The Board is responsible for the governance of the Company, governance being the systems and procedures by which the Company is directed and controlled. A prescribed set of rules does not itself determine good governance or stewardship of a company and, in fulfilling their responsibilities, the Directors believe that they govern the Company in the best interests of the shareholders, whilst having due regard to the interests of other 'stakeholders' in the Group including, in particular, customers, employees and creditors.
The three principal standing committees of the Board are the Audit, Remuneration and Executive Committees.
The Audit Committee comprises John Christmas and Ian Martin and is chaired by John Christmas. The Company's Auditor is normally in attendance. The Audit Committee reviews the external audit activities, monitors compliance with statutory requirements for financial reporting and reviews the half year and annual financial statements before they are presented to the Board for approval. The Audit Committee also keeps under review the scope and results of the audit and its cost effectiveness and the independence and objectivity of the Auditor and the effectiveness of the Group's internal control systems.
terms of reference
The Remuneration Committee comprises Ian Martin and John Christmas and is chaired by Ian Martin. Although not a member of the Committee, on occasions, and for matters not related to his own remuneration package, the Committee would normally consult the Chief Executive Officer, Mark Hardy, on proposals relating to the remuneration of members of the Group's senior management team, and they who occasionally attend meetings of the Committee by invitation. The Committee, on behalf of the Board, determines all elements of the remuneration packages of the executive Directors and would also approve any compensation arrangements resulting from the termination by the Company of a Director's service contract. The Committee also approves the grant of share options.
terms of reference
The Executive Committee comprises Mark Hardy (CEO) and Jon Hall (COO) and is chaired by Mark Hardy. Although not a member of the Committee, Natasha Rourke, Company Secretary would normally attend being the Group’s Financial Controller. The Executive Committee is responsible for the development of strategy, annual budgets and operating plans linked to the management and control of the day-to-day operations of the Group.
The Executive Committee is also responsible for monitoring key commercial opportunities and relationships, day to day stakeholder engagement and for ensuring that the Board policies are carried out on a Group-wide basis.
terms of reference
Principles and Approach
As an AIM listed company, the company is required to adopt a recognised corporate governance code and disclose any deviations from the chosen code. The Company has decided to adopt the Quoted Companies Alliance (“QCA”) code. High standards of Corporate Governance are a key priority of the Board and details of how the Company addresses key governance issues are set out in the Corporate Governance section of this website by reference to the 10 principles of Corporate Governance developed by the QCA.
1. Establish strategy and business model which promote long-term value for shareholders
The board must be able to express a shared view of the company’s purpose, business model and strategy. It should go beyond the simple description of products and corporate structures and set out how the company intends to deliver shareholder value in the medium to long-term. It should demonstrate that the delivery of long-term growth is underpinned by a clear set of values aimed at protecting the company from unnecessary risk and securing its long-term future.
The Company’s vision, together with its partners, is to create innovative data capture solutions that enhance business intelligence for our client base.
Touchstar’s mission is to deliver innovative products and solutions on a ‘turnkey’ basis, underpinned by an unparalleled attention to detail and customer-centred philosophy.
To achieve this, the company will focus on five key business strategies;
- Further penetrating existing markets by forging stronger customer and partner relationships, including alliances with independent software vendors and third party hardware manufacturers
- Expanding into new markets, where the company will offer compelling solutions set to meet specific sector / geographical customer requirements
- Inspiring Touchstar personnel and clients by building on the company’s track record of high-performance teamwork and collaboration
- Intensifying R&D innovation throughout the organisation and delivering unsurpassed quality and performance in the company’s products and solutions
- Maximising operational effectiveness with lean, world-class operations underpinned by an investment in personnel, appropriate technologies and business tools to improve functional performance across the Group
This strategy is intended to deliver long-term growth in shareholder value.
2. Seek to understand and meet shareholder needs and expectations
Directors must develop a good understanding of the needs and expectations of all elements of the company’s shareholder base.
The board must manage shareholders’ expectations and should seek to understand the motivations behind shareholder voting decisions.
