Investor relations

corporate governance statement

Compliance

Since October 2013 the Company has been a standard listed company on the Official List. As a standard listed company the governance levels are lower than those that apply to premium listed companies. The Company is fully compliant with the governance requirements of a standard listing.

A premium listed company is now required to comply with the super equivalent provisions which are contained in the 2014 Code. The Board has determined that, because of the size of the Group and the cash conservation mode that the Group continues to operate under, applying the additional requirements of the 2014 Code relating to the longer-term viability of the Company (Section C.2.2) or the continued monitoring of the effectiveness of internal controls (Section C.2.3) would not be in the best interests of the Group.

Throughout the year ended 31 December 2015, the Group complied with all the provisions set out in the 2012 Code except that those provisions relating to board and committee composition, namely Sections B.1.2, B.2.1, C.3.1 and D.2.1. The Board believes that the current structure with a non-executive Chairman who was independent on appointment, one independent non executive director and one executive director is appropriate at present. As a result the Company was not compliant with:

  • Section B.1.2, which states that except for smaller companies, at least half of the board, excluding the chairman, should comprise non-executive directors determined by the board to be independent. A smaller company should have at least two independent non executive directors.
  • Section B.2.1, which states that a majority of members of the nomination committee should be independent non-executive directors.
  • Section C.3.1, which states that the board should establish an audit committee of at least three, or in the case of smaller companies two, independent non-executive directors. In smaller companies the company chairman may be a member of, but not chair, the committee in addition to the independent non-executive directors, provided he or she was considered independent on appointment as chairman. The board should satisfy itself that at least one member of the audit committee has recent and relevant financial experience.
  • Section D.2.1 states that the board should establish a remuneration committee of at least three, or in the case of smaller companies two, independent non-executive directors. In addition the company chairman may also be a member of, but not chair, the committee if he or she was considered independent on appointment as chairman.

Board of directors

The Board is primarily responsible for the success of the Group by providing leadership within a framework of prudent and effective controls which enables risk to be assessed and managed. The Board sets the Group’s strategic aims, ensures that the necessary financial and human resources are in place for the Group to meet its objectives and reviews management performance. The Board sets the Group’s values and standards and ensures that its obligations to its shareholders and others are understood and met.

Matters reserved for the Board

The Board has a formal schedule of matters reserved to it for its decision. This schedule is reviewed annually and includes approval of:

  • Group objectives, strategy and policies;
  • business planning;
  • substantial transactions, contracts and commitments;
  • review of performance;
  • risk assessment;
  • dividends;
  • appointments to the Board and as Group Secretary; and
  • senior management appointments and succession plans.

Other specific responsibilities are delegated to Board Committees, which operate within clearly defined terms of reference. Details of the responsibilities delegated to Board Committees are given on pages 18 to 28 of the Annual Report 2015

Board balance and independence

During the year the Board consisted of two non-executive directors, a Chairman who was independent on appointment and an independent non-executive director, Michael Parker who is deemed to be independent in accordance with the 2012 Code, and the Chief Executive Officer.

The Chairman is presumed under the 2012 Code not to be independent. The Board considers Michael Parker to be independent and he is the recognised Senior Independent Director who is available to shareholders if they have any relevant issues or concerns. Brief biographical details of all members of the Board are set out on page 17 of the Annual Report 2015.

The non-executive directors bring a wide range of commercial and financial experience and knowledge and are independent of management and any business or other relationship that could interfere with the exercise of their judgement. This provides a balance whereby an individual or small group cannot dominate the Board’s decision making.

The non-executive directors entered into arrangements for initial three-year periods and their appointments continue subject to re-election at each AGM or six months’ notice in writing from either party. The terms and conditions of appointment of the non-executive directors can be inspected at the Company’s registered office and will be available for inspection at the Annual General Meeting. John Sleeman was appointed on 11 June 2007 and Michael Parker was appointed on 1 January 2010.

The Board has established a separate Nomination Committee and details of its responsibilities and activities are on page 18 of the Annual Report 2015.

Board meetings

The Board meets at least six times per annum and at other times according to business requirements. During 2015 there were eight Board meetings and a meeting in November 2015 where the Board met offsite to consider the Group’s strategy and to review key business issues. Meetings are held in central London and at the Group’s operating subsidiaries: at Abingdon in the UK; and at Erfurt in Germany. When the Board meets at the Group’s operating subsidiaries the Board will have a detailed presentation from the subsidiary directors at that location and an opportunity to review the operation and to meet local management. During 2015 the number of Board and Committee meetings with individual attendances was as follows:

Board

Audit

Remuneration

Nomination

Iain Dorrity

8/8

2/2

3/3

2/2

Michael Parker*

8/8

2/2

3/3

2/2

John Sleeman*

8/8

2/2

3/3

2/2

* Non-executive directors.

Board support

All directors have access to advice and services from the Group Secretary. The appointment and removal of the Group Secretary is a matter for the Board as a whole. The Group Secretary is responsible for advising the Board on all governance matters, ensuring Board procedures are followed and applicable rules and regulations are complied with. The directors are free to seek any further information they consider necessary and directors can obtain independent professional advice at the Group’s expense.

Information, induction and professional development

The Chairman, assisted by the Group Secretary, is responsible for ensuring that the Board receives appropriate and timely information on all relevant matters.

