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Corporate Governance Code

Statement of Compliance with the QCA Corporate Governance Code

Chairman’s introduction

The Chairman is responsible for leading the Board in the setting and monitoring of its strategic objectives. The Chairman ensures that the executive directors and non-executive directors work as a team to fulfil the objectives of Mattioli Woods plc (“the Company”) and its subsidiaries (together “the Group”) and is responsible for organising the business of the Board, ensuring its effectiveness and setting its agenda.

The Board is committed to achieving high standards of corporate governance, integrity and business ethics. We recognise the need to ensure an effective governance framework is in place to give all our stakeholders confidence that the business is effectively run.

During the financial year ended 31 May 2018, as part of the Board’s commitment to developing the corporate governance and management structures of the Group to ensure they continue to meet the changing needs of the business, we undertook internal and external reviews of the effectiveness of the Board, its sub-committees and the Group's senior executive management framework. We created a new Senior Executive Team (“SETgo”) to execute the strategy determined by the Board, bringing together a senior team with responsibility for all our key operational areas.

As part of these changes, we reduced the size of the Board to eliminate duplication between the Board and SETgo, ensuring clearer lines of responsibility within the management team and creating a balanced Board of three executive directors and three non-executive directors. We believe these changes give the business the optimal management structure to secure continued growth.

Compliance with the QCA Corporate Governance Code

Under the AIM Rules all AIM companies are required to apply a recognised corporate governance code from 28 September 2018. In July 2018 the Board resolved to adopt the Quoted Companies Alliance (“QCA”) revised corporate governance code (“QCA Code”), which requires the Group to apply 10 principles focused on the pursuit of medium to long-term value for shareholders and also to publish certain related disclosures.

This report sets out in broad terms how we comply with the QCA Code at this point in time. We will provide updates as things change. A full copy of the QCA Code is available from the QCA website at www.theqca.com.

Principle 1: Establish a strategy and business model which promote long-term value for shareholders

Mattioli Woods is one of the UK’s leading providers of wealth management and employee benefit services, with total assets under management, administration and advice of over £8.7bn. We put our clients at the core of everything we do, with the objective of growing and preserving their assets, while giving them control and understanding of their overall financial position. At the same time, we are growing our business, both organically and by acquisition, to deliver strong, sustainable shareholder returns over the long term.

Our focus is on holistic planning and providing the highest levels of personal service, maintaining very close relationships with all our clients. Our key drivers are:

  • Maintaining long-term relationships and delivering great outcomes for our clients;
  • Proactively anticipating our clients’ needs to deliver on their expectations;
  • Investing in our people and technology to service greater business volumes at a lower cost;
  • Profitably sharing knowledge and ideas between ourselves and others;
  • The development of our market standing through the integrity and expertise of our people;
  • Extending our range of products and services, seeking to attract new clients both organically and via strategic acquisitions; and
  • Being proud of our charitable and community spirit, supporting staff and local and national charities.
We plan to continue developing complementary services around our core specialisms, blending advice, investment and asset management with product provision to progress as a modern financial services business aligned to our clients’ needs, producing great client outcomes and lowering clients’ costs.

Principle 2: Seek to understand and meet shareholder needs and expectations

The Company remains committed to listening and communicating openly with its shareholders to ensure that its strategy, business model and performance are clearly understood. Understanding what analysts and investors think about us, and in turn, helping these audiences understand our business, is a key part of driving our business forward and we actively seek dialogue with the market.

The principal methods of communication with private investors remain the Annual Report and financial statements, the Interim Report, the Annual General Meeting (“AGM”) and the Group’s website at www.mattioliwoods.com.

It is intended that all directors will attend each AGM and shareholders will be given the opportunity to ask questions at the AGM on 25 October 2018. In addition, the Chairman, Chief Executive Officer and Chief Financial Officer welcome dialogue with individual shareholders to understand their views and feed these back to the Board.

The Directors actively seek to build relationships with institutional shareholders. Shareholder relations are managed primarily by the Chief Executive Officer, Chief Financial Officer, Group Managing Director and Chief Investment Officer, who make presentations to institutional shareholders and analysts each year immediately following the release of the annual and interim results. In addition, the Directors attend investor conferences and ad hoc meetings with institutional shareholders as requested.

The Board is kept informed of the views and concerns of major shareholders by briefings from the Chief Financial Officer. Any significant investment reports from brokers or analysts are also circulated to the Board. The Non-Executive Chairman is available to meet with major shareholders if required to discuss issues of importance to them.

