to the extent that they are relevant to a Company of our size.
In light of the forthcoming changes to the AIM rules and given that full compliance with the Main market code would be both unwieldly and costly, the Board has adopted the Quoted Companies Alliance Governance Code (“QCA Code”) as we consider this more applicable for small and mid-sized companies.
The Company is committed to applying the QCA Code in a way which best serves our stakeholders, given the size and nature of the Group. We explain further below how we adhere to the ten principles of the QCA Code, in four key areas.
The Board has collective responsibility for setting the strategic aims and objectives of the Group. These aims are articulated in the Chief Executive Officer’s statement in the Annual Report and on our website. In the course of implementing these strategic aims, the Board takes into account the expectations of the Company’s shareholder base and also its wider stakeholder and social responsibilities.
The Board also has responsibility for the Group’s internal control and risk management systems and structures. Our risk management process is embedded into the business and starts at Board level but is delivered throughout the Group.
The Board has overall responsibility for the effective management of all risks to which the Company is exposed. Details of the Board’s approach to risk management are set out on page 5 of the Annual Report and Accounts for the year ended 30 April 2018.
Maintaining a Dynamic Management Framework
As Chairman, I consider both the operation of the Board as a whole and the performance of individual Directors regularly. Due to the recent adoption of the QCA Code, we have not carried out a formal Board performance evaluation this year. We therefore have not yet complied with the principle 7 of the QCA Code, which requires the Company to carry out a full Board performance evaluation. We will do this during the forthcoming year.
In January 2018 we welcomed David Firth to the Board as an independent Non-Executive Director. David was appointed following the resignation of Colin Hargrave due to ill health. With David’s financial background and broad PLC experience, the Board felt he was able to bring a valuable and significant contribution to the Group. David has taken on the role of Audit Committee Chairman and is a member of the Remuneration Committee. During 2017 whilst Colin was unable to fulfil his role, David Clifford was appointed as an interim independent advisor to cover these positions in a non-board capacity. I would like to take this opportunity to thank both Colin and David Clifford for their contribution to the Company and I look forward to continuing to work with David Firth going forward. David will be put forward for election by shareholders at the next Annual General Meeting. As with this recent appointment, future Board appointments will continue to consider diversity, including gender, alongside commercial and experience-based suitability criteria, to compliment the current balance of skills on the Board.
Responsibility for the overall leadership of the Group and setting the Group’s values and standards sits with the Board. BOTB is a customer facing and customer focussed organisation, seeking to deliver an excellent experience to everyone we serve. Our business is based heavily on trust and customer feedback is actively sought using independent third parties, including Feefo and Trustpilot, as well as through social media forums such as Facebook, Twitter, YouTube and Instagram. We strive to maintain the highest standards of probity, integrity and transparency in the operation of our competitions, in our financial affairs and whilst interacting with customers, staff, shareholders and other stakeholders. In line with our strategy, the Directors and senior management seek to provide an entrepreneurial culture for our employees, whilst encouraging the strongly ethical expansion of our competition offerings to new customers, both in the UK and internationally.
Senior management supports our team to learn continuously and offer opportunities for training, in order to grow both together and as individuals. Together, we seek to improve ourselves, our processes and our business to deliver long-term shareholder value and a growing and contented customer base. We strive to support each other and to be good stewards of our assets, of our relationships with customers, staff, suppliers and ultimately of our Company’s reputation.
During the year, BOTB has undertaken a number of investor relations activities to support our shareholders. These include various investor roadshows in combination with the publishing of our biannual financial results. Investors are also actively encouraged to attend our AGM and our Board sees this as an important event in the annual calendar to meet with and talk to shareholders and other stakeholders.
Throughout the year, the Board has continued to review governance and the Group’s corporate governance framework. We reviewed our governance against the new QCA Code in July 2018 and will do so annually as required by AIM Rule 26.
14 September 2018
Roles and Responsibilities of the Chairman and Chief Executive
The Chairman is responsible for leading an effective Board, upholding the highest levels of corporate governance throughout the Company particularly at Board level; and to ensure that the overall strategy of the Group is considered and deemed appropriate by the Board as a whole.
The Chief Executive, William Hindmarch and Executive Director, Rupert Garton, are responsible for proposing the Group’s strategy and its implementation as well as the day to day management of the Group.
