As envisaged by the UK Corporate Governance Code, the Board has a Schedule of Matters Reserved and has established three committees: an Audit Committee, a Nomination Committee and a Remuneration Committee. If the need should arise, the Board may set up additional committees as appropriate.
The Schedule of Matters Reserved for the Board can be found here
Terms of Reference for the Audit Committee can be found here
Terms of Reference for the Nomination Committee can be found here
Terms of Reference for the Remuneration Committee can be found here
Committee members
- Nigel Lingwood (Chair)
- Amanda Mellor
- Jonathan Davis
- Claire Tiney
- Margaret Amos
Highlights of 2023
- Appointment of Nigel Lingwood as Non-Executive Chair in June 2023.
- Reviewed the succession plan and identified future needs, both for Board and senior management positions.
- Commenced a search for a new Non-Executive Director and Chair of the Audit Committee, resulting in the appointment of Jonathan Davis on 23 June 2023.
Priorities for 2024
- Continue to manage Board and senior management succession plans.
- Ongoing evaluation of the size and composition of the Board including the balance of skills, knowledge, independence, experience and gender and ethnic diversity.
- Review the talent pipeline below Board level.
Role and responsibilities
The key responsibilities of the Committee are:
- assessing whether the structure, size and composition (including the skills, knowledge, independence, experience and gender and ethnic diversity) of the Board continue to meet the Group’s business and strategic needs;
- considering succession planning and talent development for the Executive Directors and the Senior Management Team and, in particular, for the key roles of Chair of the Board and Chief Executive Officer, taking into account the challenges and opportunities facing the Group and the future skills and expertise needed on the Board; and
- identifying and nominating, for approval by the Board, candidates to fill Board vacancies as and when they arise together with leading the process for such appointments.
Membership and attendance
The majority of the members of the Nomination Committee are independent non-executive directors as required by the Code. Following Paul Hollingworth’s retirement, I was appointed Committee Chair on 23 June 2023, and all other members are independent Non-Executive Directors. Biographies of all Committee members can be found on pages 110 to 111.
By invitation, the meetings of the Committee may be attended by the Chief Executive Officer, the Chief Financial Officer and the Group Head of HR. The Company Secretary acts as the secretary to the Committee and minutes of each Committee meeting are provided to Board members.
Committee members
- Jonathan Davis (Chair)
- Nigel Lingwood
- Amanda Mellor
- Claire Tiney
- Margaret Amos
Highlights for 2023
- Concluded an audit tender process resulting in the appointment of PwC as External Auditor of the Company, subject to shareholder approval, and oversaw adviser transitions to ensure independence requirements have been met.
- Supported the transition to an in-house Internal Audit function.
- Maintained focus on control environment and reporting processes in businesses across the Group, including in particular newly acquired businesses, keeping pace with our expansion.
- Continued to monitor Group risk environment and internal controls with enhanced process to identify, assess and monitor emerging risks in current macroeconomic and political environment.
- In-depth presentation from the UK Finance Director providing key insights into activities, controls, processes and priorities in the UK finance function.
Priorities for 2024
- Oversee and support the External Auditor transition.
- Ensure the successful embedding of the new in-house Internal Audit function.
- Review the accounting for the recently completed acquisitions in France and Slovenia.
- Continue to monitor developments in the regulatory landscape and prepare for implementation of new regulations and standards, including in relation to the implementation of an assurance policy and the assurance requirements in the context of sustainability data.
Role and responsibilities
The primary function of the Committee is to assist the Board in fulfilling its responsibilities with regard to the integrity of financial reporting, audit, risk management and internal controls. This comprises:
- monitoring and reviewing the Group’s accounting policies, practices and significant accounting judgements;
- reviewing the annual and half-yearly financial statements, trading statements and any other financial announcements;
- reporting to the Board on whether the Annual Report and Accounts is fair, balanced and understandable;
- reviewing the Board’s shorter-term cash flow forecasts and its method for assessing the Group’s long-term viability;
- approving the appointment and recommending the re-appointment of the External Auditor and its terms of engagement and fees;
- reviewing the scope of work to be undertaken by the External Auditor and reviewing the results of that work;
- monitoring and reviewing the effectiveness of the external audit process and the External Auditor;
- reviewing and monitoring the independence of the External Auditor and approving its provision of non-audit services;
- monitoring and reviewing the adequacy and effectiveness of the risk management systems and processes and, where appropriate, making recommendations to the Board on areas for improvement;
- monitoring and reviewing the effectiveness of the Group’s Internal Audit function, and resolution of its material findings, in the context of the Group’s overall risk management systems;
- reviewing reports from the Chief Financial Officer on the controls to mitigate fraud risk; and
- overseeing the Group’s procedures for its employees to raise concerns through its Whistleblowing Policy as set out in the Code of Conduct.
Membership and attendance
In compliance with the Code, the Committee comprises four members who are independent Non-Executive Directors. Jonathan Davis is Committee Chair, and Margaret Amos, Amanda Mellor and Claire Tiney are Committee members. Nigel Lingwood stepped down as Chair and as a member of the Committee on 23 June 2023 on the commencement of his role as Chair of the Board. Jonathan Davis was appointed as a Non-Executive Director and Chair of the Audit Committee on 23 June 2023.
