Chairman

Chief Executive Director

Chief Financial Officer

Senior Independent Non-Executive Director

Independent Non-Executive Director

Company Secretary

Role profiles are in place for the Chairman and Chief Executive Officer, which clearly set out the duties of each role.

RoleResponsibilities
The Chairman of the Board
(Chris Stone)
Is responsible for the running and leadership of the Board, setting its agenda and ensuring its effectiveness on all aspects of its role, and promoting a culture of openness, debate and the highest standards of corporate governance. The Chairman, in conjunction with the CEO and other Board members, plans the agendas, which are issued with the supporting Board papers in advance of the Board meetings. These supporting papers provide appropriate information to enable the Board to discharge its duties which include monitoring, assessing and challenging the executive management of the Group.
The Chief Executive Officer
(Adam Palser)
Together with the senior management team, is responsible for the day-to-day running of the Group's business, implementing the strategy and policies approved by the Board, and regularly providing performance reports to the Board. The role of CEO is separate from that of the Chairman to ensure that no one individual has unfettered powers of decision.
The Chief Financial Officer
(Tim Kowalski)
Works closely with the CEO with specific responsibility for all financial matters, including Group accounting policies, financial control, tax and treasury management, risk management and financial probity. The CFO is also accountable for the transparency and appropriateness of management information and key performance indicators, internally and externally.
The Senior Independent Director
(Chris Batterham)
Provides a sounding board for the Chairman and serves as an intermediary for other Directors, employees and shareholders when necessary. The main responsibility is to be available to the shareholders should they have concerns that they have been unable to resolve through normal channels or when such channels would be inappropriate.
The other Non-Executive Directors
(Jonathan Brooks, Jennifer Duvalier and Mike Ettling)
Bring experience and independent judgment to the Board. Maintain an ongoing dialogue with the Executive Directors which includes constructive challenge of performance and the Group's strategy.
Company Secretary
(Suzy Cross)
Ensures good information flows within the Board and its Committees and between senior management and Non-Executive Directors. The Company Secretary is responsible for facilitating the induction of new Directors and assisting with their professional development as required. All Directors have access to the advice and services of the Company Secretary to enable them to discharge their duties as Directors. The Company Secretary is responsible for ensuring that Board procedures are complied with and for advising the Board through the Chairman on governance matters. The appointment and removal of the Company Secretary is a matter for the Board as a whole.

Meetings and attendance

The Board considers that each Director is able to allocate sufficient time to the Company to discharge their responsibilities effectively. The Non-Executive Directors are contracted to spend a minimum of 24 days per annum on Group's affairs.

A summary of each current Director's attendance at meetings that they were eligible to attend of the Board and its committees during the financial year ended 31 May 2019 is shown below. Unless otherwise indicated, all Directors held office throughout the year.

BoardAuditNominationCyber SecurityRemuneration
Chris Stone8(8)n/a1(1)#3(3)#n/a
Adam Palser8(8)n/an/an/an/a
Tim Kowalski17(7)n/an/an/an/a
Chris Batterham8(8)4(4)#1(1)3(3)4(4)
Jonathan Brooks8(8)4(4)1(1)3(3)4(4)#
Jennifer Duvalier8(8)n/a1(1)3(3)4(4)
Mike Ettling28(8)2(2)n/an/an/a
Brian Tenner31(1)n/an/an/an/a
Thomas Chambers41(2)1(1)0(0)0(0)1(1)

#Committee Chair.

  1. Appointed to the Board on 23 July 2018 and the July 2018 Board meeting was held before Tim was appointed.
  2. Appointed to the Audit Committee in January 2019 and the Committee met twice between January 2019 and May 2019.
  3. Left the Company and Board on 12 August 2018.
  4. Left the Company and Board on 26 September 2018.

What have we looked at as a Board during 2018/19

At every meeting the Board reviews the minutes from the previous meeting and the status of any outstanding actions. The CEO and CFO present their monthly performance update reports which are also circulated to Board members in months where there is no scheduled Board meeting. The Board has also reviewed the following during 2018/19.