Details of the Company’s major shareholders can be found here:
https://www.mattioliwoods.com/about/shareholder-information

Shareholders who wish to contact the Company can do so here:
https://www.mattioliwoods.com/contact

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

In addition to its shareholders, the Group believes its main stakeholders are its clients, employees, suppliers and relevant statutory authorities. Engaging with our stakeholders strengthens our relationships and helps us make better business decisions to deliver on our commitments. The Board seeks wider stakeholder feedback to stay abreast of the issues that matter most to them and our business, and to enable the Board to understand and consider these issues in decision making. The Group encourages feedback from clients through engagement with individual clients and the relevant consultants and administrators.

Our employees are one of our most important stakeholder groups and the Board therefore closely monitors and reviews the results of employee surveys as well as other feedback it receives to ensure alignment of interests.

The Group believes that having empowered and responsible employees who display sound judgment and awareness of the consequences of their decisions or actions, and who act in an ethical and responsible way, is key to the success of the business. We continue to offer our qualifying employees free shares in Mattioli Woods, matching employee contributions through our share incentive plan and make use of our apprenticeship levy to train existing and new staff in different areas of the business.

The Group continues to create opportunities for young people through both its Financial Services Development scheme and apprenticeship recruitment, winning Apprenticeship Employer of the Year at the 2017 Leicester Apprenticeship Hub Graduation Ceremony.

To deliver strong, sustainable shareholder returns over the long term the operation of a profitable business is a priority and that means investing for growth. To achieve this, the Group recognises that it needs to operate in a sustainable manner and therefore has adopted core principles to its business operations which provide a framework for both managing risk and maintaining its position as a good ‘corporate citizen’.

We are an equal opportunities employer and it is our policy to ensure that all job applicants and employees are treated fairly and on merit regardless of race, sex, marital/civil partnership status, age, disability, religious belief, pregnancy, maternity, gender reassignment or sexual orientation.

The Group aims to conduct its business with integrity and recognises the obligation to promote universal respect for and observance of human rights and fundamental freedoms for all. Mattioli Woods is committed to preventing modern slavery and human trafficking in all its activities, and to ensuring its supply chains are free from modern slavery and human trafficking. We welcomed the introduction of the Modern Slavery Act 2015 and publish a Modern Slavery and Human Trafficking Statement on our website. We have also developed policies, reviewed our due diligence processes for suppliers and provided training to staff.

We value our reputation for ethical behaviour and upholding the utmost integrity and we comply with the FCA’s clients’ best interests rule. We understand that in addition to the criminality of bribery and corruption, any such crime would also have an adverse effect on our reputation and integrity.

Mattioli Woods has a zero-tolerance approach to bribery and corruption and we ensure all our employees are adequately trained as to limit our exposure to these risks.

We believe that running a profitable and growing business, which creates jobs and contributes to the economic success of the areas in which it operates, is a good platform for good corporate social responsibility.

Mattioli Woods has a long-standing commitment to ensure our staff can engage with their local communities, playing a valuable role by forming innovative partnerships with other organisations and charities. This social awareness is present throughout the business, from our employees to our clients, our professional connections and the suppliers we use.

We have a high level of engagement within our local communities. Each year, we sponsor business, sports and community awards. Our business has benefited greatly from winning numerous awards and we feel it’s right to help other businesses reap the rewards of such accolades. In addition, we sponsor a variety of local clubs, business and sports related events across the country. We believe this brings many benefits to the local community and beyond.

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation

The Board has overall responsibility for the Group’s internal control systems and for monitoring their effectiveness. The Board, with the assistance of the Audit Committee and the Risk and Compliance Committee, maintains a system of internal controls to safeguard shareholders’ investment and the Group’s assets, and has established a process for identifying, evaluating and managing the significant risks the Group faces.

The Risk and Compliance Committee is principally responsible for monitoring identified risks and the effectiveness of mitigating action, keeping risk assessment processes under review, reviewing the impact of key regulatory changes on the Group, assessing material breaches of risk limits and regulations as well as reviewing client complaints.

Further details of the principal risks and how they are mitigated are contained in the 2018 Annual Report and Financial Statements, together with a summary of the Group’s internal control and risk management process.

The Board considers risk to the business on an ongoing basis and the Group formally reviews and documents the principal risks at least annually. Both the Board and senior management are responsible for reviewing and evaluating risk and SETgo meets on a regular basis to review ongoing trading performance, discuss budgets and forecasts and any new risks associated with ongoing trading, the outcome of which is reported to the Board.

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

The Chairman is responsible for the effectiveness of the Board, directing strategy and ensuring communication with shareholders. The Chief Executive Officer is responsible for overseeing the delivery of this strategy and the day-to-day management of the Group by the senior executive team.

