Calnex Solutions plc (“Calnex” or the “Company”) has adopted the Quoted Companies Alliance Corporate Governance Code 2018 (the “QCA Code”), the corporate governance code tailored for small and mid-size quoted companies and considers this to be appropriate given the nature of Calnex’s activities and the size of the Company.
The Board is committed to maintaining high standards of corporate governance and considers that a strong corporate governance foundation is essential in delivering shareholder value. The Board has governance procedures and policies that are considered appropriate to the nature and size of the Company and its subsidiaries.
The QCA Code is constructed around ten broad principles. Calnex seeks to adhere to these principles to the highest level possible.
Set out below is an explanation of how the Company currently complies with the principles of the QCA Code and, to the extent applicable, those areas where the Company’s corporate governance structures and practices differ from the expectations set out in the QCA Code.
Annual updates will be provided on the Company’s compliance with the QCA Code.
A summary of the Group’s risk management framework and the principal risks and uncertainties relating to Calnex and its business, along with how those risks are mitigated, can be found in the Strategic Report section in the Company’s Annual Report and Accounts.
The Company is controlled by the Board of Directors. The members of the Board have a collective responsibility and legal obligation to promote the interests of the Group. They 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.
Refer to the Statement of Directors’ Responsibilities section in the Company’s Annual Report and Accounts for further details.
Board composition
The Board consists of six directors, two of whom are full time executives and four whom are part time non-executives. The non-executive directors devote as much time as is necessary to fulfil their roles. The Group considers all four of the non-executive directors to be independent.
During the year to 31 March 2023, George Elliott and Ann Budge resigned as directors after nine and thirteen years on the Board respectively. Helen Kelisky was appointed to the Board in January 2023.
The Board is satisfied with the balance between executive and non-executive directors. The Board considers that its composition is appropriate in view of the size and requirements of the Group’s business and the need to maintain a practical balance between executive and non-executive directors. The Group believes that the makeup of the Board represents a suitable balance of independence and detailed knowledge of the business to ensure that it can fulfil its roles and responsibilities as effectively as possible. The executive directors are directly responsible for running the business operations and the non-executive directors are responsible for bringing independent judgement and scrutiny to decisions taken by the Board.
The Board is highly committed and experienced and is supported by qualified executive and senior management teams. The executive management team includes two members of the Board, the Chief Executive Officer and the Chief Financial Officer.
Before undertaking the appointment of a non-executive director of the Board, the Chair establishes that the prospective director can give the time and commitment necessary to fulfil their duties, in terms of availability both to prepare for and attend meetings and to discuss matters at other times.
Board meetings
Board meetings are planned to occur not less than seven times a year with additional meetings as and when required. The Chair is responsible for ensuring that directors receive accurate, sufficient and timely information. A scheduled meeting calendar is arranged as far in advance as possible, and ad hoc meetings are held in person or by video conference when it is necessary for the Board to discuss specific issues.
The Company Secretary compiles the Board and committee papers which are circulated to directors prior to meetings, together with a formal agenda. The Company Secretary provides minutes of each meeting, and every director is aware of the right to have any concerns minuted and to seek independent advice at the Group’s expense where appropriate. Information on the Group’s operational and financial performance is circulated to the directors in advance of meetings.
The business reports monthly on its headline performance against its agreed budget and market consensus, and the Board evaluates any significant variances. Executive management are invited to meetings from time to time, providing the whole Board with the opportunity for direct enquiry and a thorough overview of the Group.
Roles and responsibilities of the Chair and the Executive Directors
The role of the Chair and CEO are split in accordance with best practice.
The Chair has the responsibility of ensuring that the Board discharges its responsibilities and facilitates full and constructive contributions from each member of the Board in determination of the Group’s strategy and overall commercial objectives. The Chair is oversees the running of the Board, ensuring that no individual or group dominates the Board’s decision-making and ensuring the non-executive directors are properly briefed on matters. The Chair has overall responsibility for corporate governance matters in the Group and chairs the Nomination Committee.
The Board retains ultimate accountability for good governance and is responsible for monitoring the activities of the executive management team.
The CEO manages the day-to-day business activities of the Group and the executive management team ensuring that strategic and commercial objectives are met. He is accountable to the Board for the operational and financial performance of the business. The CFO is responsible for the Group’s financial controls and reporting to the Board.
The executive management team which comprises representatives from sales, operations, R&D, finance and HR reports to and regularly engages with the CEO. The day-to-day operations of the Group are managed by the executive management team.
Board Committees
The Group has established Audit, Remuneration, Nomination and AIM Compliance committees with clearly defined terms of reference which are set by the Board. Refer to the Board Committee sections in the Company’s Annual Report and Accounts for further details.
Audit Committee
The Audit Committee has the primary responsibility of monitoring the quality of internal controls and ensuring that the financial performance of Calnex is properly measured and reported on. The Committee also considers the appropriateness of the Group’s accounting policies on an annual basis. The Committee liaises with Group’s auditors on future changes to such accounting policies.
