Board of Directors
The Board of Directors is responsible for ensuring the Group is appropriately governed and led. This includes ensuring that the Executive has formulated and implemented a business strategy whilst also holding the Executive to account in delivering such strategy and results. This involves maintaining relevant internal control mechanisms and sound risk management within the business, whilst also establishing the values and behaviours the Group needs to ensure its business performance is sustainable within its sector.
At 31 December, 2019 the Board comprised six members: An Executive Chairman, Group Finance Director and three Non-executive Directors, including John Grant as the Senior Independent Director. The Executive Chairman has responsibility for the overall leadership, effectiveness and governance of the Board and of the Executive Management, along with the strategic and operational running of the Group. The Senior Independent Director supports the Executive Chairman and leads the Non-executive Directors in reviewing the performance of the Executive Chairman. The Non-executive Directors have been appointed to the Board for their specific areas of knowledge and expertise and exercise their duties in good faith based on judgements informed by their professional and personal experience to provide rigour to Board decisions. The skills and background for each Director set out in their biographies on page 22 make for a well-balanced and experienced Board in terms of skills, prior experience and personal qualities. The Board does not currently have a female Director, however, the current composition of the Board is based on a broad variety of factors and as and when a new Director is needed, it would not discriminate against the appointment of a new female Director. The Board recognises the benefits of diversity at all levels of its organisation.
In 2019 the Board was constituted of three Non-executive Directors, two of whom were deemed by the Board to be independent (John Grant and Roger McDowell). Rod Holdsworth and Andrew Bryce were independent Non-executive Directors until 9 January, 2019 and 30 April, 2019 respectively. The composition and effectiveness of the Board and its Committees are regularly reviewed to reflect the skills and resources needed to assist the Group in delivering its strategic plan. An internal review took place in 2019 following the resignation of Rod Holdsworth and Andrew Bryce and the Board resolved that the current remaining composition of the Board was effective. The last external review took place in 2016, when Linstock Ltd, a corporate advisory firm that provide objective and independent counsel to leading companies, carried out a full Board evaluation. An internal review is currently underway, evaluating areas such as: Board composition, relationship between the Board and management, the Board’s role in and oversight of strategy, risk management and internal control and succession. Each Committee is also being reviewed along with the Executive Chairman.
Appropriate training, briefings and inductions are available to all Directors on appointment and subsequently where necessary, taking into account the existing qualifications and experience of each individual Director. All Directors have access to the Company Secretary, who is responsible for ensuring that Board procedures are followed and that the Group complies with all applicable rules, regulations and obligations governing its operations. Since 2016 the Company Secretary role has been held by the Group General Counsel. The Directors also have access to the advice and services of the Group’s company secretarial partner, Addleshaw Goddard LLP. In addition, any Director may take independent professional advice, where necessary, at the Company’s expense. This includes external legal advice. The Board has taken extensive advice during 2019 in relation to the HMRC assessments received. The Board meets formally at least nine times a year and additional meetings are held where necessary to review and approve specific matters where a decision is required more urgently.
The Non-executive Directors have undertaken to devote sufficient time to their duties as a Non-executive Director in order to discharge their responsibilities effectively. This amounts to an average time commitment of two working days per month, however, Non-executive Directors regularly give more time commitment than this in the form of additional calls, emails and contributions throughout the month.
Each Director is provided with sufficient timely information in the form of Board papers, to enable full consideration of matters in advance of meetings in order to properly discharge their duties. There is a formal schedule of matters reserved for the Board which includes strategy and management, structure and capital, financial reporting and controls, internal controls, contracts, communication, Board membership and other appointments, remuneration, delegation of authority, corporate governance matters, and policies and this is displayed on the Company’s website Augeanplc.com. Under the Company’s articles of association one third of all Directors are required to retire from office at each Annual General Meeting and may stand for reelection by Shareholders. In addition, each Director is required to retire in the third calendar year following his last appointment and may stand for re-election. Any Director appointed to the Board during the year is subject to election by Shareholders at the following Annual General Meeting. The Board is satisfied that all the Directors standing for election or re-election (as appropriate) perform effectively and have demonstrated commitment to their roles.
In line with the Companies Act 2006 and the Company’s Articles of Association, approved at the 2008 AGM, the Company has strict procedures in place to capture the disclosure and subsequent consideration and potential authorisation of any Director’s interest which may conflict with those of the Company.
Risk Management and Control
The Board has overall responsibility for the Group’s systems of risk management and internal control and for reviewing their effectiveness, while the role of management, through the Management Board, is to implement Board policies on risk management and control. The day to day activities of the Group are managed by the Executive Chairman through the Management Board, whose membership includes:
- Executive Chairman;
- Group Finance Director;
- Group Operating Officer;
- Corporate Stewardship Director;
- Commercial Director;
- Technical Supply Chain Director;
- Managing Director of NSS; and
- Group General Counsel.
