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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 has 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 and is for the wider benefit of the Company, its employees, customers and suppliers.

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.

Nick Winks,
Chairman

This page was last updated on 30 May 2021.

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

Nick Winks, Chairman
Peter Smith, Interim Chief Operating Office & Chief Financial Officer
Robert Legget, Senior Independent Director
Derek Zissman, Non-Executive Director
Christopher Mills, Non-Executive Director
John Charlton, Group Company Secretary
Board biographies

The Quoted Company Alliance (‘QCA’) Code

Deliver growth

The QCA's notes on application: Compliant: What the Group does and why:
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. Sureserve is a leading compliance and energy support services group that performs critical functions in homes and public and commercial buildings, with a focus on clients in the UK public sector and regulated markets, which remain our key sustainable target markets. Services are delivered through two divisions: Compliance and Energy Services. Details of the Group’s strategy, business model and principal risks and uncertainties to the business, together with mitigating factors that the Board has identified, can be found in the Strategic Report which is contained in the Annual Report and Accounts for the year ended 30 September 2020.

 

The QCA's notes on application: Compliant: What the Group does and why:
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 Board recognises the importance of active shareholder dialogue with both institutional and private shareholders, and this is led by the Chairman and Chief Financial Officer.

Following both the annual and interim results announcements, meetings are held with analysts, private investors and institutional investors of the Company, in London, Edinburgh and regionally. The Company’s website also has details of all public announcements, Annual and Interim Reports and investor presentations.

The Annual General Meeting of the Company gives the Directors the opportunity to meet with shareholders and to provide an opportunity to give an update on the Company’s performance. It also provides shareholders with the opportunity to ask questions of the Directors, either in the formal AGM proceedings or informally after the event.

 

The QCA's notes on application: Compliant: What the Group does and why:
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.

The Board is conscious of the impact that the Company’s business activities may have on the environment and society more generally. The Company acknowledges its responsibilities to all stakeholders and encourages all feedback via the Contact Us section of the Company website at www.sureservegroup.co.uk.

Employee engagement is fostered by regular Group-wide communication with all employees and enhanced by the work of the ERC (‘Employee Relationship Council’), which meets on a regular basis throughout the year. A full Employee survey was undertaken during the year. Following on from work undertaken by the Company’s Women in Business forum the Company produced a detailed Equality, Diversity and Inclusion Report during the year. Working Groups were also established with Executive sponsorship covering Gender and Equality and Ethnicity and Diversity.

The Sureserve Academy acts as a central hub for all learning and development activities across the Group, including for the 166 apprenticeships which are in place across the Group.

Regular dialogue is maintained with suppliers, including to ensure that compliance is maintained with all central legislation around Bribery and Corruption and Modern Slavery.

The Company held a Customer Service Week focusing on championing best practice and recognising excellent customer service.

The Sureserve Foundation made initial grants to support local communities and to reinforce the Group’s support for those communities in which the business operates. The Foundation’s focus is particularly on alleviating fuel poverty.

 

The QCA's notes on application: Compliant: What the Group does and why:
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 customers. 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).

Full details of the risks and uncertainties faced by the Group, and their mitigation, can be found in the Principal Risks and Uncertainties section of the Group's Annual Report and Accounts on pages 28 – 31.

The Board has responsibility for ensuring that effective risk management is in place across the Group. Clear strategic goals are set and risks to the achievement of these objectives are monitored through regular dialogue with operational management in each of the businesses. Risk management reporting forms a key aspect of Board discussion, supported by input from relevant external and regulatory bodies.

Formal risk registers are in place at plc and operating company level and are reviewed and monitored by the Audit Committee.

Given the Covid-19 pandemic impact during the year enhanced risk review systems have been put in place by the Group Health and Safety teams. The Chairman and Chief Executive has held weekly calls, available to all staff, to support colleagues and address any operational concerns during this period.

A Risk Committee was re-established during the year and met three times during the year. This Committee reports to the Audit Committee as does the Internal Audit function which has also undertaken a number of specific reviews during the year at the request of the Committee.

The Group maintains appropriate levels of insurance cover.

 

Maintain a dynamic management framework

The QCA's notes on application: Compliant: What the Group does and why:

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 and 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 Company has a strong and experienced Board of Directors with strong sector and financial experience.

The Chairman is responsible for the overall management of the Group including the approval and implementation of the Group’s objectives and strategy, budgets and operational performance along with the maintenance of sound internal control, corporate governance and risk management procedures. The Board continually reviews these responsibilities and will look to split the role of Chairman and Chief Executive when the appropriate opportunity arises. Whilst the Board may delegate day to day management to the Executive Directors, subject to formal delegated authority limits, certain matters are reserved for full Board approval. Details of matters reserved for the Board may be found at www.sureservegroup.co.uk/ investors/corporate-governance.

