Changes to the Corporate Governance regime.

In line with the London Stock Exchange’s recent changes to the AIM Rules requiring all AIM – listed companies to adopt and comply with a recognised corporate governance code, the Board have adopted the Quoted Companies Alliance ( QCA ) Corporate Governance Code (2018).

The table below sets out how the company applies the key governance principles defined in the QCA Code. Further information as to the application of the QCA Code will be provided in the company’s next annual report and accounts, and updated on the website here.

Chairman's introduction

The Board recognises that good Corporate Governance is fundamental to effective management of the business and delivery of long term shareholder value. As such the Board is committed to ensuring that a strong Governance framework operates throughout the Group since this provides an essential foundation on which to build the future success of the Group.

Bob Holt, OBE

Chairman

This page was last updated 26 September 2018.

Board and Committee terms of reference

Matters reserved for the Board - PDF (628.64 KB)

Audit Committee - PDF (628.64 KB)

Nomination Committee - PDF (806.17 KB)

Remuneration Committee - PDF (622.76 KB)


Board of Directors

Bob Holt OBE, Executive Chairman
Robert Legget, Senior Independent Director
Derek Zissman, Non-Executive Director
Jeremy Simpson, Chief Financial Officer
Michael McMahon, Chief Operating Officer
John Charlton, Group Company Secretary

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The Quoted Company Alliance (QCA) Code

Deliver growth

The QCA’s notes on application:
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.
What the Group does and why:
Sureserve Group is a leading compliance and energy support services group that performs critical functions in homes , public and commercial buildings, with a focus on clients in the UK public sector and regulated markets. Services are delivered through two divisions : Compliance and Energy Services.

Our strategy remains to :
  • Develop key markets through utilising our strong sector market presence in order to grow both geographically and across service lines
  • Operate within focussed divisions – sticking to what we are good at within our core activities of gas, fire and electrical, air and water, lifts, energy efficiency and smart meters
  • Working together – capitalising on our strong national base to collaborate in expanding our activities within existing markets
  • Operational performance - to not only fix what is broken but to become a better, class-leading business across all our divisions
We operate within regulated markets where there is increased focus on customer requirements to comply with both regulations and environmental targets. By careful selection of the client base that we work with we are able to focus on quality of service and delivery and to achieve shared stakeholder value between clients, clients’ customers, communities, financial partners, employees, shareholders and suppliers. Lakehouse Group strategy is explained fully within our Strategic Report which is contained within pages 1-30 of our Annual Report and Accounts for the year ended 30 September 2017. The principal Risks and Uncertainties to the business are detailed on pages 26 -29 of that Report.
The QCA’s notes on application:
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.
What the Group does and why:
The Board recognises the importance of active shareholder dialogue with both institutional and private shareholders, and this is led by the Chairman and the Chief Operating Officer. The dialogue with institutional shareholders is under-pinned by Investor roadshows after each of the annual and interim results announcements. Investor views are then formally reported back to the full Board.

Contact details for the Chairman are contained on each RNS issued by the Company and contact details for investor relations and financial media relations may be found on the Investor Relations section of the Company website.

The Board is committed to a progressive dividend policy.

The AGM is a primary forum for meeting with private shareholders and there are opportunities to formally ask questions of the Board both during the AGM, or to informally speak to the Board immediately following the AGM. At the most recent AGM, voting intentions were received from 53% of the issued voting share capital with those voting in favour of all resolutions being 92%.

The Sureserve Group Investor Relations website contains current share price data, Regulatory news, Reports and Accounts, Constitutional documents and Institutional Research notes.

The Company Secretary is available to deal with all shareholder communications.
The QCA’s notes on application:
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.
What the Group does and why:
Sureserve Group constantly reviews its relationship with its wider stakeholder base. The needs, interests and expectations of this group are seen as :
  • Clients – high quality service, delivered with greater efficiency, which enables them to meet their legal, regulatory and environmental obligations
  • Clients’ customers – safe and well maintained homes and buildings which improve their quality of life
  • Communities – increased employment and skills and improved community infrastructure
  • Financial partners – responsible business management, with an understanding of risk versus returns
  • People – interesting and challenging careers in a growing business that offers them the chance to develop and reach their potential
  • Shareholders – growing revenue and profits, enabling us to pay a progressive dividend while retaining funds to invest for future growth
  • Suppliers – the potential to grow their businesses, by developing a strong relationship with an expanding group
During the last financial year Sureserve Group also established an Employee Representative Council ( ERC), made up of elected employees from across the Group and chaired by the Chairman. The ERC gives a direct voice into senior management of the Group on all workplace matters.

Our Group Responsible Business Lead, aided by our network of community development champions helps to co-ordinate connections between our operational teams and the communities in which we operate.

Sureserve Group also receives regular feedback directly from their Public Relations agency and their Broker as well as feedback from Suppliers and clients through their Business managers.
The QCA’s notes on application:
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).
What the Group does and why:
Risk management is a core focus of the Board and this is reviewed in depth at each Board meeting. Detailed feedback is obtained from each operating subsidiary, together with external regulatory bodies, for discussion at these meetings. Formal Risk Registers for the business are reviewed on a regular basis by the Board.

The Boards assessment of Principle Risks and Uncertainties is contained within pages 26 -29 of the Annual Report and Accounts for the period to 30 September 2017. Within that section of the Report the Board have identified those key actions necessary to mitigate the risks.

Operational risk and any newly identified risk to the business is discussed by the Executive directors at their regular monthly meetings.

