Corporate Governance

PCI-PAL PLC is a market leader in securing payments, protecting customer data and reducing compliance costs.

Chairman's Statement

Dear Shareholder,

The Board is responsible for ensuring the long-term success of the Group and is committed to delivering leadership through good governance and accountability for the benefit and protection of our shareholders. In this Corporate Governance section, we outline how we have complied with the latest governance code as published by the Quoted Company Alliance (the “Code”) and explain where our policies vary from the Code.

As the Chairman of the Group I am responsible for ensuring that the Board outlines and delivers its strategy. To this end the full Board meets regularly throughout the year and is available for short notice meetings as required from time to time. The Board consists of three executive directors each with their own areas of expertise, together with three non-executive directors, including myself.

In accordance with the Code, the Board has a list of matters that are reserved for its authority and also delegates certain roles and responsibilities to Committees, whilst retaining overall responsibility for the decisions recommended and made. As a Board, we have decided that a Nominations Committee is not required, given the current size of the business, and any future nominations will be decided by the full Board.

The Audit Committee has responsibility to monitor the overall integrity of the Financial Statements, and taken as a whole, ensure that they are fair, balanced and understandable. It also has responsibility for monitoring the effectiveness of the Group’s management of risk, external audit, internal controls, and the need for an internal audit. The Committee is also responsible for ensuring that the Group plans for, and adopts, the latest accounting standards. The Committee is informed by the work of the external auditors, Grant Thornton, and considers recommendations from our Chief Financial Officer.

Our Remuneration Committee has overall responsibility for policy, basis and any changes made to the Executive Directors remuneration. It is also responsible for the approval of the Group’s various share options schemes. In considering its responsibilities it also takes input from the Group Chief Executive Officer and outside advisors where appropriate.

We are confident that the Board has adopted an appropriate corporate governance strategy that will allow us to deliver on our strategic goals.

Simon Wilson
Chairman and Non-Executive Director

STATEMENT OF COMPLIANCE

The Directors recognise the importance of sound corporate governance. In accordance with the London Stock Exchange amended AIM Rules for Companies (‘AIM Rules’) the Board has chosen to apply the Quoted Companies Alliance’s (QCA) Corporate Governance Code (the ‘QCA Code’). The Board chose to apply this code as it believes that it is more suitable for small and mid-size companies.

The QCA Code includes ten governance principles and a set of disclosures. The Board has considered how we apply each principle to the extent appropriate. An explanation of the approach taken in relation to each of these principles, and also any areas where we do not comply with the QCA code, is set out below.
The Board considers that it has complied with the provisions of the QCA Code, with the exception of the following areas:

1. The Group does not have a formal system of training for the Directors for their on-going roles, instead they are expected to keep up-to-date personally with matters relevant to their own positions through memberships of relevant professional societies; regular briefings from lawyers and accountants as well as other professional advisers. However, in FY 20, for the benefit of the Non-executive Directors, a series of subject matter deep dives was initiated. These are presentations made to the board by senior management and/or outside advisors on operational and strategic matters with high relevance to the Company. The goal of these presentations and associated discussions is to enhance and build the knowledge and understanding of the business across the board and in particular the non-executive directors. This is an ongoing program and will be continued in FY 21 and beyond;

2. The Board has not prepared a formal statement on culture, ethical values and behaviours and so there is no formal, regular measurement or assessment of this. However, the Group has only 58 employees operating from two principal regions. The Board is therefore confident that it can adequately assess the corporate culture within the Group;

3. The Board has not established a nominations committee and so all matters relating to the appointment of directors are reserved for the full Board.

4. The Company Secretary, William Good, is also the Chief Financial Officer of the Group.

QCA Corporate Governance Principles
The ten QCA governance principles laid down and our response to them are as follows and are as disclosed in the Report and Account for the year ended 30 June 2020:

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

Application
The board must be able to express a shared view of the company’s purpose, business model and strategy. It should go beyond the simple description of products and corporate structures and set out how the company intends to deliver shareholder value in the medium to long-term. It should demonstrate that the delivery of long-term growth is underpinned by a clear set of values aimed at protecting the company from unnecessary risk and securing its long-term future.

Evidence & disclosure
Historically the Executive Directors prepare and present the strategic plan to the Board, which the Board challenges in order to determine the strategic priorities. Similarly, the Executive Directors also prepare and present the annual operating plan and associated budget. The Board reviews and critiques the annual plan and budget to ensure it is achievable within funding and resource constraints, as well as consistent with the Company’s longer-term strategic plan.

