Chairman’s corporate governance statement

As Chairman I am responsible for leading the Board and for its governance of the Group, in the determination of its strategy and in achieving its objectives. I am responsible for organising the business of the Board, ensuring its effectiveness and setting its agenda, and for effective communication with our shareholders.

The Board recognises that effective governance and management of risk are crucial to promoting the long-term success of our business for the benefit of our shareholders and our other stakeholders.  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 the arrangements which the Board has established to ensure that, throughout the Group, the highest standards of corporate governance are applied and maintained in a way which is consistent with our values and fosters a corporate culture that encourages growth.

The Board formally adopted the UK’s Quoted Companies Alliance Corporate Governance Code (the ‘QCA Code’) with effect from 6 August 2018 and is compliant with its principles.

Disclosures required by the QCA Code have been made in our 2019 Annual Report & Accounts, and an overview of how we comply with the principles of the QCA Code is also provided below.  Further information about our Board and corporate governance arrangements is contained  in our 2019 Annual Report & Accounts, including in the Corporate Governance Report on pages 22 to 46, which is available from our website here.  Matters Reserved for the Board are available here, whilst the Terms of Reference for the Audit Committee are available here, and the Terms of Reference for the Remuneration Committee are available here.

The Board believes that our compliance with the QCA Code enables us not only to serve the interests of our investors, by maintaining and enhancing long-term shareholder value, but also those of our other stakeholders including, in particular, our talented and dedicated colleagues. As an AIM listed company, the Company is not required to comply with the UK Corporate Governance Code 2016 (the ‘UK Code’); however, the Board supports the UK Code and considers its application when appropriate given the Group’s size and operations.

The Board seeks to promote the long-term success of the Company for the benefit of our shareholders and, as Chairman, my role is to provide the leadership to enable the Board to do so effectively.

Richard Eyre CBE

Chairman

This statement was last reviewed and updated on 16 April 2019.

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 2019 Annual Report.  Next 15’s objectives are:

1) Build and buy technology-enabled brand marketing 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, brand marketing and technology, underpinned by our principles which include building a portfolio of businesses that:

  • organically fit together;
  • are passionate about what they do;
  • have strong leadership teams empowered to pursue their own vision of success;
  • focus on the ‘who’ before the ‘what’; and
  • have a diverse and inclusive workforce;

which cater to the different needs of the various market sectors and geographies in which Next 15 operates.

Our approach to risk management is set out on page 16 of our 2019 Annual Report, and the principal risks to our business, and the actions we have taken to mitigate them, are set out on pages 17 to 21 of our 2019 Annual Report.

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 (including copies of presentations, announcements, historical annual reports, historical notices of general meetings, AGM voting records, and other governance-related materials for the last five years).

AGM voting records and notices of general meetings are available here and annual reports and other governance related materials for the last five years are available here.

The Chief Executive, the Chief Financial Officer, the Chairman, the Chair of the Remuneration Committee and the Chair of the Audit Committee will be available at the AGM to answer shareholders’ questions. Proxy votes are disclosed at the meeting following a show of hands on each shareholder resolution and are subsequently published on the Group’s 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. After the AGM, shareholders can meet informally with the Directors. Shareholders are also encouraged to submit questions to the Board throughout the year.

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. The Senior Independent Director is also available in any circumstances where the usual channels of investor communication have not resolved concerns.

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

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

Our communities and 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 hold and community involvement.

Specific activities undertaken by our businesses include the following:

  • developing 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 implementing employee mental health awareness initiatives and well-being programmes; and
  • corporate matching of charity donations and fundraising activities.

Our 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’. We trust key talent to drive their businesses 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.

Our employees are key to the Group’s success and we rely on a committed workforce to help us to achieve our short-term and long-term objectives. 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, as a result of their efforts to grow the business, towards generating the rewards which our investors enjoy. In addition, the Group regularly keeps employees appraised of the Group’s financial performance, through a combination of meetings and electronic communications.

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

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

The Group has established arrangements by which individuals may, in confidence, raise concerns about possible improprieties in matters of financial reporting and other matters. The Group has an anti-bribery code of conduct which is intended to extend to all the Group’s business dealings and transactions in all countries in which it, or its subsidiaries and associates, operate.

Our 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.

Our suppliers

Because of the nature of our business, our long-term success as a Group is not dependent on any one supplier; nevertheless, 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 businesses or supply chain.

Environment

Due to the nature of its businesses, the Board considers that the Group’s direct or indirect impact on the environment is minimal and of low risk. However, the Group still seeks to minimise the environmental impact of its activities and its business practices support environmental good practice, such as reducing paper wastage through reuse, recycling, using electronic communications, and reducing business travel by replacing face-to-face meetings with conference calls where practicable.

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 2019 Annual Report, and the principal risks to our business, and the actions we have taken to mitigate them, are set out on pages 17 to 21 of our 2019 Annual Report.

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

The Board of Directors is responsible for the strategic direction, investment decisions and effective control of the Group. During the year ended 31 January 2019 the Board comprised two Executive Directors, a Non-Executive Chairman and two Non-Executive Directors.

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.

The Board aims to convene once a month, with additional meetings being held as required. Some of the Board meetings are held by telephone conference. The Board meets in person whenever possible and aims to do so at least quarterly. Details of Board and Committee meetings held during the financial year and the attendance records of individual Directors can be found on page 27 of the 2019 Annual Report. 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.

At each Board meeting, the Chief Executive Officer provides a business review and the Chief Financial Officer provides a financial review. Board members receive monthly trading results, together with detailed commentary. Each Director receives a Board pack in advance of each meeting which includes a formal agenda together with supporting papers for items to be discussed at the meeting.

Prior to their appointment the Company informed each Director of the nature of their role, their responsibilities and duties to the Company, and the time commitment involved. On appointment each Director confirmed that, taking into account all of their other commitments, they were able to allocate sufficient time to the Company to discharge their role effectively. The Board is satisfied that the Chairman and the Non-Executive Directors each devotes sufficient time to the Company and that there have been no significant changes to their other commitments. More details of the Board’s responsibilities and processes are set out on pages 24 to 27 of the 2019 Annual Report.

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 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.

All Directors have access to the advice and services of the 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. Our Board has 40% female representation which meets 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 considers 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. During the year to 31 January 2019, the Board reviewed its governance arrangements against the principles and guidance set out in the QCA Code and is satisfied that it is compliant. The next Board evaluation is scheduled for the summer of 2019 and will include a review of the matters reserved for the Board and of the terms of reference of its Committees. 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, advisers 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.

In place of having a separate Nomination 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 and experience; comprises diverse individuals who can bring different perspectives to the Board’s discussions; has oversight of senior management and Board succession plans; and makes recommendations on matters such as Directors’ independence and commitment.

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

We have 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 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; and
  • 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 to27 of the 2019 Annual Report.

The Chairman of the Board leads the Board 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. At the time of his appointment as Chairman was considered independent in accordance with the provisions of the UK Code. 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. Any shareholder concerns not resolved through the usual mechanisms for investor communication can be conveyed to the Senior Independent Director, who is considered to be independent as defined by the UK Code and in accordance with the principles of the QCA Code. The Board is supported by Audit and Remuneration Committees.

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 Nomination 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 and experience; comprises diverse individuals who can bring different perspectives to the Board’s discussions; has oversight of senior management and Board succession plans; and makes 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

Our Board and corporate governance arrangements are described in our 2019 Annual Report & Accounts, including in the Corporate Governance Report on pages 22 to 47, which is available from our website here. How the Company communicates with our shareholders and our other stakeholders is described in Principle 2.

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