M Winkworth PLC Corporate governance and current constitutional documents

 

M Winkworth plc is subject to the City Code on Takeovers and Mergers.


Corporate Governance

The Directors acknowledge the importance of Corporate Governance and the Board has decided to apply the new and fully updated QCA Corporate Governance Code that the Quoted Companies Alliance released towards the end of April, 2018 and the principles set out therein.

Further detail about how the principles are applied to ensure that the company is managed in an efficient, effective and entrepreneurial manner for the benefit of all shareholders over the longer term is provided in the Chairman’s Statement and accompanying tables set out below.


Board Committees

The Board has delegated certain responsibilities to Board Committees, as outlined below.

Audit Committee

The audit committee is chaired by John Nicol and includes Lawrence Alkin. The audit committee is responsible for providing formal and transparent arrangements for considering how to apply suitable financial reporting and internal control principles having regard to good corporate governance and maintaining an appropriate relationship with the Group’s auditors.

Remuneration Committee

The remuneration committee is chaired by Lawrence Alkin and includes John Nicol. The remuneration committee is responsible for establishing a formal and transparent procedure for developing policy on executive remuneration and for setting the remuneration packages of individual Directors. This includes agreeing with the Board the framework for remuneration of the Chief Executive, all other executive Directors, the Company Secretary and such other members of the executive management of the Company.

The committee is also responsible for determining the total individual remuneration packages of each Director including, where appropriate, bonuses, incentive payments and share options.

Nominations Committee

Given its relatively small size, the Board as a whole fulfils the responsibilities of a Nominations Committee with the chairman and CEO leading on the board nomination and appointment process.

Copies of the terms of Reference of the Committees are available from the Company Secretary on request.

Share Dealing Code

Winkworth has adopted and will operate a share dealing code for Directors and applicable employees in order to ensure compliance with Rule 21 of the AIM Rules and will take proper steps to ensure compliance by the Directors and those employees.

Articles of Association and Memorandum of Association

Click below to view M Winkworth PLC’s Articles of Association and Memorandum of Association in pdf format.

M Winkworth PLC Articles of Association

M Winkworth PLC Memorandum of Association


THE QUOTED COMPANY ALLIANCE (QCA) CODE

The Directors recognise the importance of good corporate governance and have chosen to apply the Quoted Companies Alliance Corporate Governance Code (the ‘QCA Code’). The QCA Code was developed by the QCA in consultation with a number of significant institutional small company investors, as an alternative corporate governance code applicable to AIM companies. The underlying principle of the QCA Code is that “the purpose of good corporate governance is to ensure that the company is managed in an efficient, effective and entrepreneurial manner for the benefit of all shareholders over the longer term”.


THE CHAIRMAN’S STATEMENT ON CORPORATE GOVERNANCE

As Chairman, it remains my responsibility, working with my fellow board colleagues, to ensure that good standards of corporate governance are embraced throughout M Winkworth PLC (“Winkworth”, the “Company” or the “Group”) and its franchised offices.

As a board, we set clear expectations concerning the Group’s culture, values and behaviour. Every new starter at Winkworth attends an induction course covering not only our vision and values, but also explaining how we work with our customers and franchisees.

We firmly believe that this approach is key to helping us drive our premium high-street estate agency franchise. Our offering is based on local ownership and experienced staff with strong local knowledge supported by the centralised infrastructure, policies, processes, training and services provided by us as franchisor. Within this framework, our franchisees are encouraged to be entrepreneurial and thereby deliver long-term value for our shareholders.

Further details about the way in which the Company addresses the key governance principles as defined in the QCA Code are shown in the table below. Further information on compliance with the QCA Code will be provided in our next annual report.

Simon Agace, Non-executive Chairman

This disclosure was last reviewed and updated on 26 September 2018


THE PRINCIPLES OF THE QUOTED COMPANY ALLIANCE (QCA) CODE

DELIVER GROWTH

QCA Code Principle Application (as set out by QCA) What we do and why
1. Establish a 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.