Leadership and employees
Received an update on employee engagement and the results of the annual employee survey
Onboarded our new Chief Financial Officer (Tim Kowalski)
Approved a number of share scheme grants to employees including UK Sharesave, International Sharesave (in the Netherlands), and the Employee Stock Purchase Plan (in the US)
Had the opportunity to meet informally with colleagues from across the business at Board meetings held in New York and Leatherhead, and the Board strategy day held in Manchester
Received an update on the composition of the Executive Committee
Appointed an interim Chief People Officer (CPO) and received regular updates on the recruitment of a permanent CPO
Strategy
Regular updates on the Group's transformation programme 'Securing Growth Together' (SGT)
Visited the Group's New York office to meet colleagues and receive updates and the future plans from the US Assurance and US Escrow businesses
Had presentations providing an overview of the Group's intellectual property and strategy in relation to identifying, registering, protecting and managing intellectual property.
Held a dedicated one-day strategy session (see Board composition and division of responsibilities)
Discussed the strategy day and the key points arising out of it
Governance
Completed the Board, Committee and Chairman effectiveness reviews and discussed the results of these reviews, agreeing on key focus areas for the coming year
Approved the Notice of AGM and Proxy Form
Approved a revised Chairman and Non-Executive Director annual UK travel and subsistence allowance which replaces expenses
Attended the AGM
Delegated authority to the CEO and CFO to deal with routine share scheme maturities
Set Board and Committee meeting dates for the next three years
Reviewed and approved the Delegated Authority Matrix along with the Schedule of Matters Reserved for Decision by the Board
Reviewed and approved the Terms of Reference for all of the Board Committees
Approved some minor amendments of an administrative nature to employee share plan rules
Discussed and approved the Group's Modern Slavery Statement
Reviewed Directors' outside directorships and potential conflicts of interest and also Directors' shareholdings
Financial
Reviewed and approved the Annual Report and Accounts, ensuring that it is fair, balanced and understandable
Discussed and approved the full year and half year results and associated presentations to investors
Approved the interim and final dividends and discussed the dividend policy
Approved changes to the bank mandates and authorised signatories
Noted and approved the 2018/19 Group insurance covers renewal
Approved adding the Group's US entities as additional guarantors with regard to the Group's bank loan facilities
Considered and discussed the refinancing of the Group's bank loan/debt facilities arrangements
Noted the appointment of a global tax adviser for the Group
Discussed and approved the 2019/20 budget
Shareholder relations
Received regular updates from investor meetings
Received presentations on shareholder perspectives on the Company
Other Group business
Approved a number of strategic projects including the implementation of new business systems such as Salesforce and Workday
Approved a number of major customer contracts
Received updates on the Group's office location strategy
Received a briefing on the Group's crisis communications response plan and on managing and engaging stakeholders
Received regular updates on Brexit
Received regular update on material litigation affecting the Group

Board Strategy Session

In March 2019 the Board held a dedicated one-day strategy session which allowed for 'deep dives' into all aspects of the Group's businesses. All Managing Directors from across the Group attended for the day so that ideas could be discussed and shared. Finance Directors from the Group's businesses also attended for their particular briefing session. Board members received a briefing pack in advance of the day which contained a high level presentation for each business along with additional background briefing material.

The day was divided into sections focusing on a different area of the business and included the three-year strategic plans from the businesses around the Group such as:

  • Escrow (UK, North America, Europe and RoW)
  • Assurance (UK, North America, Europe and RoW)
  • Overall corporate strategy

The Directors used the insights gained from the strategy sessions in their consideration of the 2019/20 budget and associated approvals.

Independent advice

All Directors have access to the advice and services of the Company Secretary and Directors are entitled to take independent professional advice if necessary, at the expense of the Company.

Conflicts of interest

The Companies Act 2006 requires Directors to avoid situations where they have, or could have, a direct or indirect interest that conflicts or potentially conflicts with the interests of the Company. The Company's Articles of Association require any Director with a conflict or potential conflict to declare this to the Board. That Director will not then be involved in the discussions relating to the proposal, transaction, contract or arrangement in which they have an interest, unless agreed otherwise by the Directors of the Company in the limited circumstance specified in the Articles of Association, nor will they be counted in the quorum or be permitted to vote on any issue in which they have an interest.

Board independence

As required by the Code, at least 50% of the Board, excluding the Chairman, are independent Non-Executive Directors. The Board comprises two Executive Directors, four independent Non-Executive Directors and the Non-Executive Chairman.

The Board has debated and considers that all of the current Non-Executive Directors are independent, and in so doing considered the profile of all of the individuals, concluding that none of them:

  • has ever been an employee of the Group;
  • has ever had a material business relationship with the Group or receives any remuneration other than their salary or fees;
  • has close family ties with advisers, other Directors or senior management of the Group that could reasonably be expected to cause a conflict;
  • holds cross-directorships or has significant links with other Directors through involvement with other companies or bodies;
  • represents a significant shareholder; or
  • has at the point of this report served on the Board for more than nine years from the date of their first election.

