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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 five 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 managing director
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 managing director 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. |
