Corporate Governance Statement from the Chairman

As Chairman it is my responsibility to lead the Board and to ensure that our governance practices are robust and appropriate. The Board recognises that effective governance and management of risk are crucial to promoting the long term success of our business. The Board is responsible for ensuring that all aspects of our business are conducted transparently, ethically and effectively in a way which promotes a sustainable and successful future for the Company.

Accordingly, on behalf of the Board, I am pleased to introduce our report on the arrangements which the Board has established to ensure that, throughout the Next 15 Group, the highest standards of corporate governance are applied and maintained in a way which is consistent with our values and which continues to foster a corporate culture that encourages growth.

Following a review, the Board has formally adopted the UK’s Quoted Companies Alliance Corporate Governance Code (the “QCA Code”) with effect from 6 August 2018. The Board believes that our compliance with the QCA Code will enable us to serve the interests of our investors, by maintaining and enhancing long-term shareholder value, as well as those of our other stakeholders including, in particular, our talented and dedicated colleagues.

The report below sets out an overview of how we comply with the principles of the QCA Code at this point in time and will be updated as necessary.

Additional information about our Board and corporate governance arrangements are provided in the 2018 Annual Report & Accounts, including in the Corporate Governance Report on pages 24-27, which are available from our website here.

Richard Eyre CBE

Chairman

This statement was last reviewed and updated on 28th September 2018

Principle 1 – Establish a strategy and business which promote long-term value for shareholders

Our business model and strategy are explained on pages 10 and 11 of our 2018 Annual Report.  Next 15’s mission is to become the world’s most respected technology and data-driven communications group by achieving three objectives:

1) Build and buy technology-enabled content and data businesses.

2) Leverage strength of US businesses and their relationships with high growth companies.

3) Drive higher level consulting around business-critical activities

Our strategy is built around data, innovation consulting, content and technology underpinned by our principles which include building a group of businesses:

  • that organically fit together
  • are passionate about what they do
  • that have strong leadership teams empowered to pursue their own vision of success
  • that focus on the ‘who’ before the ‘what’
  • that expand the international presence of our existing brands
  • whose workforce is diverse and inclusive

The key risks and challenges to this strategy, and how we address them, are set out on pages 19-21 of the 2018 Annual Report.

Principle 2 – Seek to understand and meet shareholder needs and expectations

The Board recognises the importance of effective communication with its shareholders, to ensure that its strategy and performance are clearly understood. The Company communicates with shareholders through the Annual Report and Accounts, full-year and half-year results announcements, trading updates, the AGM and face-to-face meetings. A range of corporate information (including copies of presentations and announcements) is available on the Company’s website at www.next15.com.

The Chief Executive, the Chief Financial Officer and the Chairmen of the Board and each of its Committees attend the AGM and are available to answer shareholders’ questions. After the AGM, shareholders can meet informally with the Directors. Shareholders are encouraged to submit questions to the Board throughout the year.

Proxy votes are disclosed at the meeting following a show of hands on each shareholder resolution and are subsequently published on the corporate website.  In the event of a significant proportion of votes ever being received against a particular resolution, the Board would take steps to understand shareholder concerns and consider what action they might want to take in response.

The Board is happy to enter into dialogue with institutional shareholders based on a mutual understanding of objectives, subject to its duties regarding equal treatment of shareholders and the dissemination of inside information. The Chief Executive Officer and the Chief Financial Officer meet institutional shareholders on a regular basis.

The Board as a whole is kept informed of the views and concerns of the major shareholders. When requested to do so, the non-executive Directors will attend meetings with major shareholders and shareholder advisory groups and are prepared to contact individual shareholders should any specific area of concern or enquiry be raised.  The Senior Independent non-executive Director (Genevieve Shore) is also available in any circumstances where usual channels of investor communication have not resolved concerns.

To request a meeting please contact: Investor-relations@next15.com.

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

Communities & Wider Society

We take our social responsibilities seriously and are committed to advancing policies and processes across the Group to ensure we address and monitor all aspects of social responsibility and community engagement that are relevant to our business.  These range from concern for employee health and safety, care for the environment, protection of any personal data which we hold1 and community involvement.

The Group’s business model takes into account our social responsibilities through:

  • Technically appropriate operations
  • Environmentally sound practices
  • Socially responsible actions.

