The Directors recognise the importance of sound corporate governance. As a company whose shares are traded on AIM, the Board has decided to comply with the QCA Code. In addition, the Directors have adopted a code of conduct for dealings in the shares of the Company by directors and employees and are committed to maintaining the highest standards of corporate governance. Dean Masefield, in his capacity as CFO, has assumed responsibility for ensuring that the Company has appropriate corporate governance standards in place and that these requirements are followed and applied within the Company as a whole.
The corporate governance arrangements that the Board has adopted are designed to ensure that the Company delivers long term value to its Shareholders and that Shareholders have the opportunity to express their views and expectations for the Company in a manner that encourages open dialogue with the Board.
The Board recognises that its decisions regarding strategy and risk will impact the corporate culture of the Company as a whole and that this will impact the performance of the Company. The Board is very aware that the tone and culture set by the Board will greatly impact all aspects of the Company as a whole and the way that employees behave. A large part of the Company’s activities is centred upon what needs to be an open and respectful dialogue with employees, clients and other stakeholders. Therefore, the importance of sound ethical values and behaviours is crucial to the ability of the Company to successfully achieve its corporate objectives. The Board places great importance on this aspect of corporate life and seeks to ensure that this flows through all that the Company does.
The key governance related matter that occurred during the financial year ended 31 December 2020 was the appointment of two independent non-executive Directors together with the appointment of Anthony Brockbank as Group General Counsel.
The QCA Code sets out 10 principles that should be applied. These are listed below together with a short explanation of how the Company applies each of the principles:
Strategy & purpose: The Company invests in and acquires businesses in the construction materials sector. The principal activity of the Group is the production of high quality aggregates and supply of value-added construction materials. The Group’s aim is to create value for shareholders through the successful execution of its buy and build strategy in the construction materials sector.
Business model: The Group’s business plan is to acquire high quality and well managed assets in the construction materials sector, providing the Group with a strong operating platform, diversified income streams and stable cash flows in order to grow the Group and execute on its strategy further. The Group is run as a commercially-minded business, seeking to return an increase on investment capital to Shareholders. Proven methods of raising capital through recognised means available to publicly-listed companies are relied on to fund growth acquisitions. Following each acquisition, the Group seeks to implement operational efficiencies that improve safety, enhance productivity, increase profitability and ultimately create value for Shareholders.
Shareholder dialogue: The Company remains committed to listening and communicating openly with its shareholders to ensure that its strategy, business model and performance are clearly understood. Understanding what analysts and investors think about the Company, and in turn, helping these audiences understand the Company’s business, is a key part of driving the business forward and the Company actively seeks dialogue with the market. The Company does so via investor roadshows, attending investor conferences, hosting capital markets days and through regular reporting.
Private Shareholders: The AGM is the main forum for dialogue between retail Shareholders and the Company. The Directors routinely attend the AGM and are available to answer questions raised by Shareholders. The results of the AGM are subsequently published on the Company’s corporate website. Private Shareholder events are intended to be held periodically.
Institutional Shareholders: The Company actively seeks to build relationships with institutional Shareholders through calls, presentations, and visits. Shareholder relations are managed primarily by the CEO, but the Executive Chairman and Senior Independent Non-Executive Director are also available to meet with major shareholders to discuss issues of importance.
Engagement: Engaging with stakeholders strengthens relationships and helps make better business decisions to deliver on commitments. The Company is regularly updated on wider stakeholder engagement feedback to stay abreast of stakeholder insights into the issues that matter most to them and the Group’s business, and to enable the Board to understand and consider these issues in decision-making. With Shareholders, suppliers and customers, employees are one of the most important stakeholder groups and employees’ engagement surveys and feedback are closely monitored.
Employees, contractors & suppliers: The Group has established a safe and healthy work environment, which complies with the relevant occupational health & safety laws. The Group ensures that the workforce is provided with sufficient training to develop the appropriate skills and knowledge to complete the tasks requested of them. For the sake of occupational health & safety, all contractors and sub-contractors are treated in exactly the same manner as employees.
Communities: The Group has supported and given back to the community by participating in a selection of projects in recent years. Further details of the Group’s environmental, social and governance related initiatives are in the relevant annual reports.
Modern slavery: As part of our mission to “do the right thing” we oppose modern slavery in all its forms and work to prevent it by any means that we can. We expect anyone who has any suspicions of modern slavery in our business or our supply chain to raise their concerns without delay.
Risk register: To assist the Board with effectively managing risk across the Group the Company has established a risk register which is reviewed periodically.
Internal control: The Company has an established framework of internal control, the effectiveness of which is regularly reviewed by executive management, the Audit Committee and the Board in light of an ongoing assessment of significant risks facing the Company and the Group. The Company recognises that maintaining sound controls and discipline is critical to managing the downside risks to its business plan.
The Board has ultimate responsibility for the Group’s system of internal control and for reviewing its effectiveness. The Audit Committee assists the Board in discharging its duties regarding the financial statements, accounting policies and the maintenance of proper internal business, and operational and financial controls. The Board presently considers that the internal controls in place are appropriate for the size, complexity and risk profile of the Group.
