Introduction

The board of SysGroup (“Board”) seeks to follow the best practice in corporate governance as appropriate for a company of our size, nature and stage of development. As a public company listed on AIM we recognise the trust placed in the Board by shareholders, employees and other stakeholders, and the importance of a corporate governance framework that is robust and effective. The Board has adopted the principles of the 2018 Quoted Companies Alliance Corporate Governance Code – (“the QCA Code”) to support the Company’s governance framework. We have set out below appropriate disclosures of how the Company complies with the ten principles set out in the QCA Code the recognised corporate governance code that the Company has adopted, and, if applicable, provide details and the rationale for areas of non-compliance.
A full copy of the QCA Code is available from the QCA’s website: www.theqca.com

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

SysGroup’s business strategy is to expand its position as a trusted technology solutions provider to clients predominantly in the UK. The Board believes that a business focused on the provision of advanced solutions to address common business challenges (driving productivity, mitigating risk, increasing resilience and becoming more sustainable) offers the highest growth opportunity, the potential for increased margins, longer-term contracts, and greater forward revenue visibility. The Group provides consultancy, cloud, resilience and managed IT solutions to customers either as fully outsourced services or as an extension to their existing IT department.

We intend to continue to supplement organic growth with carefully considered acquisitions that add critical mass and provide benefits from economies of scale.

The Company publishes its strategy in our Report and Accounts each financial year which is available from our website.

2. Seek to understand and meet shareholder needs and expectations

The Directors recognise the importance of listening to and communicating openly with the Company’s shareholders to ensure that the strategy, business model and financial performance are understood. We also recognise that understanding what analysts and investors think about the Company helps the Board to formulate future strategy. The Directors actively seek to build relationships with our major institutional investors and shareholders. The Executive Directors meet our major shareholders individually each year following the release of the full year and interim accounts and are available for meetings at other times if requested. The Non-Executive Directors can also be contacted by shareholders if they wish to raise any matters.

We see the Annual Report and Half Year Results Announcement (together “the Reports”) as key communications to our shareholders. In these Reports we provide a clear explanation of the business performance, financial position, organisational changes and prospects.

All private and institutional investors are invited to attend the AGM where the Company Directors are present to answer any questions. Additionally, shareholders can contact the Company with any questions by using the investor enquiry email address on the website.

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

In addition to our shareholders, we have a wide group of stakeholders who assist in creating value in the Group. We have strong relationships with customers and suppliers, and our workforce is of central importance. It is our team that provides a high quality service and we ensure that we continue to invest in them through appropriate training and development.

A high proportion of the Group’s managed services are provided under contracts ranging from twelve months to three years. We develop close working relationships with our customers through their use of our support services and from finding solutions to improve their IT infrastructure and processes. We request feedback from customers on a regular basis to assess how we are performing.

The Group selects suppliers on the basis of their service quality and competitive pricing. Long term relationships are particularly helpful in situations where we can work with the supplier to identify value creating opportunities. New suppliers are subject to appropriate due diligence take-on procedures and the Group makes regular monthly payments to suppliers.

The Group’s employees are key stakeholders in the success of the business. We seek to recruit high calibre individuals and the Group invests in their ongoing development needs through internal and external training. The Group offers competitive remuneration and benefits packages. We believe that having a contemporary work place environment is a key element to attract, retain and motivate our employees and in the previous twelve months we have invested in expanding and enhancing our Liverpool and London offices.

As a Company admitted to trading on AIM we recognise the importance of high quality regulatory compliance and internal governance. We have adopted the QCA Code and comply with AIM Rules for Companies, the Companies Act, Employment, GDPR, Health & Safety, Anti-Bribery and Corruption, and other relevant regulations.

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

The principal risks and uncertainties of the Group are described in the Annual Report & Accounts (a copy of which can be downloaded from the Company’s website). In the monthly Board Meetings the Board are updated on any significant issues that have arisen and the actions that management have taken to address them.

The Directors acknowledge their responsibility for the Company’s and the Group’s systems of internal controls, which are designed to safeguard the assets of the Group and ensure the reliability of financial information for both internal use and external publication. Overall control is achieved by having reporting processes and systems that are appropriate to the size and complexity of the Group’s operations and by ensuring the workforce is sufficiently trained. The Company and Group’s financial reporting procedures and policies are documented in a formalised Financial Reporting Procedures document.

The Senior Management Team are responsible for monitoring and addressing the key risks of the business and any significant issues are escalated as high priority to the Executive Directors.

As the Group continues to grow the risks of the business and risk management framework will remain subject to regular review.

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

The Board comprises five Directors – two Executives and three Non-Executives – and reflects a blend of different experience and backgrounds which are described in the Director Profiles in the Annual Report & Accounts and are available on the Company’s website. There is a clear division of responsibility between the Chairman of the Board (a Non-Executive role) and the Chief Executive Officer. The Board considers the Non-Executive Directors to be independent in character and judgement notwithstanding their shareholding and/or share warrants in the Group. The Board of Directors meet regularly, usually monthly and at least six times a year. Additional Board meetings are sometimes held outside the regular calendar of dates and these may be attended by telephone conference. The Board, through the Chairman and the Non-Executive Directors, as well as the Executive Directors, maintains regular contact with its advisers and seeks to ensure that the Board develops an understanding of the views of the major shareholders of the Company.

The Company has effective procedures in place to monitor Directors’ conflicts of interests which are reported to and dealt with by the Board.