Specific activities undertaken by our businesses include the following:

  • Fair and equitable employee practices including programmes that encourage diversity
  • Minimising environmental impacts through recycling and offsetting flight emissions
  • Monitoring potential risks and applying mitigating policies
  • Involvement in community activities and encouraging our employees to give back through volunteering programmes
  • implementing and monitoring Health and Safety practices, including employee mental health and well-being
  • Corporate matching of charity donations and fundraising activities.

In addition to its shareholders, the Company’s principal stakeholders are:

  1. Employees and workers

We invest in people, and Next 15’s people are at the heart of everything we do. As a Group we focus on the ‘who’ before the ‘what’. This principle espoused by the author Jim Collins, creates a different way of running a Group. In essence it pushes you to trust key talent to drive their business in the direction they believe is best, instead of the Group telling leaders what is best.  We encourage the businesses in the Group to take the same approach.

It is right that our employees share in the success of Next 15.  Accordingly a number of incentive arrangements operate across the business to reward colleagues for the contribution they are making towards generating the rewards which our investors enjoy as a result of their efforts to grow the business.

Knowing what our people think and feel is key to our growth as a group.  Our businesses monitor engagement and act on feedback in multiple ways, including yearly engagement surveys, pulse surveys, 360 degree appraisals and central reporting of HR issues.  Trends and issues are reported to our Group CEO at quarterly Executive Committee meetings of senior management.

We use the information to help develop a people strategy for each business that leverages the feedback and creates a work environment, benefits package and policies that add to business culture and maintain compliance.

  1. Customers

Client-focus is critical to the success of each of our businesses.  By their nature our businesses work in collaboration with their clients: we embed teams within client organisations, use agile processes and build businesses to better serve client needs based on what they tell us.

Repeat business is our best customer feedback.  16 of our Top 20 clients in the year to January 2017 were still Top 20 clients for the year to January 2018.

  1. Suppliers

Because of the nature of our business, our long-term success as a Group is not dependent on any one supplier, however we believe in treating our suppliers fairly, for example by ensuring that we pay our suppliers promptly in accordance with the prevailing terms of business.

The Group has a zero‐tolerance approach to practices which are at odds with our values and culture, for example corruption, bribery and modern slavery.  We are committed to acting ethically and with integrity in all business dealings and relationships and to implementing and enforcing effective systems and controls to ensure such practices are not taking place anywhere in our business or supply chain.

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

Our approach to risk management is set out on pages 17-18 of the 2018 Annual Report, and the principal risks to our business, and the actions we have taken to mitigate them are set out at pages 19-21.

Principle 5 – Maintain the board as functioning, balanced team led by the chair

As at 28 September 2018 the Board comprised two executive Directors, a non-executive Chairman and two non-executive Directors.

The Board is satisfied that it has a suitable balance between independence (of character and judgement) and knowledge of the Company to enable it to discharge its duties and responsibilities effectively. The non-executive Directors and the non-executive Chairman are considered to be independent. No single Director is dominant in the decision-making process.

The Board aims to convene once a month, with additional meetings being held as required. As Tim Dyson is located in San Francisco, some of the Board meetings are held by telephone conference. The Board meets face to face whenever possible and aims to do so at least quarterly. Details of Board and Committee meetings held during the previous financial year and the attendance records of individual Directors are set out on page 26 of the Annual Report & Accounts 2018.  In addition the board meets once a year to discuss the Group’s strategy, typically face to face over three days, including meetings with each of the Group’s businesses.

More details of the Board’s responsibilities and processes are set out on pages 24-27 of the 2018 Annual Report.

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

The Board is made up of Richard Eyre, CBE (Chairman); Tim Dyson (CEO), Peter Harris (CFO), Penny Ladkin-Brand (Non-executive Director) and Genevieve Shore (Non-executive Director))

Genevieve Shore is Senior Independent non-executive Director and is also chairman of the Remuneration Committee and a member of the Audit Committee.

Penny Ladkin-Brand chairs the Audit Committee and serves on the Remuneration Committee of the Board.

The relevant experience, skills and personal qualities of the Board are set out at pages 22-23 of the 2018 Annual Report

The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and knowledge, including a range of financial, commercial and entrepreneurial experience.

All Directors have access to the advice and services of the General Counsel and Company Secretary, who is responsible for ensuring that Board procedures are followed and that the Company complies with all applicable rules, regulations and obligations. Directors may take independent professional advice at the Company’s expense, as and when necessary to support the performance of their duties as Directors of the Company. Appropriate induction and training for new and existing Directors is provided where required.