Board composition has been stable during the year and the Board consists of two Executive Directors and three Non-Executive Directors. Details of the Directors, including brief biographies, Committee membership, key strengths and experience, skills and qualifications, can be found on pages 44 and 45 of the Report and Accounts for the period ending 30 September 2020.

All Directors are subject to re-election at each Annual General Meeting of the Company.

Robert Legget and Derek Zissman are both considered to be Independent Non-Executive Directors of the Group. Because of his management responsibility for Harwood Capital Management, the Group’s largest shareholder (19.2%), Christopher Mills is not considered to be independent as a Non-Executive Director of the Group.

The Board is supported in its work by Audit, Remuneration and Nomination Committees which are chaired by the Independent Non-Executive Directors. All Non-Executive Directors are required to commit sufficient time to their roles in order to adequately discharge their duties.

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 48 of the Report and Accounts for the period ending 30 September 2020.

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: Compliant: What the Group does and why:

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 of Directors has substantial and relevant experience – both in terms of the sectors in which the Company operates and in financial, operational and public company experience. Details of each Director, including a brief biography, Committee membership, key strengths and experience, skills and qualifications, are detailed on pages 44 and 45 of the Report and Accounts.

The Directors are mindful of the importance of diversity within the workforce and have set this as a focus in the Nomination Committee’s action plan for 2020/21.

All Directors are required to commit sufficient time to their roles in order to adequately discharge their duties. Training is maintained through regular business updates from the Executive Directors and briefings from external advisers.

Supporting the work of the Board are three Board Committees, all with formally delegated powers – an Audit Committee, a Remuneration Committee and a Nomination Committee. All are chaired by and comprise the Non-Executive Directors.

Each of the Directors is subject to either an Executive Service Agreement or a letter of appointment. The Company’s Articles of Association require all of the Directors to retire at every Annual General Meeting.

Non-Executive Directors are appointed for terms of three years, which may be renewed, subject to the particular Director being re-elected by shareholders.

During the year advice was received from external professional advisers regarding legacy matters from the former construction division, establishment of a new Executive Share Option Scheme (Remuneration Committee). In addition advice was taken regarding the establishment of a further SAYE Scheme for employees.

The QCA's notes on application: Compliant: What the Group does and why:

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.

 

As previously reported in order to ensure the effective operation of the Board and the Committees, and in line with QCA Code Guidelines, an evaluation of the Board was undertaken by an external, independent consultant. The process of appointing an external consultant was overseen by the Senior Independent Director and the Company Secretary.

The initial evaluation and the results of the Board evaluation were presented to the Board on 10 January 2019. The Board evaluation process included an observed Board meeting, confidential questionnaires and individual interviews of Board members. The questionnaire included sections relating to the compliance principles of the Quoted Companies Alliance Code.

The Board undertook to implement the recommendations and invited the evaluator to return in late 2019 to form a view on progress. The Follow Up Review was concluded in December 2019. Again, a process of an observed Board meeting and individual interviews of Board members was undertaken. The evaluator concluded that most of the recommendations had been successfully implemented. The Follow Up review identified further areas for development and the Board has agreed to implement them. The conclusions of the Follow Up Review were presented to the Board in January 2020.

In summary, these were:

  • The business was seen to have transitioned well following the disposal of its construction activities and had recovered well to growth
  • Board members are entirely focused on driving shareholder value
  • Corporate Governance was healthy
The Board was unanimous in its agreement with the evaluation assessment that the Board, its Committees and individuals continue to be effective. The Board valued the independence of the external evaluator and the approach taken.
The QCA's notes on application: Compliant: What the Group does and why:

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.

 

The Company maintains regular dialogue with our employees, clients, customers, communities, financial partners, shareholders and suppliers all in furtherance of our shared value of driving performance and engagement. Our Group Responsible Business Lead is key to delivering this agenda, which is driven by the Board.

Employee engagement is supported by the Employee Relations Council, regular staff communications and an annual staff survey. Since the start of the Covid-19 pandemic in March 2020 the Chairman and Chief Executive has held regular, weekly calls available to all employees to address any employee concerns and to provide updates on Government guidance and support measures.

The Sureserve Foundation, which is focused on the alleviation of fuel poverty has distributed grants to eight organisations during the financial year.

