Cosalt plc Annual report & financial statements 2008

Governance
Corporate governance report
This report explains the Board’s application of the Principles
of Good Governance contained in the Combined Code on
Corporate Governance.
In this report the Board has adopted the ‘comply or explain’
principle, and explains where the Group does not fully
comply with the recommendations, giving reasons for
such non-compliance.
The Board
The Board consists of three Executive and six Non executive
Directors and the role of Chairman and Chief Executive
are clearly defined and separate. Mr Hobdey is the senior
independent Non executive Director.
In accordance with the Articles of Association one-third of
the Board is required to retire by rotation each year. In addition
any Director appointed during the year will stand for re-election
at the next Annual General Meeting. One of the Non executive
Directors, John Kelly, will be standing for re-election on an
annual basis to comply with the Revised Combined Code
as he has been a member of the Board for over nine years.
The Board recommends Shareholders to vote in favour of
Mr Kelly’s re-election as he continues to provide valuable
experience and insight for the benefit of the Company,
particularly from his own area of expertise. As a result of the
formal evaluation procedure undertaken this year the Board
is of the view Mr Kelly remains effective and committed
to his role on the Board and its Committees. The Directors
are of the view that Mr Kelly continues to be independent
notwithstanding his service of more than nine years as he
has no business or other relationship with the Company or
Management which in any way affects his independence and
he remains robustly independent of thought, expression and
judgement. Similarly although Messrs Peacock and Powell,
by virtue of their connection to Hanover Investors Limited,
Mr Ophir by his connection to the Rappaport family and
Mr Ross are significant Shareholders, due to their substantial
investments and involvement in other companies the Board
believes they are still able to exercise independent judgement.
The Board considers Mr Hobdey to be independent.
The Board is responsible to Shareholders for the proper
management of the Group and for the Group’s system
of corporate governance. It reviews trading performance
forecasts and strategy and agrees future plans. The
Non executive Chairman, David Hobdey, is responsible
for the running of the Board. Executive responsibility for the
running of the Company’s business rests with three Executive
Directors, Mark Lejman, Mike Reynolds and Neil Carrick.
The Directors are provided with regular information on
the Company’s performance and activities and meet on a
regular basis. Meetings include a formal schedule of matters
specifically reserved for the Board’s decision and additional
meetings are arranged as necessary.
Corporate governance report
The Board met 15 times during the year and all of the meetings
were attended by all Directors, with the exception of Mr Peacock
who did not attend four meetings and Messrs Hobdey, Ross,
Kelly and Powell who did not attend one meeting. Messrs
Lejman, Ophir and Reynolds joined the Board on 1 June 2008,
3 June 2008 and 11 August 2008 respectively. The Non executive
Directors periodically visit different parts of the Group and meet
the local Management.
Through this procedure the Board is able to retain full control
of the Group, determining strategy and monitoring performance
of objectives and compliance with policies. Directors have
access to the advice and services of the Company Secretary
and may take independent professional advice if necessary,
at the Company’s expense. Appropriate training is available
for all Directors as required. Executive and Non executive
Directors are formally appointed by the Board as a whole on
recommendation from the Nominations Committee. Whilst Non
executive Directors have not been appointed for a specific term,
their re-election is, along with all other Directors, submitted to
the Shareholders in General Meeting on a rotational basis at
least once every three years and at the first opportunity after
their initial appointment. Non executive Directors do not benefit
from share options or pension provisions.
Board evaluation
The Board conducted a formal evaluation of its own
performance and that of its Committees and individual
Directors during the year. The evaluation consisted of
questionnaires. All Directors, excluding the Chairman,
took part in the evaluation of the Chairman.
All necessary actions will be implemented following the
Board appraisal of the review findings.
Board Committees
The Audit Committee of the Board is chaired by Mr Hobdey
and is constituted by the six Non executive Directors.
The Audit Committee has written terms of reference which
are available from the Company Secretary on request. Its main
responsibilities are to review the financial statements integrity
and announcements relating to the Group’s performance and
review the scope and findings of the Group’s external Auditors
and the Group’s accounting controls and procedures through
regular monitoring and a programme of internal audit reviews of
controls of operating units. The Committee is also responsible
for making recommendations to the Board in relation to the
appointment of the external Auditor. During the financial year the
Committee has reviewed the effectiveness of the external audit
process and the audit strategy proposed by KPMG Audit Plc.
Cosalt plc Annual report & financial statements 2008
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