General principles

The board of Personal Group Holdings Plc supports the principles and is committed to achieving high standards of corporate governance. As an AIM listed company it is not required to comply with the Combined Code but notwithstanding this seeks to comply with those provisions which are most appropriate given the size of the group and the nature of its operations.

Board of directors

The board presently consists of four executive and three non-executive directors. The board meets on a regular basis and is responsible for the strategy and development of the group and the efficient management of its resources. It is supplied in a timely manner prior to meetings with information on financial, business and corporate matters which enables it to discharge its duties. All directors have access to the advice and services of the company secretary and appropriate training is given as and when required. There are also procedures in place for the non-executive directors to obtain independent legal or other professional advice at the group’s expense.

The group has a formal schedule of matters which are reserved for decision by the board. In addition the board has established committees with written terms of reference to fulfil specific functions as set out below. The matters reserved for the board include the appointment of directors and senior executives, in consequence of which a separate nominations committee is considered unnecessary at the present time.


Audit committee
The audit committee comprises the three non-executive directors and is chaired by R M Green. It meets at least twice a year with the finance director and auditors usually in attendance. The committee reviews accounting matters, financial reporting and internal controls together with the interim and annual results announcements.

Auditor independence
The audit committee reviews the nature and extent of non-audit services supplied by the external auditors to the group, seeking to balance objectivity and value for money.

In determining the policy, the audit committee has taken into account relevant ethical guidance regarding the provision of non-audit services by the external audit firm, and does not agree to the auditor providing a service if, having regard to the ethical guidance, the result is that:

- the external auditor audits its own firm’s work;
- the external auditor makes management decisions for the group;
- a mutuality of interest is created; or
- the external auditor is put in the role of advocate for the group.

Remuneration committee
The remuneration committee consists of the three non-executive directors with the group chief executive in attendance. The committee meets as required but not less than once a year. It reviews and makes recommendations to the board regarding the terms and conditions of employment of the executive directors including performance related bonuses and share options, and sets the framework for the remuneration of other senior executives. The remuneration of the non-executive directors is fixed by the board as a whole.

Compliance committee
The compliance committee was established in December 2005. It comprises the three non-executive directors with the group chief executive and the group compliance director normally in attendance. It is chaired by H H Driver. The committee meets as required but not less than four times a year. It oversees the compliance function of the group and reports to the board on Financial Services Authority compliance activities of the group as a whole.

Internal control
The board of directors is responsible for the group’s system of internal control and for reviewing its effectiveness. Such a system however is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss.

The board has established a continuous process for identifying, evaluating and managing the group’s significant risks. This process involves the monitoring of all controls including financial, operational and compliance controls and risk management. It is based principally on reviewing reports from senior management and professional advisers to ensure that any significant weaknesses are promptly remedied and to indicate a need for more extensive monitoring.

Relationship with shareholders
The board attaches a high importance to maintaining good relationships with institutional shareholders and analysts, and seeks to keep them fully updated on the group’s performance, strategy and management. In addition the board welcomes as many shareholders as possible to attend the Annual General Meeting and encourages open discussion after the formal proceedings.

Corporate social responsibility
The group is committed to ensuring that the way in which its business is conducted has a positive impact on its employees and on the communities in which it operates. Its activity in this respect includes a charitable fund to which Personal Assurance Plc presently contributes approximately half of one per cent of premium income. The group supports a range of voluntary sector and community activities, primarily where its own employees or employees of host companies from whom the group derives its business are actively involved.