The Board of AMS considers strong corporate governance within the Group to be a key element to the success of the business.
Please click here to access our Statement of Compliance with the UK Corporate Governance Code 2018.
Corporate Governance Framework
The Board is committed to the principles of good corporate governance which encompass leadership, effectiveness, accountability, remuneration and shareholder relations. Our shares are quoted on the AIM market and are subject to the AIM Admission Rules of the London Stock Exchange.
For the year ended 31 December 2019, Advanced Medical Solutions Group chose to comply with the 2018 UK Corporate Governance Code (Code), which was updated for financial years beginning on or after 1 January 2019. The Code sets a higher standard than the alternative Quoted Companies Alliance (QCA) Code and this aligns with our corporate governance principles. We comply as far as is practicable and appropriate for a public Company of the Group’s size. We set out important details of our work during the year on the following pages.
All statements made are made against the Code.
Whilst exercising our governance responsibilities, the Group aims to create value and to honour our responsibilities to our key stakeholders, further details of which are outlined in our Engagement with Stakeholders section here.
We have provided additional insight into our approach to board succession. From our engagement with shareholders and proxy firms, Glass Lewis and ISS, we believe this will be welcomed. Furthermore, in line with Code Provision 24 and general best practice, Peter Allen has stepped down from the Audit Committee with effect from 6 May 2020. When invited, Peter will attend Audit Committee meetings as the Board considers my extensive accounting experience adds value to the discussion.
Please click here to access the Governance section of our 2019 Annual Report.
Our corporate governance framework is supported by our core company values which are embedded in our ‘Care, Fair, Dare’ approach outlined below. This approach summarises our culture, underpins our values and helps us to deliver results, building a sustainable future for our business. We have defined the principles and expectations of how we will operate together to deliver success as the Company continues to grow.
Throughout 2019, we worked on implementing Care, Fair, Dare action plans in teams and held review workshops. We have listened to the feedback and further developed our principles and expectations. These will now form part of our appraisal system and recruitment of potential new employees. Employees have personal objectives which directly link to the business’ corporate objectives and receive feedback on competencies via a 360 degree review based on our culture of Care, Fair, Dare to ensure achievements align with the culture we wish to embed. We have re-launched our reward and recognition process to ensure a clear link to living our Care, Fair, Dare values.
In 2020 we will increase our focus on employees and culture by focusing on the measurement of our Employee Engagement Score and Staff Retention/Turnover as Key Performance Indicators within our strategic pillar of Culture.
AMS is also subject to the UK City Code on Takeovers and Mergers.
We are embedding the section 172 principles at both Senior Management Team (SMT) and Board level (click here – Engagement with Shareholders), and have a robust framework of systems and controls throughout the Company.
Board and Committees
The Main Board of Directors sets the standards for the Group and through the internal Business Unit structure ensures that these standards and the core values are communicated to management and employees, and are implemented throughout the Group. Led by a strong and experienced Non-Executive Chairman, the Board comprises the Chief Executive, Chief Financial Officer and two Non-Executive Directors. The Non-Executive Directors, both of whom are considered by the Board to be independent, bring a valuable range of expertise and experience to assist the Group to achieve its strategic aims. We aim to appoint a new Non-Executive Director in 2020 to replace Peter Steinmann. This appointment will be a replacement for one of the existing Non-Executive Directors and will provide a 6-9 month handover period prior to one of them stepping down at the 2021 AGM. The Chairman fosters a climate of debate and challenge in the boardroom. This is built on his challenging but supportive relationship with the Chief Executive which sets the tone for Board interaction and discussions.
The Board appreciates the continuing evolution of Board membership and the Nomination Committee remains aware of its obligations to encourage diversity. While no targets have been set the Company will continue to follow best practice. The Board currently comprises a number of different nationalities with a wide range of skills and experiences from a variety of business backgrounds. Our current female representation on the Board is 16.7%, and the Board will take into consideration the Hampton-Alexander review when making future appointments. All Directors are required to stand for re-election at each Annual General Meeting.
Our Board and Committees have continued to perform effectively and every year we review the Terms of Reference for each Committee. The work of our Committees is outlined in our 2019 Annual Report.
Moving forward the Board is committed to:
- continued training and development opportunities for Directors to meet their and the Group’s needs;
- further engagement with Senior Management;
- continued consideration of Board composition to ensure an appropriate balance of skills, experience and diversity; and
- implementing the succession plan outlined below and in the 2019 Annual Report to refresh the Board in line with Corporate Governance best practice over the next 3 years.
We have a well-established and mature Board which has successfully overseen the growth of the Group over recent years. Despite the benefits this brings, we are aware of the tenure requirements for our Non-Executive Directors and Chairman and the importance of succession planning. In accordance with the Code, the Group intends to refresh the composition of the Non-Executive Directors. We have initiated these plans to refresh the Board and this process stared with Peter Steinmann retiring from the Board at the AGM in 2020. This allows for a smooth and effective handover, particularly with respect to the Chairmanships of the Audit and Remuneration Committees.
Board members are provided with appropriate documentation in advance of each Board meeting and in addition to Board meetings the Chairman and Chief Executive meet frequently and make regular contact with other Board members. The Board has approved a procedure whereby Directors may consult the Company’s advisers and take independent professional advice at the Company’s expense.
The Directors are kept appraised of developments in legal, regulatory and financial matters affecting the Group from the Chief Financial Officer, the Deputy Company Secretary and the Group’s external auditors and advisers.
The performance evaluations of the Board, its Directors, Committees and Committee members are undertaken by the Chairman annually and the results are implemented by the Board in collaboration with the Committee Chairmen where appropriate.
The Board acknowledges that it is responsible for the Group’s system of internal control and for reviewing its effectiveness, taking guidance from the Audit Committee. In the context of the Group’s business any such system can only reasonably be expected to manage rather than eliminate risks arising from its operations. The Board accepts responsibility for determining the nature and extent of the risks it is willing to take in achieving its strategic objectives. The recent challenging business climate has resulted in a sustained focus on the approach to risk. The Directors consider risk management to be crucial to the Group’s success and give a high priority to ensuring that adequate systems are in place to evaluate and limit risk exposure. Details of how Internal Controls and Risk Management are managed can be found in the 2019 Annual Report and the Company applies the Risk Management Model outlined below: