The Directors recognise the importance of sound corporate governance and believe it to be fundamental to our success as a rapidly growing business. The Board works to ensure that our structure and processes remain aligned and are fit for the purpose of implementing our ambitious growth plans. The Board and its Committees play a central role in the Company’s governance by providing an external and independent perspective on matters material to our stakeholders, and by seeking to ensure that effective internal controls and risk management measures are in place. The Board also supports the promotion of a culture of good governance throughout the Company.
Horizon complies with the Corporate Governance Guidelines to the extent appropriate for a company of its nature and size. The Corporate Governance Guidelines were devised by the QCA, in consultation with a number of significant institutional small company investors, as an alternative corporate governance code applicable to AIM companies. An alternative code was proposed because the QCA considers the UK Corporate Governance Code to be inappropriate to many AIM companies.
The Corporate Governance Guidelines state that, ‘The purpose of good corporate governance is to ensure that the company is managed in an efficient, effective and entrepreneurial manner for the benefit of all shareholders over the longer term.’
The Board comprises eight Directors of which two are executive directors and six are considered by the Board to be independent.
The Board holds full meetings on at least a bi-monthly basis, with attendance required in person whenever practicable. In addition, ad hoc meetings may be called to discuss urgent pertinent issues arising during the course of the year. The Chairman meets with the Executive Directors prior to scheduled and ad hoc meetings to discuss and set each Board agenda, including a forward schedule of items for future consideration.
Regular and appropriate Board and Committee evaluation is vital to improving Board effectiveness and suitability to the evolving needs of the business. This year we conducted an internally facilitated evaluation process. Overall, it was concluded that the Board is performing strongly, considering strategic matters in an appropriate manner and effectively managing the rapid growth of the business.
During the year, the Board increased its focus on risk management suitable to the growing needs of the business. A formalized Business Risk Management Process was adopted, the results of which are formally reported to the Board at least once per annum, and monitored on a regular basis.
The Board has overall responsibility for ensuring the Group maintains an adequate system of internal control and risk management, while the Audit Committee reviews its effectiveness on behalf of the Board.
In accordance with best practice, the Company has established Audit and Remuneration Committees with written terms of reference for each which deal with their authorities and duties.
The Audit Committee meets at least twice a year and is responsible for ensuring that the financial performance of the Company is properly reported on and monitored. In particular, the Audit Committee:
During the year, Grahame Cook, an experienced FTSE and AIM non-executive with significant financial experience, was appointed Chair of the Audit Committee.
The remuneration committee is chaired by Mrs Susan Searle and its other members Dr Susan Galbraith, Dr Ian Gilham and Dr Vishal Gulati. The committee meets not less than twice a year. Executive Directors may attend meetings at the Committee’s invitation, and the committee obtains advice from third parties where appropriate.
The remuneration committee has responsibility for recommending, within agreed terms of reference, the Group’s policy on the remuneration of senior executives and specific remuneration packages for Executive Directors, including pension rights and compensation payments. It is also responsible for making recommendations for grants of options under the Long Term Incentive Plan.
The Board as a whole is responsible for approving recommendations made by the remuneration committee. The remuneration of Non-executive Directors is a matter for the Board, based on recommendations made by the Remuneration Committee. No Director may be involved in any discussions relating to their own remuneration.
The Board believes it is important to have open communications with shareholders. To this end, the CEO and CFO, working in consultation with the Company’s corporate brokers and public relations advisors, make themselves available and expect to meet with major institutional shareholders at least twice a year.
The Board actively encourages the participation of all Directors in the AGM, which is the principal forum for dialogue with shareholders. A presentation is made outlining recent developments in the business and an open question and answer session follows to enable shareholders to ask about the business in general.
The Company has established an AIM Compliance Committee to ensure that the Company is complying with the AIM Rules. In addition, the committee will assess the Company’s corporate governance obligations every year. The AIM compliance and corporate governance committee is chaired by Dr Ian Gilham (Chairman) and its other members are Richard Vellacott, Dr Jonathan Milner, Susan Searle and Dr Susan Galbraith.