STATEMENT OF COMPLIANCE WITH THE 2018 QCA CORPORATE GOVERNANCE CODE
The Board of CentralNic Group PLC places governance and controls at the centre of its strategy. The Board appreciates the value of good corporate governance and has decided to adopt the Corporate Governance Guidelines for Smaller Quoted Companies, published from time to time by the Quoted Companies Alliance (the “QCA Code”), to the extent that they believe it is appropriate in light of the size, stage of development and resources of an AIM-quoted company. CentralNic sees governance not only as a compliance driven requirement but as an opportunity to gain commercial sustainability and advantage.
This section sets out how CentralNic Group PLC is currently applying the ten principles of the QCA Code. This page was late updated on 24 April 2023. Further information on this is included in our Annual Report.
1. Establish a strategy and business model which promote long-term value for shareholders
CentralNic operates in two highly attractive markets: high-growth digital advertising (Online Marketing segment) and domain name management solutions (Online Presence segment).
The Online Marketing segment is dedicated to helping online consumers make informed choices through the provision of privacy-safe, easy-to-understand advertorials and review websites. The company uses artificial intelligence-based customer journeys to convert general internet users into high-confidence consumers. CentralNic captures the value it creates for consumers through strategic partnerships with world-leading search and e-commerce partners, generating utility style revenues.
Our strategy for the Online Marketing segment involves expanding both the range of verticals and our geographical presence. Currently, we are primarily focused on e-commerce goods that can be shipped, and our reach is limited to German-speaking countries. By extending our scope in these areas, we aim to unlock significant growth potential, moving beyond incremental improvements to achieve exponential expansion.
The Online Presence segment serves as a distribution channel for digital products, particularly domain names, and stands out by providing the broadest inventory of domain extensions through fully automated APIs and fulfilment services. The company offers web hosting companies, leading international brands, and SMBs one-stop-shop access to all their needs. Additionally, operators of country-code and generic domains benefit from access to an unrivalled distribution network. CentralNic generates highly reliable subscription based revenues from its services.
CentralNic’s strategy for the Online Presence segment revolves around finalising the operational integration of a carefully assembled group of global businesses. By transforming these businesses into a unified marketplace, we aim to achieve organic growth by continuously adding new suppliers, distribution channels, and customers.
CentralNic is focused on winning new customers, growing existing customer relationships, launching new products, contracting with new suppliers and entering new geographical markets. This will help the Group to expand its reach and drive long-term growth and profitability. We are clearly committed to beat the organic growth targets implied by market consensus.
More information on the Board’s established strategy and business model is included in the strategic report section of our 2022 Annual report, which can be found here.
2. Seek to understand and meet shareholder needs and expectations
The Board regards the importance of effective communication with shareholders as essential. Relations with Shareholders are managed principally by the Chief Executive Officer, Chief Financial Officer and the Chairman, and meetings are regularly held with institutional investors and analysts during the year.
The Chairman, Chief Executive Officer, the Chief Financial Officer and if required other Non-Executive Directors make themselves available for meetings with major shareholders either individually or collectively.
The Group’s Shareholders are invited to attend the AGM at which the majority of Directors are present. The Group’s Nominated Advisors and Joint Brokers also convey shareholder opinions to the Chairman and Chief Executive Officer and these are discussed with the Board. Contact details for our Nominated Advisors and Joint Brokers are available on our investor website. https://investor.centralnicgroup.com/contacts/
3. Take into account wider stakeholder and social responsibilities and their implications for long-term success
The company recognises that engaging with our stakeholders strengthens our relationships and helps us make better business decisions. Our stakeholders include shareholders, Suppliers, customers, our employees and relevant statutory Authorities in its area of operation. The Board is regularly updated on wider stakeholder engagement feedback which provides invaluable insight assisting with decision making.
The Group encourages feedback from its customers through engagement with their dedicated account managers and advisors. Customers are also able to provide feedback on our service through our 24/7 support service for each brand we operate.
The Group’s approach to sustainability addresses both its environmental and social impacts, supporting the Group’s vision to remain an employer of choice, while meeting client demands for socially responsible partners.
The Group is committed to operating in an environmentally responsible manner and is certified as a Carbon Neutral Company. The Group respects local laws and customs while supporting international laws and regulations. These policies have been integral in the way Group companies have done business in the past and will continue to play a central role in influencing the Group’s practice in the future.
Health and Safety
The Directors and senior management are committed to providing for the welfare, health and safety of the Group’s employees and have procedures in place, including regular monitoring by third party specialists, to ensure compliance with its legal and contractual obligations.