During FY 20, the Board initiated the beginning of a refreshed review of the Company’s long-term strategic goals which will continue into FY21. This will result in new five-year plan to replace the one first presented to shareholders in 2016 when the Company began its transformational journey to becoming a global pure-play Cloud services company for the secure payments market. The Board is allocating significant time and effort to the refresh of its strategic plan as it will set the course for the business for another 5 years. The results of this re-assessment will be communicated to shareholders and wider stakeholders upon its completion.

Principle 2: Seek to understand and meet shareholder needs and expectations

Application
Directors must develop a good understanding of the needs and expectations of all elements of the company’s shareholder base.

The board must manage shareholders’ expectations and should seek to understand the motivations behind shareholder voting decisions.

Evidence & disclosure
The Company has improved its Financial Performance and Reporting (“FPR”) plan. The CEO and CFO twice yearly, as a minimum, offer meetings with its institutional and senior shareholders to allow the institutions to formally meet and discuss the performance of the Group to date. The Chairman of the Board also offers a direct line of communication to these, and other shareholders, in case other questions arise that need to be answered independently.

The Company also hosts video briefings which allow analysts and other retail shareholders the opportunity to listen and question the CEO and CFO

The Group has also implemented a detailed media plan publishing articles and documents on social media and through the company website allowing shareholders an opportunity to gain a better understanding of the Group products and markets.

The Company, once a year, holds its AGM and the Board of Directors all attend and are available to answer any specific questions raised.

As a result of the Group’s shareholder communication strategy, institutional shareholders now hold circa 50% of the share capital of the Group and they have supported the majority of two equity share placings in recent years.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success

Application
Long-term success relies upon good relations with a range of different stakeholder groups both internal (workforce) and external (suppliers, customers, partners, regulators and others). The board needs to identify the company’s stakeholders and understand their needs, interests and expectations.

Where matters that relate to the company’s impact on society, the communities within which it operates or the environment have the potential to affect the company’s ability to deliver shareholder value over the medium- to long-term, then those matters must be integrated into the company’s strategy and business model.

Feedback is an essential part of all control mechanisms. Systems need to be in place to solicit, consider and act on feedback from all stakeholder groups.

Evidence & disclosure
The Group Corporate Responsibilities report shows that the Group has established a clear Mission, Vision and Value statement against which the Group’s corporate responsibilities can be measured.

The Group’s staff are enormously important to the future performance of the Group and so significant time and effort is taken to ensure that each member feels part of the PCI Pal team and are rewarded accordingly. The CEO has established a formal HR department and the Group has a detailed staff handbook guiding the employees on the culture and expectations of each employee. The employees are regularly requested to provide feedback on core matters via surveys and all are given the opportunity to have a 1:1 meeting with their team leaders and managers. Each employee undertakes an annual staff review. It is the Group’s policy that all staff should be awarded share options appropriate to their position in the Group. As a result of our policies staff retention is high, with only one person leaving the Group last year.

Our partners and customers are vital to the Group. Our Chief Revenue Officer (“CRO”) leads our sales operation and his team maintain regular dialogue with all our key channel partners and new sales prospects. However, our customer relationship management does not end with sales. All new contracts are on-boarded and deployed by our Professional Services team. Each new contract is allocated to a Project Manager who is responsible for co-ordinating the set up and establishment of new contracts. Every new customer that has gone through our deployment processes is given the opportunity to provide feedback via a survey. The results are evaluated as a Net Promoter Score. Our Professional Services Team have consistently ranked in the top quartile global benchmark of the standard. Once deployed the customers service is proactively monitored and managed by our dedicated Customer Service Desk who are available to handle and escalate accordingly any issues or requirements the Customer might request.

The Group regularly uses a number of core key suppliers ranging from Amazon Web Services through to core telephony providers and security consultancy. All these core suppliers are managed by one of our senior management team who are in regular contact with the supplier’s own customer relationship specialists. This allows the Group to have regular dialogue with the supplier.

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation

Application
The board needs to ensure that the company’s risk management framework identifies and addresses all relevant risks in order to execute and deliver strategy; companies need to consider their extended business, including the company’s supply chain, from key suppliers to end-customer.

Setting strategy includes determining the extent of exposure to the identified risks that the company is able to bear and willing to take (risk tolerance and risk appetite).

Evidence & disclosure
The Board is responsible for ensuring that the appropriate framework of controls is in place to enable the proper assessment and management of risks. On a quarterly basis the opportunity is given to one of the senior managers to present to the full Board on the workings of their department and the risks and challenges they face and to answer any questions that arise

The Board conducted in FY 20 a refreshed assessment of the risks faced by the business lead by the Group’s CISO, a main Board director and the findings are reported in the Principal Risks, Uncertainties and Risk Mitigation report. At the same time the Board assessed its appetite and risk tolerance towards different risks, and consciously directed the Executive Directors to allocate prioritised resources accordingly in the FY 21 operating plan and budget.