The Board has established an Audit Committee and Remuneration Committee each of which have written terms of reference.
The Audit Committee comprises of David Firth (Chairman) and Michael Hindmarch. The Committee meet as deemed necessary but at least twice a year.
The Audit Committee is responsible for:
• Monitoring the integrity of the financial statements;
• Reviewing accounting policies and other reporting issues;
• Reviewing the effectiveness of the Company’s internal controls and risk management
• Overseeing the relationship with the external auditor including approving their remuneration and approving the audit plan and reviewing its findings; and
• Reviewing the need for an internal audit function.
The Remuneration Committee comprises of Michael Hindmarch (Chairman) and David Firth and is responsible for making recommendations to the Board on the Group’s framework of executive remuneration and its cost. The Committee determines the contract terms, remuneration and other benefits for each of the Executive Directors.
Matters reserved for the Board
There are certain matters specifically reserved to the Board for its decision which includes approvals of major expenditure and investments and key policies. Board meetings are held on a regular basis and effectively no decision of any consequence is made other than by the Board.
To enable the Board to discharge its duties, all Directors have full and timely access to all relevant information. All Directors have access to the Company Secretary, Prism Cosec Limited. There is no agreed formal procedure for the Directors to take independent professional advice at the Company's expense. All Directors submit themselves for re-election at the annual general meeting at regular intervals.
The Directors comply with Rule 21 of the AIM Rules relating to Directors' dealing as applicable to AIM Companies, and the Company has adopted a dealing code for all Directors and employees in terms no less exacting than the Model Code for Directors' Dealings as set out in the Listing Rules of the UK Listing Authority.
The Chief Executive is the Group’s principal spokesperson with investors, fund managers, the press and other interested parties. Following the announcement of the interim and full year results, investor roadshows are carried out and at the Annual General Meeting, private investors are given the opportunity to question the Board.
This year’s Annual General Meeting was held on 6 September 2018. The Notice of the Annual General Meeting is set out at the back of the Annual Report which is available here along with historical Annual Reports and Accounts.
This table displays the voting figures from the Annual General Meeting held on 6 September 2018. All resolutions received strong support from shareholders. Should voting on a resolution receive a significant number of votes against it, the Company would seek to engage with shareholders to understand the reasons behind the result.
Please contact our registrars, Computershare Investor Services PLC, should you have a query regarding the administration of your shareholding including:
• Purchasing shares
• Change of name/address
• Lost/stolen share certificate or dividend cheque
• Transferring shares
Shareholder helpline: +44 (0) 370 707 1543
Manage shareholding online: www.investorcentre.com
Due to the recent adoption of the QCA Code, the Company does not currently comply with principle 7, which requires the Company to carry out a formal Board performance evaluation. The Board has discussed performance evaluation at its Board meetings and, in consultation with the Company Secretary, are considering the best approach to assess the Board both individually and collectively. It is likely to be by way of a tailored questionnaire to be completed by each Director. We intend to do this during the current financial year and a summary of the findings and recommendations will be published in the Annual Report and Accounts for the year ended 30 April 2019.
As the Company has a relatively small Board there is no formal procedure in place for succession. Where Directors have left, positions have been filled in consultation with the Nomad and based on the skills and experience required for the role in question. Most recently, this was exemplified by David Firth’s appointment, as his past experience and financial background made him appropriate to replace Colin Hargrave.
Culture and Ethics
BOTB is a customer facing and customer focussed organisation, seeking to deliver an excellent experience to everyone we serve. We strive to maintain the highest standards of probity, integrity and transparency in the operation of our competitions, in our financial affairs and whilst interacting with both customers and staff. The Directors and senior management strive to provide an entrepreneurial culture for our employees, whilst encouraging the ethical pursuit of opportunities to expand our product offerings to new customers, both in the UK and internationally. Senior management also support our team to learn continuously and offer opportunities for training, in order to grow both together and as individuals. We will together seek to improve ourselves, our processes and our business to deliver long term shareholder value and a growing and contented customer base. Together, we support each other and will be good stewards of our assets, of our relationships with customers, staff, suppliers and ultimately of our company’s reputation.
Evolution of Governance
The Board is mindful of the importance of governance in the successful growth of the business and it will continue to review and assess its governance framework to ensure it remains appropriate to the size and nature of the business.