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Governance Policy

Corporate Governance

STATEMENT OF COMPLIANCE WITH THE 2018 QCA CORPORATE GOVERNANCE CODE

Chairman’s Introduction
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. Further information on this is included in our Annual Report.

Mike Turner
Non-Executive Chairman

1. Establish a strategy and business model which promote long-term value for shareholders

CentralNic’s strategy for continuing its growth is to increase its scale and scope of operations by developing and operating scalable software platforms to serve global markets with domain names and related services. The Company specifically identifies and develops areas of the domain industry with high-growth and/or high-margin potential. This includes taking a leading role in disruptive initiatives such as new Top Level Domains (“TLDs”), selling country code domain extensions, taking market share in emerging markets and focusing on the enterprise sector.

The Company continues to win, retain and grow business from well-resourced clients with complementary objectives. It also sources and executes acquisition transactions that meet the Group’s strategic criteria of being earnings accretive with a strong recurring revenue base, particularly revenues from domain registrations and their subsequent annual renewal.

More information on the Board’s established strategy and business model is included in the strategic report section of our 2017 Annual report, which is available 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 Executive or 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 here.

The Group’s website contains information on current business activities and recent company announcements.

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. By way of example the Group companies have arranged and promoted a number of ACE (Athletics, Community and Environmental) activities in the past.

Environment
The Group is committed to operating in an environmentally responsible manner and is certified by the 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.

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 2017 annual report, which is available 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, delivery 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, the Group has voluntarily chosen that two Directors will retire at the Annual General Meeting and being eligible, will offer themselves for re-election.

Further details of the composition of the Board and time commitment required from Directors will be set out in our 2018 Report and Accounts.

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 four 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 2017 Report and Accounts.

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 committees coordinate on succession planning of the executive leadership team and make recommendations to the Board for the re-appointment of Non-Executive Directors if and 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.

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

Chairman
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, delivery 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 Chief Executive Officer is also responsible together with the Chairman and the Chief Financial Officer for Shareholder relations.

Company Secretary
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.

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.

BOARD COMMITTEES

The Board has established Compliance, Audit, Remuneration, and Nominations Committees.

Compliance Committee
The Compliance Committee meets monthly and is responsible for ensuring that all governance policies are administered, reviewed and complied with across the Group. Don Baladasan, the Chief Financial Officer of the Group, chairs this committee and provides conduit between the Board and the Compliance Committee. This ensures timely decisions and challenges are communicated to the Board. In addition, a formal summary report relating to the activities of the Compliance Committee is produced at Board meetings.

The Compliance Committee meets monthly and is responsible for ensuring that all governance policies are administered, reviewed and complied with across the Group. Don Baladasan, the Chief Financial Officer of the Group, chairs this committee and provides conduit between the Board and the Compliance Committee. This ensures timely decisions and challenges are communicated to the Board. In addition, a formal summary report relating to the activities of the Compliance Committee is produced at Board meetings.

CentralNic takes a multi-disciplinary approach to governance as it is not possible to have strong governance being driven by one department due to departments interacting on day-to-day operations. The Compliance Committee has representation from Sales, Marketing, Technology, Operations, Legal and Finance departments. By engaging with each department and team leaders, CentralNic works to improve communication, transparency and accountability in compliance matters. CentralNic manages enforcement through well publicised guidelines and policies.

Audit Committee

The Audit Committee has Iain McDonald as Chairman and other members of the Committee include Mike Turner, Thomas Rickert and Thomas Pridmore. 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 the year the Committee met on three occasions.

Remuneration Committee

The Group’s Remuneration Committee is responsible, on behalf of the Board, for developing remuneration policy.

The Remuneration Committee has Tom Pridmore as its Chairman and other members of the Committee include Mike Turner, Samuel Dayani and Thomas Rickert. 
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 Committee was created in September 2013 and is required to meet at least twice a year. During 2017 the Committee met on four occasions.

Nominations Committee

The Group’s Nominations Committee has the power and authority to carry out a selection process of candidates before proposing new appointments to the Board.

The Nominations Committee has Mike Turner as its Chairman and other members of the Committee include Iain McDonald, Thomas Rickert and Tom Pridmore.

The Nominations Committee was created in September 2013 and is required to meet at least once a year. During 2017 the Committee met on one occasion.

The Chairman and Non-Executive Directors do not participate in agenda items at any meeting when discussions in respect of matters relating to their own position take place.

10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

The Board has established Compliance, Remuneration, Nominations and Audit Committees and provides additional disclosure on pages 26-27 of the 2017 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 results of the votes received in relation to the 2018 AGM are detailed below:-

  VOTES
FOR
% VOTES
AGAINST
% VOTES
TOTAL
% of ISC
VOTED
VOTES
WITHHELD
1 50,458,157 100.00 0 0.00 50,458,157 52.29% 0
2 50,407,653 99.91 43,504 0.09 50,458,157 52.29% 7,000
3 50,414,653 99.91 43,504 0.09 50,458,157 52.29% 0
4 50,458,157 100.00 0 0.00 50,458,157 52.29% 0
5 50,458,157 100.00 0 0.00 50,458,157 52.29% 0
6 50,458,157 100.00 0 0.00 50,458,157 52.29% 0
7 50,458,157 100.00 0 0.00 50,458,157 52.29% 0
8 44,814,956 88.82 5,643,201 11.18 50,458,157 52.29% 0
9 50,451,157 99.99 7,000 0.01 50,458,157 52.29% 0

Share Dealing Code
The Directors understand the importance of the Market Abuse Regulations and AIM Rules relating to dealings in the Company’s shares by directors and other employees and have put in place a Share Dealing Code. The Board believes that the Share Dealing Code in place is appropriate for a company quoted on AIM and is compliant with Rule 21 of the AIM Rules. The Company and the Directors have taken all reasonable steps to ensure compliance with the Policy by the Company’s Directors and relevant employees.

Anti-bribery and corruption, anti-money laundering and sanctions compliance
CentralNic conducts business ethically, maintains financial integrity and strives to behave responsibly in its business dealings. The Group’s Directors and its senior management are committed to ensuring strict adherence to its anti-bribery and corruption policy and compliance with anti-bribery and corruption laws. The Group also maintains and ensures adherence to its policies in relation to Anti-Money Laundering and Trade Sanctions and Embargoes, again to comply with relevant laws across the relevant jurisdictions.