The Management Board meets to formally review performance and risk once each month and maintains regular dialogue, including weekly calls, between these meetings.
The Management Board regularly reviews the control environment of the Group and is responsible for managing and mitigating commercial, operational, safety, compliance and financial risks. This system is designed to provide reasonable but not absolute assurance against material misstatement or loss.
The Group operates a series of controls to meet its needs. Key features of the control system include the following:
- maintenance of an operational risk register, covering the key health and safety, regulatory and operating risks faced by the Group;
- maintenance of a register of the major financial risks faced by the Group;
- monthly reviews of business risks affecting the Group, identifying procedures and action required to manage and mitigate those risks;
- reports provided to the Board at every meeting setting out the key risks and their management;
- a clearly defined organisational structure with terms of reference for Board Committees and responsibilities and authorisation limits for executive and senior management;
- regular visits by the Executive Directors and senior management to operating locations to meet with local management and staff and to review business performance;
- regular visits by the Group’s technical team to all sites to identify risks and propose improvements to be implemented by senior management. This includes powers to stop activities if they are deemed to represent a danger, or are inappropriate in the context of proper compliance;
- a range of compliance management systems at the Group’s sites subject to external review, including certification to ISO 9001:2015; 14001:2015; 45001:2018 and the Publicly Available Specification of common management system requirements PAS 99:2012;
- an annual strategic planning and budgeting process;
- reviews by senior management, the Management Board and the Board of monthly financial and operating information, including comparisons with budgets and forecasts. The Group uses balanced scorecard reports, containing key performance indicator targets, as a mechanism for monitoring and managing the monthly performance of key operations;
- maintenance of a comprehensive insurance programme, agreed with insurers following a detailed annual review of the risks faced by the Group’s businesses.
To provide an overview of the risks faced by the Group, the Audit Committee undertakes a six-monthly review of the corporate risk register, which considers a broad range of risk items. This takes account of the control environment and may lead to recommendations which are implemented through the Management Board.
Last Reviewed: 4 May 2020
Below are links to each of the Board’s standing Committees:
AGM & CORPORATE GOVERNANCE CODE
Annual General Meeting
The AGM is held in June every year in London. All shareholders are invited to attend and vote at the meeting. The meeting notice and voting forms are sent to shareholders in advance.
Corporate Governance Code
Jim Meredith, Executive Chairman confirms that Augean remains committed to high standards of corporate governance in all of its activities and reports against the Quoted Companies Alliance Corporate Governance Code, a full version of which is available from the QCA at http://www.QCA.com
The Board recognises the value of the Code and good governance and as far as is practicable and appropriate for a public company of the size and nature of Augean plc, adheres to it. The Board regularly reviews guidance from regulatory bodies, supported by its Nominated Adviser, and responds as appropriate. As a business traded on the Alternative Investment Market of the London Stock Exchange and operating in markets based on regulatory frameworks, the Group is familiar with the benefits and challenges associated with maintaining strong and effective governance. In this regard the Board remains focused on the need for a system of corporate governance which delivers compliance with regulation whilst enhancing the performance of the Group. This includes recognising the need to manage and mitigate the risks faced by the business across all of its activities.
Each of the Board’s standing Committees (Audit, Remuneration and Nominations) continued to be active. A report from each Committee chairman can be found in our Annual Report or within the sub-tabs of this section of our website, and I am grateful to each for their diligence and skill in ensuring that the Board plays an effective role in the proper management of the Company and the wider Group.
As Chairman, one of my principal concerns is to maintain excellent relationships with our Shareholders. I continued to make myself available to Shareholders to discuss strategy and governance matters and was pleased to again have individual meetings with some of the Group’s major Shareholders this year.
The Board has a proactive investor relations programme and believes in maintaining good communication with all stakeholders, including institutional and private Shareholders, analysts and the press. This includes making the Executive Directors available to meet with institutional Shareholders and analysts following the announcement of interim and final results. The Board receives feedback from these meetings and uses this to refine its approach to investor relations.
THE QCA CODE
The QCA Code is constructed around ten broad principles which focus on the pursuit of medium to long-term value for shareholders without stifling the entrepreneurial spirit in which the company was created. These ten principles are:
To Deliver Growth:
1. Establish a strategy and business model which promotes long term value for shareholders.
2. Seek to understand and meet shareholder needs and expectations.
3. Take into account wider stakeholder and social responsibilities and their implications for long-term success.
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation
Maintain a Dynamic Framework:
5. Maintain the board as a well-functioning, balanced team led by the chair.
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities.
7. Evaluate board performance based on clear and relevant objective, seeking continuous improvement.
8. Promote a corporate culture that is based on ethical values and behaviours.
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board.
10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other
As a Company we strive to fulfil these ten broad principles and our website and Annual Report and Accounts cover this as set out in further detail in the table which can be downloaded here.