Notes to the financial statements - Plasmon

Corporate governance
The Directors recognise the importance of adopting good governance
practices in the best interests of the shareholders.
Throughout the year the Company has been in compliance with the
provisions set out in the Combined Code for Corporate Governance
appended to the Listing Rules of the UK Listing Authority, with the
exception that a Senior Non-Executive Director, Henri Zinsli, was only
appointed on 19 September 2002. The Board continues to monitor
the latest corporate governance guidance to ensure that the Group
maintains the appropriate standards.
As outlined below, the Board has considered the independence of the
non-executive directors and believes that all the non-executive
Directors are currently independent of management and free from any
business or other relationship which could materially interfere with the
exercise of their independent judgement.
The following narrative statement explains how the Group has applied
the Principles of Good Corporate Governance contained in the
Combined Code.
The Board
The Board comprises two executive Directors and three non-executive
Directors. It is headed by a non-executive Chairman and is responsible
to shareholders for leading and controlling the Group. It meets at least
six times a year, reviewing trading performance, ensuring adequate
funding facilities are in place, setting and monitoring strategy,
reviewing risk management processes, examining business expansion
opportunities and shareholder reporting.
When appointing new directors, the Board principally considers their
experience and knowledge of the technology sector together with
their ability to contribute to a specific area of importance to the
Company. Due to the infrequent changes to the Board there is no
formal induction policy for new directors, with appropriate
arrangements being made as required.
To enable it to carry out its responsibilities, the Chief Executive and
Finance Director supply detailed information on the Group’s
operations to the Board on a monthly basis.
It is the Company’s policy that all directors should submit themselves
for re-election at regular intervals and at least every three years. The
Director submitting himself for re-election this year is shown on
page 23.
The Board has both an audit committee and a remuneration
committee, details of which are outlined below, but does not consider
a nomination committee to be necessary due to the small size of the
Board.
Plasmon Plc
Annual Report 2003
Corporate governance
18
The Audit Committee
The Audit Committee, which is chaired by John Barrie Morgans,
comprises all the non-executive Directors and meets not less than
twice annually. The Audit Committee provides a forum for reporting by
the Group’s Auditors and, by invitation, meetings are attended by the
Chief Executive and the Finance Director. It is responsible for reviewing
a wide range of financial matters, including the Interim and Annual
Report prior to their submission to the Board, and monitoring the
controls that are in force to ensure the integrity of the financial
information reported to the shareholders. The Audit Committee
advises the Board on the appointment of external Auditors and on
their remuneration for audit and non-audit work, and discusses the
nature and scope of the audit with the external Auditors.
The members of the Audit Committee are:
John Barrie Morgans (Chairman)
Henri Zinsli
Christopher McFadden
The Remuneration Committee
The Remuneration Committee is responsible for determining the
contract terms, remuneration and other benefits of the executive
Directors, including their performance-related pay. The Remuneration
report, which includes details of Directors’ remuneration and beneficial
interests in the Company’s share capital, together with information on
their service contracts, is set out on pages 18 to 22
The members of the Remuneration Committee are:
Christopher McFadden (appointed Chairman 19 September 2002)
John Barrie Morgans (resigned as Chairman 19 September 2002)
Henri Zinsli
Relations with shareholders
As part of the Company’s communication activities, detailed
presentations are made to major institutional investors on a regular
basis, including whenever a major event occurs. The Board takes
feedback received from these presentations and other
communications for shareholders, into consideration wherever
appropriate.
The Annual General Meeting is the occasion when the Directors are
routinely available to answer questions from shareholders, and the
Directors view this public accountability for their actions as being the
main purpose of the meeting.