Corporate Governance

Statement of Compliance with the QCA Corporate Governance Code

Chairman's Statement

As a quoted company traded on the AIM market of the London Stock Exchange, we understand the importance of sound corporate governance and of adopting the principles of good governance across the business. We aim to maintain an efficient and effective management framework that enables long-term, sustainable growth for our shareholders.

As Chairman, I carry the ultimate responsibility for the corporate governance of the Group. In September, the Board have reaffirmed its commitment to good corporate governance by adopting and applying the Quoted Companies Alliance (QCA) Corporate Governance Code 2018.

The QCA has ten broad principles and we have set out below how we apply these principles to the business. More information is provided each year in our Annual Report.

This information was last updated on 31 October 2018.

Principle 1 – Business Model & Strategy

Our Business Model

We create value for our shareholders through our acquisition-based model and by leveraging our centralised, scalable infrastructure.

Our Strategy

We seek to create sustainable value by continuing to execute our simple strategy, built on driving organic growth, acquisitions and efficiency.

Principle 2 – Understanding and meeting shareholders needs and expectations

The Group provides up to date information to its shareholders through market announcements and copies of all results and announcements are available online at www.harwoodwealth.co.uk

The Chief Executive Officer and the Chief Financial Officer carry out presentations to institutional shareholders on a regular basis and the Group encourages all shareholders to attend its Annual General Meeting where the Directors are available to answer any shareholders questions or concerns.

N+1 Singer has been appointed as the Group’s broker and Alma PR as their financial PR Adviser. Both organisations provide feedback from institutional shareholders from investor presentations and the Directors use this feedback to improve and enhance future Annual Reports and presentations as appropriate.

Principle 3 – Other stakeholder responsibilities

The Board recognises that the Group’s long-term success relies on good relations with its wider stakeholders – the Financial Conduct Authority (FCA), financial advisers, employees, clients and suppliers. The Chairman takes a pro-active role by personally contacting a sample of stakeholders, from time-to-time, and providing feedback to the Board.

Clients

The Group has processes to gather regular feedback from clients, including recommendations or complaints, for identifying any improvements that would result in better client outcomes or satisfaction. Also, the Group has established a Product & Service Committee which meets three times a year. This Committee reviews existing and potential new products or services to ensure they are distributed to and meet the needs of the proper target market.

Advisers

Every financial planner of the Group has a nominated Training & Competency Supervisor and they also have direct access to the Group’s Client Solutions Manager. Regular development forums are held, and these are attended by senior management of the Group.

Employees

Employees have regular 1-2-1 sessions with their immediate line manager, and annual reviews where development plans are discussed to ensure individual’s objectives are aligned to the business strategy and to improve levels of employee engagement. Internal newsletters, briefings and communications are distributed to keep all employees informed of important developments. A forum for the senior management of the Group takes place on a regular basis to involve the broader management team in business planning and to improve teamwork and Group identity.

Suppliers

The Group has identified key suppliers or advisers such as the nominated broker, external auditor, legal adviser and PR consultants. The Group seeks the independent and experienced view of its key advisers on various matters as and when required. The Group values their independence and seeks to establish long-term business relationships to benefit the Group.

The Financial Conduct Authority

Most of the Group’s revenue is derived from FCA regulated subsidiaries. The Group takes an open and co-operative approach to the regulator and positively embraces the FCA’s 11 principles of business. The Group submits regular returns to the FCA. Employees whose role encompasses compliance activities are encouraged to attend regular forums or workshops arranged by the FCA on topical issues. All new and existing employees, advisers are made aware of the FCA’s principles of business. The Group arranges regular external compliance audits to provide assurance that the Group is meeting the requirements of the regulator.

Principle 4 - Effective risk management

The Group has a formal risk governance framework that provides a structured process for identifying, evaluating and mitigating risks deemed by the Board as being of significant relevance to the Group in view of its risk profile and risk appetite. The process seeks to understand and mitigate, rather than eliminate risks and therefore can provide reasonable rather than absolute assurance against loss. The Board regularly reviews a register of principal risks and uncertainties, which is maintained on behalf of the Board by the Chief Financial Officer. The risk register is reviewed by the Board on a quarterly basis and a detailed review is undertaken on at least an annual basis.

