The Directors recognise their responsibility for the proper management of the Group and are committed to maintaining high standards of Corporate Governance. Under the AIM rules for companies the Group is not required to comply with the UK corporate governance code. Nevertheless the Group has taken steps to comply in so far as the Directors consider appropriate given the size and nature of the Group and the interests of the shareholders. This statement sets out how the Board applies the principles of good corporate governance in its management of the business.
Board of directors
The Board comprises 2 executive and 5 non-executive Directors. Biographies of the Directors are provided and set out the broad range of commercial, technical and financial expertise possessed by Board members. The combination of skills and talents ensures that strategic focus and sound commercial stewardship is available to the Group. The non-executive Directors are highly experienced, exercise independent judgments on issues arising and are able to challenge constructively the decisions of the executive Directors.
All Directors are subject to election by shareholders and re-election thereafter is by rotation at intervals of not more than three years.
All Directors are offered an opportunity to request information and training relevant to their legal and other duties as a Director. They are also given written rules and guidelines setting out their responsibilities within an AIM listed company. All Directors are able to take independent legal and professional advice, if required, at the expense of the Company. Directors have access at all times to the services of the Company Secretary who is responsible to the Board for ensuring that all agreed policies and procedures are followed and all relevant rules and guidelines are complied with.
Meetings of the Board
The Board, which meets regularly, at least ten times per year, has overall responsibility for the strategic direction and management of the business. All key decisions affecting the Group are considered by the Board as a whole. The annual Group budget and business plan, trading and cash flow forecasts, major items of capital expenditure and any other significant strategic actions all require Board approval.
Board meetings are subject to a formal agenda and receive reports on the performance of each of the Group’s businesses. Monthly management accounts, that compare actual results with budget, are subject to detailed review. Other strategic and commercial issues are considered as required. Board decisions are communicated on a timely basis to management to ensure that operational implementation occurs without delay.
Communication with shareholders
The Board is committed to constructive dialogue with its shareholders. The company uses the AGM as an opportunity to communicate with its shareholders.
The Group’s website (www.flowgroup.uk.com) is the primary source of information on the Group. This includes an overview of the activities of the Group, information on the Group’s subsidiaries and details of all recent Group announcements. The Group also releases regular investor newsletters.
The Board has overall responsibility for ensuring that the Group maintains a system of internal control to provide them with reasonable assurance regarding the reliability of financial information used within the business and for publication. The Board is also responsible for ensuring that assets are safeguarded and risk is identified as early as practically possible. The internal control systems established are designed to manage rather than completely eliminate risk and can only provide reasonable but not absolute assurance against misstatement or loss.
The Board reviews the effectiveness of the systems of internal control and its reporting procedures and augments and develops these procedures as required to ensure that an appropriate control framework is maintained at all times. The principal control mechanisms deployed by the Group are: Board approval for all strategic and commercially significant transactions; detailed scrutiny of the monthly management accounts with all material variances investigated; executive review and monitoring of key decision-making processes at subsidiary board level; Board reports on business performance and commercial developments; periodic risk assessments at each business involving senior executive management; standard accounting controls and reporting procedures; and regular liaison with the Group’s auditors and other professionals as required.
The audit committee comprises David Grundy (Chair) and other members yet to be appointed. The members will all non-executive directors of the Company. The audit committee meets not less than two times a year. The audit committee receives and reviews reports from management and from the Company’s auditors relating to the interim and annual accounts and to the internal control procedures in use throughout the Group. It is responsible for ensuring that the financial performance of the Group is properly reported with particular regard to legal requirements, accounting standards and the AIM Rules for Companies. The ultimate responsibility for reviewing and approving the annual report and accounts and the half-yearly reports remains with the Board.
The remuneration committee comprises David Grundy, another member and a Chair yet to be appointed. The members will all non-executive Directors of the Company. It meets not less than twice a year. It is responsible for determining and reviewing the terms and conditions of service (including remuneration) and termination of employment of executive directors and senior employees and the grant of options implemented from time to time.
Share dealing code
The directors comply with Rule 21 of the AIM Rules relating to directors’ and applicable employees’ dealings in the company’s securities. Accordingly, the Company has adopted the Share dealing code for directors and applicable employees and the company takes all reasonable steps to ensure compliance by its directors and applicable employees with the provisions of the AIM Rules relating to dealings in securities.
Summary of directors’ responsibilities
|Board position||Audit committee||Remuneration committee|
|Alan Lovell||Non Executive Chairman|
|Nigel Canham||Chief Financial Officer|
|Andrew Beasley||Managing Director, Flow Energy|
|David Grundy||Non Executive Director||Chair||Member|
|Brad Tirpak||Non Executive Director|
|Brian F Carroll
||Non Executive Director|
|Jamie Brooke||Non Executive Director|