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, reflecting the fact that we are a small, fast-growing entrepreneurial company.

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 four executive directors each with their own areas of expertise, together with two non-executive directors, including myself. During the year there were no changes to the Board.

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.

Our Audit Committee has focused upon ensuring that the Group plans for, and adopts, the latest accounting standards, the most important of which is the forthcoming adoption of IFRS 15: Revenue from Contracts with Customers. The Committee is advised by our auditors, Grant Thornton, and considers recommendations from our Chief Financial Officer.

Our Remuneration Committee has overall responsibility for changes made to the Executive Directors remuneration, including as a result of the recent relocation of James Barham to the US. It is also responsible for the approval of the Group’s various share options schemes. It takes advice from the Group Chief Executive Officer in considering all matters.

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

Chris Fielding
Non-Executive Chairman

STATEMENT OF COMPLIANCE

The Directors recognise the importance of sound corporate governance. The Board considers that it has complied with the provisions of the UK Corporate Governance Code, (the Code) as issued by the Quoted Company Alliance, with the exception of the following areas:
1. The Company does not have a formal system of training 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;
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 41 employees operating from two principal locations. The Board is therefore confident that it can adequately assess the corporate culture within the Group;
3. Given the company size and recent growth, the Board has not carried out a formal evaluation of the Board’s performance or of its individual directors, but does so on an informal basis from time to time;
4. The Board has not established a nominations committee and so all matters relating to the appointment of directors are reserved for the full Board.

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.

William, 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.

Chris Fielding – Independent Non-Executive Chairman

Appointed to Board: 1st September 2014 – contracted one day per month

Responsibilities:
Non-executive chairman of the Board responsible for the corporate governance of the company. Chairman of the Audit Committee and Member of the Remuneration Committee

Working history
Chris is Managing Director, Corporate Finance, and COO, Commercial & Investment Banking at W H Ireland and has over thirty years of corporate and finance experience. Previous to his current role, Chris worked at Arden Partners and spent eleven years prior to that at Hoare Govett, where he was a 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.

James Barham – Chief Executive Officer

Appointed to the Board: 30th September 2016

Responsibilities:
Chief Executive Officer of PCI PAL (US) Inc responsible for delivering the growth and profitability plans in that strategically important region. He is also responsible for the Group Marketing of our solutions.

Working History
Having spent his entire career in the contact centre outsourcing and technology space, James joined the Group in 2008 and was instrumental in developing the PCI Pal business and product suite. James is a graduate of Bath Spa University and fulfilled graduate training at Hiscox PLC before moving into contact centres and technology. James has now relocated to our Charlotte, North Carolina office.

William Good – Chief Financial Officer

Appointed to the Board: 1st April 2017

Responsibilities:
Chief Financial Officer of the Group responsibility for the timely reporting on the financial performance of the Group and its treasury position. Group Company Secretary responsible for ensuring the statutory requirements of the Group are met. He is also responsible for the overall Human Resources policy of the Group.

Working history
William is an Associate of the Chartered Institute of Management Accountants. He joined PCI–PAL PLC on 1st 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 Technology Officer

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.

Jason Starr – Independent non-executive director and senior independent director

Appointed to the Board 1st January 2015 – contracted one day per month

Responsibilities:
Senior non-executive director. Chairman of the Remuneration Committee. Member of the Audit Committee

Working history
Jason is 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 Company does not have a formal system of training 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 membership of relevant professional societies; regular briefings from lawyers and accountants, as well as other professional advisers.
Given the company size and recent growth, the Board does not carry out a formal evaluation of its performance or of its individual directors.

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 only 41 employees operating from two principal locations. The Board is therefore confident that it can adequately assess the corporate culture within the Group.

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
• Sales and Marketing
• Operations
• Development and IT
• Finance
• US region

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 CTO 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.

Whilst the Audit Committee formally consists of Jason Starr and Chris Fielding, due to the size of the Company, any business relating to the audit has normally been considered by the full board.

Our audit partner can however raise any issues and request a meeting of the committee if it is felt that any governance or other issues need to be discussed without the executive director’s attendance.

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.