Corporate Governance
The directors support the relevant principles of the UK Corporate Governance Code issued in July 2018 by the Financial Reporting Council, being the principles of good governance and the code of best practice as set out in the Main Principles of the Code annexed to the Listing Rules of the Financial Conduct Authority.
The UK Corporate Governance Code is available at the following location:
www.frc.org.uk/corporate/ukcgcode.cfm
The Board confirms that it has applied the main principles set out in the UK Corporate Governance Code, as explained below, other than the exceptions shown in the Compliance Statement below.
The Board
The Company is led and controlled by a Board of directors who are all non-executives and who have had relevant experience with quoted companies prior to their appointment. The Chairman is Geoffrey Gamble.
The directors are subject to re-election at each AGM by rotation, except in the AGM following the appointment of a new director when that new director’s appointment will also be subject to shareholder approval.
During the year to 31 December 2022 the following meetings were held:
| 6 full board meetings | 2 Audit Committee meetings |
| All members attended the meetings. | All members attended the meetings |
All directors either had relevant experience with quoted companies prior to their appointment or had a good knowledge base of the rules and regulations concerning a director’s responsibilities with listed companies and it was therefore not thought necessary to provide further training in respect of their obligations and duties.
The Board has also established procedures whereby directors wishing to do so in the furtherance of their duties may take independent professional advice at the Company’s expense.
All directors have access to the advice and services of the Company Secretary. The Company Secretary provides the Board with full information on the Company’s assets and liabilities and other relevant information requested by the Chairman, in advance of each Board meeting.
The Board believes that it presents a balanced and understandable assessment of the Company’s position and prospects. The Audit Committee meets twice a year. Under the chairmanship of a non-executive director, its membership comprises some of the other non-executive directors. During the year the Audit Committee was chaired by Mr Gamble. The Audit Committee reviews the accounts and is reported to by the external auditors. The audit committee did not identify or consider any significant issues relating to the financial statements as substantially all the investments are valued by reference to publicly quoted prices. Further, the Audit Committee keeps under review the cost effectiveness, independence and objectivity of the auditors. A formal statement of independence is received from the external auditors each year.
The terms of reference of the audit committee are available for inspection at the Company’s registered office.
The Audit Committee is satisfied with the performance of Moore Kingston Smith LLP and the Company will be recommending their reappointment at the AGM.
The investment manager is authorised and regulated by the Financial Conduct Authority and the directors have an opportunity to review their own auditors’ review of their financial controls.
Relations with shareholders
The Chairman is the Company’s principal spokesman with investors, fund managers, the press and other interested parties.
Separate resolutions are proposed at the AGM on each substantially separate issue. The Registrars collate proxy votes and the results (together with the proxy forms) are forwarded to the Company Secretary immediately prior to the AGM. In order to comply with the Governance Code, proxy votes will be announced at the AGM, following each vote on a show of hands, except in the event of a poll being called.
Financial Reporting
The directors are responsible for preparing the Company’s financial statements, and the financial statements are audited by the Company’s auditors.
Internal Control
The directors are responsible for the Company’s system of internal control. Although no system of internal control can provide absolute assurance against material misstatement or loss, the Company’s systems are designed to provide the directors with reasonable assurance that problems are identified on a timely basis and dealt with appropriately.
The directors have conducted a review of the effectiveness of the system of internal control for the year covered by the financial statements. This accords with the FRC’s guidance on Risk Management, Internal Control and Related Financial and Business Reporting.
Compliance Statement
The Listing Rules require the Board to report on compliance with the Governance Code provisions throughout the accounting year. The Comply or Explain directions of the Governance Code does however acknowledge that some provisions may have less relevance for investment companies. With the exception of the limited items outlined below, the Company has complied throughout the accounting year to 31 December 2022 with the requirements of the Governance Code.
1. The Board has not appointed a nominations committee as they consider the Board to be small and it comprises wholly non-executive directors. Appointments of new directors are dealt with by the full Board.
2. New directors do not receive a full, formal and tailored induction on joining the Board. Such matters are addressed on an individual basis as they arise.
3. Due to the size of the Board and the nature of the Company’s business, a formal performance evaluation of the Board, its committees, the individual directors and the Chairman has not been undertaken. Specific performance issues are dealt with as they arise.
4. The Company has three independent directors, as defined by the Governance Code issued in July 2018. The board consider that Messrs. Gamble, Barnard and Cameron-Mowat are independent in character and judgement and there are no relationships or circumstances which are likely to, or could appear to affect the directors’ judgement. The Board considers that all directors have sufficient experience to be able to exercise proper judgement within the meaning of the Governance Code.
5. The Company does not have a chief executive officer or senior independent director. The Board does not consider this to be necessary for the size of the Company.
6. The Company does not conduct a formal review as to whether there is a need for an internal audit function. The directors do not consider that an internal audit would be an appropriate control for a venture capital trust.
7. The Audit Committee is chaired by Geoffrey Gamble, Chairman of the Board of directors, whom the board regard as independent despite recommendations to the contrary in the Governance Code due to his being Chairman of the Board of directors.
8. The non-executive directors do not have service contracts, whereas the recommendation is for fixed term renewable contracts.
9. The Company has no major shareholders so shareholders are not given the opportunity to meet any new non-executive directors at a specific meeting other than the annual general meeting.