The Audit Committee comprised the non-executive directors throughout the year or from date of appointment as appropriate and is chaired by Graeme Bissett. The Committee invites the external auditor, executive directors and other senior managers to attend its meetings when appropriate.
The duties of the Audit Committee are set out in its terms of reference, which are available on the Company’s website. The Committee has committed to meet no less than three times in each financial year and its key functions include reviewing and advising the Board on:
- the integrity of the financial statements of the Group, including its annual and interim reports, preliminary results announcements and any other formal announcements relating to its financial performance;
- compliance with accounting standards and legal and regulatory requirements;
- decisions of judgement and risk affecting financial reporting;
- disclosures in the interim and annual report and financial statements;
- any change in accounting policies;
- the effectiveness of the Group’s financial and internal controls;
- the Group’s risk management processes, including principal risks and internal control findings highlighted by management or external audit;
- the appointment and remuneration of the external auditor;
- any significant concerns of the external auditor about the conduct, results or overall outcome of the annual audit of the Group; and
- any matters that may significantly affect the independence of the external auditor.
The ultimate responsibility for reviewing and approving the Annual Report and Accounts and Interim Report remains with the Board.
Remuneration Committee
The Remuneration Committee reviews the performance of the executive directors and makes recommendations to the Board on matters relating to their remuneration and terms of service.
The committee comprised the non-executive directors throughout the year or from date of appointment as appropriate and, up to and including 31 March 2023, was chaired by Graeme Bissett. From 1 April 2023, the Committee will be chaired by Margaret Rice-Jones. The Committee invites the executive directors to attend its meetings when appropriate.
The duties of the Remuneration Committee are set out in its terms of reference, which are available on the Company’s website. The Remuneration Committee meets at least three times a year and its main responsibilities are:
- to ensure that the Company’s remuneration policy attracts and retains employees with the right skills and expertise needed to enable the Company to achieve its goals and strategies;
- to ensure that fair and competitive compensation, with appropriate performance incentives, is awarded;
- to review the performance of the executive directors and make recommendations to the Board on matters relating to their remuneration and terms of service;
- to make recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any employee share option scheme or equity incentive plans in operation.
- for all long term incentive plans, to determine each year the overall number of awards and the individual awards to executive directors and senior management;
- to review and approve Group-wide salary increases and discretionary employee profit share payments; and
- to review any major changes in employee benefits structures throughout the Group.
Nomination Committee
The Nomination Committee regularly reviews the structure, size and composition of the Board.
The Committee is chaired by Stephen Davidson and has Graeme Bissett, Margaret Rice Jones, Helen Kelisky and Tommy Cook as members.
The duties of the Nomination Committee are set out in its terms of reference, which are available on the Company’s website. The Committee’s duties include:
- reviewing the structure, size and composition (including the skills, knowledge and experience) of the Board, together with Board and senior management succession planning;
- recommending to the Board any changes required;
- identifying and nominating candidates to fill Board vacancies;
- reviewing the results of the Board performance evaluation process; and
- making recommendations to the Board concerning suitable candidates for the membership of the Board’s Committees and the re-election of directors at the annual general meeting.
The Committee meets at least once a year and otherwise as required. It reports to the Board on how it has discharged its responsibilities.
AIM Compliance Committee
The AIM Compliance Committee is responsible for ensuring that the Group has in place at all times appropriate procedures, resources and controls to enable it to comply with the AIM Rules.
The Committee is chaired by Graeme Bissett and has Stephen Davidson, Margaret Rice Jones, Helen Kelisky and Ashleigh Greenan as members.
The duties of the AIM Compliance Committee are set out in its terms of reference, which are available on the Company’s website.
The Company’s obligations under the AIM Rules, including AIM Rule 31 requires the following:
- Have in place sufficient procedures, resources and controls to enable its compliance with the AIM Rules;
- Seek advice from its Nominated Advisor (“Nomad”) regarding its compliance with the AIM Rules whenever appropriate and take that advice into account;
- Provide the Company’s Nomad with any information it reasonably requests in order for the Nomad to carry out its responsibilities under the AIM Rules for Nominated Advisors, including any proposed changes to the Board and provision of draft notifications in advance;
- Ensure that each of the Group’s directors accepts full responsibility, collectively and individually, for compliance with the AIM Rules; and
- Ensure that each Director discloses without delay all information which the Group needs in order to comply with AIM Rule 17 (Disclosure of Miscellaneous Information) insofar as that information is known to the director or could with reasonable diligence be ascertained by the Director.
The Committee meets at least twice a year and otherwise as required. It reports to the Board on how it has discharged its responsibilities.