Maintain a dynamic management framework

The QCA’s notes on application:
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 fulfill their roles.
What the Group does and why:
The Board comprises of a Chairman, two further Executive Directors and currently two Non-Executive Directors. The Board considers that all Non-Executive Directors are independent. Full details of Board Directors may be found on the Company website and at pages 36-37 of the Annual Report and Accounts for the period ending 30 September 2017. The Board consider that there is an appropriate balance between Executive and Non-Executive Directors.

The Chairman leads the Board in all matters of Corporate Governance.

The reason for having an Executive Chairman is documented in previous Annual Reports and through Stock Exchange announcements during the period 2015 /2016. The separation of the two roles is more commonly seen as a desirable Corporate Governance standard, but in this case the experience, commitment, stability and enthusiasm that the current Executive Chairman has brought to the Board was felt to be critical to the success of the ongoing business. Shareholder approval was obtained for the appointment of an Executive Chairman, Bob Holt, and for his incentive package. An RNS was issued on 22 July 2016 and following the publication of a circular a General Meeting was held on 9 August 2016 where shareholders approved the appointment and remuneration package for the Executive Chairman.

The Company also has a Chief Operating Officer, Michael McMahon.

The Board has a formal Senior Independent Director, Robert Legget, who amongst other duties oversaw the appointment process for the Executive Chairman.

The Board is supported by Audit, Remuneration and Nominations Committees, membership of which is made up solely of the Non-Executive Directors. There is a formal Schedule of Matters Reserved for the Board, details of which, together with the Terms of Reference of all Board Committees may be found on the Company’s website.

Details regarding the attendance records for Board and Committee meetings for all Directors, and the time commitment expected for the Non-Executive Directors is contained on page 35 of the Report and Accounts for the period ending 30 September 2017.

There is a regular and timely information flow to all Directors concerning the Group’s operational and financial performance ahead of scheduled Board meetings.

All Directors have access to the advice and services of the Company Secretary and are able to take independent professional advice in the execution of their duties, at the Company’s expense.
The QCA’s notes on application:
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.
What the Group does and why:
The Board considers that there is currently an appropriate balance between sector, financial and public markets skills at Board level. Directors biographies can be found on pages 36 -37 of the Annual Report and Accounts for the year to 30 September 2017.

The Nominations Committee of the Board considers matters of Board and Senior Management succession. Where new appointments are considered, the search for candidates is carried out having due regard for merit against appropriate criteria and for matters including gender diversity.

The Company Secretary supports the Chairman in addressing the training and development needs of Directors. The Annual Report for the year ending 30 September 2018 will contain details of how the individual Directors maintain their skill set for their role.
The QCA’s notes on application:
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.
What the Group does and why:
Following a period of change the Board has now commenced on a process of formal Board evaluation to review the effectiveness of the Board , taking into account the Financial Reporting Council’s Guidance on Board Effectiveness. This will be led by external partners. Given that this will be the first year of implementation then no parameters to reflect progress have been set at present.

It is proposed that all Directors undergo an annual performance evaluation before being proposed for re-election to ensure that their performance continues to be effective, that where appropriate they maintain their independence and that sufficient time commitment to their role is evidenced. All Directors stand for re-election at each AGM. Evidence of their attendance at Board and Committee meetings is to be found on page 35 of the Report and Accounts for the period ending 30 September 2017.

Share price performance remains a key metric for Board performance as identified in the incentive schemes available to the Executive Directors and detailed on page 43 of the Report and Accounts for the period ending 30 September 2017.

Succession planning for both Board members and Senior Management is the responsibility of the Nominations Committee who use external consultants as necessary.
The QCA’s notes on application:
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.
What the Group does and why:
Our culture is based around our business model which evolves through our working together agenda in order that we:
  • Achieve differentiation through our service offering
  • Do business the right way
  • Focus on operational excellence
This achieves shared stakeholder value for our clients, clients’ customers, communities, financial partners, employees, shareholders and suppliers.

Our responsible business agenda is driven by the Board and implemented by our Group Responsible Business Lead and a network of locally based community development champions.

The Sureserve Group Employee Representative Council provides a forum encourages employee engagement and involvement and provides the opportunity for two way dialogue and feedback on the future direction of the business.
The QCA’s notes on application:
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.
What the Group does and why:
The Corporate Governance section, on pages 34 – 51 of the Annual Report and Accounts for the year ended 30 September 2017, gives full details of the company’s governance structures and the roles of the various Board Committee’s. Terms of Reference for the Committee’s and details of Matters Reserved for the Board are available on the Company website. The Directors consider that the Group has an appropriate governance framework for the size of the business.

Build trust

The QCA’s notes on application:
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 structures 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).
What the Group does and why:
Reports from each Board Committee are contained on pages 39 -51 within the Corporate Governance section of the Annual Report and Accounts for the year ended 30 September 2017.

The Board maintains an active dialogue with both Institutional and Private shareholders together with employees – both employee shareholders and others.

Regular Institutional shareholder dialogue is led by the Chairman and Chief Executive. Company produced Results Presentations are available on the Investor Relations section of the Company’s website, along with Research notes produced by external parties.

The AGM is an important opportunity for the Board to listen to the views of Private shareholders. These may be expressed by formal questions to the Board during the AGM process, or informally in conversation after the AGM.

There is feedback to the full Group Board of any shareholder dialogue that has taken place since the preceding Board meeting.

At the most recent AGM voting intentions were received from 53% of the issued voting share capital, with those voting in favour of all resolutions averaging 92%.

Going forward the Company’s website will display the results of voting on all resolutions in future general meetings, ( including annual general meetings), including any actions to be taken as a result of resolutions for which votes against have been received from at least 20% of independent shareholders.

The Company’s website also includes historical Annual Reports and other governance related material covering the last 5 year period.