To enable the Board to discharge its duties, all Directors receive appropriate and timely information. Briefing papers are distributed to all Directors in advance of Board and Committee meetings. All Directors have access to the advice and services of the Chief Financial Officer and Company Secretary, who is responsible for ensuring that the Board procedures are followed, and that applicable rules and regulations are complied with.

The Board is responsible to shareholders for the proper management of the Group and has a formal schedule of matters specifically reserved to it for decision. These include strategic planning, business acquisitions and disposals, authorisation of major capital expenditure and material contractual arrangements, setting policies for the conduct of business and approval of budgets and financial statements. Other matters are delegated to SETgo, supported by policies for reporting to the Board.

Further details of the composition of the Board, time commitment required from the Directors and the Directors’ attendance records for the year ended 31 May 2018 at Board and Committee meetings are set out in the 2018 Annual Report and Financial Statements.

Principle 6: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities

The Board comprises three executive and three independent non-executive directors with an appropriate balance of sector, financial and public market skills and experience. The skills and experience of the Directors are set out in their biographies here. The experience and knowledge of each of the Directors gives them the ability to constructively challenge the strategy and to scrutinise performance.

The Chairman ensures directors update their skills, knowledge and familiarity with the Group as required to fulfil their roles on the Board and its committees. Ongoing training is provided as necessary and includes updates from the Nominated Adviser and Company Secretary on changes to the AIM Rules, requirements under the Companies Acts and other regulatory matters. All directors have access to independent professional advice at the Company’s expense where they judge it necessary to discharge their duties.

The Nominations Committee is responsible for reviewing the size, structure and composition of the Board, establishing appropriate succession plans for the executive directors and other senior executives in the Group and for the nomination of candidates to fill Board vacancies where required. The Committee works in close consultation with the executive directors, with its main priorities being Board structure and management succession.

Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

During the financial year ended 31 May 2018 an external review of the Board’s effectiveness was undertaken by an independent third party. This involved one-to-one interviews with directors and a review of Board and Committee papers and minutes. The key points raised in the review were around board composition and succession planning.

In response, we reduced the size of our Board to eliminate duplication of documentation and discussion between the Board and SETgo, ensuring clearer lines of responsibility within the management team and creating a balanced Board of three executive directors and three non-executive directors.

Individual appraisal of each director’s performance is undertaken either by the Chief Executive Officer or Chairman each year and involves meetings with each director on a one-to-one basis. The non-executive directors, led by the senior independent director, carry out an appraisal of the performance of the Chairman and Chief Executive Officer.

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

We are a business built on the integrity and expertise of our people. As an Investors in People company we are committed to developing our people and building the capacity to deliver sustainable growth.

The Directors are dedicated to maintaining our culture of putting clients first, encouraging a collegiate approach and preserving our integrity. The remuneration arrangements of the Directors are, among other things, designed to support positive behaviours and a strong and appropriate conduct culture.

Our core values provide a framework for integrity, leading to responsible and ethical business practices. Structures for accountability from our administration and consultancy teams through to SETgo and the Group’s Board are clearly defined. The proper operation of the supporting processes and controls are reviewed by the Audit Committee and the Risk and Compliance Committee and take into account ethical considerations, including procedures for ‘whistle-blowing’.

We have a strong compliance culture, a focus on positive client outcomes and a business model that embraces FCA principles, including treating clients fairly.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the board

The Chairman is responsible for leadership of the Board, ensuring its effectiveness on all aspects of its role, setting its agenda and ensuring that the Directors receive accurate, timely and clear information. The Chairman also ensures effective communication with shareholders and facilitates the effective contribution of other non-executive directors. The Chief Executive Officer is responsible for the operational management of the Group and the implementation of Board strategy and policy. By dividing responsibilities in this way, no one individual has unfettered powers of decision making.

In preparing to adopt the QCA Code the Board considered whether the Group’s risk management framework identifies and addresses all relevant risks in order to execute and deliver strategy. One of the Board’s key objectives is to maintain governance structures and processes that are fit for purpose and support good decision making. Accordingly, in July 2018 the Board resolved to split the existing Audit, Risk and Compliance Committee into two separate committees with immediate effect: an Audit Committee and a separate Risk and Compliance Committee. The Group’s other governance arrangements remain unchanged.

The Board is responsible to shareholders for the proper management of the Group and has a formal schedule of matters specifically reserved to it for decision. These include strategic planning, business acquisitions and disposals, authorisation of major capital expenditure and material contractual arrangements, setting policies for the conduct of business and approval of budgets and financial statements. Other matters are delegated to SETgo, supported by policies for reporting to the Board.