The risk management framework is a specific matter of overview by the Audit Committee, who advises the Board accordingly. The Committee has undertaken a review of the internal controls of the Group as detailed in the Chairman of the Audit Committee report.

The Group has an information security department headed by the CISO. This department has specific responsibility for maintaining the highest levels of security for the Group’s operations. This can be evidenced by the maintenance of the Group’s core PCI DSS Level 1 accreditation, the highest level available, which is certified by an independent consultancy, as well as our ISO 9001, 14001, 22301 and 27001 accreditations.

The Executive Directors are responsible for the management of the business and implementing the Board’s decisions.

Principle 5: Maintain the board as a well-functioning, balanced team led by the chair

Application
The board members have a collective responsibility and legal obligation to promote the interests of the company and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the chair of the board.

The board (and any committees) should be provided with high-quality information in a timely manner to facilitate proper assessment of the matters requiring a decision or insight.

The board should have an appropriate balance between executive and non-executive directors and should have at least two independent non-executive directors. Independence is a board judgement.

The board should be supported by committees (e.g. audit, remuneration, nomination) that have the necessary skills and knowledge to discharge their duties and responsibilities effectively.

Directors must commit the time necessary to fulfil their roles.

Evidence & disclosure
The Board is collectively responsible for the long-term success of the Group and provides effective leadership by setting the strategic aim of the Group and overseeing the efficient implementation of these aims in order to achieve a successful and sustainable business. The Board has a specific list of items and activities that can only be authorised by the full Board and has delegated other matters to the CEO.

The Board of PCI-PAL PLC is made up of an independent Non-Executive Chairman, two independent Non-Executive Directors, the CEO, CFO, and CISO. Details of the Board’s experience are shown on the Board of Directors pages, which demonstrate the range of skills and insight that they bring to the Board. It is important that the Non-Executive Directors bring a wide range of skills to the Board in order to provide robust challenges to the Executive Directors and to ensure that shareholders’ interests are represented.

Given the Company’s recent expansion of the business into North America, and its transformation to a channel-centric pure-play Cloud services company, the Board decided to add additional skills and experience to the Board. In November 2019, Simon Wilson joined the board and became Chairman. Simon brings career-long experience in B2B software, Cloud businesses, and international operations, especially in North America.

The three Non-Executive Directors are deemed to be independent. In reaching this conclusion, the Board explicitly considered the prior consulting relationship of Simon Wilson with the Company, when he provided consulting advice to the board and senior management in its market entry to, and expansion in, North America. As part of his compensation for these services, Mr Wilson was granted 250,000 options, the details of which are included in the Director’s Report.

The professional relationship between Chris Fielding and Jason Starr was also explicitly considered by the Board. Chris Fielding is a Managing Director at the investment bank W H Ireland, and W H Ireland has been the appointed NOMAD for The Dillistone Group PLC since 2012, where Jason Starr is CEO and executive board director. In both cases these potential conflicts were openly discussed by all Board Directors as part of an evaluation of board effectiveness exercise undertaken in FY20. The Board concluded that these relationships do not impair the independence of character, judgement and thought of the directors concerned, and therefore all of the non-executive directors were deemed to be independent.

All Directors are subject to election by the shareholders at the first Annual General Meeting following their appointment, and to re-election thereafter every three years.

Under the articles of association, the Board has the authority to approve any conflicts or potential conflicts of interest that are declared by individual directors; conditions may be attached to such approvals and directors will generally not be entitled to participate in discussions or vote on matters in which they have or may have a conflict of interest.

The Board typically meets formally four to six times per year to review and discuss the operating and financial performance of the company relative to its annual operating plan and budget, assess any matters specifically reserved for the board, and to review progress towards its longer term strategic goals. During FY20, it was considered appropriate to hold a much higher number of meetings in order to more rapidly assess the impact of COVID-19 on the business, and the appropriate action and steps to be taken by management in response. These additional meetings and attendance thereof are summarised below

Directors’ meeting attendance 2019/20

Directors' Meeting attendance

Directors can formally attend meetings either: in person; by conference call or by video conferencing. Since the advent of the coronavirus pandemic, all meetings have been held remotely by video conference. The executive directors are employed on a full-time basis.

