Compliance with Corporate Governance Code

Chairman’s Introduction

Smoove plc and its subsidiaries are committed to high standards of corporate governance. The Directors recognise the importance of sound corporate governance and confirm that they aim to comply with best practices appropriate for a company of its nature and scale.

Taking this into account, the Board have chosen to comply with the QCA Corporate Governance Code. Below we outline how we have applied each of the principles of the code and how its application supports the Group’s medium to long-term success.

Martin Rowland
Chairman

 

 

Principle 1: Establish a strategy and business model which promote long-term value for shareholders

The Group’s strategy is to grow market share and value through focusing on continual improvement, innovation and quality. We will also endeavour to acquire complementary businesses to Smoove where appropriate to do so.

The Group’s strategy and business model are communicated to shareholders through the Annual Report. Our strategy is discussed on pages 14 to 17 and the business model on page 8.

Principle 2: Seek to understand and meet shareholder needs and expectations

The Group seeks to maintain a regular dialogue with both existing and potential new shareholders to communicate the Group’s strategy and progress and to understand the needs and expectations of its shareholders.

The Board communicates with its shareholders in a number of ways. Principal ways are through regulatory announcements, the Annual Report and the Annual General Meeting. In addition, the CEO and the CFO regularly meet with a large range of existing and potential institutional investors and private client fund managers throughout the UK. The CEO and CFO have also hosted a presentation for private investors.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success

The Group has a range of stakeholders. The benefits we bring to the various parties in our business model are illustrated on page 9 of the Annual Report. Making sure that all stakeholders in the model benefit from it help ensure the long-term viability of the model.

Chief among the Group’s stakeholders are its staff. While there is the usual day-to-day communication, the Group also holds regular ‘town hall’ meetings for staff and conducts regular staff surveys. The Group also runs a Share Incentive Plan (SIP) to enable staff to share in the success of the Group.

The Group also encourages staff participation in charitable activities through time and fund matching.

Principle 4: Risk Management

The principal risks and uncertainties affecting the Group are set out on pages 22 and 23 of the Annual Report along with the potential impact and how these risks are mitigated.

The risk management committee owns and manages all risk registers for the Group. The risk management committee meets once a month to identify, assess and manage the risks faced by the Group. The risk management committee reports back to the Board their findings and the Board will assess to ensure the control systems in place are effective.

The Board and risk committee follow the following risk management cycle:

• Identify risk (Opportunities and threats)
• Assess scale of risk (Potential likelihood and impact)
• Develop risk response strategy (Transfer, Accept, Reduce, Avoid)
• Implement strategy and allocate responsibilities
• Implementation and monitoring of controls

Review and refine the process and repeat the process.

Principle 5: Maintain the Board as a well-functioning, balanced team led by the Chair

The Group’s Board is currently comprised of three Non-Executive Directors and two Executive Directors. The Chairman is responsible for the effective management of the Board.

All of the Board Directors are subject to election by shareholders at the first Annual General Meeting after their appointment to the Board and will continue to seek re-election at least once every three years.

The Board considers Elaine Bucknor, Non-Executive Director and Martin Rowland, Chairman to be independent. The board does not consider Oliver Scott as technically independent but he does provide a different perspective to the Executive Directors and therefore there are sufficient checks and balances within the Board for the size and complexity of the Group.

Elaine and Martin receive their fees through payroll while fees in relation to Oliver are paid to Kestrel Partners via invoice. Martin was awarded share options in relation to the work he did to secure the sale of CAL but is not expected to receive any further share options in the future.

Principle 6: Ensure that between them, the Directors have the necessary up-to-date experience, skills and capabilities

The Board considers that all of the Board Directors are of sufficient competence and calibre and, together, have the range of skills necessary to run and monitor the Group successfully.

A summary of the experience, skills and capabilities of each of the Board of Directors can be found here.

The Board regularly reviews the composition of the Board to ensure that it has the necessary breadth and depth of skills to support the ongoing development of the Group. The Board was delighted that Oliver Scott joined the Board in January 2020. He has an extensive background in the investment industry, spending over 25 years at institutional investment and corporate finance houses. During the past 10 years, he has held and continues to hold various non-executive directorships in public and private technology companies.

In June 2018, Elaine Bucknor joined the Board. As a technology company, the Board felt it was important to have a technology specialist as a Non-Executive Director and were delighted that someone with Elaine’s background and experience agreed to join.

In November 2018 Martin Rowland joined the Board. It is felt that Martin’s M&A experience will be invaluable as the business looks to continue to grow by acquisition as well as organically.

In February 2020 Martin Rowland moved from Non-Executive Director to Chairman.

Principle 7: Evaluation Board performance based on clear and relevant objectives, seeking continuous improvement

In 2021, the Board undertook an evaluation of the Board and Committees with an external evaluation provider. The process involved the circulation of a questionnaire that aimed to solicit feedback on the Board’s strategy, composition, processes and governance. Positive feedback on the Board’s progress was received in every category. The review highlighted a number of key areas for future focus and attention:

• Implement our strategy to maximise the opportunities presented by DigitalMove and the KPIs that underpin our strategy;
• Enhanced focus on quality and skill base on the Board, ensuring succession plans are developed over the next 12 months;
• Facilitate more open dialogue between the Board and senior managers, allowing for more senior management presentations at Board meetings during the year; and
• Enhanced focus on culture and views from the wider stakeholder

The Board will continue to work together to address key areas raised during the external evaluation and will consider conducting an internal evaluation during the current period.

Principle 8: Promote a corporate culture that is based on ethical values and behaviours

The Board seeks to maintain the highest standards of integrity and probity in the conduct of the Group’s operations. These values are enshrined in the written policies and working practices adopted by all employees in the Group.

The Board understands that their decisions regarding strategy and risk will impact the corporate culture of the Group and that this in turn will impact the performance of the Group.

The Board is aware that the control environment set will greatly impact all aspects of the company and the way that employees behave and perform.

The Board believes that sound ethical values and behaviours set out in the ULS Ethics policy are vital to enable the company to achieve is corporate objectives. The Group places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting the performance of the Group. This is achieved through informal discussions between Group management, operating company management and employees as well as regular ‘town hall’ meetings.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

The Board has overall responsibility for promoting the success of the Group. The Executive Directors have day-to-day responsibility for the operational management of the Group’s activities. The Non-Executive Directors are responsible for bringing independent and objective judgment to Board decisions.

Ten Board meetings are held each year where all Board Directors are expected to attend. The Non-Executive Directors will additionally meet with the Executive Directors on a regular basis. In particular, the Chairman will meet with the CEO monthly. The Non-Executive Directors’ time commitment to the Group is at least two days per month.

The Board has established Audit, Remuneration and Nominations Committees. Details of these Committees can be found on pages 35 and 36 of the Annual Report.

Principle 10: Communicate how the Group is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

How the Group and the Board communicate with its shareholders and other stakeholders is outlined above, in particular, under principles 2 and 3.

The Annual Report, notice of AGMs and results of previous AGMs can be found on the website. Results of voting at each AGM is communicated via an RNS.

Date of last review: 07/03/22

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