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Corporate Governance
The Board of Directors is committed to the highest standards of corporate governance.
We recognise the importance of sound corporate governance and we have a responsibility to ensure high standards of integrity and to promote a culture based on trust, ethical values and behaviours.
Accordingly, the Company follows the principles as set out in the Corporate Governance Code for Small and Mid-Size Quoted Companies from the Quoted Companies Alliance (“the QCA Code”) so far as it is appropriate at its current size and stage of development.
The QCA Code is a set of corporate governance guidelines published by the Quoted Companies Alliance, which includes a code of best practice, comprising principles intended as a minimum standard, and recommendations for reporting corporate governance matters.
Details as to how the Company addresses the key governance principles defined in the QCA Code are set out here and have been approved by the Company’s Board of Directors.
Roger McDowell
Non-Executive Chair
Principle 1 – Establish a purpose, strategy and business model which promote long-term value for shareholders
The strategic aims and objectives of the Group are set by the Board. The Group's strategy is focused on expanding its presence in existing aerospace and industrial gas turbine markets whilst continuing to develop new products and technologies.
Principle 2 – Promote a corporate culture that is based on ethical values and behaviors
The Company is committed to the Group operating to the highest standards of ethical behaviour. In support of the Group’s business objectives, the Company strives for excellence in all it does through five key values: honesty and integrity, respect, empowerment and responsibility, delivery of commitments and open communication.
The Board endeavours to lead by example and to demonstrate these values at all times. The values underpin the Group’s strong ethical culture and influence decision making and behaviours.
Internal policies and practices support this, ensuring no one is discriminated against and that the values are upheld.
The Group’s Anti-Bribery and Corruption Policy is reviewed annually. Any known non-compliance with the policy is reported to the Board immediately, with no reports received to date.
Principle 3 – Seek to understand and meet shareholder needs and expectations
The Board recognises its significant responsibility towards the Shareholders and is committed to maintaining good communication and investor relations and having a constructive dialogue with all its shareholders, acknowledging the regulatory constraints applicable to a public company. As such, the Company primarily communicates with shareholders through regulatory announcements. In addition, the Company makes use of its investor website to provide information to shareholders and other interested parties.
The Executive Directors intend to regularly meet with the Shareholders to foster a mutual understanding of objectives. Feedback from these meetings and market updates will be presented to the Board to ensure it understands shareholders’ views. The Executive Directors will also provide periodic briefings to any analysts who cover the industry.
The Chair is available to Shareholders to discuss strategy and governance issues. The Directors encourage the participation of all Shareholders, including private investors, at the annual general meeting of the Company and any other general meetings to be held. The Annual Report, which includes the Company’s financial accounts, will be published on the Company’s website and can be accessed by Shareholders.
The Company has engaged a public relations company to assist in communicating with Shareholders and will provide a mechanism for Shareholders to engage with the Board, ask questions and provide additional feedback.
The Directors believe that these methods of Shareholder engagement are sufficient to support the Company’s aims in meeting Shareholder needs and expectations.
Principle 4 – Take into account wider stakeholder interests, including social and environmental responsibilities and their implications for long-term success
The Company’s engagement with all its stakeholder groups is important in any strategic decision making, with formal and informal feedback from stakeholders being shared at Board meetings and used to inform and influence key matters and decisions made by the Board.
The Company’s engagement in investor relations activities demonstrates its commitment to transparent communication with investors.
The Company intends to conduct itself responsibly concerning the environment and local communities as it implements its business strategy. The Company is committed to ensuring that the Group practices sound environmental management, and has policies to comply, in all material respects, with applicable environmental laws and regulations. All of the Company’s employees, officers and directors are expected to comply with its policies, programmes, standards and procedures with respect to environmental management.
The Group fosters a work environment where everyone is treated with respect and dignity. The Company is an equal opportunity employer and does not discriminate against employees, officers, directors, or potential employees, officers, or directors based on race, colour, religion, gender, national origin, age, sexual orientation, disability or any other category protected by any laws or regulations applicable in the jurisdiction where such employees, officers or directors are located. The Group will make reasonable accommodations for its directors, officers and employees in compliance with applicable laws and regulations.
Principle 5 – Embed effective risk management, internal controls and assurance activities, considering both opportunities and threats, throughout the organisation
The Audit Committee will undertake a detailed review of the approach to risk management on behalf of the Board (though the Board retains overall responsibility for setting both the framework and risk appetite of the Company, in line with best practice).
The Company has clear procedures for capital investment appraisal, contract risk appraisal and financial reporting. The Audit Committee and Board will also receive the detailed risk reviews on a bi-annual basis which are used to inform strategy setting. The Company also ensures that its internal controls are sufficiently robust to manage the identified risks adequately.
The Audit Committee will be chaired by Peter Southby. The other members of the committee will be Jan van Egmond and Roger McDowell. The Audit Committee will normally meet not less than three times in each financial year and as otherwise required by its Chair.
The Company’s Principal Risks and Uncertainties will be set out within the annual report and the Board will consider risks to the business at every Board meeting. The Company will formally review and document the principal risks to the business at least annually.
Principle 6 – Establish and maintain the Board as a well- functioning, balanced team led by the Chair
The Company recognises the benefits of having a diverse Board and workforce in general and seeks to recruit and develop the best-qualified candidates to support and achieve the Company’s long-term strategic and business objectives.
From Admission the Board will comprise Roger McDowell, Jason Duffin, Duncan Longson, Peter Southby and Jan van Egmond. Each Director has agreed to devote as much time as is required to carry out the roles and responsibilities that the Director has agreed to take on.
