Corporate Governance Policy
AIM companies are not required to comply with the UK Corporate Governance Code 2010 (Principles of good governance and standards of good practice in relation to board leadership and effectiveness, remuneration, accountability and relations with shareholders) adopted by the London Stock Exchange. However, the directors have chosen to make the following disclosures to meet the provisions of the Code deemed most relevant to AIM listed companies such as Numis.
The Board is authorised to manage the business of the Company on behalf of the shareholders. This is achieved by its own decision making and by delegating responsibilities to the Board Committees and authority to manage the business to the Chief Executive Officer. The Board of Numis Corporation Plc is chaired by Sir David Arculus and meets a set number of times a year and at other times as necessary, to discuss a formal schedule of matters specifically reserved for its decision. These matters routinely include:
- The Groups strategy and associated risks;
- Acquisitions, disposals and other material transactions;
- Financial performance of the business and approval of annual budgets, the half year results, annual report and accounts and dividends;
- Appointments to and removal from the Board and Committees of the Board;
- Risk management strategy and risk appetite;
- Remuneration strategy;
- Actual or potential conflicts of interest relating to any Director; and
- Changes relating to the Group’s capital structure or the Company’s status as an AIM listed.
The Chairman conducts an annual assessment of the effectiveness of the Board and its Committees through an internal questionnaire completed by each Director followed up by one-to-one discussions with each Director. The questionnaire covers a number of areas including Board composition, meeting structure, strategic oversight, risk management, succession planning, information content and format and, finally, performance of the Board Committees. The outcomes and principal findings are reported to the Board for consideration.
The performance of the Chief Executive Officer is appraised annually by the Chairman. The performance of the remaining Executive Directors is appraised annually by the Chief Executive Officer.
Chairman and Chief Executive Officer
The Chairman is Sir David Arculus and he is responsible for leading the Board, ensuring its effectiveness, steering its agenda, promoting a healthy culture of challenge and debate together with monitoring and evaluating the performance of the Chief Executive Officer. The Chief Executive Officer is Oliver Hemsley who is responsible for the executive management of the Group and its business on a day-to-day basis. This includes making recommendations to the Board in respect of strategy.
Committees of the Board
Audit and Risk Committee
The Audit and Risk Committee comprises Geoffrey Vero (Chairman), Gerald Corbett and Tom Bartlam who are all non-executive Directors and meets at least four times each year. The members of the Committee have a broad range of relevant financial and risk experience, two of whom are chartered accountants. Internal and external audit team representation is invited to attend every meeting of the Committee. Other members of the Board, and the Head of Compliance and Risk may also attend by invitation as may the chairman of the Board.
The Audit and Risk Committee is responsible for the overall risk framework, internal control environment and financial reporting of the Company and the Group. It receives reports from the Group’s management relating to the Group’s risk exposures and mitigating controls as well as detailed findings arising from internal and external audit reviews.
The Committee reports to the Board on the Group’s full and half year results, having examined the accounting policies on which they are based and ensured compliance with relevant accounting standards. In addition, it reviews the scope of internal and external audit, their effectiveness, independence and objectivity taking into account relevant regulatory and professional requirements.
The Committee has direct and unrestricted access to the internal and external audit function.
The Committee is also responsible for:
- Monitoring the content and integrity of financial reporting;
- Reviewing the appropriateness of accounting judgments;
- Reviewing the Group’s risk policies and control frame work;
- Reviewing the Group’s regulatory reporting procedures and relationship with regulators;
- Review and recommendation to the Board of the Group’s risk appetite;
- Review and approval of financial and other risk limits and adherence thereto; and
- Reviewing and challenging the Group’s Internal Capital Adequacy Assessment Process and Individual Liquidity Adequacy Assessment.
The Remuneration Committee comprises Tom Bartlam (Chairman), Gerald Corbett and Geoffrey Vero who are all non-executive Directors and meets at least twice each year. Other members of the Board and the Head of Human Resources may attend by invitation. Its primary responsibility is to review salary levels, discretionary variable remuneration and the terms and conditions of service of the Executive Directors. The Remuneration Committee also reviews the compensation decisions made in respect of all other senior executives and those members of staff determined to be Code Staff under the FSA’s Remuneration Code regulations.
Finally, the Committee is responsible for determining the overall Remuneration Policy applied to the Group and its subsidiaries, including the quantum of variable remuneration and the method of delivery taking into account relevant regulatory and corporate governance developments.
The Remuneration Committee is authorised to seek any information it requires in order to perform its duties and obtain external legal or other professional advice that it considers necessary from time to time.
The Nominations Committee comprises Sir David Arculus (Chairman), Tom Bartlam, Gerald Corbett and Geoffrey Vero who are all non-executive Directors. Other members of the Board and the Head of Human Resources may attend by invitation. The Committee considers appointments to the Board and meets as necessary. The Committee is responsible for identifying and nominating candidates, for making recommendations on Board composition and for considering succession planning requirements.
Executive Operational Committees
The Management Committee, chaired by Oliver Hemsley, deals with the implementation of business strategy and day-to-day operational matters. It meets weekly to discuss the core activities of the Group, current performance, progress on management initiatives and corporate compliance matters.
Risk Oversight Committee
The Risk Oversight Committee, chaired by the Group’s Head of Compliance and Risk, meets quarterly to consider and assess all significant risk exposures faced by the Group. The Committees remit encompasses both financial and non-financial risks and the methodology applied in order to identify, measure and report their impact. One of the key responsibilities of the Committee is to manage the overall method and format of risk reporting into the Audit and Risk Committee and the Board.
Financial Risk Committee
The Financial Risk Committee, chaired by the Group’s Head of Compliance and Risk, meets bi-weekly (or more frequently as it determines necessary) to discuss and manage the market, credit, liquidity and related operational risks of the Group, including amongst other financial risks the market risk of the Group’s trading book and investment portfolio. The Financial Risk Committee makes recommendations to the Audit and Risk Committee on Risk Policy which sets various limits at individual stock and overall trading book level as well as being responsible for the review and approval of counterparty limits.
New Business Committee
The New Business Committee, chaired by Oliver Hemsley, is responsible for exercising senior management oversight across all issues in relation to Numis entering into new corporate client relationships, underlying transactions on behalf of corporate clients and reviewing or terminating relationships with corporate clients. It has responsibility for assessing the impact on Numis of all such matters and in doing so gives due consideration to the reputational, regulatory, execution and commercial risks attached.
In addition to the New Business Committee, further approval is required by the Risk Committee prior to the launch of a fund raising, issue of a public document which contains Numis’ name or in the case of a transaction giving rise to significant unusual concerns of significant financial or reputational risk to the firm.
The Board is ultimately responsible for maintaining the Group’s risk framework and system of internal control and for reviewing its effectiveness. The system of internal control is designed to manage rather than eliminate the risk of failure to achieve business objectives, as such it can provide only reasonable but not absolute assurance against material misstatement or loss.
The Group’s system of internal control has been actively managed throughout the year. The Group has a number of committees with formal terms of reference and a Compliance department responsible for the Group’s adherence to the rules of the Financial Services Authority and other relevant regulators.
In addition, the Group has a fully independent, outsourced Internal Audit function reporting to the Audit and Risk Committee in order to provide further assurances over the adequacy and effectiveness of the systems of internal control throughout the business and ensure that the Group’s approach to continuous improvement is maintained.
An Advisory Board was established during 2011 the purposes of which is to provide support to the Executive members of the Board and assist the Group enhance and develop its business and reach in the market place. The Advisory Board is an advisory only body and does not make decisions in its own right.