The Board is aware of the need to protect the interests of minority shareholders and balancing these interests with those of the more substantial shareholders. At each board meeting, the Board is updated on the meetings and communications with the shareholders. Research notes by brokers are circulated to all Board members. Throughout the year the Chairman and Chief Executive Officer meet the large, institutional shareholders who hold the majority of the shares. Regular feedback is given to the Board following meetings with the shareholders from the financial PR advisors, and from the shareholders via the brokers. The Group recognises that whilst the majority of the shareholders are large institutions, attention should be paid to the private shareholders and the Investor Relations section of the Group website is regularly updated and amended with the aim being to provide good information to all shareholders, particularly private investors. In addition, the Company holds an open Q&A session at every Annual General Meeting.
3. Consider wider stakeholder and social responsibilities and their implications for long-term success
Long-term success relies upon good relations with a range of different stakeholder groups both internal (workforce) and external (suppliers, customers, regulators and others). The board needs to identify the company’s stakeholders and understand their needs, interests and expectations.
Where matters that relate to the company’s impact on society, the communities within which it operates or the environment have the potential to affect the company’s ability to deliver shareholder value over the medium to long-term, then those matters must be integrated into the company’s strategy and business model.
Feedback is an essential part of all control mechanisms. Systems need to be in place to solicit, consider and act on feedback from all stakeholder groups.
The Directors are aware of the impact the business activities have on the communities in which the company’s businesses operate.
The company’s responsibilities to stakeholders including staff, suppliers and customers and wider society are also recognised as important to the delivery of the Company’s business objectives.
The environmental impact of the company’s activities is carefully considered and the maintenance of high environmental standards applied. The Group is committed to reducing that impact as far as reasonably possible through full regulatory compliance, recycling programmes and other initiatives.
The Board has regard to the feedback of relevant stakeholders in its decision-making and the formulation of strategy.
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation
The board needs to ensure that the company’s risk management framework identifies and addresses all relevant risks in order to execute and deliver strategy; companies need to consider their extended business, including the company’s supply chain, from key suppliers to end-customer.
Setting strategy includes determining the extent of exposure to the identified risks that the company is able to bear and willing to take (risk tolerance and risk appetite).
The Board has an established Audit, Remuneration, and Executive Committees.
The Group receives regular feedback from its external auditors on the state of its risk management and internal controls. The Board does not consider it to be appropriate to have its own internal audit function at the present time, given the Group’s size and nature of its business.
The annual budget setting process examines all areas of the company’s operations both operationally and financially.
The Company has clear, documented procedures in place to assess and progress opportunities arising, whether for process improvement, product enhancement, new business or any other matter.
Maintain a Dynamic Management Framework:
5. Maintain the board as a well-functioning, balanced team led by the chair
The board members have a collective responsibility and legal obligation to promote the interests of the company and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the chair of the board.
The board (and any committees) should be provided with high quality information in a timely manner to facilitate proper assessment of the matters requiring a decision or insight.
The board should have an appropriate balance between executive and non-executive directors and should have at least two independent non-executive directors. Independence is a board judgement.
The board should be supported by committees (e.g. audit, remuneration, executive) that have the necessary skills and knowledge to discharge their duties and responsibilities effectively.
Directors must commit the time necessary to fulfil their roles.
The Board is comprised of a non-executive Chairman, two executive directors, and an independent non-executive director. The Board considers that of its two non-executive directors, only one is independent however they are considered independent in terms of character and judgement in how they conduct their roles, giving a balance between executive and non-executive directors.
The Chairman is responsible for leading the Board, facilitating the effective contribution of all members and ensuring that it operates effectively in the interests of the shareholders. The Chief Executive Officer is responsible for the leadership of the business and implementation of the strategy. The Company Secretary is responsible, on behalf of the Chairman, for ensuring that all Board and Committee meetings are conducted properly, that the Directors receive the appropriate information prior to the meeting, for ensuring that governance requirements are considered and implemented and for accurately recording each meeting. The Directors may have access to independent professional advice, where needed, at the Group’s expense.
The Board has an established Audit, Remuneration, and Executive Committee further details of which are contained in the Corporate Governance section.
A description of the roles of the Directors is included on the website. The directors are aware of, and committed to, the time requirements needed to fulfil their roles.
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
The board must have an appropriate balance of sector, financial and public markets skills and experience, as well as an appropriate balance of personal qualities and capabilities. The board should understand and challenge its own diversity, including gender balance, as part of its composition.
