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Statement of Compliance with QCA Corporate Governance Code

As a Board of Directors, we feel the Quoted Companies Alliance (QCA) Corporate Governance Code is the most appropriate code for Eckoh plc, given the Groups size, complexity and stage of maturity. The Board is committed to providing entrepreneurial leadership through good governance and accountability for the benefit and protection of our shareholders and stakeholders.

We are confident as a Board that the correct strategy has been adopted and that our culture of good governance and accountability will enable us to work towards delivering the strategic goals while maintaining Eckoh as a sustainable business.

We have set out in the table below, against each of the Principles of the QCA Corporate Governance Code, how Eckoh complies with the QCA Corporate Governance Code and where the relevant information can be located in the Annual Report for the year ended 31 March 2019.

PrincipleApplication
1: Establish a strategy and business model which promote long-term value for shareholders The strategy and business model which explains the strategic objectives of the Group and how the Company generates and preserves value over the longer term are set out in the Strategic Report on pages 3 to 11 of the Annual Report.
The Board is collectively responsible for the long-term success of the Company and provides effective leadership by setting the strategic aim of the Company and overseeing the efficient implementation of these aims in order to achieve a successful and sustainable business. In practise the Executive Directors prepare and present, at a one-day strategy session, the strategic plan to the Board, which the Board challenges in order to determine the strategic priorities.
The strategic plan was presented to the Board by Senior Management, led by the Chief Executive and represented both the UK and US businesses. On an ongoing basis the Board ensures that the strategic plan is taken into consideration in its decision-making process.
2: Seek to understand and meet shareholder needs and expectations The Directors consider that the Annual Report and Financial Statements play an important role in providing Shareholders with an evaluation of the Company’s position and prospects. The Board aims to achieve clear reporting of financial performance to all Shareholders. The Board acknowledges the importance of an open dialogue with its institutional Shareholders and welcomes correspondence from private investors.
The Executive Directors have an ongoing programme of meetings with institutional investors and analysts twice a year for up to two weeks at a time. During the year the meetings took place in June and November and were held in the UK in London and Edinburgh and Paris, in addition to meetings at the Company’s premises and investor conferences in London and Boston. Feedback from these meetings is reported to the Board. In addition, the Non-Executive Chairman has held meetings with the top 6 Shareholders, independently of the Executive Directors.
In addition to the Annual Report and the Company’s website, the Annual General Meeting (AGM) is an ideal forum at which to communicate with investors, and the Board encourages Shareholder participation. All Board members are present at the AGM and are available to answer questions from Shareholders.
The articles of association require that at the AGM one third or as near as possible, of the Directors will retire by rotation. Nik Philpot, Chief Executive Officer and Chrissie Herbert, Chief Financial Officer will retire by rotation and put themselves forward for re-election at the AGM.
3: Take into account wider stakeholder and social responsibilities and their implications for long-term success Eckoh’s Corporate Responsibility statement, which focuses on our business ethics, employee engagement, our local community and the environment is found on pages 24 to 27 of the Annual Report.
In addition to the stakeholders covered in the Corporate Responsibility statement, our Customers are also important stakeholders, whose opinions and voice Eckoh values highly. We have various channels for Customers and prospects to communicate with the Group, through regular business reviews, that are conducted by our Client Services Team, to post project reviews and in the UK an annual Customer Satisfaction survey.
4: Embed effective risk management, considering both opportunities and threats, throughout the organisation The Board has overall responsibility for establishing and maintaining sound risk management and internal control systems, and for the monitoring of these systems to ensure that they are effective and fit for purpose. The Audit Committee provides support to the Board in this regard and overseas the monitoring process. Further information on the risk management and internal control system is set out in the Audit Committee report in the Annual Report on page 34.
The Directors have carried out a robust assessment of the principal risks facing the Group and how these risks could affect the business, financial condition or operations of the Group. The explanation of these principal risks including how they are being mitigated can be found on pages 12 to 13 of the Annual Report.
5: Maintain the Board as a well-functioning, balanced team led by the chair The Board, led by the Chairman, has a collective responsibility and legal obligation to promote the interests of the Group. The Chairman is ultimately responsible for Corporate Governance. However, the Board is responsible for defining the corporate governance policies.
