Chair’s corporate governance statement
The Directors recognise that shareholders look to the Board to promote the long-term success of the Company and I recognise that effective governance is crucial to achieving this. In this section of our report, we have set out our approach to governance and provided further detail on how the Board and its Committees operate.
The Board has continued to apply the Quoted Companies Alliance Corporate Governance Code (the ‘QCA Code’). The corporate governance framework which the Group operates, including Board leadership and effectiveness, Board remuneration, and internal controls is based upon practices which the Board believes are proportional to the size, risks, complexity, and operations of the businesses within the Group.
During the year to 31 January 2021, we concluded the orderly transition of the Board Chair role from Richard Eyre to me and refreshed and added further diversity to the Board with the appointment of Robyn Perriss as a Non-Executive Director and Chair of the Audit Committee. In addition, we undertook a comprehensive independent evaluation of the Board’s and Committees’ effectiveness with an external specialist board evaluation firm. This robust exercise revealed a positive picture of a Board that is working well across the key areas of board effectiveness, governance, and performance. We have embraced the recommendations from the external board evaluation and have developed a roadmap to implement these as part of our strong focus on our governance framework.
As Chair I am responsible for leading the Board and for its governance of the Group. I look forward to building on Richard Eyre’s successful tenure as Chair and to working with the Board to progress continual improvements of our board effectiveness and governance framework to promote the long-term success of the Group.
We always welcome feedback from our shareholders, and I encourage all to participate in our AGM.
This statement was last reviewed and updated on 12 April 2021.
Principle 1 – Establish a strategy and business model which promote long-term value for shareholders
Our business model and strategy are explained on pages 8 and 9 of our 2021 Annual Report. Next
15’s objectives are:
1) To build a portfolio of businesses who are best-in-class experts in every aspect of growth, and who can work collectively to solve the most challenging problems for the world’s biggest companies.
2) To use our growth expertise internally to create an environment in which highly talented teams can deliver their best work. An environment that attracts ambitious entrepreneurs to have their ambitions accelerated and exceptional talent to grow their careers and experience.
3) To set the standard in being good corporate citizens in the way that we care for our people, environment, and the communities we are part of, whilst influencing our customers to do the right thing wherever we can.
Our businesses execute our strategy by operating under one or more of the following principles which cater to the different needs of the various market sectors and geographies in which Next 15 operates:
Data and analytics, and the insights they reveal, are increasingly embedded across the Group; we actively foster innovation and the development of products and tools in our businesses so that we can do (and prove that we do) the best possible work for clients. Our continued, significant investment in data driven growth consulting is at the heart of our ability to help clients solve problems, innovate and spot new opportunities.
The body of content, ideas and expectations surrounding a product is what constitutes a brand. Developing digital content that travels gracefully across technology platform, application and language is essential to consistent brand marketing. Creativity doesn’t just apply to content creation though; it also applies to the development of the digital assets that will be used to engage with customers. For many of today’s businesses, these digital points of engagement are now their most valuable assets.
Building brands is a long-term process and requires a rich set of skills and programmes. But as sales and marketing converge our clients are looking for ways to identify people ready and willing to buy their products and services. A well-engineered mixture of first party data, content and algorithms solves this problem as the much-needed fuel for corporate growth.
Our marketing heritage helps customers build desire for their products. But the pace of change is such that it is no longer enough simply to paint the best face on a brand through clever marketing. To be effective we have to stand back, think like founders and help redesign the company and its products for success in fast changing markets. Our consulting capability is now helping our customers transform their existing businesses or create entirely new ones to grasp emerging opportunities.
Principle 2 – Seek to understand and meet shareholder needs and expectations
The Board recognises the importance of maintaining an effective dialogue with its shareholders, to ensure that its strategy and performance are clearly understood. We communicate with our shareholders through our annual report and accounts, full-year and half-year results announcements, trading updates, AGMs and face-to-face meetings. A range of corporate information is available from the Group’s website at www.next15.com (including copies of presentations, announcements, historical annual reports, historical notices of general meetings, AGM voting records, and other governance-related materials).
In early 2021, we engaged directly with our institutional shareholders on changes to the remuneration packages for both Executive and Non-Executive Directors, to better align the packages to market levels and Next 15’s longer-term strategy. Further details of these changes are set out in the Directors’ Remuneration Report from page 40 in the Annual Report & Accounts.
Ordinarily the Board would be available to take questions from shareholders at the AGM. In accordance with current UK government measures, shareholders may not be able to attend the AGM in person. If the restrictions on public gatherings remain in place and shareholders are unable to attend the AGM, in order to ensure that shareholders have adequate access to the Board, we will ensure that the Board is able to meet shareholders and respond to their questions by way of an interactive webcast. Details of this and any other changes to the AGM arrangements will be published on the Group’s website. We strongly encourage all shareholders to vote on all resolutions by completing an online proxy appointment form in advance of the meeting, appointing the chair of the meeting as your proxy. Proxy votes will be counted at the meeting for each shareholder resolution and are subsequently published on the Group’s website at www.next15.com. 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. Shareholders are also encouraged to submit questions to the Board throughout the year via the Company Secretary to firstname.lastname@example.org. More information concerning the arrangements for the AGM can be found on page 59.
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 are prepared to contact individual shareholders should any specific area of concern or enquiry be raised.
To request a meeting please contact: Investoremail@example.com.