On appointment to the Board, new directors receive background reading about the Group and details of Board procedures and other governance related matters. In addition, the directors participate in a comprehensive induction programme, including site visits to the Group’s operations and meetings with the executive directors and senior management across the Group.

The Chairman regularly reviews and agrees with each director their training and development needs as part of the succession planning process. Directors receive ongoing training and updates on relevant issues as appropriate, taking into account their individual qualifications and experience. The Group Secretary helps directors undertake any other professional development they consider necessary to assist them in carrying out their duties.

Chairman and Chief Executive Officer

The roles of Chairman and Chief Executive Officer are separated and their responsibilities are clearly established. The Chairman is responsible for the leadership and workings of the Board and ensuring its effectiveness and the Chief Executive Officer is responsible for the implementation of strategy and policies and the day-to-day decision making and administration.

Other significant commitments of the Chairman, John Sleeman, are set out in the Directors section on page 17 of the Annual Report 2015. The Board is satisfied that these commitments do not restrict him from effectively carrying out his duties as Chairman.

Performance evaluation

The directors believe that an effective Board is vital to the success of the Group and, as a result, undertake a thorough evaluation each year in order to assess how well the Board, its Committees, the directors and the Chairman are performing. The aim is to improve the effectiveness of the Board, its Committees and ultimately the Group’s performance. The process is led by the Chairman and is supported by the Group Secretary. The Board believes that in normal trading circumstances a combination of external reviews every third/fourth year with internal reviews in the other intervening years is the most appropriate method for evaluating effectiveness. The Board decided that, in view of the cash conservation measures being taken throughout the organisation, the next external review would be postponed until the Group enters a more normal trading environment. As a result an internal evaluation was undertaken this year.

The performance of the Chief Executive Officer was evaluated by the Chairman and the Senior Independent Director. The performance of the Senior Independent Director was evaluated by the Chairman and the Chief Executive Officer. Following the review process, the Chairman concluded that both directors continue to make an effective contribution to the work of the Board, are well prepared and informed concerning items to be considered by the Board, have a good understanding of the Group’s businesses and that their commitment to the role remains strong.

The Senior Independent Director together with the Chief Executive Officer evaluated the performance of the Chairman and concluded that the Chairman operated effectively in his role.

As was highlighted above, the Board carried out an internal evaluation of its effectiveness by a process which involved a structured discussion at a Board meeting in January 2016. The process was led by the Chairman with the assistance of the Group Secretary. The discussion focused on: the Board’s roles and responsibilities; the Board’s culture and dynamics; the Board’s processes; and the role of the Chairman. The review concluded that the Board was operating in an effective manner.

The Audit, Nomination and Remuneration Committees carried out internal evaluations of their effectiveness at meetings in January 2016 and March 2016. The process for each review was similar to that used for the Board’s effectiveness review. The reviews concluded that each Committee was operating in an effective manner.

Relations with shareholders

The Board values the views of its shareholders and recognises their interest in the Group’s strategy and performance, Board membership and quality of management.

The AGM is used to communicate with investors and documents are sent to shareholders at least 20 working days before the meeting. The Chief Executive Officer makes a presentation there on the Group’s progress. The Chairman, the Chief Executive Officer, and the chairmen of the Audit Committee and the Remuneration Committee are available to answer relevant questions. Separate resolutions are proposed on each substantial issue so that they can be given proper consideration and there is a resolution to receive and consider the Annual Report and financial statements. The Group counts all proxy votes and will indicate the level of proxies lodged on each resolution, after it has been dealt with by a show of hands.

The totals of proxy votes on each resolution, including details of any votes withheld, are announced at the meeting after each resolution has been dealt with on a show of hands and the full proxy voting results are announced through a regulatory news service and on the Company’s website. In the event of a close result as indicated by the proxies held by the chairman of the meeting, the chairman would call a poll but this has not proved necessary at any of the AGMs to date. The Board believes that the immediacy of voting on a show of hands with the proxy votes immediately being announced, rather than a laborious process of conducting a formal poll on every resolution, is appreciated by the shareholders who attend the meeting.

During the year the executives maintained a regular programme of visits and presentations to major institutional shareholders in the UK. All directors receive copies of articles concerning the Group and are updated by the Group’s financial advisers on investors’ perceptions of PV Crystalox Solar.

There were formal presentations following the preliminary and interim results and in addition the Group issued a trading update on 10 February 2016. The requirement in the Disclosure Rules and Transparency Rules to publish interim management statements was removed in November 2014 and as a result the Group no longer publishes such statements.

Key announcements, financial reports, the presentations referred to above and other information about the Group can be found on the Group’s website at www.pvcrystalox.com.

Accountability

The Board aims to present a balanced and understandable assessment of the Group’s position and prospects in all reports and other price-sensitive disclosures, reports to regulators and information required to be presented by statute. The responsibilities of the directors as regards the financial statements are described on page 31 of the Annual Report 2015 and those of the auditors on pages 32 to 35 Annual Report 2015. A statement on going concern appears on page 05 of the Annual Report 2015.

Remuneration Committee

The Directors’ Remuneration Report and details of the activities of the Remuneration Committee are on pages 19 to 26 Annual Report 2015. It sets out a summary of the Group’s policy and the full details of all elements of the remuneration package of each individual director.

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