More information on ESG matters can be found on the ESG section of the Annual Report on pages 23-38.
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation
The Board has primary responsibility for establishing and maintaining the Group’s financial and non-financial controls, as well as identifying the major risks facing the Group.
Internal control systems are designed to meet the particular needs of the Group and the risks to which it is exposed. By their nature, internal controls can provide reasonable but not absolute assurance against material misstatement of loss.
The Executive Directors and Senior Management have specific responsibilities for aspects of the group’s affairs and have regular discussions to address operational matters, as well as considering the skill sets required in their teams to maintain the internal controls required.
Further information on risk assessments and risk management is included in our 2022 Annual Report on pages 42-45, which can be found here.
5. Maintain the board as a well-functioning, balanced team led by the chair
The Chairman is responsible for leading the Board effectively and overseeing the adoption, and communication of the company’s corporate governance model. The Chairman also ensures effective shareholder communications.
To enable the Board to discharge its duties, all Directors receive appropriate and timely information. Briefing papers are distributed to all Directors in advance of Board meetings. All Directors have access to the advice and services of the Company Secretary, who is responsible for ensuring that the Board procedures are followed, and that applicable rules and regulations are complied with.
In addition, procedures are in place to enable the Directors to obtain independent professional advice in the furtherance of their duties, if necessary, at the Company’s expense.
As the business has developed, the composition of the Board has been under constant review to ensure that it remains appropriate to the managerial requirements of the Group. In line with the requirements of the Company’s Articles of Association, three Directors retired at the Annual General Meeting and being eligible, offered themselves for re-election.
Further details of the composition of the Board and attendance of the Directors at meetings are set out in the Corporate Governance Section of the Annual Report and Accounts 2022 on page 48-51.
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
The Board currently comprises the Non-Executive Chairman, two Executive Directors and five Non-Executive Directors. There is a balance between independence and skill and expertise needed in the Board to enable it to discharge its duties and responsibilities effectively. More details on the skills and expertise of the Board are available on their biographical details included in our 2022 Report and Accounts on pages 46-47 and on our website here.
Throughout their period in office the Directors are continually updated on the Group’s business, the industry, corporate social responsibility matters and other changes affecting the Group by written briefings and meetings with senior management. They are also updated on changes to the legal and governance requirements of the Group, and upon themselves as Directors, on an ongoing and timely basis.
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
A formal process of performance evaluation of the Board, its Committees and its individual Directors takes place every year. The Review may be conducted internally or by external consultants. The performance of the Board, its Committees and its individual Directors is also continually monitored by the Chairman.
The Remuneration and Nominations committee coordinate on succession planning of the executive leadership team and make recommendations to the Board for the re-appointment of Non-Executive Directors when necessary.
8. Promote a corporate culture that is based on ethical values and behaviours
The Group is committed to maintaining and promoting high standards of business integrity. Company values, which incorporate the principles of corporate social responsibility and sustainability, guide the Group’s relationships with its stakeholders including clients, employees and the communities and environment in which the Group operates.
We promote a culture within the Group of ethical values and behaviours. We have internal policies covering a range of ethical behaviours, such as anti-bribery and corruption, money laundering, anti-slavery and employee conduct generally both internally and externally. New employees are trained on these policies and the expectations of the Company when it comes to ethical values and behaviours.
The Group respects local laws and customs while supporting international laws and regulations. These policies have been integral in the way Group companies have done business in the past and will continue to play a central role in influencing the Group’s practice in the future.
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board
The Board is committed to achieving high standards of corporate governance and business ethics. The Board is collectively responsible to the shareholders for the overall direction and control of the company and delegates the management of the business to the executive directors and senior management. The Board also delegates certain matters to its Board Committees so that it can operate efficiently and give the right level of attention and consideration to relevant matters.
Matters reserved for the Board include business strategy and management, financial reporting (including the approval of the annual budget), Group policies, corporate governance matters, major capital expenditure projects, material acquisitions and investments and establishment and monitoring of internal controls.
The Board composition and governance structures are reviewed on an ad hoc basis, by the Chairman as the company grows.
The Chairman is an independent Non-Executive Director. The role of the Chairman and the CEO are performed by separate individuals. The Chairman is responsible for leading the Board effectively and overseeing the adoption and communication of the company’s corporate governance model. The Chairman is also responsible together with the Chief Executive Officer and the Chief Financial Officer for Shareholder relations.
