Corporate Governance
The K3 Capital Group plc Board recognises its responsibility towards good and competent corporate governance.
The Board is aligned in promoting long-term shareholder value and as such has adopted the Quoted Companies’ Alliance Corporate Governance Code (QCA Code). The Board feels that the QCA Code is appropriate to allow K3 Capital Group plc to fulfil its obligations to stakeholders.
The QCA Code states that corporate governance is fundamentally about culture. Throughout FY20, K3 Capital Group has continued to promote a healthy and proactive ethos ensuring that all stakeholders are at the forefront of decision making.
Roles & Responsibilities
Ian Mattioli, as Group Chairman, assumes responsibility for leading the Board and ensuring that the Group’s corporate governance is appropriate and effective. The Chairman is also responsible for ensuring the Board agenda is effective in recognising the financial and operational matters allowing for effective delivery of the Group strategy.
The Chairman is not responsible for the day to day operations of K3 Capital Group plc; such responsibilities are managed by the Group CEO, John Rigby.
Executive & Non-Executive Directors
K3 Capital Group plc has a Non-Executive Chairman and two independent Non-Executive Directors (NED), led by a Senior Independent Director (SID) whose responsibility is to provide scrutiny and direction of the performance of the Executive Directors. The SID also chairs the Audit committee and is a member of both the Remuneration and Nomination committees.
The four Executive Directors have the responsibility of delivering the Board strategy on a day to day basis and reporting back on their progress.
This page was last updated: 04 February 2021
The ten principles that form the QCA Code are outlined on the following pages, with commentary on how K3 Capital Group plc complies with each principle:
Establish a strategy and business model which promote long-term value for shareholders
The Group’s strategy is set out on page 14 & 15 of the FY20 Annual Report.
The Group’s Executive Directors and senior management team have regular meetings throughout the year to focus on the Group’s five year rolling strategic plan. The strategy is communicated to all staff members at corporate team briefs and separate team meetings.
Marketing Strategy
As a marketing centric company, direct marketing plays an important role in the development of each subsidiary’s reputation and growth. Marketing is embedded within the culture of the Group with every Director and employee aligned to preserve and improve upon the Group’s reputation within its marketplace. Regular marketing meetings are held between senior management, and it is given particular focus at Board meetings to ensure marketing activity is aligned to the Group’s vision of targeting higher value clients.
Technology Strategy
To maintain costs and economies of scale, significant importance has been placed on the Group’s technology base over recent years. Several new developments have streamlined working practices, encouraged greater client communication and improved the quality of data held by the Group. The Board see the development of systems and platforms as an ongoing commitment.
Employment Strategy
The nature of the services that the Group offers means that it is partially reliant on forging good relationships with both clients and potential acquirers. Whilst technology has aided such relationships through greater communication, a personal relationship with K3 employees is essential. Ongoing training, development and monitoring of individuals is designed to improve both knowledge and customer service with the requirements of the client the key factor in any development plans put in place.
Seek to understand and meet shareholder needs and expectations
The CEO and CFO meet our shareholders on a number of occasions throughout the year and have open dialogue to receive feedback.
Investor roadshow meetings are undertaken at least twice a year, within different UK locations, following the interim and annual report announcements.
Management will provide a live presentation to investors relating to the Preliminary results for FY20 via the Investor Meet Company platform.
Shareholders are invited to the AGM held each year where Board members interact with our shareholders on a one to one basis and take questions as they arise.
The Executive Directors are available to meet shareholders on request and a number of ad-hoc meetings may be held during the year. They also regularly conduct phone and video conversations with shareholders when required.
Shareholder feedback is discussed at Board meetings.
Contact details:
John Rigby
Chief Executive Officer
rigby@k3capitalgroupplc.com
Andrew Melbourne
Chief Financial Officer
melbourne@k3capitalgroupplc.com
Take into account wider stakeholder and social responsibilities and their implications for long-term success
EMPLOYEES
Regular meetings take place with staff groups to share Group strategy and seek feedback.
In order to motivate and retain employees, at the date of this report the Group currently had 65 members of staff enrolled in the LTIP scheme or with Growth Options.
The Group’s Investors In People status was positively reviewed during FY20, resulting in the retention of our accredited status for a further 12 months.
CLIENTS
Relationships with our clients are fundamental to our success, as it allows us to successfully conclude transactions. The K3 team have continuous communications with clients and processes to monitor feedback, and reviews are in place and are acted upon when required.
SUPPLIERS
Suppliers allow K3 to undertake new client mandates, and to deliver our services. We have long term relationships in place, and these are maintained through regular communication and review meetings with senior employees.
OUR COMMUNITY
The Group cares about its community and regularly undertakes fundraising events that generate high levels of employee engagement. Throughout the financial year, money raised by staff has been supplemented with donations from the Group, which has benefitted charities and organisations as detailed on page 40 of the FY20 Annual Report.
