The Directors recognise the importance of sound corporate governance and intend that SCISYS will comply with the main provisions of the UK Corporate Governance Code (the "Code") commensurate with its size and stage of development.
The Board is chaired by Mike Love as Non-Executive Chairman, with David Coghlan as independent Non-Executive Director. The Board currently consists of the Non-Executive Chairman, the Non-Executive Director and five Executive Directors. The Board meets at least four times each year.
Division of Responsibilities
David Jones is Chief Executive with Klaus Heidrich as Chief Operations Officer. The Chairman is responsible for leadership of the Board, setting its agenda and monitoring its effectiveness. He ensures effective communication with shareholders and that the Board is aware of the views of major shareholders. He ensures that the Executive Directors develop a strategy which is supported by the Board as a whole. The Executive Directors through the Chief Executive are responsible for executing the strategy once agreed by the Board.
The Non-Executive Chairman and Independent Non-Executive Director bring wide and varied commercial experience to the Board and Committee deliberations. They are appointed for an initial three-year term, subject to election by shareholders at the first AGM after their appointment, after which their appointment may be extended subject to mutual agreement and shareholder approval. SCISYS remains committed to a Board which has a balanced representation of executives and non-executives.
The Board's Role
The Board supports the executive management team in delivering sustainable added value for shareholders. It considers strategic issues, key projects and major investments and regularly monitors performance against delivery of the key targets of the Business Review. The Board delegates certain functions to its three principal committees and the Executive Board. Through the Audit Committee, the Directors ensure the integrity of financial information, the effectiveness of the financial controls and the internal control and risk management systems. The Remuneration Committee sets the remuneration policy for Executive Directors and determines their individual remuneration arrangements. The Nomination Committee recommends the appointment of Board Directors and has responsibility for succession planning at Board level. These and other key responsibilities are formally reserved powers of the Board.
The Audit Committee
The Audit Committee is chaired by David Coghlan, comprises himself and Mike Love and meets three times a year. The Financial Director and external auditors attend by invitation. The Audit Committee advises the Board on the appointment, independence and objectivity of the external auditors, as well as on their remuneration, both on audit and non-audit work. It also discusses the nature, scope and results of the audit with the external auditors. The Audit Committee reviews external audit activities, monitors compliance with statutory requirements for financial reporting and reviews the half-year and annual accounts, before they are presented to the Board for approval. It is also required to review the effectiveness of the Company's internal control systems, to review the statement on internal control systems prior to endorsement by the Board and to consider, from time to time, the need for a 'risk sub-committee' to assist in monitoring the internal control systems. In accordance with best practice, the Audit Committee reviews the need for an internal audit function once a year.
The Remuneration Committee comprises Mike Love and David Coghlan. It is responsible for recommending to the Board the contract terms, remuneration and other benefits of the company's CEO, COO, Chairman, the executive directors, the company secretary and such other members of the executive management as it is designated to consider. The remuneration of non-executive directors is a matter for the Chairman and the executive members of the Board. No director or manager shall be involved in any decisions as to their own remuneration.
The Nomination Committee currently comprises of Mike Love and David Coghlan. Meetings are arranged as necessary. The Committee is responsible for nominating candidates (both Executive and Non-Executive) for the approval of the Board, to fill vacancies or appoint additional persons to the Board.
All Directors are required to seek election by shareholders at the first opportunity after their appointment and must stand for re-election to the Board every three years under the Company's Articles of Association.
The Executive Board, chaired by David Jones, comprises himself, the SCISYS PLC Executive Directors (excluding Klaus Meng) and the Divisional Directors and meets at least bi-monthly. While the SCISYS PLC Board remains the prime authority in the Company, the Executive Board oversees and co-ordinates the operational functions of the business. It therefore has delegated terms of reference agreed by the full Board which outlines its role and powers to commit SCISYS group.
SCISYS is committed to maintaining good communications with investors. Normal shareholder contact is the responsibility of the Non-Executive Chairman together with the Chief Executive Officer and the Financial Director.
There is regular dialogue with institutional investors who, along with analysts, are invited to presentations immediately after the announcement of the group's interim and full year results. Shareholders have the opportunity to meet and question the Board at the AGM. The Independent Non Executive Director and Chairmen of the Audit, Remuneration and Nomination Committees will be available to answer questions. A detailed explanation of each item of special business to be considered at the AGM is included with the Notice of Meeting which is usually sent to shareholders at least 20 working days before the meeting. All resolutions proposed at the AGM are taken on a poll vote. This follows best practice guidelines and enables all votes to be counted, not just those of shareholders who attend the meeting.
The issue of corporate governance plays an important role within the running of SCISYS. Compliance with the UK Corporate Governance Code is reviewed by the Board on an annual basis.