Chief Executive Director
The Board has delegated to the CEO the authority to manage the Group’s day-to-day affairs save those matters which are reserved for the Board. The CEO is responsible for managing the Executive Directors and reporting to the Board for the Group’s management and performance. The CEO manages the Group in accordance with this statement, the Group Strategy, Business model and policies. The CEO is also responsible together with the Chairman and the Chief Financial Officer for Shareholder relations.
The Company Secretary is responsible for ensuring that the Board procedures are followed, and that applicable rules and regulations are complied with. The Company Secretary is also responsible for coordinating and distributing materials for Board meetings and shareholder meetings. All Directors have access to the Company Secretary. The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do with the proper functioning of the Board. The appointment and removal of the Company Secretary is a matter reserved for the Board.
The Board has established Remuneration and Nominations and Audit Committees and provides additional disclosure on pages 52-58 of the 2022 Report and Accounts in relation the work of the board committees undertaken during the year, including the audit committee report and the remuneration committee report.
The Audit Committee has Marie Holive as Chairman and other members of the Committee include Iain McDonald and Horst Siffrin. The Chief Financial Officer is invited to and regularly does attend the Committee meetings, as does the Chief Executive Officer.
The primary responsibilities of the Committee, having due regard for the interests of Shareholders include:
- Monitoring the integrity of the half yearly and annual financial statements and formal announcements regarding the Group’s financial performance
- Reviewing significant accounting policies, areas of significant estimates and judgments and disclosures in financial reports
- Monitoring the quality and effectiveness of internal control procedures and risk management systems
- Considering the requirement for Internal Audit, taking into account the size, distribution and nature of the Company and the Group and its operations Reviewing the external auditor reports relating to the Company’s accounting and internal control procedures
- Overseeing the Board’s relationship with the external auditors, including their continued independence and making recommendations to the Board on the selection of external auditors
The Audit Committee is required to meet at least twice a year. During 2022 year the Committee met on five occasions.
Remuneration and Nominations Committee
The Group’s Remuneration and Nominations Committee is responsible, on behalf of the Board, for developing remuneration policy and has the power and authority to carry out a selection process of candidates before proposing new appointments to the Board.
The Remuneration and Nominations Committee has Max Royde as its Chairman and other members of the Committee include Max Samuel Dayani and Marie Holive.
The primary responsibilities of the Committee, having due regard for the interests of Shareholders include:
- Determining and agreeing with the Board the remuneration policy for the Chairman of the Board, the non-Executive Directors and the Executive Directors and other senior managers
- Reviewing the design of share incentive plans for approval by the Board and determining the award policy to Executive Directors and personnel under existing plans
- Determining the remainder of the remuneration packages (principally salaries, bonus and pension) for the Executive Directors and senior management including any performance-related targets
- Reviewing and noting remuneration trends across the Group
- Co-ordinating with the Nominations Committee in relation to the remuneration to be offered to any new Executive Director; and
- Taking responsibility for the selection criteria and if appropriate selecting, appointing and setting terms of reference for any remuneration consultants engaged to advise the Committee
The Remuneration and Nominations Committee was originally created in September 2013 as two separate committees and was merged into one in 2021. It is required to meet at least twice a year. During 2022 the Remuneration and Nominations Committee met on three occasions.
10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
CentralNic is committed to communicating openly with shareholders to ensure that the strategy and performance are clearly understood. The Group communicates with Shareholders through the publication of the Annual Report, full-year and half-year announcements, trading updates and its Annual General Meeting (AGM) and encourages shareholders’ participation in face-to-face meetings. In addition to the AGM the Group also regularly meets with, and presents to, its institutional shareholders, including regular roadshows following the announcement of interim and full year results. This allows the Group to maintain a dialogue with its shareholders to ensure we understand their needs and expectations.
A range of corporate information is also available for Shareholders, investors and the public to access on the Investor website
Announcements released to the London Stock Exchange are available at https://investor.centralnicgroup.com/rns-news/
At the Company’s last AGM in 2023, all Resolutions were duly passed.
Results of the voting at the last AGM were as follows:
|Ordinary Resolutions||% of votes in favour|
|1. Annual Report and accounts||100.00|
|2. Final Dividend||100.00|
|3. Annual Report on Directors’ remuneration||75.34|
|4. Proposal to re-elect Thomas Rickert||Withdrawn|
|5. Proposal to re-elect Sam Dayani||92.30|
|6. Proposal to elect Claire MacLellan||99.98|
|7. Proposal to elect William Green||99.18|
|8. Appointment of auditors||99.97|
|9. Remuneration of auditors||99.98|
|10. Power of Directors to allot shares||82.23|
|11. Disapplication of pre-emption rights||80.25|
|12. Purchase of own shares||100.00|