The QCA Code recommends that an AIM company should, at a minimum, have at least two independent non-executive directors, with which the Company complies. The Board is satisfied that it has an appropriate balance between executive and non-executive directors and independent directors given its current stage of development, although will keep this under review, together with any future requirement for a senior independent director, as the Company grows.
The Board meets at least every 3 months and at any other time deemed necessary for the good management of the business. It has established an Audit Committee, Remuneration and Nomination Committee which comprise a majority of independent non-executive Directors. The Nomination Committee is responsible for reviewing the structure, size and composition of the Board and making recommendations regarding Board appointments and succession planning.
The Company intends to provide Shareholders with the opportunity to vote annually on the (re-) election of all individual Directors to the Board.
The Company has effective procedures in place to monitor and deal with potential or actual directors’ conflicts of interest. The Board is aware of the other commitments and interests of its Directors, and changes to these commitments and interests are reported to and, where appropriate, agreed with the rest of the Board. At present, each Board member commits sufficient time to fulfil their duties and obligations to the Board and the Company.
Principle 7 – Maintain appropriate governance structures and ensure that individually and collectively the directors have the necessary up-to-date experience, skills and capabilities
The Board is satisfied that the governance arrangements for the business are appropriate and that the delegations in place are effective and with strong oversight and controls. The Board is comprised of senior executives with extensive experience covering all areas of the Company’s activities, including technology, accounting and finance, as well as public markets experience. The Nomination Committee assists the Board in reviewing its composition and ensuring that the Board and its committees maintain an appropriate balance of skills, experience, independence and knowledge.
The Board members are kept up to date on a regular basis on key issues and developments pertaining to the Company as well as their responsibilities as members of the Board. Each Board member ensures that they are kept up to date with any relevant training required in order to ensure that they have the appropriate skills and knowledge required in order to fulfil their role.
The Company seeks external expertise and advice when required.
Principle 8 – Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
The Board carries out an annual self-assessment of its performance. This includes evaluation of the performance and effectiveness of the Board members, both collectively and individually, and of its Committees. The process is led by the Chair. The results of the evaluation are the subject of a full, robust and open debate at a meeting of the Board, where actions for improvements are agreed. Progress against these actions is then monitored and reported on throughout the year.
Succession planning is also a vital task for boards and the management of succession planning represents a key responsibility of the Board.
Principle 9 – Establish a remuneration policy which is supportive of long-term value creation and the Company’s purpose, strategy and culture
The Remuneration Committee is tasked with establishing a remuneration policy that supports long term value creation whilst also motivating management.
The Remuneration Committee will be chaired by Jan van Egmond. The other members of the committee will be Roger McDowell and Peter Southby. The Remuneration Committee will normally meet not less than twice in each financial year and as otherwise required by its Chair.
The Company intends to put its annual remuneration report to an advisory shareholder vote.
Principle 10 – Communicate how the Company is governed, and is performing, by maintaining a dialogue with shareholders and other relevant stakeholders
The Board is committed to maintaining good communication and having constructive dialogue with its Shareholders. The Investors section of the Company’s website (https://www.tek4.co.uk/) provides all required regulatory information as well as additional information Shareholders may find helpful including: information on Board members, advisors and significant shareholdings, a historical list of the Company’s announcements, its corporate governance information, the Company’s publications including historic annual reports and notices of annual general meetings or general meetings, together with share price information.
The Company communicates progress throughout the year through Regulatory Information Service announcements, in its interim financial statements and annual report and accounts.
Results of Shareholder meetings and details of votes cast will be publicly announced via a Regulatory Information Service and displayed on the Company’s website with suitable explanations of any actions undertaken as a result of any significant votes against resolutions.
The Chair, as well as the Chief Executive Officer will regularly make themselves available to meet with institutional shareholders to foster a mutual understanding not only of the Company’s trading performance but also of its governance and corporate culture and address any concerns/questions that Shareholders may have.
Board Committees
Audit Committee
The Audit Committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Group is properly measured and reported on. It will receive and review reports from the Group’s management and auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Group. Under its terms of reference, it is required to meet at least twice a year, at which the Executive Directors may attend by invitation, and is responsible for keeping under review the scope and results of the audit, its cost effectiveness and the independence and objectivity of the auditors. It also has responsibility for matters of risk, for public reporting and internal controls and for arrangements whereby employees may raise matters of concern in confidence. The Audit Committee is chaired by Peter Southby and its other members are Jan van Egmond and Roger McDowell, all of whom are independent and are deemed to have recent and relevant financial expertise.
The Audit Committee will undertake a detailed review of the approach to risk management on behalf of the Board (though the Board retains overall responsibility for setting both the framework and risk appetite of the Company, in line with best practice).
Remuneration Committee
The Remuneration Committee will review the performance of the Executive Directors and make recommendations to the Board on matters relating to their remuneration and terms of employment. The Remuneration Committee will also make recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any share option scheme or equity incentive scheme in operation from time to time. Under its terms of reference, it is required to meet at least twice a year and is responsible for ensuring that the Executive Directors, officers and other key employees are fairly rewarded (which extends to all aspects of remuneration) for their individual contribution to the overall performance of the Group. The remuneration and terms and conditions of appointment of the Non-Executive Directors of the Company will be set by the Board. The Remuneration Committee is chaired by Jan van Egmond and its other members are Roger McDowell and Peter Southby.
Nomination Committee
The Nomination Committee will review the structure, size and composition of the Board and identify and nominate, for the approval of the Board, candidates to fill Board vacancies as and when required. It will also keep under review succession planning for Directors and senior management and make recommendations to the Board regarding the appointment, re-appointment and retirement of Directors. Under its terms of reference, it is required to meet at least twice a year and otherwise as required. The Nomination Committee is chaired by Roger McDowell and its other members are Peter Southby and Jan van Egmond.