Principle 5 – Board structure

Board

The Board consists of seven Directors including the Chairman. There are four executive and three non-executive Directors. Peter Mann, Chairman, and Paul Tuson are considered independent non-executive directors. The Board is scheduled to meet four times a year and has full and timely access to all the relevant information to enable it to carry out its duties. The Board has access to the Group’s advisers and the Company Secretary to keep up to date with corporate governance matters and to ensure the relevant rules and regulations are followed. The Board has delegated specific responsibilities to the Audit and Remuneration Committees.

Audit

The Audit Committee comprises Paul Tuson (Chairman), Christopher Mills and Peter Mann. It meets at least twice a year and is responsible for ensuring that the financial performance of the Group is properly recorded and monitored on a regular basis. This includes reviews of the annual and interim accounts, results announcements, internal control systems and procedures and accounting policies. The Audit Committee has responsibility for recommending the appointment of the external auditor. It will review the cost effectiveness, independence, and objectivity of the current auditors.

Remuneration

The Remuneration Committee comprises Paul Tuson (Chairman), Christopher Mills, and Peter Mann. It meets at least twice a year and is responsible for determining the Group’s policy on the remuneration of the Executive Directors. It is also responsible for making any recommendations for the introduction of share options schemes and long-term incentive plans for the Executive Directors.

Attendance

The attendance record by individual Directors at scheduled meetings can be found in the latest Annual Report and Accounts.

Principle 6 – Board experience, skills and capabilities

The Board has established a skills, diversity and experience matrix which is set out below. This will be periodically reviewed by the Board to ensure this meets current and future requirements.

Name Position Age Gender FCA Regulated Firm Financial Management Investment Management Financial Planning - Clients Risk Management Listed Board Service Sector Acquisitions Business Development
Peter Mann Chairman 60+ M X - X X - X X X X
Christopher Mills NED 60+ M X - X - - X X X X
Paul Tuson NED 50-60 M   X - - X X - X X
Alan Durrant CEO 40-50 M X - X - - X X X X
Gillian Davies Interim CFO 50-60 F - X - - X X - X X
Nick Bravery CFO 50-60 M X X - - X X X X X
Neil Dunkley MD 40-50 M X - - X - - X X X
Mark Howard CCO 40-50 M X - - X - - X X X
Name Position Age Gender FCA Regulated Firm Financial Management Investment Management
Peter Mann Chairman 60+ M X - X
Christopher Mills NED 60+ M X - X
Paul Tuson NED 50-60 M   X -
Alan Durrant CEO 40-50 M X - X
Gillian Davies Interim CFO 50-60 F - X -
Nick Bravery CFO 50-60 M X X -
Neil Dunkley MD 40-50 M X - -
Mark Howard CCO 40-50 M X - -
Name Financial Planning - Clients Risk Management Listed Board Service Sector Acquisitions Business Development
Peter Mann X - X X X X
Christopher Mills - - X X X X
Paul Tuson - X X - X X
Alan Durrant - - X X X X
Gillian Davies - X X - X X
Nick Bravery - X X X X X
Neil Dunkley X - - X X X
Mark Howard X - - X X X
Name Position Age Gender
Peter Mann Chairman 60+ M
Christopher Mills NED 60+ M
Paul Tuson NED 50-60 M
Alan Durrant CEO 40-50 M
Gillian Davies Interim CFO 50-60 F
Nick Bravery CFO 50-60 M
Neil Dunkley MD 40-50 M
Mark Howard CCO 40-50 M
Name FCA Regulated Firm Financial Management Investment Management
Peter Mann X - X
Christopher Mills X - X
Paul Tuson X -
Alan Durrant X - X
Gillian Davies - X -
Nick Bravery X X -
Neil Dunkley X - -
Mark Howard X - -
Name Financial Planning - Clients Risk Management Listed Board
Peter Mann X - X
Christopher Mills - - X
Paul Tuson - X X
Alan Durrant - - X
Gillian Davies - X X
Nick Bravery - X X
Neil Dunkley X - -
Mark Howard X - -
Name Service Sector Acquisitions Business Development
Peter Mann X X X
Christopher Mills X X X
Paul Tuson - X X
Alan Durrant X X X
Gillian Davies - X X
Nick Bravery X X X
Neil Dunkley X X X
Mark Howard X X X

Principle 7 – Board evaluation

With effect from 2018 the Board will conduct an internal Board performance evaluation and annually thereafter. The criteria against which Board effectiveness is reviewed are:

  • Board composition
  • Board processes
  • Behaviours, including Executive Director performance and contribution
  • Activities

The Chairman leads the Board evaluation process and where considered appropriate, will use external advisers to ensure the process is robust and fit for purpose. The non-executive Directors meet annually to consider each Executive Directors contribution and performance. The Chairman provides individual feedback to each Executive Director.