As set out in the Chairman’s and CEO’s Statements in the Company’s most recent Annual Report and Accounts, Winkworth looks to grow its franchise network and add like-minded entrepreneurial franchisees and offices to the network. Not, however, through growth at any cost, as new franchisees need to adhere to the Winkworth brand values. We also have a conservative approach to financing expansion.

Winkworth plans to remain competitive in the current market by operating a model that emphasises our premium, pro-active service through :-

  • Good, experienced agents with strong local area knowledge; and
  • A visible high street presence,

Supported by strong on-line, digital capabilities :-

  • allowing clients flexibility on how they choose to interact with Winkworth; and
  • helping offices to be more efficient
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.

Information for shareholders (and other interested parties) is provided on our website, www.winkworthplc.com, including the preliminary and half-year results announcements to the City.

We have an on-going programme of individual meetings with institutional shareholders and analysts following our interim and full-year results announcements. The CEO and the CFO use these meetings to update our investor audience on Winkworth’s strategy and performance. Additional meetings are arranged periodically. Board members receive copies of feedback reports from these meetings, keeping them in touch with shareholder opinion.

The Board recognises the AGM as an important opportunity to meet private shareholders. The Directors are available to listen to the views of shareholders informally immediately following the AGM. After the AGM has finished, the results are posted on the Company News page within the investors section of www.winkworthplc.com.

Should voting decisions not be in line with the company’s expectations, the Board will engage with those shareholders to understand and address any issues. The Company Secretary is the main point of contact for such matters.

3. Take into account 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.

Winkworth is committed to building a sustainable, long-term business, not just for its shareholders but for all its stakeholders including members of staff, franchisees and the communities they operate in, customers, suppliers, regulators, industry bodies and creditors.

The ways in which the Company receives feedback from shareholders is detailed under Principle 2 (above).

Dependent on the nature of the stakeholder relationship, feedback on Winkworth is gathered through a combination of meetings, conversations, online reviews and social media.

Meetings are held with representative groups of franchisees to get their input on key strategic and operational issues.

Winkworth supports best practice in estate agency through involvement with regulatory bodies such as NAEA and NALS.

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 principal risks facing Winkworth are detailed on pages 5 & 6 of our Report and Accounts for the year ended 31 December 2017 which sets out the risks to the business, and how we seek to mitigate them.

The Board considers risk to the business at every Board meeting. The Company formally reviews and documents the principal risks to the business at least annually.

Both the Board and senior managers are responsible for reviewing and evaluating risk and the Executive Directors meet at least monthly to review ongoing trading performance, discuss budgets and forecasts and new risks associated with ongoing trading.

MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK

QCA Code Principle Application (as set out by QCA) What we do and why
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, nomination) that have the necessary skills and knowledge to discharge their duties and responsibilities effectively.

Directors must commit the time necessary to fulfill their roles.

The Company is controlled by the Board of Directors. Simon Agace, the Non-executive Chairman, is responsible for the running of the Board and Dominic Agace, the CEO, has executive responsibility for running the business and implementing the strategy.

All Directors receive regular and timely information on the Group’s operational and financial performance. Relevant information is circulated to the Directors in advance of meetings. All Directors have direct access to the advice and services of the Company Secretary and, if necessary, are able to take independent professional advice on the furtherance of their duties at the Company’s expense.

The Board comprises two Executive Directors and three Non-executive Directors. The Non-executive Directors are all professionally qualified and experienced in Winkworth’s areas of operation. Whilst Lawrence Alkin owns more than 3% of the Ordinary Shares of M. Winkworth PLC, we consider him to be independent, and all the Non-executives Directors are considered to bring an independent judgement to bear notwithstanding their relationships, varying lengths of service, and investments in M Winkworth PLC.

