The Company is committed to high standards of corporate governance and supports the principles laid down in the UK Corporate Governance Code issued by the Financial Reporting Council in 2018 (the ‘Code’), available from the FRC website at www.frc.org.uk. The Board considers that the Company has been in compliance with the principles and provisions of the Code throughout the year ended 31 December 2021 with the exception of Provisions 11 and 24.
From 2019, the Code provides that at least half the board of directors of a UK public listed company, excluding the chairman, should comprise non-executive directors whom the board of directors considers to be independent (Provision 11). Having considered the guidelines for independence as set out in the Code and the situation of each Director, the Board is satisfied on each Director’s independence and considers that, even though the Company does not meet the quota of independent directors pursuant to the Code, two independent directors, which has been the case since late 2018, are adequate for a company of the Company’s size and nature of the business conducted by the Group.
As a “smaller company” (as defined in the Code as a company below FTSE 350 index throughout the year immediately prior to the reporting year), the Company complies with the requirements of Provision 24 except that the Chair of the Board is a member of the Audit and Risk Committee. The Board is satisfied that both members of the Audit and Risk Committee are independent and bring a wide range of skills, expertise, experience and competence relevant to the sector in which the Company operates and the challenges it faces and can satisfy the responsibilities of Provision 25.
The Board will continue to monitor its corporate governance arrangements, in the light of the Code (and future changes), as the Group develops and grows.
The principles of the Code have been applied as follows:
a) The Board of Directors represents the shareholders’ interests in maintaining and growing a successful business including optimizing consistent long-term financial returns.
b) As at 31 December 2021, the Board comprised one Executive Director and five Non-Executive Directors. The Chairman is responsible for the leadership of the Board and ensuring its effectiveness. The different roles of the Chairman and Chief Executive Officer are acknowledged. Jane Moriarty, the Senior Independent Director, is available to shareholders, if they have concerns that are not able to be resolved through normal channels. Two Non-Executive Directors, Andy Cumming and Jane Moriarty were considered by the Board to be independent throughout 2021.
c) There are a number of standing Committees of the Board to which various matters are delegated. They all have formal terms of reference approved by the Board.
d) The Board met 11 times in 2021. Attendance details are given in the Company’s Annual Report. A formal agenda is prepared for each meeting and all board papers and information are circulated to the Board at least 5 business days before the meetings except in the case of meetings that are convened on short notice.
e) All of the Directors are subject to re-election by the shareholders at the Annual Meeting. The Board is satisfied to support the re-election of Andy Cumming, Jane Moriarty, Mei Lan Lam, Andrea Giunti Lombardo and Ken Fund as Non-Executive Directors as they have individually produced excellent performance in their duties and have shown a high level of commitment to their roles.
f) The remuneration of the Executive Directors is recommended by the Remuneration Committee, comprising Jane Moriarty, who is the Committee Chair, Andy Cumming, and C.K. Lau. The Committee meets at least twice a year. In the year ended 31 December 2021 the Committee had met 4 times.
g) The Audit and Risk Committee comprises Jane Moriarty, who is Committee Chair, and Andy Cumming. The Board is satisfied that the members of the Committee have appropriate financial experience to fulfil their role. Further details of the Committee’s work can be found in the Company’s Annual Report.
h) The Nominations Committee comprises Andy Cumming, who is Committee Chair, Jane Moriarty and C.K. Lau. Details of the work of the Nominations Committee are set out in the Company’s Annual Report.
i) C.K. Lau and the Company Chairman are responsible for investor relations. They meet with major shareholders during the course of the year in order to understand their views, that are then communicated to the rest of the Board at Board meetings. The Non-Executive Chairman and Senior Independent Director will meet with major shareholders from time to time. Shareholders are invited to attend the Annual Meeting at least 20 days in advance of the meeting. In 2021 as a result of the Covid-19 pandemic and government restrictions on travel, shareholders were advised not to attend the Annual Meeting and to vote by proxy. Quarto notified shareholders of the opportunity to ask questions via e-mail in advance of the Annual Meeting.
j) The Board has a procedure for Directors to take independent professional advice at the Company’s expense, if required.
k) All Directors have access to the advice and services of the Company Secretary.
l) During 2021 Quarto arranged appropriate insurance cover in respect of legal action against the Directors. From February 2022, the Company will indemnify the Directors in accordance with its By-Laws.
m) The Company has an established whistle-blowing policy and anti-bribery policy.