Whistleblowing
The Company has established procedures by which employees may, in confidence, raise concerns relating to danger, fraud, or other illegal or unethical conduct in the workplace. The whistleblowing policy applies to all employees of the Group, and also consultants, casual workers and agency workers. The Audit Committee is responsible for monitoring the Group’s whistleblowing arrangements and the policy is reviewed periodically by the Board.

Compliance with laws
The Group has systems in place designed to ensure compliance with all relevant laws, new regulations and all relevant codes of business practice. This includes:

  • Taking all appropriate steps to comply with the provisions of the Market Abuse Regulation
  • A copy of the Group’s anti-slavery and human trafficking policy statement in relation to the Modern Slavery Act 2015, which can be found on the Company website
  • The Company’s Code of Conduct – available on the Company website
  • An anti-corruption policy and Group whistleblowing policy, both of which relate to compliance with the Bribery Act 2010, can also be found on the Company website
  • The Group has complied with the provision of statutory information relating to the gender pay gap legislation and payment practices regime
  • The Energy Savings Opportunity Scheme (‘ESOS’), offering full cooperation during audits of the Group’s energy use
  • The Company has adopted a share dealing code for the Directors and applicable employees of the Group for the purpose of ensuring compliance by such persons with the provisions of the AIM Rules relating to dealings in the Company’s securities (including, in particular, Rule 21 of the AIM Rules).The Directors consider that this share dealing code is appropriate for a company whose shares are admitted to trading on AIM
The QCA's notes on application: Compliant: What the Group does and why:

The company should maintain governance structures and processes in line with its corporate culture and appropriate to its:

•    Size and complexity
•    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.

 

Details of how the Board and its Committees’ structure operates can be found on page 51 of the Annual Report and Accounts for the year ending 30 September 2020.

The PLC Board held eight meetings during the year.

Within the annual calendar of Board meetings there is normally an annual budget presentation at which the Executive team presents its budget for the forthcoming year. The Non-Executive Directors are encouraged to attend visits to the individual operating businesses to discuss performance and other issues with the management teams.

The Company Secretary works closely with the Chairman and the Chairmen of the Board Committees to ensure that Board procedures, including setting agendas and the timely distribution of papers, are complied with and that there are good communication flows between the Board and its Committees, and between senior management and Non-Executive Directors.

There is a formal agenda at each Board meeting which includes an operational update from the Chief Executive and financial updates from the Chief Financial Officer. Both reports cover all business units within the Group and also cover new business opportunities.

Health and Safety and strategic issues are dealt with at each Board meeting by the Chairman and Chief Executive.

During the course of the year, other matters considered by the Board include annual and half-year results announcements, principal risks and uncertainties, corporate social responsibility, AGM resolutions, shareholder communications and management incentivisation.

Board papers are circulated to the Directors at least three clear business days in advance of meetings to enable proper consideration of the content of the papers.

The Chairman maintains regular contact with the Non-Executive Directors outside of formal Board meetings.

The roles of all Board members during the year were as detailed on page 49 of the Annual Report and Accounts 2020.

All Directors have access to the support and advice of the Company Secretary as required. Directors are also able to take independent professional advice at the Company’s expense in the furtherance of their duties where considered necessary.

Board Committees
The Board has established three Board Committees, all with formally delegated powers – an Audit Committee, a Remuneration Committee and a Nomination Committee. All are chaired by and comprise the Non-Executive Directors; Bob Holt also attends Nomination Committee.

The terms of reference for all Board Committees are reviewed regularly and can be found on the Company website at www.sureservegroup.co.uk/investors/corporate-governance.

Committee Chairmen attend the Company AGM and are available to answer any questions from shareholders regarding the activities of the Committees.

Build trust

The QCA's notes on application: Compliant: What the Group does and why:

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
•    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).

 

In the year to 30 September 2020 the Executive Directors and members of the Board met and had dialogue with a large number of shareholders and investors.

The Company aims to maintain an active dialogue with key stakeholders, including institutional investors, to discuss issues relating to the performance of the Group, including strategy and new developments. The Senior Independent Director is available to discuss any matter shareholders might wish to raise and attends meetings with investors as required.

The Company’s website includes an investor relations section containing all RNS announcements, share price information, annual documents available for download and similar materials at www.sureservegroup.co.uk/investors. The website also provides details for contacting the Company on any issues.

The AGM remains a valuable opportunity for the Board to engage with shareholders and to answer any questions which shareholders may have. This year’s AGM will be held on 18 March 2021 and full details of the venue and resolutions proposed may be found in the Notice of Meeting enclosed with these accounts or on the Company website. In the interests of maintaining the safety of our shareholders, colleagues and staff, as well as the public, this year’s AGM will be a virtual meeting, full details of which are contained in the notice convening the Annual General Meeting.