Board composition: The Board comprises the Executive Chairman, two Executive Directors, two Independent NonExecutive Directors and two Non-Executive Directors. The Board considers, after careful review, that the Independent Non-Executive Directors bring an independent judgement to bear. The biographies of the members of the Board can be found on the Company’s website. The Board is satisfied that it has a suitable balance between independence and knowledge of the Group and its operations to discharge its duties and responsibilities effectively. The Board receives periodic updates from the management team. All directors are encouraged to use their independent judgement and to challenge all matters, whether strategic, operational or financial. Membership of the Board, its activities, performance and composition are subject to periodic review.
Conflicts of interest: The Company has effective procedures in place to monitor and deal with 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.
|Director||Formal quarterly meetings and meetings post change to Articles||Offshore meetings to comply with Articles|
|Attended||Eligible to attend||Meetings attended||Eligible to attend|
In order to be efficient, the Directors meet formally and informally both in person and by telephone. To date there have been quarterly formal meetings of the Board held in person, plus additional ad-hoc meetings of the Board where appropriate, and the volume and frequency of such meetings is expected to continue at this rate.
At a general meeting of the Company held on 27 September 2019, Shareholders voted to approve amending the Articles removing the restriction on the Board from making any resolutions in the United Kingdom. The Board meet collectively prior to any matters being resolved, however in order to comply with the Articles prior to their amendment, two members of the Board were required to hold a meeting offshore to pass the resolutions. There were eight such meetings in 2019 in addition to the quarterly meetings which all Board members attended, plus two ad-hoc meetings.
In addition to Board meetings, the executive Directors attend monthly executive committee meetings with the ExCo members of the subsidiary operations.
Suitability: The Board guides and monitors the business and affairs of the Company on behalf of the Shareholders by whom they are elected and to whom they are accountable. The Board is satisfied that given its size and stage of development, between the Directors, it has an effective and appropriate balance of skills and experience across technical, commercial and financial disciplines. The Company complies with the QCA Code and full biographical details of the Directors and their skills and experience can be found on the Company’s website.
Appointment, removal & re-election: The Nominations Committee makes decisions regarding the appointment and removal of Directors, and there is a formal, rigorous and transparent procedure for appointments.
Independent advice: All Directors are able to take independent professional advice in the furtherance of 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.
Appraisal: The Chairman assesses the individual contributions of each member of the Board to ensure that their contribution is relevant and effective; they are committed; and where relevant, they have maintained their independence.
An evaluation of the Board will be carried out annually and on a three-yearly cycle the evaluations may be facilitated by an independent evaluator.
The Remuneration Committee will compare the performance of the Board with the requirements of its charter, the Company vision and KPIs. Succession planning is considered by the Board as a whole.
The Board will annually review and make recommendations relating to talent management and succession planning for the Board and the CEO.
Code of conduct: The Board has adopted a code of conduct which provides a framework for ethical decision-making and actions across the Group. The code of conduct reiterates the Group’s commitment to integrity and fair dealing in its business affairs and its duty of care to all employees, contractors and stakeholders.
Each Board members adherence to the Group’s code of conduct is assessed as part of the annual Board review & appraisal.
Anti-corruption and bribery: The Board has adopted an anti-corruption and bribery policy to further ensure honest and ethical conduct of employees. The Company also provides periodic training to employees to ensure they are aware of their responsibilities in relation to bribery and corruption. The Company has a zero-tolerance approach to bribery and corruption. The Company’s General Counsel is responsible for monitoring compliance with and maintaining the anticorruption and bribery policy.
Board programme: The Board is responsible for approving the Company strategy and policies, for safeguarding the assets of the Company, and is the ultimate decision-making body of the Company in all matters except those that are reserved for specific shareholder approval.
The Board meets at least four times each year in accordance with its scheduled meeting calendar and maintains regular dialogue between Board members, in particular between the CEO, the Chairman and the non-executive Board members.
The Board and its Committees receive appropriate and timely information prior to each meeting, with a formal agenda being produced for each meeting, and Board and Committee papers distributed several days before meetings take place.
Roles & responsibilities: There is a clear division of responsibility at the head of the Company between the Chairman and the CEO.
The Board is supported by the Audit, Remuneration, AIM and MAR Compliance and Nominations committees. Each committee has access to such resources, information and advice as it deems necessary, at the cost of the Company, to enable the committee to discharge its duties.
As the Group grows and develops the Board will periodically review its corporate governance framework to ensure it remains appropriate for the size, complexity and risk profile of the Group.
Communication: The Company attaches great importance to providing shareholders with clear and transparent information on the Company’s activities, strategy and financial position through the Annual Report and Accounts, full-year and half-year announcements, the Annual General Meeting (AGM) and one-to-one meetings with large existing or potential new shareholders.
The Company announces significant developments via various outlets including the London Stock Exchange’s Regulatory News Service (RNS).
The Board receives regular updates on the views of shareholders through briefings and reports from the CEO and the Company’s brokers. The Company communicates with institutional investors frequently through briefings with management. In addition, analysts’ notes and brokers’ briefings are reviewed to achieve a wide understanding of investors’ views.