Corero has adopted the Quoted Company Alliance Corporate Governance Code (the “QCA Code”). Further disclosure as required by the QCA Code is included in the Corero Annual Report and Accounts for the year ended 31 December 2018.
Corero’s compliance with the QCA Code was last reviewed on 8 April 2019.
Corero recognises its responsibility to provide entrepreneurial and responsible leadership to the Group within a framework of prudent and effective controls (described below) allowing assessment and management of the key issues and risks impacting the business.
The Board sets Corero’s overall strategic direction, reviews management performance and ensures that the Company has the necessary financial and human resource in place to meet its objectives. The Board is satisfied that the necessary controls and resources exist within the Company to enable these responsibilities to be met.
Operational management of the Company is delegated to the Chief Executive Officer.
The Board comprises the Non-Executive Chairman, three Executive Directors and two Non-Executive Directors whose Board and Committee responsibilities are set out below:
The composition of the Board is reviewed regularly. Appropriate training, briefings, and inductions are available to all Directors on appointment and subsequently as necessary, taking into account existing qualifications and experience.
The Corero Board currently comprises two independent non-executive directors, Richard Last and Peter George. As Richard Last is a shareholder (0.52% of Corero’s issued share capital) and holder of share options (630,000 share options), his independence has been considered by the Board. The Board is satisfied that Richard Last is independent.
Non-executive directors, per their letters of appointment, have a minimum time commitment to the Company including the attendance of board meetings and the Company AGM. In addition, non-executive directors are expected to devote appropriate preparation time ahead of each meeting.
One third of all Directors are subject to annual reappointment by shareholders as well as any Director appointed to the Board in the period since the last AGM, any non-executive director whose tenure is more than nine years or any non-executive director whose independence is the subject of Board judgement.
The Board meets on average once a quarter with additional meetings or conference calls are held as required. Each Director is provided with sufficient information to enable them to consider matters in good time for meetings and enable them to discharge their duties properly.
All Directors are able to take independent legal advice in relation to their duties, if necessary at the Company’s expense. In addition, the Directors have direct access to the advice and services of the Company Secretary and Chief Financial Officer.
The Board also ensures that the principal goal of the Company is to create shareholder value, while having regard to other stakeholder interests and takes responsibility for setting the Company’s values and standards.
There is a documented schedule of matters reserved for the Board, the most significant of which are:
- responsibility for the overall strategy and management of the Company;
- approval of strategic plans and budgets and any material changes to them;
- approval of the acquisition or disposal of subsidiaries and major investments, projects and contracts;
- oversight of the Company’s operations ensuring competent and prudent management, sound planning and management of adequate accounting and other records;
- changes relating to the Company’s capital structure;
- final approval of the annual and interim financial statements and accounting policies;
- approval of the dividend policy;
- ensuring an appropriate system of internal control and risk management is in place;
- approval of changes to the structure, size and composition of the Board;
- review of the management structure and senior management responsibilities;
- with the assistance of the Nominations and Remuneration Committee, approval of remuneration policies;
- delegation of the Board’s powers and authorities;
- consideration of the independence of the Non-Executive Directors; and
- receiving reports on the views of the Company’s shareholders.
The Board receives monthly briefings on the Company’s performance (including detailed commentary and analysis), key issues and risks affecting the Company’s business.
The Company maintains liability insurance for its Directors and Officers. The Company has also entered into indemnity agreements with the Directors, in terms of which the Company has indemnified its Directors, subject to the Companies Act limitations, against any liability arising out of the exercise of the Directors’ powers, duties and responsibilities as a Director or Officer.
The Company has an Audit, Risk and Compliance Committee, a Nomination Committee and a Remuneration Committee, details of which are set out below.
Audit, Risk and Compliance Committee (“ARCC”)
The ARCC members comprise Richard Last, who is the Committee Chairman, and Peter George, and meets at least twice a year. The Company’s Chief Financial Officer and Financial Controller, and the Company’s external auditors attend the meetings. The ARCC reviews the scope and results of the external audit, its cost effectiveness and the objectivity of the auditors. It also reviews, prior to publication, the interim financial statements, preliminary results announcement, the annual financial statements and the other information included in the Annual Report. In addition, the ARCC considers the regulatory, technical and operational risks of the Company and ensures these risks are properly assessed, monitored and reported on and the appropriate policies and procedures are in place
The terms of reference of the Corero ARCC are available here.
Nominations Committee (“NC”)
The NC comprises Jens Montanana, who is the Committee Chairman, Richard Last and Peter George. The NC meets at least once a year.
The NC reviews and recommends nominees as new directors to the Board, membership of the NC and RC, and makes recommendations to the Board concerning succession plans for Executive Directors and Non-Executive Directors.
The terms of reference of the Corero NC are available here.
Remuneration Committee (“RC”)
The RC comprises Peter George, who is the Committee Chairman, Jens Montanana and Richard Last. The RC meets at least twice a year.
The RC reviews the performance of the Executive Directors and sets the remuneration of the Executive Directors. In addition, the RC determines the payment of bonuses to Executive Directors and approves the Company’s bonus and incentive arrangements for employees.
The remuneration of the Chairman and Non-Executive Directors is decided upon by the Board.
The RC is also responsible for ensuring the Company’s share option schemes are operated properly and approves the share option grants to Executive Directors and employees.
The terms of reference of the Corero RC are available here.
Evolution of the Company’s governance framework
The Board will, as the Company’s business develops and grows, review the appropriateness of the governance framework on an ongoing basis, including the composition of the Board and the requirement for an internal audit function, to ensure the Company delivers on its strategy and goals whilst maintaining appropriate governance structures.
Corero has established a Board effectiveness review to enable the Board to stand back and assess its strengths and areas for development. This review will be conducted internally and will be performed annually. The first such review was conducted in January 2019. The review showed that the Board is operating effectively. The recommendations following this review were:
- Annual away-day strategy review to be held.
- Chairman to meet with each director annually to undertake a formal review of each individuals’ performance, development plans and performance of the Board and committees.
The Board plans to refresh the performance assessment process based on external advice and if appropriate engage a third-party facilitator to assist in the performance of such effectiveness reviews every three years.
Given Corero’s size, the Company does not have internal succession candidates for the Executive Directors. In the event an Executive Director replacement is required, the Company would seek to recruit a replacement through a recruitment search process. The Board are satisfied that the Company’s middle management will ensure the Company’s business is not adversely impacted in the period between an Executive Director leaving and a replacement being recruited.
The Corero NC reviews and recommends nominees as new directors to the Board. Senior management appointments are required to be approved by the Corero NC.