The Board fully supports the underlying principles of Corporate Governance contained in the Corporate Governance Code (‘The Code’) and adopted the 2013 Quoted Companies Alliance Code for Small and Mid-sized Quoted Companies (‘the QCA Code’). In the 2016 and 2017 Annual Reports this Code is reported against.
A revised QCA Code was released in April 2018. The Board has reviewed the revised Code and approved its adoption. The responsibility for ensuring compliance and accurate reporting of Corporate Governance resides with the Audit and Risk Committee (“the Committee”). Corporate Governance will be continually monitored and reviewed formally by the Committee annually, following publication of the report and accounts each year.
Compliance with each of the ten principles set out in the revised QCA Code is summarised below:
Establish a strategy and business model which promote long-term value for shareholders
Pressure Technologies has an established strategy for growth, which it reports on annually to its shareholders in the Company’s Annual Report, indicating how it has delivered on the strategy and how it has managed strategic risks. The Board reviews the strategy at least once a year to ensure that it remains relevant and sustainable.
The Company’s business model is clearly set out on page 4 of the 2017 Annual Report.
Seek to understand and meet shareholder needs and expectations
The Company actively encourages good communication with all shareholders from the largest to the smallest. Presentations to institutional and mid-sized investors (typically by the Chief Executive and Chief Financial Officer), are offered at the full-year and half-year and all investor presentations are posted to the Group’s website. Feedback is obtained following all investor meetings and this feedback is reviewed by the Board. The Annual General Meeting, which is the platform for private investors to directly question the Board, is held at Group Company offices where presentations are given by the Chairman, Chief Executive and members of the senior management team. In the past, this has been a well-attended event with an open Q&A session and an opportunity for investors to engage with Board members following the formal meeting. A tour of the site is offered for anyone who wishes to see the business in action. From time to time, the executives will host or attend events for new and existing private investors. The Company has always aimed to accommodate investors who wish to visit its manufacturing sites.
Take into account wider stakeholder and social responsibilities and their implications for long-term success
The Board fully recognises that long-term growth and profitability are enhanced when businesses behave in a sustainable and responsible manner, with respect for the environment and all stakeholders.
The Group’s stakeholders include employees, customers, investors, suppliers, advisors and the communities in which the Group’s businesses operate.
The 2017 Annual Report, sets out on pages 16-17, the Group’s approach to sustainable and responsible business.
Embed effective risk management, considering both opportunities and threats, throughout the organisation
The Committee conducts regular reviews of business risk and oversees the approach to risk management. In 2017, the Committee specifically reviewed how risk management was conducted throughout the Group’s subsidiary companies.
On page 40 of the 2017 Annual Report the Committee reported that it had evaluated the effectiveness of internal controls and the risk management system. As the Company evolves, the Committee will review and advise on the design and operation of internal controls.
Acknowledging the increasing threat to cyber security, the Group has recruited new skills and resources to ensure effective risk management and protection in this critically important area.
The risk reporting model, set out on pages 24-27 of the 2017 Annual Report, includes a risk heat map and links the key risks to the Group’s strategy.
Maintain the Board as well-functioning, balanced team led by the Chair
The Board comprises a non-executive Chairman, Alan Wilson, who has served the business for five years, a senior independent non-executive Director, Neil MacDonald, who has also served the business for five years, an independent non-executive Director, Brian Newman who has served the business for three years. There are two executive Directors, Chris Walters, Chief Executive who joined the Group in September 2018 and Joanna Allen, Chief Financial Officer, who joined in July 2015.
Board meeting frequency and attendance is set out on pages 28-29 of the 2017 Annual Report. Frequency and attendance of committee meetings is not currently disclosed, but the Terms of Reference for these committees are set out in the links below.
The Group uses specialist software for its Board reports which facilitates the quality and timeliness of getting information to the Board.
Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
The Board comprises an effective balance of knowledge, skills, experience and independence. The Board represents relevant industry experience from engineering, operational management, finance and investment. Every member of the Board is there for the benefit of Pressure Technologies plc and each recognises his or her responsibility to the Company’s stakeholders. The Board regularly reviews its composition to ensure that it has the necessary breadth and depth of skills to support the ongoing development of the Group. The approach to maintaining relevance and diversity on the Board as well as assigning internal advisory responsibilities, such as those of the Company Secretary and Senior Independent Director, are continuously reviewed by the Committee.