ENVIRONMENT
K3 is aware of its environmental responsibilities and where possible, promotes a paperless office. Systems introduced in recent years have eliminated the need for all documents to be printed and held in paper files. Confidential waste is shredded and recycled.
Embed effective risk management, considering both opportunities and threats, throughout the organisation
The Group risk register is maintained by the Board and senior management team.
Risk is a fixed item on the management team agenda.
The register is subject to a bi-monthly review.
Risks and uncertainties are disclosed in the Strategic Review within the Chief Financial Officer’s report on pages 17 to 23 of the FY20 Annual Report.
Maintain the Board as a well-functioning, balanced team led by the Chair
The Board is led by our Non-Executive Chairman, Ian Mattioli.
The Board includes a Senior Independent Non-Executive Director, Martin Robinson, who has significant experience of public and private Directorships.
The Board currently has three sub-committees: the Audit Committee, the Nominations Committee and the Remuneration Committee, which are chaired by either Ian Mattioli or Martin Robinson. Details of the number of meetings held and attendance by Directors are noted in the Directors’ Report on pages 30 to 34 of the FY20 Annual Report.
Non-Executive Directors communicate directly with Executive Directors and senior management between formal Board meetings. The Board met 6 times in the year. In addition, the Board held strategy days to review growth opportunities and priorities across the medium to longer term. Directors are expected to attend all meetings of the Board, and of the Committees on which they sit, and to devote sufficient time to the Group’s affairs to enable them to fulfill their duties as Directors. The time commitments of the board are detailed on page 30 of the FY20 Annual Report.
The board has been strengthened post year end, and the Non-Executive function of our Board has been balanced further through the appointment of Charlotte Stranner, Stuart Lees’ change to Non-Executive Director and appointment of Martin Robinson as Senior Independent Director.
Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities
The current K3 Board has adequate sector, financial and plc experience.
Between them, the Executive Directors have many decades of experience in the company sales industry. Biographies on all Directors, giving details of their experience and roles on the Board, are shown on pages 28 and 29.
With the support of our Nominated Advisor, Auditors and other advisors, the Board training and development needs are maintained.
Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
Whilst the Board performance is considered to be good, historically there has not been a formal evaluation of the Board.
As detailed throughout this report a comprehensive review of the Board structure was carried out post year end, and is further detailed on our website.
The Remuneration Committee evaluates Executive Director performance alongside remuneration and reward.
With regards to financial performance, the Auditors meet with the Audit Committee (comprising the Non-Executive Directors) biannually and beyond the audit report, to comment on the systems, procedures and efficacy of management.
A rigorous recruitment process is undertaken for new Directors prior to their proposal and election. In terms of re-election, their performance is reconsidered prior to them being proposed, to ensure they remain effective in their role and that they retain their independence.
Re-election is considered by the shareholders at the AGM at which shareholders have the opportunity to approve Board membership. Each Board member is elected for a period of three years on a rolling cycle. At each AGM, at least one third of members on the existing Board would need to be re-elected. Succession planning for the Board is an ongoing topic of discussion.
Promote a culture that is based on ethical values and behaviours
K3 is proud to promote a culture that puts the client at the heart of its operations. Such values are embedded within the Group’s working practices from the senior management, right through to each department’s recruitment strategies.
We are committed to equal opportunities in every part of our business and we promote team members on merit. We recruit, train, promote and retain skilled and motivated people regardless of gender, age, marital status, disability, sexual orientation, race and religion, or ethnic or national origin. In line with this, we also promote a culture of openness and responsibility in our business.
Our people are key to our success and we want them to be successful both as individuals and in the teams they operate. We are very proud of the culture we have across the Group and the way that our team members work and collaborate together to create a unique environment that what we believe is a great place to work. We support a number of initiatives and activities that focus on the health and well-being of our people, diversity and inclusion, personal development opportunities and charitable activities within the communities where we work. Other factors, such as employee attrition, are also monitored closely to identify potential trends and issues.
Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board
The K3 Board generally meets 6 times a year (minimum of 4) and the Audit and Remuneration Committees meet at least once a year.
The controls are subject to review internally by individual teams within the Company.
A culture of challenge and continuous improvement is encouraged to ensure that controls evolve with the business.
The plc website and annual reports describe the roles and terms of reference for the Committees.
Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
Communications with shareholders are explained in point (2) above.
In addition to the interim and full year investor roadshows, regular meetings and phone / video calls are held with analysts, retail investor groups and prospective investors.
In addition, the plc website contains information about the business activities, access to all RNS announcements and copies of the Annual Report.
The work of the Audit, Nominations and Remuneration Committees is described on pages 32 and 33.
The plc website also includes historical announcements.
K3 undertake Capital Markets days when required and senior management are available to provide any additional information surrounding the marketing, data and operations functions of the Group.