Division of roles and responsibilities
The Chairman is responsible for the leadership of the Board and ensuing the effectiveness of all aspects of its role. Each scheduled meeting includes an agenda that allows each Executive Director to report to the Board on performance of the business including risk analysis and monitoring. Non-scheduled meetings are normally called to discuss single points of matter.

The Chairman’s role and the Chief Executives role have been divided. The Chairman sets the agenda for each meeting and ensures compliance with Board procedures and sets the highest standards of integrity, probity and corporate governance throughout the Group. The Chief Executive is responsible for running the Group’s business by proposing and developing the Group’s strategy and overall commercial objectives. The Chief Executive also ensures that the Chairman is notified of forthcoming matters that may affect the running of the Group that the Chairman may not be aware of.

The articles of association require that at the AGM one third, or as near as possible, of the Directors will retire by rotation. In addition, any new Director to the Board will automatically stand for re-election at the first AGM following his or her appointment.

The Group maintains appropriate insurance cover in respect of legal action against the Directors.

Committees
The Board has established two committees to assist in its considerations and to make recommendations to the Board. These committees are the Audit Committee and the Remuneration Committee, the terms of reference for each are published in full on the company website under the Corporate Governance section.

Principle 6: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities

Application
The board must have an appropriate balance of sector, financial and public markets skills and experience, as well as an appropriate balance of personal qualities and capabilities. The Board should understand and challenge its own diversity, including gender balance, as part of its composition.

The board should not be dominated by one person or a group of people. Strong personal bonds can be important but can also divide a board.

As companies evolve, the mix of skills and experience required on the board will change, and board composition will need to evolve to reflect this change.

Evidence & disclosure
The directors have a broad spectrum of experience, as shown in the Board or Directors section, allowing it to assess and monitors the full spectrum of risks and requirements of the Group. Where required the directors will take further advice from professional advisors such as lawyers, accountants and tax specialists. Each director has the full authority of the Board to take any advice they feel necessary to undertake their individual roles.

Following the end of the fiscal year, the Board authorised the creation of an advisory committee in August 2020. The charter of the advisory committee and role of each member is to provide additional breadth of market and product perspectives to the CEO and the Board of Directors as the Company navigates its future. The Board believes that by being able to engage over time with world-class industry expertise through the committee, will enhance the Board’s ability to fulfil its responsibilities in the areas of strategy and risk management so as to fully address the dynamics of PCI Pal’s fast-developing global opportunity and marketplace. At the time of writing this report, the committee has one member, Ms Neira Jones, and the Company plans to add other complementary members when appropriate in the future.

Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

Application
The board should regularly review the effectiveness of its performance as a unit, as well as that of its committees and the individual directors.

The board performance review may be carried out internally or, ideally, externally facilitated from time to time. The review should identify development or mentoring needs of individual directors or the wider senior management team.

It is healthy for membership of the board to be periodically refreshed. Succession planning is a vital task for boards. No member of the board should become indispensable.

Evidence & disclosure
Since the formation of the PCI Pal business, in September 2016, James Barham immediately joined the Board, subsequently becoming CEO in October 2018, while William Good, the CFO, was appointed in April 2017. This year Simon Wilson joined as a non-executive director in November 2019 and was subsequently appointed as Chairman of the Group.

In light of the Company’s recent rapid growth, substantive change in its business and operating model, and changes in its executive leadership and board composition, the Board conducted its first formal evaluation of effectiveness during FY 20. Simon Wilson, the newly appointed director and Chairman conducted the evaluation using a mixed methodology of an anonymous survey tool, direct one-on-one conversations, and frank and open group discussion among all board directors together. The exercise was designed to evaluate the effectiveness of the operation of the board as a whole; the board’s individual committees; as well as the contributions of each individual director. The objective of these assessments is to enable the board, its committees and its directors to set out down a path of continuous and incremental improvement of our governance at all levels. As part of the goal for continuous improvement, the evaluation of board effectiveness will be on-going periodic assessment process.

The broad conclusions of this initial evaluation were that there were a number of areas where improvements in effectiveness could be made, and an acknowledgment that the work of the board naturally expands over time in the face of change, growth and complexity of the business. For example, in terms of the organisation of board meetings, focus and balance of agenda topics, increased attention to forward looking matters, deepening of non-executive directors’ knowledge of operational aspects of the new Cloud business, and expansion of committee work.

Examples of action already taken by the Board as a result of this evaluation process include; deep dive subject matter presentations by a variety of senior management, regularly scheduled closed board sessions where the non-executive directors can discuss matters openly without management present, more extensive and scheduled committee activities, use of outside advisors, rationalization of information provided by management to the Board, and active and timely assessment of the effectiveness of each individual board and committee meeting.