On the Group’s website and on page 31 of the 2017 Annual Report, the skills that each member brings to the Board, are clearly set out.
The Chief Executive, in conjunction with the executive team, ensures that the Directors’ knowledge is kept up to date on key issues and developments pertaining to the Group, its operational environment and to the Directors’ responsibilities as members of the Board. During the course of the year, Directors received updates from the Company Secretary and various external advisers on a number of corporate governance matters.
Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
The corporate governance statement on page 29 of the 2017 Annual Report notes that details of the performance evaluation procedures for each Director, the whole Board, or each committee, are not currently disclosed.
A Board evaluation was carried out in January 2014. The current Board evaluation process will be reviewed, updated and implemented for the next evaluation in January 2019.
The updated evaluation process and schedule will be published through the Group’s website.
Promote a corporate culture that is based on ethical values and behaviours
Pressure Technologies plc is proud of its reputation for being honest and fair in the way it does business. This reputation has been established over many years through leadership and continuous reinforcement of ethical principles by managers and all employees. These principles apply to how the Group works with its customers, suppliers, governments, employees, shareholders, competitors and the local communities in which it operates and are clearly set out on the website and on pages 16-17 of the 2017 Annual Report.
Maintain governance structures and processes that are fit for purpose and support good decision-making by the board
The roles of each of the Board Committees are set out in their Terms of Reference and Matters Reserved for the Board. Links to these documents are set out below.
The roles of individual Directors are not formally described, but this will be reviewed and disclosed if relevant.
The responsibility for ensuring governance structures are continually reviewed and relevant to the business and its stakeholders, falls to the Committee.
Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
The Board reports on Governance on pages 28-29 of the 2017 Annual Report. Disclosures can be found below on this Governance page.
In addition to a Directors’ Report, reports from the Remuneration Committee and the Audit and Risk Committee are included in the Annual Report.
Shareholders are encouraged to attend the Annual General Meeting (AGM) through the offering of presentations, factory tours and access to the Board. The AGM is well attended and has an open Q&A session.
The Chief Executive and the Chief Financial Officer meet regularly with the Group’s larger institutional investors and feedback is always obtained. Pressure Technologies has a reputation amongst its investors for its fair and frank disclosure on the Company’s performance. All investor presentations are available on the Group’s website.
The voting statistics from AGMs are disclosed in a Regulatory News release on the day of the AGM. If relevant, details of any actions to be taken as a result of resolutions for which votes against had been received from at least 20 percent of independent shareholders, would also be disclosed.
The Group’s website is regularly updated and historic documents dating back to the Company’s listing in 2007, are available.
The Annual Report is reviewed against FTSE 350 best practice and best practice is adopted, where relevant and practical.
From time to time the executives attend private investor events and welcome investors to the manufacturing facilities.
Audit and Risk Committee
Chaired by Neil MacDonald
The Committee meets not less than four times a year and is responsible for making recommendations to the Board on the appointment of the auditors and the audit fee, for reviewing the conduct and control of the annual audit and for reviewing the operation of the internal financial controls. It also has responsibility for the reporting of the financial performance of the Company and for reviewing financial statements prior to publication. The Audit and Risk Committee has unrestricted access to the Group's auditors and will ensure that auditor independence has not been compromised.
Risk is reviewed and updated as to whether it has increased, deceased, remained the same or is no longer a risk. New risks are also addressed at these meetings.
Chaired by Alan Wilson
The Nomination Committee meets at least once a year and at such other times as the Chairman of the Committee shall require. It has the responsibility for leading the process for Board appointments and making recommendations to the Board accordingly via a formal, transparent and rigorous appointment procedure. The committee is also responsible for succession planning.
Chaired by Alan Wilson
The Remuneration Committee meets at least four times a year and reviews the performance of the Executive Directors and sets the scale and structure of their remuneration and the basis of their service agreements with due regard to the interests of shareholders. It also determines the allocation of share options to employees. It is a rule of the Remuneration Committee that a Director shall not participate in discussions or decisions concerning his/her own remuneration.
Board Purpose Statement