The Board is supported by the Audit and Remuneration Committees. Given the relatively small size of the Board, this as a whole fulfils the responsibilities of a Nominations Committee with the chairman and CEO leading on the board nomination and appointment process.

The Board has a Schedule of Matters Reserved to it which, together with the Committee Terms of Reference, are available from the Company Secretary on request.

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.

The Non-executives are professionally qualified and have considerable property, estate agency and franchise experience and expertise.

Andrew Nicol is a chartered accountant with broad finance and operational experience. Dominic Agace has grown through the ranks of the business and has been CEO of Winkworth since flotation.

The chairman and CEO consider the balance of skills, knowledge and experience on the board and make appropriate recommendations for consideration by the whole board.

Where new Board appointments are considered, a search is conducted, and the board examines every candidate on the basis of their experience and suitability. Appointments are made on the basis of merit alone. The Board also considers succession planning.

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.

The Board carries out an evaluation of its performance annually, taking into account the Financial Reporting Council’s Guidance on Board Effectiveness.

All Directors undergo a performance evaluation before being proposed for re-election to ensure that their performance is and continues to be effective, that, where appropriate, they maintain their independence, and that they are demonstrating continued commitment to the role.

Appraisals are carried out each year for all Executive Directors.

The Company Secretary and General Counsel support the Chairman in addressing the training and development needs of Directors.

All continuing Directors stand for re-election on a bi-annual basis.

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.

With our people-based ethos and as a premium, customer-focussed business dependent on its reputation, we understand that our success depends on everyone working under the Winkworth brand doing so with respect, loyalty and pride. All our offices need to ensure we exceed our customers’ expectations by delivering the highest quality service at all times so that our customers not only return, but also share their experience with other potential customers.

With our franchised offices generating a significant percentage of our revenue, we invest in our franchisees and their staff, providing training and support for them. Through induction, staff joining the network learn about the Group’s heritage, its culture, and the key role they play in continuing to enhance its reputation, both locally and more generally.

We encourage customer feedback, both directly to offices and via online review platforms and social media. Our complaints procedure is run by Mr Hugh Dunsmore-Hardy, previously CEO of NAEA www.winkworth.co.uk/about-winkworth/client-relations

Clear statements of behaviour are issued by the board and include anti-bribery and anti-money laundering. The board expects all Winkworth representatives to behave honestly, professionally, fairly and with integrity at all times.

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.

Simon Agace, as Chairman, is responsible for leading an effective board, fostering a good corporate governance culture and ensuring appropriate strategic focus and direction.

The CEO, Dominic Agace, has overall responsibility for proposing the strategic focus to the board, implementing the strategy once it has been approved and managing the Group’s business.

The non-executive directors are willing to engage with shareholders should they have a concern that is not resolved through the normal channels.

Both executive directors have particular roles and areas of responsibility in the running of the business with Dominic Agace responsible for operations, and Andrew Nicol, CFO, responsible for finance and developing the Group’s infrastructure. As such, they continually engage with the Group’s stakeholders.

The Board is supported by Audit and Remuneration Committees.

The board has a formal written schedule of matters reserved for its review and approval.

BUILD TRUST

QCA Code Principle Application (as set out by QCA) What we do and why
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 structure 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 Company encourages two-way communication with both institutional and private investors and responds quickly to all queries received.

The Board recognizes the AGM as an important opportunity to meet private shareholders. The Directors are available to listen to the views of shareholders informally immediately following the AGM.

The CEO and CFO talk regularly with the Group’s major shareholders and ensure that their views are communicated fully to the Board.

Announcements covering all material events are released via a regulatory news service in compliance with the AIM Rules for Companies and a copy of the announcement is posted on the Company News page within the investors section of www.winkworthplc.com. In addition, as soon as practicable after any general meeting has concluded, the results of the meeting are released and a copy of the announcement is posted on the Company News page.

The investor relations section of www.winkworthplc.com also includes historical annual reports and other governance-related material, including notices of all general meetings over the last five years.