The Board believes in the importance of diverse Board membership. Women currently comprise 40% of the Next 15 Board, meeting the recommendation set out by Lord Davies on diversity for a minimum of 33% female representation (applicable to FTSE 350 boards) by 2020. The Board is conscious that gender is not the only diversity factor and account is also taken of a range of other factors in assessing the balance of the Board.

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

The performance of the Board is key to the Company’s success. The performance of the Board and its Committees is evaluated regularly, and the evaluations are conducted with the aim of improving their effectiveness. The last Board evaluation was facilitated internally during the year to 31 January 2018 and involved a questionnaire to each Board Director.

Although the Board has reviewed its governance arrangements against the principles and guidance set out in the QCA Code and is satisfied that it is compliant, it is intended that, at its next Board evaluation, further attention will be paid to whether any enhancements to existing arrangements could further improve the Company’s compliance with the QCA Code.  It is envisaged that, as the business continues to develop, the Board’s Governance practices will continue to evolve.  In this regard, the Board is open minded to change and welcomes insight that may come from a number of different sources including industry bodies, institutional investors and emerging practice.

The Board has agreed that its succession planning framework should ensure that Board appointments provide an appropriate mix of skills and experience and a level of independence which will support the Group’s objectives for business growth and its key strategic goals. The outcomes from the Board’s regular evaluation processes will help inform these assessments and, in particular, can highlight where gaps in Board skills or experience might exist or arise, either as the business evolves and new skills are needed or as a result of future vacancies.

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

Next 15 has a strong corporate culture based on personal responsibility and treating stakeholders fairly.  Businesses within the Group are given a high degree of autonomy in line with the Group’s emphasis on personal responsibility, however the Board and its committees set a high standard for ethical behaviour and ensure the Group complies with applicable laws and regulation.  The Board will intervene for instance where a client or sector is not compatible with the Group’s ethical values, or where employees are not being treated fairly.

The Group determines that ethical values and behaviours are recognised and respected through:

  • the emphasis on the ‘who’ before the ‘what’ during due diligence when the Group acquires new businesses
  • presentations by each business to the Board during the Group’s annual strategy sessions
  • quarterly Executive Committee meetings with the CEO and senior management
  • HR policies, appraisals and training within each business.
Principle 9 – Making governance structures and processes that are fit for purpose and support good decision-making by the board

The Board’s structures and processes are set out in detail at pages 24-27 of the 2018 Annual Report.

The Chairman is responsible for leading the Board and for its governance of the business, in the determination of its strategy and in achieving its objectives. The Chairman is responsible for organising the business of the Board, ensuring its effectiveness and setting its agenda, and is also responsible for effective communication with the Group’s shareholders.

The Chief Executive Officer oversees the Group on a day-to-day basis and is accountable to the Board for the financial and operational performance of the Group. The Chief Executive Officer has responsibility for implementing the agreed strategy and policies of the Board.

The Senior Independent non-executive Director performs a valuable role and any shareholder concerns not resolved through the usual mechanisms for investor communication can be conveyed to the Senior Independent non-executive Director.

Broadly, the Audit Committee is responsible for reviewing financial reporting, the relationship with the external Auditor, internal controls, and oversight of the effectiveness of risk and risk management systems.  The Remuneration Committee is responsible for reviewing and approving executive remuneration policies and practices, taking account of pay practices and policies across the group’s workforce.  In place of having a separate nominations committee, the Board as a whole leads Board recruitment and appointment processes. It also has responsibility for reviewing the balance of the Board to ensure that, collectively, the Board has a good range of skills, knowledge, experience and comprises diverse individuals who can bring different perspectives to the Board’s discussions, for having oversight of senior management and Board succession plans and for making recommendations on matters such as Directors’ independence and commitment.

Matters reserved for the Board are available here.

The Terms of Reference for the Audit Committee are available here.

The Terms of Reference for the Remuneration Committee are available here.

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

The Corporate Governance Report, separate committee reports and Directors’ Remuneration Report (available at pages 24-38 of the 2018 Annual Report) set out how the Group is governed and the work of the Board’s committees undertaken during the year.

The Company communicates with shareholders through the Annual Report and Accounts, full-year and half-year results announcements, trading updates, the AGM and face-to-face meetings.  The outcomes of the votes at the 2018 AGM and notices of all general meetings over the last five years are available here.

Historical annual reports and other governance related materials for the last five years are available here.

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