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Corporate Governance

Corporate Governance

In line with the London Stock Exchange’s recent changes to the AIM Rules for Companies requiring all AIM-quoted companies to adopt a recognised corporate governance code, explain how the company complies with that code’s requirements and identify and explain areas of non-compliance, the Company has elected to adopt the Quoted Companies Alliance Corporate Governance Code (“QCA Code” or the “Code”). The Directors recognise the importance of sound corporate governance commensurate with the size and current nature of the Company and the interests of shareholders and remain committed to evolving the corporate governance arrangements as the business further evolves. The below sets out in broad terms how the Company complies with the QCA Code and explains the areas of non-compliance where relevant.

Principle 1: Establish a strategy and business model which promotes long term value for shareholders.

The Company was established in 2017 to acquire downstream and specialty chemicals assets with a view to deploying a buy-and-build strategy, consolidating sub-scale operators and building out products and customer breadth.

The Company intends to acquire a platform trading asset headquartered in the UK, Europe or North America. The Directors believe that the opportunity exists to create significant shareholder value through a well-executed buy-and-build strategy along with the implementation of operational improvements.

The Company is led by a highly experienced, knowledgeable and reputable Board, who are central to the Company achieving its strategic objectives. The biographies of the Board are detailed here.

The Company’s financial statements which can be found here provide further detail on the key challenges faced by the Company in achieving its strategy and how these risks are addressed.

Principle 2: Seek to understand and meet shareholder needs and expectations

The Company is committed to maintaining an open dialogue and engaging in constructive conversations with both current and potential shareholders. The Board stays informed of shareholders’ views via regular meetings and other communications with shareholders and through its joint brokers.  

The Company’s financial statements, which can be found here, provide further detail on those responsible for shareholder liaison and the key means of communication.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications on long term success.

The Directors are aware of the importance of considering the Company’s impact on its wider stakeholders and the benefits of taking into account the Company’s’ social responsibilities for the long term success of the business. 

The Company does not currently hold an operating business and, until it does, has a very limited number of stakeholders given that it has no customers and its suppliers are primarily professional advisers. The Company has continual interactions with its limited workforce. Following the completion of the Company’s first platform acquisition, the Directors will consider both the wider stakeholders and its social responsibilities.

Principle 4: Embedded effective risk management, considering both opportunities and threats throughout the organisation

In preparation for the Company’s IPO, the Directors and senior management team, in consultation with a range of industry experts, identified a comprehensive list of risks to which the business is exposed, both in its current form and post completion of the Company’s Platform Acquisition. The risks are detailed in the Company’s Admission Document. The Directors have subsequently reviewed this list of risks, and assessed those which they believe have the greatest potential impact on the business in its current form. These, along with the mitigating factors, are detailed in the Company’s financial statements which are available here.

The Board are aware of the importance of an effective risk management process reflective of the size and complexity of the business. At or around the time an operating business is acquired, the Board will review the risks to which the new enlarged group is exposed and an appropriate risk management process will be put in place.

Principle 5: Maintain the board as a well-functioning, balanced team led by the chair

To achieve this principle, the QCA Code requires a balance between executive and non-executive directors and at least two independent non-executive directors be in place. The Company deviates from the QCA Code in this respect, as the Board currently includes just one independent non-executive director, John McAdam. The Board believes that the Company, its management and shareholders are closely aligned in its current primary purpose of securing a platform acquisition and, given the size and nature of the business, that the current Board composition is appropriate for the Company’s current operations and provides an appropriate mix of experience and expertise to support the business in its current form and drive the Company in achieving its strategy.

The Board believes that the appointment of John McAdam, effective 1 October 2018, has established suitable independent challenge, further strengthened capabilities of the Board and demonstrates the positive intent of the Group to continue to challenge and enhance its corporate governance framework as the business grows and evolves.

Further information on how a well-functioning and balanced Board is achieved is detailed in the financial statements which can be found here.

Principle 6: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities

The Board have a wealth of knowledge and experience and the Directors Bios detail the experience and expertise that each member brings to the Company.

The Company secretary is responsible for ensuring that the Directors regularly receive high quality information including financial and operational reports. 

The Board considers and reviews the requirement for continued professional development. The Board undertakes to ensure that their awareness of developments in corporate governance and the regulatory framework is current, as well as remaining knowledgeable of any industry specific updates. The Company Secretary, Nomad and specialised external advisers all serve to strengthen this development by providing guidance and updates as required.

Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

The Board has not yet undertaken a board effectiveness review. Following the addition of John McAdam and in consideration of the time passed since incorporation, the Board believes it will be beneficial to conduct an annual evaluation of its own performance going forward and is committed to undertaking its first evaluation in the twelve months following publication of the Company’s 30 June 2018 financial statements. Details of the board evaluation process and the criteria upon which effectiveness will be considered are included in the Company’s financial statements which can be found here.

Principle 8: Promote a corporate culture that is based on ethical values and behaviours

Ethical values and behaviours are embedded in the corporate culture which the Board uphold. The Directors foster a forum where transparency, openness, integrity and constructive challenge are actively encouraged and have created an effective corporate governance and compliance framework which will be developed to meet the revised requirements of a new enlarged group following completion of the Company’s first platform acquisition. Currently, as a result of the Company’s limited headcount the board is able to determine that the ethical values and behaviours are recognised and respected through direct discussion with employees.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the board

The Chairman is responsible for the running of the Board and the day to day running of the Company and its subsidiaries (the “Group”) is the responsibility of the CEO. All Board members have full access to the Group’s advisers for seeking professional advice at the Company’s expense and the Company’s culture is to openly discuss any important issues and frequently engage with Board members outside of formal meetings. Operating and financial responsibility for all subsidiary companies is the responsibility of the Board.

The role of the Non Executive Director is to actively and constructively challenge the Board and draw on his extensive experience and knowledge to contribute to Board discussions and decisions.

The Board meets formally at least six times a year but also often meets additionally on an ad hoc basis where necessary. Meetings are prepared for using a standing agenda which is updated to incorporate all relevant ad hoc business or matters of interest. The Board is presented with papers from management to support its discussions including financial information, shareholder analysis and investor relations, subsidiary management reporting and details of acquisition targets and deal progress.

Matters reserved for the Board are found here.

The Board has established two committees, an Audit and Risk Committee and Nomination and Remuneration Committee. The terms of reference for the committees are available here:

Audit and Risk Committee Terms of Reference

Nomination and Remuneration Committee Terms of Reference

Around the time of the Company’s Platform Acquisition the board and committee composition will be revisited to ensure that it meets the changing needs of the business and at least one further Independent non-executive director will be appointed.

Principle 10: Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

The Board is always available for communication with shareholders and the Executive Directors frequently engage constructively with current and potential shareholders. All shareholders have the opportunity, and are encouraged, to attend and vote at the annual general meeting of the Company during which the Board will be available to discuss issues affecting the Company. The Board stays informed of shareholders’ views via regular meetings and other communications its members have with shareholders and through its joint brokers.

The Audit and Risk Committee and Nomination and Remuneration Committee will be established on 1 October 2018 and as such no committee reports have been prepared. Prior to their establishment, the Board performed the roles expected of the Audit and Risk Committee and Nomination and Remuneration Committee and their reports for the period ended 30 June 2018 can be found in the financial statements.

The Company has not published the results of historic voting on its website; however the Company will disclose this information going forward effective from the results of its AGM on 20.11 2018.