Each member of the Board brings different skills and experience to the Board and the Board Committees. The Board is satisfied that there is sufficient diversity in the Board structure to bring a balance of skills, experience, independence and knowledge to the Group. Where vacancies arise or gaps are identified that must be addressed, the Board (via the Nomination Committee) follows a rigorous selection process using external executive search agencies. More detail on the biographies of the Board of Directors can be found in the Governance section in the Company’s Annual Report and Accounts.
The Board conducts an annual review of its composition to ensure there is adequate diversity to allow for its proper functioning and that the Board works effectively together as a unit. When a new appointment to the Board is to be made, consideration will be given to the particular skills, knowledge and experience that a potential new member could add to the existing Board composition.
The non-executive directors hold senior positions with other companies ensuring that their knowledge is continuously refreshed. Specific training will be provided to the Board by the Group when required to support the directors’ existing skillsets.
The Board has access to external advice, including the Company’s solicitors where required. The Board is provided with specific training on the AIM Rules for Companies by its Nominated Adviser on an annual basis. The Company’s Nominated Adviser is available to provide guidance and additional training to the Board on specific regulatory matters as required.
The effectiveness of the Board, individual directors and senior management is evaluated on an ongoing basis as part of the Board’s ongoing review of the business.
In line with the requirements of the QCA Code, an annual evaluation process is undertaken, led by the Chair, which considers the effectiveness of the Board, its Committees and individual directors, highlighting relevant areas for improvement. A detailed questionnaire is completed by each director, with the results collected by the Chair and discussed by the Board. The most recent evaluation during the year concluded that the Board and the Committee performances had been satisfactory and the addition of Margaret Rice-Jones and Stephen Davidson in late FY22 strengthened the Board and enhanced its expertise and skill set. The evaluation also concluded that the Board would be strengthened further by adding another non-executive director with industry and domain experience, particularly due to the planned retirement of Ann Budge in late FY23. As a result, Helen Kelisky was appointed as non-executive director in January 2023.
The Board will execute an external review of its performance at an appropriate time in the future.
The Board’s effectiveness is also assessed in an informal manner by the Chair on an on-going basis. The Chair has been tasked with assessing the individual contributions of each of the members of the team to ensure that their contribution is relevant and effective, they are committed and, where relevant, can continue to be considered independent.
The performance of the Chair is reviewed annually by means of a survey led by the Audit Committee Chair who canvasses views from directors and key advisers.
The Nomination Committee is responsible for considering succession planning and advising the Board accordingly.
The Board places significant importance on the promotion of ethical values and behaviours within the Group and takes ultimate responsibility for ensuring these are promoted and maintained throughout the organisation and that they guide the Group’s business objectives and strategy.
Calnex is an innovative and forward-thinking business where employees are encouraged to share their views, contribute to decision making, challenge behaviours and improve processes to make a positive contribution to business success. The Group has a diverse workforce where inclusion is key to building high performing, engaged and successful teams.
The impact of the Group’s people-related processes is monitored through the annual employee appraisal process and through the use of a satisfaction and engagement survey which is performed annually. The executive team reviews the key findings of the survey and determines whether any action is required.
The Group has documented procedures with respect to its responsibilities regarding ethical behaviour, specifically bribery and corrupt practices and modern slavery and employees receive training in these areas on a regular basis.
The Group has adopted, and will operate as applicable, a code for Directors’ and applicable employees’ dealings in securities in accordance with Rule 21 of the AIM Rules for Companies.
All Group policies are available to the staff through the Group SharePoint.
The Board has overall responsibility for promoting the success of the Group.
Further detail on Board and Committee roles and responsibilities are described above under ‘Principle 5: Maintain the board as a well-functioning, balanced team led by the chair’.
The Board has a formal schedule of matters reserved to it, including the approval of annual financial plans and the review of performance against these plans, the Group’s strategy and objectives, and the treasury and risk management policies.
The Board reviews its governance framework on a regular basis to ensure it is fit for purpose and carries out a review of the Committees’ Terms of Reference during each financial year.
Reports of the Board’s Audit, Remuneration, AIM Compliance and Nomination Committees can be found in the Governance section of the Company’s Annual Report and Accounts.
THIS INFORMATION WAS LAST REVIEWED AND UPDATED ON 17 JANUARY 2024.
Key Documents
Date | Title | Size |
---|---|---|
23 February 2024 | Remuneration Committee Terms of Reference | 119 KB |
23 February 2024 | Nomination Committee Terms of Reference | 121 KB |
23 February 2024 | Audit Committee Terms of Reference | 141 KB |
23 February 2024 | AIM Rules Compliance Committee Terms of Reference | 134 KB |
17 January 2024 | Corporate Governance | 250 KB |
19 May 2021 | Audit Committee Terms of Reference | 240 KB |
19 May 2021 | AIM Compliance Committee Terms of Reference | 234 KB |
19 May 2021 | Remuneration Committee Terms of Reference | 223 KB |
19 May 2021 | Nomination Committee Terms of Reference | 224 KB |
13 April 2021 | Matters Reserved for the Board | 115 KB |