Committee members
- Claire Tiney (Chair)
- Nigel Lingwood
- Amanda Mellor
- Margaret Amos
- Jonathan Davis
Highlights for 2023
Matters considered and decisions reached by the Committee during the year included:
- implemented the Policy approved by shareholder at the 2020 AGM;
- reviewed the Directors’ Remuneration Policy and consulted with shareholders on the proposals;
- fully considered feedback received from shareholders in refining and finalising the proposals, and approved the 2023 Directors’ Remuneration Policy to be put forward to shareholders at the 2023 AGM;
- reviewed approach to wider workforce remuneration in the context of continuing cost-of-living crisis;
- considered and approved the Directors’ Remuneration Report 2021/22;
- reviewed outcomes for Executive Director and Senior Management Team bonuses for 2021/22;
- reviewed performance measurement outcomes and vesting of LTIP awards granted in October 2019;
- reviewed and approved the parameters of the ABP, including performance measures and targets for 2022/23 for the Executive Directors and Senior Management Team;
- considered and approved the LTIP awards to the Executive Directors and Senior Management Team for 2022/23;
- reviewed market trends and developments in executive remuneration in advance of considering Executive Director and Senior Management Team remuneration proposals for 2023/24;
- reviewed and approved the Executive Director and Senior Management Team salaries for 2023/24; and
- evaluated the performance of the Committee in conjunction with an internal facilitator.
Priorities
- Continue to monitor shareholder guidance and best market practice, whilst ensuring that the remuneration framework is aligned to our strategy and ESG targets.
- Continue to take into account wider workforce trends and policies when setting Executive Director and senior management remuneration.
- Determine incentive scheme outcomes and set incentive scheme targets.
Role of the Committee
The role of the Committee is to recommend to the Board a strategy and framework for remuneration for Executive Directors and the Senior Management Team in order to attract and retain leaders who are focused and incentivised to deliver the Company’s strategic business priorities, within a remuneration framework which is aligned with the interests of our shareholders and thus designed to promote the long-term success of the Company.
The Committee has clearly defined terms of reference which are available on the Company’s website, www.volutiongroupplc.com. The Committee’s main responsibilities are to:
- establish and maintain formal and transparent procedures for developing policy on executive remuneration and for fixing the remuneration packages of individual Directors, and to monitor and report on them;
- determine the remuneration, including pension arrangements, of the Executive Directors, taking into account pay and policies across the wider workforce;
- monitor and make recommendations in respect of remuneration for the tier of senior management one level below that of the Board;
- approve annual and long-term incentive arrangements together with their targets and levels of awards;
- determine the level of fees for the Chair of the Board; and
- select and appoint the external advisers to the Committee.
Membership
The Committee currently comprises four independent Non-Executive Directors, Claire Tiney (Chair), Margaret Amos, Jonathan Davis, and Amanda Mellor, and the Non-Executive Chair, Nigel Lingwood.
The Chair of the Board is also a member of the Committee because the Board considers it essential that the Chair is involved in setting Remuneration Policy (although he is not party to any discussion directly relating to his own remuneration).
Claire Tiney is the Chair of the Committee and has chaired the Committee since 30 April 2020. Claire has been a member of the Committee since 1 August 2016 and has extensive experience of chairing listed company remuneration committees.
Paul Hollingworth stepped down from the Committee on 23 June 2023 when he retired from the Board. Jonathan Davis joined the Committee on 23 June 2023.
During the year the Committee also consulted with the Chief Executive Officer, the Chief Financial Officer and the Company Secretary, but not on matters relating to their own remuneration.
Process for the 2023 Board and Committee evaluation
The process of evaluating the performance of the Board and its Committees, to identify areas for further development, was undertaken internally for 2023. The evaluation process involved the Chair and the Company Secretary discussing and agreeing the scope of the evaluation, and developing a series of web-based questionnaires tailored to the specific circumstances of the Company.
Directors were required to score certain aspects of the Board’s and Committees’ performance, and to comment on the areas of focus, which included leadership and accountability, strategy and risk, Board culture, Board composition, and roles and responsibilities.
The responses to the evaluation of the Board and its Committees were collated and analysed by the Company Secretary and then reviewed by the Chair prior to being considered by the full Board. The Chair also appraised the performance of individual Directors.
The results of the evaluation demonstrated that the composition and performance of the Board and its Committees (and the performance of the Chair) were rated highly and continue to operate effectively. Whilst there are no significant concerns among the Directors about the Board’s effectiveness, some observations and recommendations were made which were considered by the Board.
The key areas of recommendation are set out below.
As a separate exercise the Senior Independent Director, together with the Non-Executive Directors, conducted the Chair’s performance evaluation.
Board performance evaluation: 2023 recommendations
- continued focus on interaction with wider senior management team;
- further discussion and updates on climate-related matters and TCFD reporting;
- increased time to be spent on discussion on product strategy and development plans; and
- focus on the pipeline of talent across the business to be further increased.