The Non-Executive Directors provide a strong independent element on the Board and are well placed to constructively challenge and help develop proposals on strategy and succession planning. Between them they bring an extensive and broad range of experience to the Group.

Details of the Directors' respective experience is set out in their biographical profiles in the Board of Directors.

The terms and conditions of appointment of Non-Executive Directors are available for inspection at the Company's registered office during normal business hours.

Diversity

The principle of Board diversity (and indeed diversity across the Group) is strongly supported by the Board. It is the Board's policy that appointments to the Board will always be based on merit so that the Board has the right balance of individuals in place. The Board recognises that diversity of thought, approach and experience is an important consideration and is therefore one of the selection criteria used to assess candidates prior to any Board appointments. Read more about diversity in the Nomination Committee report.

The Company's policy is to find, develop and maintain a diverse workforce at all levels with an initial focus on developing a culture where women can achieve and retain senior positions.

Annual re-election

In accordance with the Code, any Directors appointed in the financial year are subject to election by shareholders at the AGM and, in line with best practice, all the other Directors are subject to re-election annually.

Director induction, training and development

Tim Kowalski joined the Board during the year and was provided with an induction and also time with the previous CFO (Brian Tenner) to ensure an orderly handover. During the year the Board had training on 'Digital Footprints' in relation to online security and identity theft and undertook visits to the Group's New York and Leatherhead offices which allowed Board members to interact and engage with colleagues across the organisation.

New Directors are provided with an induction on appointment, which included visits to the Group's operations and meetings with operational and executive management. Each Director's induction is tailored to their experience and background with the aim of enhancing their understanding of the Group's strategy, business, the operating divisions, employees, customers, suppliers and advisers and the role of the Board in setting the tone of our culture and governance standards.

The Company acknowledges the importance of developing the skills of the Directors to run an effective Board. To assist in this, Directors are given the opportunity to attend relevant courses and seminars to acquire additional skills and experience to enhance their contribution to the ongoing progress of the Group. All of the Directors attend sessions which are aimed at updating the Board on trends and developments in corporate governance.

Board and Committee effectiveness review

The performance of the Board and its Committees is appraised annually and an internal effectiveness review was completed for the year ended 2019. The overall rating was very positive meaning that the Board and its Committees are functioning well.

The results were presented to the March 2019 Board meeting and following that the Chairman held 1:1 calls with Board colleagues for 'deeper dives' into any areas they wished to discuss in more detail. The Chairman provided a final verbal update on the 2019 evaluation and its focus areas at the April 2019 Board meeting and has held sessions with the CEO to discuss areas highlighted by the evaluation process.

The evaluation identified changes which would improve the working of the Board, including:

  • An increased focus on succession planning and ensuring that these plans are reviewed on a regular basis;
  • An increased focus on Corporate Social Responsibility;
  • A continued focus on strategy and strategic discussion;
  • Enhancing Board interactions and communications with the Company and its customers; and
  • Developing Board involvement in the Group's culture related initiatives.

Progress from the previous year

The 2019 evaluation process also reviewed progress on actions identified in the 2018 evaluation process.

Area identified in 2018 evaluation process2019 evaluation
– progress
Increased strategic discussionGood progress and more Board strategic discussion including a dedicated one-day Board strategy session.
Enhancements to the Board through NED appointmentsGood progress with appointment of two Non-Executives who bring HR/remuneration experience and technology expertise.
Strengthening of the Senior Management TeamGood progress with the appointment of new senior management members including a Group Operations Director, a Group Sales and Marketing Director, a Chief People Officer, a Director of Risk and Assurance, and a Transformation Programme Manager to oversee and drive through a change programme linked to the Group's strategy.

Committee evaluation

During the year, each of the Audit, Remuneration, Nomination and Cyber Security Committees carried out an internal self-evaluation on their effectiveness. The conclusion from the Committee reviews is that, overall, the Committees are working well but some recommendations were made, as per the table below.

CommitteeFocus areas
Audit
  • No recommendations.
Cyber Security
  • No recommendations.
Nomination
  • Succession planning.
Remuneration
  • Increased consultation with the external remuneration consultants, the Chief People Officer, and the Group's shareholders when considering senior executive reward.
  • Better alignment of remuneration policy to key business metrics.
  • Developing reward strategy and reward competitive positioning.
  • Increased Committee involvement with HR policies in the wider business.