The Executive Directors meet annually to consider the contribution of the non-executive Directors. The CEO will provide feedback on an individual basis.

The Group regularly considers succession planning for the senior management of the Group including the Directors. Potential Board candidates are reviewed by a majority of existing Directors to determine an appropriate match to the skills and experience matrix set out above. Advice on all potential Board appointments is sought from the Group’s nominated adviser.

Principle 8 - Corporate culture

Ethics Policy

The Group Board has approved an Ethics Policy and is committed to ethical business conduct and expects the highest standards of integrity to be followed by the Directors and all employees.

Our values

  • Accessible
  • Trust
  • Value
  • Wisdom
  • Professional
  • Knowledge
  • Respect

These words represent the values which are at the heart of the business. They guide the Group’s principles and how it interacts with customers, employees, advisers, suppliers and investors. This philosophy is reflected in the culture of the Group to help achieve its mission.

Principle 9 – Governance structure

Corporate Governance Charter

The Group has an established and detailed Corporate Governance Charter. The Board reviews this Charter from time to time or as regulation requires or as the Group grows in scale and complexity.

The OECD defines corporate governance as follows:

“Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined. Good corporate governance should provide proper incentives for the board and management to pursue objectives that are in the interests of the company and its shareholders and should facilitate effective monitoring.”

Roles and responsibilities

  • Chairman
    The Chairman is responsible for the leadership and effectiveness of the Board. Together with the Chief Executive Officer, the Chairman sets the Board’s agenda and ensures that all items receive appropriate consideration especially strategic issues. The Chairman promotes the culture and values of the Group. The Chairman is the official spokesperson for the Board.
  • Chief Executive Officer
    The CEO is responsible for the running of the business and the implementation of Board decisions and policies. The CEO is also responsible for Investor Relations.
  • Chief Financial Officer
    The CFO is responsible for the Group’s finances including budgets and forecasts.
  • Non-executive Directors
    The NEDs are appointed to provide oversight, independence and constructive challenge to the Executive Directors. They also provide strategic advice and guidance.
  • Managing Director, Financial Planning
    The MD is responsible for the implementation of Board decisions and policies in the Financial Planning division.
  • Chief Commercial Officer
    The CCO is responsible for identifying and recommending appropriate acquisition targets to the Board.

Matters reserved for the Board

The following matters are reserved for the Board:

  • The alteration of its memorandum or articles of association or the adoption of any articles or the passing of any resolutions inconsistent with them.
  • Except in the case of a subsidiary undertaking issuing shares to the Company or its nominee, the variation of its authorised or issued share or loan capital or the creation or grant of any options or other rights to subscribe for shares or to convert into shares.
  • The alteration of the rights attaching to any of its shares.
  • The consolidation, subdivision or conversion of any of its shares.
  • The reduction of its share capital or reduction of any uncalled liability in respect of partly paid shares or the purchase or redemption of any of its shares.
  • The issue of debentures, securities convertible into shares, share warrants or options in respect of shares.
  • The issue of any additional Shares or share capital in the Company at a discount to their market value or otherwise than for full value.
  • The declaration or payment of a dividend, other than in accordance with the articles of association of the Company.
  • Unless required to do so by law doing or permitting anything to be done as a result of which the Company may be wound up (whether voluntarily or compulsorily).
  • The creation of a fixed or floating charge, lien (other than a lien arising by operation of law) or other encumbrance over all or part of its undertaking or assets, except to secure its indebtedness to its bankers for sums borrowed in the normal course of business.
  • Any agreement or arrangement concerning any of the foregoing.

Principle 10 - Stakeholder communication

The Board are committed to good communications with all stakeholders providing them with access to information to help them make informed decisions about the Group.

The Investor Information section of the Group’s website provides access to all required regulatory information. The Directors section provides further details of each Director and the Announcements section details all Group announcements in the last five years. The website also gives information about the Group’s advisers and significant shareholders and Director’s interests. Results of shareholder meetings and votes can also be found here.