As an AIM listed company, the Company is not required to comply with the provisions of the UK Corporate Governance Code (“The Code”). The Company does not intend to fully comply with the Code and does not give a statement of compliance with the Code. However, the Board of Directors recognises the importance of, and is committed to, ensuring that effective corporate governance procedures relevant to smaller listed companies are in place.
The board comprises a non-executive chairman, one executive director and two non-executive directors. The board considers that D Harrel, J S Allkins, and M Fletcher are independent.
J S Allkins is currently the senior independent director. The role of senior independent director is to be available to shareholders if they have concerns which contact through the chairman, chief executive or finance director have failed to resolve, or for which such contact is inappropriate. The non-executives will meet without the chairman at least once a year and the senior independent director will lead this meeting.
The board is scheduled to meet 10 times each year, with additional meetings called if required.
The board’s main focus is on strategic and policy issues and also the regular review of objectives and performance. To enable them to carry out these responsibilities, all directors have full and timely access to all relevant information on matters before the board. The board has formally delegated specific responsibilities to board committees, including the audit, remuneration and nomination committees. Copies of the terms of reference of each of these committees can be accessed via the Company website at www.fairpoint.co.uk.
The posts of chairman and chief executive are held by different individuals. Broadly, the chairman is responsible for the effective working of the board and ensuring that all directors and, in particular, the non-executive directors, contribute effectively to the board. The chief executive has responsibility for all operational matters. The board considers that no one individual has unfettered power of decision.
The board has adopted a procedure which allows for the directors to obtain independent professional advice, in certain circumstances at the expense of the Company. Further, the board will ensure that the Company provides sufficient resources to all the board committees in order to assist them in undertaking their duties. All directors have access to the advice and services of the company secretary.
All the directors are subject to election by shareholders at the first annual general meeting after their appointment. Thereafter, all directors are then subject to retirement by rotation at intervals of no more than three years.
The Company maintains an appropriate level of directors’ and officers’ insurance in respect of legal action against the directors and this is reviewed annually.
The nominations committee is chaired by D Harrel and includes J S Allkins.
The committee evaluates the balance of skills, knowledge and experience on the board and is responsible for board appointments. Following such an evaluation, it will prepare a description of the role and capabilities required for a particular appointment.
The remuneration committee consists of J S Allkins and M Fletcher and is chaired by M Fletcher.
The remuneration committee has delegated responsibility for setting the remuneration for all executive directors, including any compensation payments. Details of directors’ remuneration are set out in the remuneration report. No director participates in the committee when their own remuneration is discussed.
The audit committee consists of J S Allkins and M Fletcher and is chaired by J S Allkins.
The committee meets at least three times per year to discuss governance, financial reporting, internal control and risk management. The audit committee also has responsibility for making recommendations on the appointment, reappointment and removal of the external auditors. There is an internal audit function, the head of which reports to the chair of the Audit Committee.
The board is responsible for the Company’s internal control framework and for reviewing its effectiveness. On behalf of the board, the audit committee regularly reviews controls, including financial, operational and compliance controls and risk management procedures. The directors are responsible for ensuring that the Group maintains a system of internal control to provide them with reasonable assurance regarding the reliability of financial information used within the business and for publication and that assets are safeguarded. The key features of the internal control system are:
- A control environment with clearly defined organisation structures. The management of the Company and its subsidiaries is delegated to the chief executive officer and authority is delegated to senior executives as appropriate.
- Comprehensive business planning, risk assessment and financial reporting procedures, including annual preparation of detailed budgets for the year ahead and projections for subsequent years.
- Comprehensive monthly financial reporting system, highlighting variances to budget and regularly updated forecasts
- A review of financial and non-financial key performance indicators to assess progress towards objectives at each board meeting.
- Program of risk based audit reviews presented at regular intervals to the Audit Committee.
Whistle blowing policy
The Group operates a whistle blowing policy to allow all staff the opportunity to raise issues and concerns anonymously to the board directly.
Relations with shareholders
The Company encourages a dialogue with both its institutional and private investors. The chief executive and finance director meet regularly with institutional shareholders and analysts. The results of these meetings and any analysts’ reports are circulated to all directors.
The senior independent non-executive director and the other non-executive directors are available to shareholders if they have concerns that have not been resolved through the normal channels of chairman, chief executive or finance director or for which such contact is inappropriate.
The board intends to continue to use the annual general meeting to communicate with investors and to encourage their participation.
Audit Committee Terms of Reference
Nomination Committee Terms of Reference
Remuneration Committee Terms of Reference
Articles of association Revised May 2009
Articles of association