Personal profiles of the Board are presented in the Annual Report & Accounts with explanations provided for how the Board exercises control together with the composition and scope of the Audit and Remuneration Committees. The Annual Report & Accounts can be found here and the Personal profiles of the Directors can be found here.

The Board is satisfied that it has a suitable balance between Executive and Non-Executive Directors and is sufficiently resourced to discharge its duties and responsibilities effectively.

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

The Board is satisfied that the Directors have an appropriate level of experience, skills and capabilities to effectively discharge their duties and responsibilities. The recruitment of Executive and Non-Executive Directors is carefully considered and profiled to match against the specific requirements of the Group.

Details of the skills and experience of each of the Directors can be found in the Annual Report & Accounts as well as on the Company’s website.

All members of the Board receive training as required and can take independent professional advice if necessary in the furtherance of their duties. Details of external advisers can be found on the Company’s website.

At each Annual General Meeting of the Company one-third of the Directors retire from office by rotation and a Director retiring by rotation is eligible for re-election. Subject to the provisions of the Act and of the Articles, the Directors to retire in every year shall include (so far as necessary to obtain the number required) any Director who wishes to retire and not to offer himself for re-election. Any further Directors so to retire are those who have been longest in office since their last appointment or reappointment.

No person other than a Director retiring at the meeting shall, unless recommended by the Directors for appointment, be eligible for appointment to the office of Director at any General Meeting unless, not less than seven nor more than 28 days before the day appointed for the meeting, the Company receives notice in writing by a member duly qualified to attend and vote at the meeting with the necessary particulars and authorities.

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

The Chairman of the Board is responsible for assessing the individual contributions of the Directors and this is reviewed on an ongoing basis. The Chairman is satisfied that all the Directors are making valued contributions and the Board is working effectively together.

Whilst the Company does not currently have a formal appraisal process for Directors, over the next twelve months we intend to review our processes for Board performance evaluation to establish a more formalised framework of assessment, feedback and review.

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

The Directors both individually and together as a Board are committed to promoting ethical values and behaviours throughout the organisation.

We have demonstrated this in the previous twelve months by appointing a Head of People & Culture who is responsible for reviewing the Group’s approach to employee communication, embedding the corporate culture and responsible for general employee engagement. We have also launched “SysHub”, an online platform for our employees that, in addition to offering employee benefits and Company latest news, is a “go-to” source for all the Group’s internal policies including the Health & Safety Policy, Anti-Corruption and Bribery Policy, Whistleblowing Policy, and Data Protection Policy.

All new employees are provided with an Employee Handbook on joining the organisation which explains all the employee related corporate policies.

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

The Directors recognise the importance of a robust system of governance to ensure appropriate levels of internal control, financial reporting, risk management, compliance and corporate responsibility.

Board Meetings

Board meetings are attended by the Directors in person and are held on scheduled calendar dates, usually each month and at least six times a year. If a Director is unable to attend in person they may attend instead by telephone conference. An agenda and relevant Board papers are circulated in advance of the meeting to allow the Directors sufficient time to review. The Board meeting is chaired by the Chairperson, Michael Edelson, and all matters on the agenda are covered with the opportunity for any additional matters to be raised. Minutes are recorded for each meeting, reviewed by all Directors, and signed when approved by the Chairperson.

Matters reserved for the Board include delegation of authority, annual budget approval, acquisitions and business disposals, Executive recruitment and remuneration, capital structure changes, corporate governance, and the approval of the interim and annual report and accounts. Any other matters of high significance and/or material in nature are reported to the Board for necessary approvals. The Board is also responsible for reviewing the effectiveness of the internal controls and risk management framework.

Audit Committee

The Company has established an Audit Committee that comprises of Michael Edelson, Mark Quartermaine and Mike Fletcher. Mike Fletcher is the Chairman of this Committee. The Audit Committee meets at least twice a year and is responsible for reviewing the integrity of the financial statements of the Group, the Group’s compliance with legal and regulatory requirements, and the adequacy and effectiveness of the Group’s internal financial controls and risk management processes including the extent to which internal audit review is required. It reviews the external auditors’ performance and independence and makes recommendations to the Board on the appointment of the auditors.

Remuneration Committee

The Company has established a Remuneration Committee that comprises Michael Edelson, Mike Fletcher and Mark Quartermaine. Mark Quartermaine is the Chairman. The Committee meets at least twice a year and is responsible for determining and reviewing with the Board the policy for the remuneration of the Executive Directors and such other members of the executive management it is designated to consider. Within the terms of the agreed policy, it determines the total individual remuneration of the Executive Directors. The Remuneration Committee also approves the design of, and determines targets for, any performance related pay schemes, reviews the design of any share incentive plans, determines the awards to the Executive Directors and determines the policy for, and scope of, pension arrangements for each Executive Director.

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

The Annual Report & Accounts is a key deliverable to our shareholders to explain how our business is performing and our approach to governance and risk management. In the Annual Report we endeavour to provide all relevant information that allows shareholders to gain a clear understanding of how we run the business and we shall continue to identify areas of disclosure that can be enhanced.

The regular meetings between our principal shareholders and the Executive Directors are a key element to maintaining a dialogue. The Company communicates with institutional investors through briefings with management and analyst notes are reviewed to understand the external view of the Company.

Regular communications to shareholders

• Full Year Announcement
• Annual Report & Accounts
• Interim Announcement
• Annual General Meeting
• Institutional shareholder meetings following Results Announcements and on request
• Regulatory RNS Announcements

This page was last updated on 23 January 2023