Principle 3 – Take into account wider stakeholder and social responsibilities and their implications for long-term success
The Corporate Governance Statement includes information on how the Board considers the wider stakeholder and how we have regard to our environmental and social responsibilities, which can be found on pages 30 to 34.
The Directors are fully aware of their duty to promote the success of the Company for the benefit of its members as a whole in accordance with section 172 of the Companies Act 2006, and in doing so to have regard to the matters set out in section 172(1) (a) – (f). The s172 statement can be found on pages 21 and 22 of the Annual Report & Accounts.
Principle 4 – Embed effective risk management, considering both opportunities and threats, throughout the organisation.
Our approach to risk management is set out on page 16 of our 2021 Annual Report & Accounts, and the principal risks to our business, and the actions we have taken to mitigate them, are set out on pages 17 to 20 of our 2021 Annual Report & Accounts.
Principle 5 – Maintain the board as a well-functioning, balanced team led by the chair
The Board is responsible for the strategic direction, investment decisions and effective control of the Group. During the year ended 31 January 2021 the Board comprised two Executive Directors, a Non-Executive Chairman and three Non-Executive Directors.
On 7 May 2020, the Company announced that Richard Eyre CBE would complete nine years as Chairman of the Board on 11 May 2020 and Penny Ladkin-Brand, who chaired the Audit Committee from July 2017, would become Chair of the Board with effect from 1 February 2021. Penny became Senior Independent Director with effect from 7 May 2020 and Richard agreed to continue in post to the end of the financial year, to support a smooth transition. During that time, Penny Ladkin-Brand stepped down from the position of Chief Financial Officer and as an Executive Director of Future plc, a global platform for specialist media, and took up the role of Chief Strategy Officer at Future plc. Richard retired from the Board on 31 January 2021 and Penny succeeded him as Chair of the Board from that date and stepped down as Senior Independent Director and Chair of the Audit Committee.
Robyn Perriss joined the Board on 12 November 2020, as a Non-Executive Director and member of the Audit and Remuneration Committees. From February 2021 she was appointed Chair of the Audit Committee. Robyn brings significant expertise of growth through digital disruption as well as governance and strategic oversight, making her a valuable addition to the Board as Next 15 continues its progress in technology-driven marketing. Robyn served as Finance Director at Rightmove plc, the UK’s largest property portal until 30 June 2020 and previously held senior roles at Rightmove, including as Financial Controller and Company Secretary. Before joining Rightmove, Robyn was Group Financial Controller at Auto Trader, another media sector disruptor. Robyn joined Softcat plc, a leading provider of IT infrastructure to the corporate and public sectors, as a Non‑Executive Director and Chair of the Audit Committee in July 2019 and in January 2021 was appointed to the board of Dr Martens Limited, as a Non-Executive Director, on its floatation on the London Stock Exchange.
Principle 6 – Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
Biographies of each of the Board Directors, including the Committees on which they serve and chair, are available here.
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. The Board is also 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 are considered to be independent. No single Director is dominant in the decision-making process.
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. During the year ended 31 January 2021, the Company engaged the services of Board Excellence to carry out a detailed and independent review of the Board and Board Committee processes, procedures and effectiveness. Board Excellence is a specialist board evaluation firm and has no other connection with the Company. The process consisted of completion by the Board and senior executives of a searching questionnaire of the board dynamics, effectiveness and governance, a review of the last 12 months of all Board, Committee and governance related materials and confidential one-to-one interviews of all the board members and senior executives.
This culminated in a detailed report assessing the board’s effectiveness, governance, and performance across 20 key categories, assessing compliance with the QCA Code and the Financial Reporting Council (FRC) Guidance on Board Effectiveness (2018), comparison with international best practices and recommendations on driving sustained improvement in the board effectiveness. By way of overview, the evaluation concluded that the Board is working effectively, balancing strong oversight, debate and challenge with the independent non-executive directors adding strategic value.
The evaluation also concluded that there was strong compliance with the QCA Code and a deep commitment by the Board to employee engagement and Environment, Social and Governance (ESG).
The principal findings of the independent evaluation and recommendations that are endorsed by the Board for implementation are to:
- Enhance the strategic framework at board/executive level to incorporate agile approaches in the light of market disruption and emerging opportunities.
- Streamline the individual brand executive reporting at board level.
- Expand the focus on ESG at board and committee level.
Principle 8 – Promote a corporate culture that is based on ethical values and behaviours
We have a strong corporate culture based on entrepreneurial spirit, taking personal responsibility and treating all stakeholders fairly and equitably. Businesses within the Group are given a high degree of autonomy in line with the Group’s emphasis on personal responsibility, with the centre acting as enablers and teachers. However, the Board and its Committees set a high standard for ethical behaviour and ensure the Group complies with applicable laws and regulations, and the executive team work to embed a corporate conscience that runs throughout Group initiatives and practices.
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 evaluates acquiring new businesses;
- presentations by each business to the Board throughout the year focusing on all areas of their responsibility including people, clients and sustainable growth;
- quarterly Executive Committee meetings with the CEO and senior management; and
- HR policies and practices, reviews and objective setting, and training within each business in the areas they require the most development.
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 on pages 24 to 35 of the 2021 Annual Report & Accounts.
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
Our Board and corporate governance arrangements are described in our 2021 Annual Report & Accounts in the Corporate Governance Report on pages 24 to 61, which is available on our website here. How the Company communicates with our shareholders and our other stakeholders is described in Principle 2.