The Board has delegated authority to four committees. The Chairman of each committee provides a report of any meeting of that committee at the next Board meeting. The Chairman of each committee is present at the Annual General Meeting to answer questions from shareholders. These committees are:

  • Risk and Compliance Committee
  • Audit Committee
  • Remuneration Committee
  • Nominations Committee

Risk and Compliance Committee


The Risk and Compliance Committee comprises Anne Gunther (Chairman), Carol Duncumb, Joanne Lake, Ian Mattioli as CEO and Mark Smith as Compliance Oversight Function. Senior managers and representatives from the internal audit, risk and compliance functions attend committee meetings as necessary.

The Risk and Compliance Committee is principally responsible for monitoring identified risks and the effectiveness of mitigating action, keeping risk assessment processes under review, reviewing the impact of key regulatory changes on the Group, assessing material breaches of risk limits and regulations as well as reviewing client complaints.

The committee met six times during the year ended 31 May 2018 (in conjunction with the now separate Audit Committee) with future meetings to be structured around the financial calendar of the Company.

Audit Committee

The Audit Committee comprises Anne Gunther (Chairman), Carol Duncumb and Joanne Lake. Anne Gunther is a Chartered Banker and the Board is satisfied that all members of the committee have recent and relevant financial experience. The Board believes the committee is independent, with all members being independent non-executive directors.

The key responsibilities of the Audit Committee are:

  • To review the Group’s accounting procedures and internal financial controls;
  • To review the reporting of financial and other information to the shareholders of the Company and to monitor the integrity of the financial statements;
  • To review the effectiveness of the external audit process and the independence and objectivity of the external auditors; and
  • To report to the Board on how it has discharged its responsibilities.

Committee meetings are normally attended by Chief Financial Officer and Chief Operating Officer and by representatives of the external auditors by way of invitation. The presence of other senior executives from the Group may be requested. The committee meets with representatives of the external auditors without management present at least once a year. A report on the duties of the Audit Committee and how it discharges its responsibilities is provided in the 2018 Annual Report and Financial Statements.

Remuneration Committee

The Remuneration Committee comprises Carol Duncumb (Chairman), Joanne Lake and Anne Gunther. The Committee meets not less than twice a year. It is responsible for determining and reviewing the Group’s policy on executive remuneration and other benefits and terms of employment, including performance related bonuses and share options. The Committee also administers the operation of the share option and share incentive schemes established by the Company.

The members of the Remuneration Committee have no personal interest in the outcome of their decisions and seek to serve the interests of shareholders to ensure the continuing success of the Company. The remuneration of the non-executive directors is determined by the Board itself. No director is permitted to participate in decisions concerning their own remuneration.

Details of the activities and responsibilities of the Remuneration Committee are set out in in the 2018 Annual Report and Financial Statements.

Nominations Committee

The Nominations Committee comprises Joanne Lake (Chairman), Carol Duncumb and Anne Gunther. The Committee is responsible for reviewing the size, structure and composition of the Board, establishing appropriate succession plans for the executive directors and other senior executives in the Group and for the nomination of candidates to fill Board vacancies where required. The Committee works in close consultation with the executive directors, with its main priorities being Board structure and management succession.

Details of the activities and responsibilities of the Nominations Committee are set out in the 2018 Annual Report and Financial Statements.

The terms of reference of each Committee can be downloaded at:
https://www.mattioliwoods.com/about/aim-rules

The Board is committed to achieving high standards of corporate governance and will continue to review the governance structure of the Company to ensure an effective governance framework is in place.

Principle 10: Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

The Company remains committed to listening and communicating openly with its shareholders to ensure that its strategy, business model and performance are clearly understood. The principal methods of communication with private and institutional investors remain the Annual Report and financial statements, the Interim Report, the AGM, the Group’s website and presentations to institutional shareholders and analysts.

Notices of AGMs are available on our website here:
https://www.mattioliwoods.com/about/shareholder-information

The Group’s performance and value to our shareholders are influenced by other stakeholders, principally our clients, suppliers, employees, relevant statutory authorities and our strategic partners. Our approach to all these parties is founded on the principle of open and honest dialogue, based on a mutual understanding of needs and objectives.

Relationships with our clients are managed on an individual basis through our client relationship managers and consultants. Employees have performance development reviews and employee forums also provide a communication route between employees and management, including SETgo. Mattioli Woods also participates in trade associations and industry groups, which give us access to client and supplier groups and decision makers in Government and other regulatory bodies. Mattioli Woods is a member of the Association of Member-directed Pension Schemes and the Quoted Companies Alliance.


Last updated: 28 September 2018