Individual Director appraisals process

During the year, the Senior Independent Non-Executive Director evaluated the performance of the Chairman and the Chairman evaluated the performance of each Director. In addition, the Non-Executive Directors met independently from the Executive Directors to discuss with the Chairman the overall functioning of the Board and his contribution in making it effective.

Operation of Governance Framework

Role of the Board

The Board is responsible for reviewing, challenging and approving the strategic direction of the Group, while providing strong values-based leadership of the Company, within a framework of prudent and effective controls, which enable risk to be assessed and appropriately managed. The Board reviews the Group's business model and strategic objectives to ensure that the necessary financial and human resources are in place to achieve these objectives, to sustain them over the long term and to review management performance in their delivery.

The Board sets the tone of the Company's values and ethical standards and manages the business in a manner to meet its obligations to shareholders and other stakeholders.

The Board receives information on at least a monthly basis to enable it to review trading performance, forecasts and strategy and it has a schedule of matters specifically reserved for its decision. The most significant of these are:

  • Approval of strategic plans, the annual budget and any material changes to them.
  • Oversight of the Group's operations ensuring competent and prudent management, sound planning, and an adequate system of internal control and governance.
  • Through the Audit Committee, oversight of financial reporting systems and information and adherence to appropriate accounting policies.
  • Changes to the structure, size and composition of the Board and Executive Committee, oversight of the Company culture and ethical standards of the leadership and the independence of Non-Executive Directors, taking into consideration prudent succession planning.
  • Approval of the acquisition or disposal of subsidiaries and major investments and capital projects.
  • Approval of the dividend, treasury and banking policies, including the Group's capital structure.
  • Through the Remuneration Committee, the delivery of an effective Executive Remuneration Policy.
  • Receiving reports on the views of shareholders and approval of all documents put to shareholders at a general meeting or circulated to shareholders.
  • Approval of the appointment of key advisers.

The Board has reviewed and revised this schedule during the year and added specific matters where it feels it is critical to the ongoing success of the business and are of a significant nature to merit the Board having such a decision reserved to it. Also during the year, the Group Authority Matrix (which documents the levels of authority delegated from the Board to various role holders within the Group) was revised and refreshed. The schedule of matters reserved for decision by the Board and the Group Authority Matrix are complementary documents and are designed to ensure that decisions are either made by the Board or delegated to an appropriate senior colleague within the Group.

As noted above, the operational management of the Group is delegated to the Executive Committee. The Board also delegates other matters to Board committees and management as appropriate.

Risk management

The Board has ultimate responsibility for ensuring that business risks are effectively managed. The Board has delegated regular review of the risk management procedures to the Cyber Security Committee in relation to cyber risks and to the Audit Committee in relation to all other risks. The Board reviews the overall risk environment on at least an annual basis. The day-to-day management of business risks is the responsibility of the Executive Committee.

Internal control

The Group has a system of internal controls which aim to support the delivery of the Group's strategy by managing the risk of failing to achieve business objectives and to protect the stewardship of the Group's assets. As with all such systems, the goal is to manage risk within acceptable parameters rather than to eliminate risk entirely. The Group can therefore only provide reasonable and not absolute assurance that the business objectives and asset stewardship will be provided successfully.

In addition, the Group insures against various risks, but certain risks remain difficult to insure, due to the breadth and cost of cover. In some cases, external insurance is not available at all, or at least not at an economically viable price. The Group regularly reviews both the type and amount of external insurance that it buys in conjunction with its insurance brokers. For a more detailed review of risk management processes, the principal risks faced by the Group and their mitigation, as well as a risk 'heat map' in the Principal risks and uncertainties.

The Audit Committee is responsible for reviewing the effectiveness of the risk management and internal control systems. The steps it takes in relation to the review are set out in the Audit committee report.

The Audit Committee makes a recommendation to the Board on effectiveness which the Board considers, together with reports from the Cyber Security Committee, in forming its own view on the effectiveness of the risk management and internal control systems.

During the year ended 31 May 2019, the Board reviewed the effectiveness of the Group's risk management and internal control systems. We confirm that the processes outlined in the Audit committee report have been in place for the year under review and up to the date of approval of this Annual Report and Accounts and that these processes accord with the UK Corporate Governance Code and the FRC Guidance on Risk Management, Internal Control and Related Financial and Business Reporting. We also confirm that no significant failings or weaknesses were identified in relation to the review.

Executive remuneration

During the year, we operated within the Remuneration Policy approved by shareholders at the 2017 AGM. Details of how the Remuneration Policy has been applied during this financial year are set out in the Annual report on Remuneration.

Board and Committee and Chairman evaluation process 2019