Principle 8: Promote a corporate culture that is based on ethical values and behaviours

Application
The board should embody and promote a corporate culture that is based on sound ethical values and behaviours and use it as an asset and a source of competitive advantage.

The policy set by the board should be visible in the actions and decisions of the chief executive and the rest of the management team. Corporate values should guide the objectives and strategy of the company.

The culture should be visible in every aspect of the business, including recruitment, nominations, training and engagement. The performance and reward system should endorse the desired ethical behaviours across all levels of the company.

The corporate culture should be recognisable throughout the disclosures in the annual report, website and any other statements issued by the company.

Evidence & disclosure
The Group has an established corporate and social responsibility policy as detailed in the Corporate and Social Responsibilities report, which is also published on the Group website and in the Company employee handbook.

Every new member of staff undertakes an induction programme which includes a full briefing on the company handbook and an understanding as to the requirements on the moral, ethical and behavioural requirements of each employee.

Every employee will be given the opportunity to undertake further training at the Company’s expense, so long as it is deemed to enhance the future of the business.

Performance of individuals and teams is monitored on a monthly basis. The Group has a “no fault” policy to errors actively encouraging employees to highlight any errors that have occurred and to allow the business to establish a solution to the error and to put in place any changes in systems and procedures that should stop the error reoccurring.

All new employee positions are advertised to all employees in the Group and where possible we will look to promote existing employees to more senior positions, before offering a position to a new externally hired person.

Every quarter the CEO holds an “all hands” briefing where he will outline the performance of the Group and the positives and negatives it has faced. All employees in the Group have access to Microsoft Team’s and so can “chat” to any member of staff independently, including the CEO and Executive Directors, and raise any issues or questions they wish.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the board.

Application
The company should maintain governance structures and processes in line with its corporate culture and appropriate to its size and complexity; and capacity, appetite and tolerance for risk.

The governance structures should evolve over time in parallel with its objectives, strategy and business model to reflect the development of the company.

Evidence & disclosure
The Directors review a management reporting pack each month focused upon financial and operating metrics and performance against budgets and other targets. More detailed Board reports are prepared by management on a quarterly basis, which cover both financial statements as well as operational and strategic topics considered important and timely to the business. As noted above, the board also now receives periodic deep dive presentations on the operations of the business. Taken together, these reports and board meetings enable the Directors to fulfil all of their duties of stewardship.

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

Application
A healthy dialogue should exist between the board and all of its stakeholders, including shareholders, to enable all interested parties to come to informed decisions about the company.

In particular, appropriate communication and reporting structures should exist between the board and all constituent parts of its shareholder base. This will assist the communication of shareholders’ views to the board; and the shareholders’ understanding of the unique circumstances and constraints faced by the company.

It should be clear where these communication practices are described (annual report or website).

Application & disclosure
The Board recognises the importance of regular and effective communication with shareholders. The primary forms of communication are:

  1. The annual and interim statutory financial reports and associated investor and analyst presentations and reports.
  2. Announcements relating to trading or business updates released to the London Stock Exchange. As the Company grows, the Board is committed to expanding its disclosures to ensure that all stakeholders are able to fully understand not just the Company’s financial results, but also its business model and strategy.
  3. The Annual General Meeting which provides shareholders with an opportunity to meet the Board of Directors and to ask questions relating to the business. The new incoming Chairman also offered all major shareholders an opportunity to meet and share their views on the strategy of the Company and its board and management team. These meetings will continue to be offered each year going forward. All votes made at any AGM or EGM are published and the Board will publish commentary on any vote where 20% or more of the independent shareholders have voted against any resolution.
  4. Private investor roadshows and presentations at investor conferences.

Shareholder Engagement

SHAREHOLDER ENGAGEMENT

The Board believes it has a successful engagement with all its shareholders and recognises the importance of regular and effective communication with them. The primary forms of communication are:
1. The annual and interim statutory financial reports and associated investor and analyst presentations and reports.
2. Announcements relating to trading or business updates released to the London Stock Exchange.
3. The Annual General Meeting which provides shareholders with an opportunity to meet the Board of Directors and to ask questions relating to the business.

All statutory financial reports are published on www.pcipal.com and are made available on a timely basis.

Contact with significant shareholders

James Barham, the Group CEO, is in regular dialogue with the significant shareholders as detailed in the Voting Rights and Capital section of this website.

James, along with his fellow executive directors, as required, meet with or talk with these shareholders to gain a good understanding of their needs and expectations for the business.