The board should not be dominated by one person or a group of people. Strong personal bonds can be important but can also divide a board.
As companies evolve, the mix of skills and experience required on the board will change, and board composition will need to evolve to reflect this change.
Directors who have been appointed to the Company have been chosen because of the skills and experience they offer. Full biographical details of all Directors are included within this website.
As noted above, the Company has put in place an Audit, Remuneration, and Executive committee. The responsibilities of each of these are set out in the corporate governance statement.
Formal terms of reference have been agreed for all Board Committees and can be found within the website.
Audit Committee terms of reference
Remuneration Committee terms of reference
Executive Committee terms of reference
The Board recognises that it needs to improve its diversity, and this will be addressed through succession planning and future appointments.
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
The board should regularly review the effectiveness of its performance as a unit, as well as that of its committees and the individual directors.
The board performance review may be carried out internally or, ideally, externally facilitated from time to time. The review should identify development or mentoring needs of individual directors or the wider senior management team.
It is healthy for membership of the board to be periodically refreshed. Succession planning is a vital task for boards. No member of the board should become indispensable.
At the highest level, the Board judges its own performance by reference to the Company’s progress against the targets set out in the Company’s strategic plan.
The Company undertakes regular monitoring of personal and corporate performance using agreed key performance indicators and detailed financial reports. Responsibility for assessing and monitoring the performance of the executive directors lies with the Chairman and the independent non-executive director.
The Board and the Remuneration Committee evaluate the Board performance, including but not limited to Board balance, Board skills and remuneration, to ensure that the Board is fit for purpose and is appropriate for the Group’s ongoing development and growth.
8. Promote a corporate culture that is based on ethical values and behaviours
The board should embody and promote a corporate culture that is based on sound ethical values and behaviours and use it as an asset and a source of competitive advantage.
The policy set by the board should be visible in the actions and decisions of the chief executive and the rest of the management team. Corporate values should guide the objectives and strategy of the company.
The culture should be visible in every aspect of the business, including recruitment, nominations, training and engagement. The performance and reward system should endorse the desired ethical behaviours across all levels of the company.
The corporate culture should be recognisable throughout the disclosures in the annual report, website and any other statements issued by the company.
The Board is committed to embodying and promoting a sound corporate culture and has endorsed various policies which require ethical behaviour of staff and relevant counterparties.
The Board and management conduct themselves ethically at all times and promote a culture in line with the standards set out on the website.
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board
The company should maintain governance structures and processes in line with its corporate culture and appropriate to its:
- size and complexity; and
- capacity, appetite and tolerance for risk.
The governance structures should evolve over time in parallel with its objectives, strategy and business model to reflect the development of the company.
The Company’s Corporate Governance Statement terms of reference explains the structures which are in place at Board and Committee level and how these interact, including the roles which individual Directors fulfil on the Board.
Beneath the Board, there is an operational governance framework which facilitates the effective management of the business by the executive directors. Further details are contained in the annual report and accounts, available on the website.
The organisational structure is kept under review and evolves as the needs of the business change as it grows and develops.
10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
A healthy dialogue should exist between the board and all of its stakeholders, including shareholders, to enable all interested parties to come to informed decisions about the company.
In particular, appropriate communication and reporting structures should exist between the board and all constituent parts of its shareholder base. This will assist:
- the communication of shareholders’ views to the board; and
- the shareholders’ understanding of the unique circumstances and constraints faced by the company.
It should be clear where these communication practices are described (annual report or website).
The Board attaches great importance to providing shareholders with clear and transparent information on the Group’s activities, strategy and financial position.
The communication between the Company and its shareholders are explained in the disclosure above against principle 2.
At the Annual General Meeting the Chairman issues a statement on current trading. All Directors are available following the meeting to answer questions and for informal discussions. The results of the proxy votes are announced at the meeting, including the abstentions.
The Board holds regular meetings with larger shareholders and regards the annual general meeting as a good opportunity to communicate directly with shareholders via an open question and answer session.
The Company lists contact details on its website and on all announcements released via RNS, should shareholders wish to communicate with the Board.
The Takeover Code
TouchStar plc, being a UK registered and traded company, is subject to The City Code on Takeovers and Mergers.