The Board is made up of three Non-Executive Directors and two Executive Directors and has delegated certain roles and responsibilities to its Audit, Nomination and Remuneration Committees whilst retaining overall responsibility.
Non-Executive Directors are all independent and are expected to devote sufficient time to the Company to meet their responsibilities.
The Board and its Committees met regularly throughout the year with the meetings scheduled around key dates in the Company’s corporate calendar. There were twelve scheduled meetings during the year and one meeting at short notice. The table on page 31 of the Annual Report shows Directors’ attendance of Board and Committee meetings. Where a Director is unable to attend a meeting, he or she receives and reads the papers for consideration at that meeting and will provide input through the Chairman, Chief Executive Officer, Chief Financial Officer or Company Secretary as appropriate.
Further details covering the work undertaken by the Board during the year and the division of roles and responsibilities are set out on pages 31 to 32 of the Annual Report.
6: ensure that between them the directors have the necessary up-to-date experience, skills and capabilities The Board considers its current composition and overall size to be both appropriate and suitable with the adequate skills, experience and capabilities to make informed decisions, evaluate performance and constructively challenge strategy. The biographies of each of the Directors can be found on page 28.
All members of the Board attend seminars and regulatory events to ensure that their knowledge is up to date and relevant. Where the Board considers it does not possess the necessary expertise or experience it will engage the services of professional advisors. The Board considers that the three non-Executive Directors, including the Chairman, are independent.
During the year, the Board commenced a search for an additional Non-Executive Director. The search will continue into the new financial year, to ensure the additional Non-Executive Director has the appropriate industry experience. Whilst the Directors do not see a gap in experience with the current Directors, it is felt as the Group continues to grow and evolve that a Non-Executive Director with industry experience could add value.
The Nomination Committee, through a thorough evaluation of the skills, knowledge and experience of a proposed new Director makes recommendations to the Board who then make the final decision on the appointment of a new Director.
7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement Following the changes of the Board in the financial year ended 31 March 2018 and as explained in the Annual Report 2018, during the financial year ended 31 March 2019, the Chairman led a formal review of the Board, its Committees and each Director. The performance evaluation of the Chairman was undertaken by the Chair of the Remuneration Committee, David Coghlan. The review centred on the following areas:
- the Board’s role and scope of its authority, how it is led by the Chairman, the frequency and time allotted to the Board meetings and their agendas.
- the Committees terms of reference, leadership, the frequency and time allotted to the Committee meetings and their agendas;
- the Directors feedback was free-ranging and unstructured with guidance on areas to consider.
8: Promote a corporate culture that is based on ethical values and behaviours Our Corporate Responsibility section on pages 24 to 27 set out the importance of business ethics to Eckoh and the way we do business. The employee engagement section on pages 25 to 26 demonstrates the value we place on our employees and the culture we drive in the UK and US business.
9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the board The Board provides the strategic leadership for the Company and ensures that the business operates within the Corporate Governance framework that has been adopted. Its prime purpose is to ensure the delivery of shareholder value in the long term by setting the business model and defining the strategic goals to achieve this.
The Board is supported by a Remuneration Committee, Audit Committee and Nomination Committee. Each committee has formally delegated duties and responsibilities and the terms of reference for the Committees are reviewed annually. The Committee Chair is responsible for reporting, throughout the year, to the Board any recommendations or issues which require further consideration by the Board. The Board reviews annually the list of matters that are reserved for the Board.
The report on the Nomination Committee is set out below and the reports of the Audit Committee and the Remuneration Committee are set out on page 34 and page 37 respectively.
The role and responsibilities of the Chairman, Chief Executive and other Directors have been set out under principle 5 on pages 30 to 32 of the Annual Report.
10: Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders The Company is committed to open communication with all its Shareholders. Communications with Shareholders is predominantly through the Annual Report and AGM. The last AGM results can be found on the Group’s website. Other communications are in the form of full-year and half-year announcements, periodic market announcements (as appropriate) one-to-one meetings and investor roadshows. The Remuneration Committee report is included on pages 37 to 42 of the Annual Report.
The Group’s website www.eckoh.com is regularly updated. Annual Reports and Notices of Meetings can be found on the Group website.

The information on this website was last updated on 6 September 2019.

Christopher Humphrey
Chairman
6 September 2019