The dialogue of these meetings are reported back to the full Board at the next available meeting and the Board will take due consideration of the matters discussed in shaping the on-going strategy for the business.

The Chairman will offer to meet with the significant shareholders at least once a year if requested.

Board of Directors

The Directors of the company have been delegated clear, individual responsibilities, in line with their skill sets and experience. Each director reports regularly to the full board on the performance of the company in relation to their areas of responsibility.

Simon Wilson - Chairman and Non-Executive Director

Simon Wilson

Appointed to the Board: 1st November 2019

Responsibilities:
Member of the Audit Committee

Working History
Simon’s background includes thirty years in international business to business software. He has been a resident of the United States for over twenty-five years. Past positions include CEO, CFO and corporate development roles as well as an independent board director in a range of US and UK companies, including SurfControl plc, Endace plc and M86 Security.

James Barham – Chief Executive Officer

James Barham

Appointed to the Board: 30th September 2016

Responsibilities:
Chief Executive Officer of PCI-PAL PLC

Working History
A founder of PCI Pal, James was instrumental in establishing and leading the business’ sales, marketing, and operations prior to relocating to the US to set up the company’s North American operation. In October 2018, James took up the position of group CEO. He leads the continued development of the Group following a career spent almost entirely in the technology space.  James has a BSc (Honours) in Business Management & Communications.

William Good – Chief Financial Officer

William Good

Appointed to the Board: 1st April 2017

Responsibilities:
Chief Financial Officer

Working history
William is an Associate of the Chartered Institute of Management Accountants. He joined PCI Pal PLC on 1 April 2017 as Chief Financial Officer and Company Secretary. Previously, William has been the CFO and Company Secretary of four AIM / Main Market listed companies: Card Clear PLC, Retail Decisions PLC, Revenue Assurance Services PLC, and Managed Support Services PLC.

Geoff Forsyth – Chief Information Security Officer

Geoff

Appointed to the Board: 27th October 1999

Responsibilities:
Chief Technology Officer responsible for the design and development and running of all technical infrastructure systems. He is also responsible for all PCI DSS compliance, ISO compliance and IT security

Working history
Geoff joined KDM International in 1996 and was a founding director of PCI PAL PLC in 1999. He has spent the last 20 years designing, developing and implementing a wide range of internet services – including the award-winning CallScripter contact centre software package. A Fellow of the British Computer Society.

Chris Fielding – Independent Non-Executive Director and Senior Independent Director

Chris Fielding

Appointed to Board: 1st September 2014

Responsibilities:
Chris is the Chairman of the Audit Committee and a member of the Remuneration Committee.

Working history
Chris is Managing Director and COO of Commercial & Investment Banking at W H Ireland and has over 30 years of corporate and finance experience. Previous to his current role, Chris worked at Arden Partners and spent 11 years prior to that at Hoare Govett, where he was the director of Corporate Finance. He qualified as a chartered accountant with Price Waterhouse and held appointments at Thomas Cook, Cadbury Schweppes and Barclays de Zoete Wedd.

Jason Starr – Independent Non-Executive Director

Jason Starr

Appointed to the Board: 1st January 2015

Responsibilities:
Jason is the Chairman of the Remuneration Committee and a member of the Audit Committee

Working history
Jason is a Chief Executive Officer of Dillistone Group PLC (“Dillistone”), the AIM quoted international supplier of software and services for the recruitment sector. Jason joined Dillistone in 1994 and was appointed Marketing Manager in 1996 before becoming Managing Director of Dillistone’s UK business in 1998 and then CEO of Dillistone Group PLC when it was admitted to trading on AIM in 2006. Jason has a BA (Honours) business studies degree from the London Guildhall University.

ATTENDANCE

Full details of the directors attendance at meetings are published in the annual report and accounts for the year.

DIVERSITY AND GENDER BALANCE

There are currently no female directors on the main Board of the Company. The Board is confident both that the opportunities in the Company are not excluded or limited by any diversity issues (including gender) and that the Board nevertheless contains the necessary mix of experience, skills and other personal qualities and capabilities necessary to deliver its strategy.

MATTERS RESERVED FOR THE BOARD OF DIRECTORS

The Board has delegated the day to day management of PCI-PAL PLC to the Chief Executive and the executive management team. This document sets out the list of matters which are to be decided by the Board of directors as a whole.

Matters which the Board considers suitable for delegation to its committees are contained in the terms of reference of its committees.
In addition, the Board will receive reports and recommendations from time to time on any matters which are significant to the company or which the Board requests due to the significance of such matters to the company or group.

