24
AVESCO GROUP PLC ANNUAL REPORT 2011
www.avesco.com
CORPORATE GOVERNANCE REPORT
This corporate governance report sets out how the principles identified in the UK Corporate Governance Code have been applied by the Company in the period. Although, as an AIM listed company, the Company is not required to comply with the UK Corporate Governance Code, the Directors regard compliance as a benchmark of best practice, which they wish to follow wherever relevant and not disproportionate having regard to the size of the Group.
The Board The Board comprises the Directors listed on pages 18 to 19. Mr Gibbins also served as a Director until his resignation on 10 March 2011.
There is a non-executive Chairman and a Chief Executive Officer. Mr Murray, who is the non-executive Chairman, is not considered to be independent in view of his previous involvement in an executive capacity with the Group and his shareholding in the Company. Mr Giniger is the Chairman and Chief Executive Officer of Taya Investment Company Ltd., a substantial shareholder in the Company, and therefore is not considered to be independent.
The Board is scheduled to meet at least four times each year, in addition to which meetings will also be convened on an ad hoc basis if there is urgent or delegated business which cannot wait until the next scheduled meeting of the full Board. The following table sets out details of the number of meetings of the Board (excluding ad hoc meetings) and of the audit and remuneration committees during the year and the attendance at those meetings by the Directors who were in office during the period:
Director
Total Number of meetings GP Andrews
JL Christmas AB Giniger (1) IP Martin
RA Murray DJ Nicholson MES Gibbins (2)
(1) Meetings attended since appointed on 10 March 2011. (2) Meetings attended prior to resignation on 10 March 2011.
The Board considers the overall strategic direction, development and control of the Group and reviews the financial and operational performance. Various major decisions require Board approval, including the approval of the annual budget, larger capital expenditure proposals, acquisitions and disposals. Board papers, which are sent out in advance of each meeting, include a set agenda although further subjects are added for discussion as the need arises.
The executive Directors meet as a management team on a weekly basis. These executive management meetings consider and review the operational and financial management and performance of the Group, receive reports from the key managers in respect of their respective areas of responsibility, discuss significant issues and determine any appropriate action to be taken.
The Chairman and the Chief Executive have clearly established responsibilities although these have not been defined in writing. In addition to chairing the Board and the Audit and Remuneration Committees, the Chairman is responsible for ensuring that the Board is kept properly informed and is consulted on all issues reserved to it. The Chairman consults with the other non-executive Director on corporate governance issues, communicates the views of the shareholders to the Board and ensures a constructive relationship between the executive and non-executive members of the Board. The Chief Executive has final executive responsibility to the Board for the success of the Group.
The Board has access to the advice and services of the Company Secretary and there is a written procedure for obtaining independent legal advice at the Company's expense.
The non-executive Directors review the performance of the executive Directors. No formal performance evaluation of the non-executive Directors or of the Board committees has been conducted.
On appointment, new Directors take part in an induction programme when they receive information about the Group, the role of the Board and the Board committees, the Company’s corporate governance practices and procedures, and the latest financial information about the Group. They are also advised of their legal duties as a director of a public company. Visits are arranged to Group locations together with meetings with senior executives.
The articles of association of the Company require Directors to submit themselves for re-election at the first Annual General Meeting following appointment and then every three years.
Audit committee The audit committee comprises Mr Murray and Mr Giniger. Mr Murray is the Chairman of the audit committee and served throughout the year. Mr Gibbins was a member of the committee until 10 March 2011, when he ceased to be a Director and Mr Giniger joined the committee.
The audit committee reviews the Group’s annual report, financial statements, interim statements and preliminary announcements before recommending their approval to the Board. This process involves meeting with the external auditors to discuss issues relating to the audit and financial control of the Group. The audit committee also reviews the Company's internal financial controls and risk management systems, the scope of the audit and the independence and objectivity of the auditors. The auditors have direct access, should they so require, to the chairman of the audit committee.
Nomination committee The Company does not have a nomination committee. Any appointments to the Board would be considered by the Board as a whole.
In considering the appointment of a new director, the Board considers and defines the characteristics, qualities, skills and experience that it considers would complement the overall balance and composition of the Board. The committee may appoint an external consultant to help in the identification and recruitment of an individual who satisfies the committee’s criteria, unless the Board is already able to identify an appropriate individual.
Board Audit Remuneration
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