The Board reserves to itself:

1. Strategy and Management
1.1. Responsibility for the overall leadership of the company.
1.2. Approval of the group’s strategic aims and objectives, vision and mission and values.
1.3. Approval of the company’s business plan and budgets and any material changes to them.
1.4. Oversight of the group’s operations and management.
1.5. Review of performance in the light of the group’s strategic aims, objectives, business plans and budgets and ensuring that any necessary corrective action is taken.
1.6. Extension of the group’s activities into new business or geographic areas
1.7. Any decision to cease to operate all or any material part of the group’s business

2. Structure and Capital
2.1. Major changes to the group’s corporate structure including, but not limited to, the establishment of affiliates and subsidiaries.
2.2. Changes to the group’s management structure.

3. Financial Reporting
3.1. Approval of the Annual Report and Accounts, any narrative reporting contained in the Annual Report and any other formal documents that are made publicly available and which contain financial statements.

4. Risk Management and Internal Controls
4.1. Responsible for a sound system of internal control and risk management and oversight and review of risk management and internal control.

5. Approvals
5.1. Approval of major capital projects, investments or contracts in excess of the amounts delegated under the Delegated Signing Authority Policy approved by the Board from time to time.
5.2. Approval of any other contracts of the company (or any subsidiary) not covered by 5.1 that is not in the ordinary course of business, for example loans and repayments outside previously agreed payment arrangements.
5.3. Approval of giving notice of the suspension or termination of any material arrangements, contracts or transactions.
5.4. Commencement, defence or settlement of claims and/or legal proceedings being otherwise material to the interests of the group
5.5. Approval of any shareholder resolution required or requested by a subsidiary of the company.

6. Communication
6.1. Ensuring dialogue with stakeholders occurs based on the mutual understanding of objectives.

7. Board Membership and other Appointments
7.1. Appointments and removals: Board membership including Senior Independent Director, membership and chairmanship of Board committees and appointment of the Chief Executive.
7.2. The appointment and removal of the Chairman
7.3. Ensuring that adequate succession planning is in place for the Board, the Chief Executive and the executive management team.
7.4. Reviewing the Chief Executive’s appointments to the executive management team.
7.5. Approving the suspension or termination of service of the Chief Executive or any member of the executive management team as an employee of the company, subject to the law and their service contract.
7.6. Appointment or removal of the company secretary.
7.7. Appointment, reappointment or removal of the external auditor following the recommendation of the Audit Committee.
7.8. Appointments to the boards of subsidiaries.

8. Remuneration
8.1. Determining the remuneration policy and remuneration for the Chief Executive and the executive management team.
8.2. Determining the remuneration of the non-executive directors

9. Delegation of Authority
9.1. Approval of the division of responsibilities between the Chairman and the Chief Executive.
9.2. Approval of the delegated levels of authority, including the Chief Executive’s authority limits.
9.3. Approving the terms of reference of Board committees
9.4. The Board may instruct any Committee to undertake a detailed investigation of any matter which the Board considers significant to the company or group.

10. Corporate Governance Matters
10.1. Determining the independence of non-executive directors.
10.2. Reviewing the group’s overall corporate governance arrangements.
10.3. Receiving reports on the views of the company’s stakeholders to ensure they are communicated to the Board as a whole.

11. Other
11.1. Any decision reasonably likely to have a material impact on the company or group from any perspective, including, but not limited to, financial, operational, strategic or reputational.
11.2. Approving this document of Matters Reserved for Board decision.

EVALUATION AND CONTINUOUS IMPROVEMENT

The Group does not have a formal system of training for the Directors for their on-going roles, instead they are expected to keep up-to-date personally with matters relevant to their own positions through memberships of relevant professional societies; regular briefings from lawyers and accountants as well as other professional advisers.

In light of the Company’s recent rapid growth, substantive change in its business and operating model, and changes in its executive leadership and board composition, the Board conducted its first formal evaluation of effectiveness during FY 20. Simon Wilson, the newly appointed director and Chairman conducted the evaluation using a mixed methodology of an anonymous survey tool, direct one-on-one conversations, and frank and open group discussion among all board directors together. The exercise was designed to evaluate the effectiveness of the operation of the board as a whole; the board’s individual committees; as well as the contributions of each individual director. The objective of these assessments is to enable the board, its committees and its directors to set out down a path of continuous and incremental improvement of our governance at all levels. As part of the goal for continuous improvement, the evaluation of board effectiveness will be on-going periodic assessment process.

The broad conclusions of this initial evaluation were that there were a number of areas where improvements in effectiveness could be made, and an acknowledgment that the work of the board naturally expands over time in the face of change, growth and complexity of the business. For example, in terms of the organisation of board meetings, focus and balance of agenda topics, increased attention to forward looking matters, deepening of non-executive directors’ knowledge of operational aspects of the new Cloud business, and expansion of committee work.

Examples of action already taken by the Board as a result of this evaluation process include; deep dive subject matter presentations by a variety of senior management, regularly scheduled closed board sessions where the non-executive directors can discuss matters openly without management present, more extensive and scheduled committee activities, use of outside advisors, rationalization of information provided by management to the Board, and active and timely assessment of the effectiveness of each individual board and committee meeting.

SUCCESSION PLANNING

The Board does not carry out a formal assessment of succession planning for its members, but does so informally from time to time.

Corporate Culture & Risks

CORPORATE CULTURE & RISKS

The Board has not prepared a formal statement on culture, ethical values and behaviours and so there is no formal, regular measurement or assessment of this.

However, the Group has less than 100 employees operating from two principal locations. The Board is therefore confident that it can adequately assess the corporate culture within the Group.

The Group published its mission, vision and value statement as part of its Corporate Responsibilities statement which can be found in latest report and accounts for the most recent financial year.

Company handbook

All subsidiaries have adopted a detailed company handbook that is available online for all employees. Within the hand book are specific guidance on:

• The Group vision and mission statement
• Behaviour and conduct while at work
• Caring for others
• Training and development opportunities
• Ethical policies such as the Bribery Act requirements
• Health, Safety and Well Being
• Employment benefit schemes
• Time and attendance rules

PRINCIPAL RISKS AND UNCERTAINTIES
The Group is exposed to several risks factors that may affect its performance.

The Board has a framework for reviewing and assessing these risks on a regular basis and has put in place appropriate procedures to mitigate, where possible, against them.

No system of control or mitigation can completely eliminate all risks.

The Board has determined that there a number of principal risks facing the Group. The latest risks that have been identified have been published in the latest Report and Accounts on the performance of
the Group. These reports can be found here.

Stakeholder & Social Responsibilities

STAKEHOLDER AND SOCIAL RESPONSIBILITIES

The long-term success of the Company relies on good relations with many different stakeholder groups.

Business stakeholders

The business has been structured internally into several distinct departments, being:

  • Corporate – lead by the CEO
  • Sales – Led by the CRO
  • Marketing – Led by the SVP Global Marketing
  • Engineering – Led by the CTO
  • Infosec – Led by the CISO
  • Professional Services – Led by the SVP Professional Services
  • Finance – Led by the CFO

Each department has a dedicated head who is responsible for the various stakeholders within their departments, so for instance, the CFO is responsible for working with the Auditors or the CISO is responsible for working with the external CSO responsible for the PCI DSS compliance testing.

Each head builds up an understanding of the needs, expectations and requirements of each stake holder, be they an employee, a customer or supplier.

On a regular basis the heads of departments are able to report back to the wider management team any positive or negative views and the team discuss any required responses when compared to the Company’s overall corporate aims and culture.

Any agreed changes will be implemented by the appropriate head.

Shareholders and external regulatory stakeholders

The CEO is responsible for shareholder liaison and communication as detailed in the shareholder engagement section.

The CEO is also responsible for the day-to-day engagement with the Company NOMAD, lawyers and advisers although any director can contact any adviser they wish to speak to, as they see fit, if they require specific advice.

The CEO updates the full Board, as part of his standard board report, on any material shareholder and external regulatory stakeholder meeting and conversations held.

Governance Committees

GOVERNANCE COMMITTEES

The Board of directors have established the following committees:
1. An Audit Committee
2. A remuneration committee

The Board has not established a nominations committee responsible for overseeing the recruitment of Board directors and succession planning as they believe the Company is too small to warrant such a requirement.

Audit Committee

The Chairman of the Committee is Chris Fielding

The terms of reference of the audit committee can be downloaded here.

Remuneration Committee

The Chair of the Committee is Jason Starr.

The terms of reference of the remuneration committee can be downloaded here.

The committee is responsible for setting the terms and conditions of employment for the executive directors and meet on two occasions during the year.

The current policy is to set remuneration in accordance with market conditions in order to attract, retain and motivate the executive board.

The committee reviews Group performance and arising from those reviews may determine performance related bonuses.

No director is involved in deciding his or her own remuneration level or performance related bonuses.

The fees for non-executive directors are set at smaller turnover AIM quoted market rates to attract individuals with the necessary experience and ability to make a substantial contribution to the Group’s affairs and its continued development.