Corporate Governance

STATEMENT OF COMPLIANCE WITH THE 2018 QCA CORPORATE GOVERNANCE CODE

Chairman’s Introduction
High standards of corporate governance are a key priority for the Board of GYG plc and, in line with the London Stock Exchange’s recent changes to the AIM Rules requiring all AIM-listed companies to adopt and comply with a recognised corporate governance code, the Board has adopted the 2018 Quoted Companies Alliance Corporate Governance Code (the “QCA Code”) as the basis of the Group’s governance framework. It is the responsibility of the Board to ensure that the Group is managed for the long-term benefit of all shareholders and stakeholders, with effective and efficient decision-making. Corporate governance is an important aspect of this, reducing risk and adding value to our business.

The Directors acknowledge the importance of the ten principles set out in the QCA Code and, in this section, the Group’s current approach to complying with those principles is set out. Further information on our compliance with the QCA Code will be provided in our next annual report.

Stephen Murphy
Non-Executive Chairman


QCA PRINCIPLES

DELIVER GROWTH

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

GYG plc has a long-established reputation in European marine supply and the global superyacht refit segment and now seeks to grow its market share in new build by developing long term relationships with leading new build ship yards across Europe and enhancing its international footprint in the refit sector.

The Board has established a strategy and business model which seek to promote long-term value for shareholders and has identified the following key areas of operation to focus on improving on the Group’s performance going forwards;

  • Leverage market leading position across all segments
  • Enter into new agreements with shipyards to create long term trading partnerships
  • Generate further Operational efficiencies and synergies
  • Expanding the marine supply offering
  • Acquisition-led growth where and when appropriate to expand the business model

A fuller explanation of how the strategy and business model are executed is contained in both the Admission Document and the 2017 Annual Report and Financial Statements. Both documents are available to download in full from this website.

2. Seek to understand and meet shareholder needs and expectations

The Company recognises the importance of engaging with its shareholders and reports formally to them when its full-year and half-year results are published. At the same time, Executive Directors present the results to institutional investors, analysts and the media. The Non-Executive Directors are available to discuss any matter stakeholders might wish to raise, and the Chairman and independent Non-Executive Director attend meetings with investors and analysts as required.

At every Board meeting, the Chief Executive Officer provides a summary of the content of any engagement the Executive Directors have had with investors to ensure that major shareholders’ views are communicated to the Board as a whole. The Board is also provided with brokers’ and analysts’ reports when published. This process enables the Chairman and the other Non-Executive Director to be kept informed of major shareholders’ opinions on strategy and governance, and for them to understand any issues or concerns.

Shareholders are encouraged to attend the annual general meeting at which the Group’s activities and results are considered, and questions answered by the Directors. General information about the Group is also available on the Company’s website. This includes an overview of activities of the Group and details of all recent Company announcements.

The Company maintains a dedicated email address and telephone number which investors may use to contact the Company which, together with the Company’s address, are prominently displayed on the Company’s website. Investors may also make contact requests through the Company’s Nominated Advisor, Zeus Capital Limited.

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

In addition to its shareholders, the Company believes its main stakeholder groups are its employees, clients, suppliers and relevant Statutory Authorities in its areas of operation.

The Group recognises the increasing importance of corporate social responsibility and endeavours to take it into account when operating its business in the interests of its stakeholders, including its investors, employees, customers, suppliers, business partners and the communities where it conducts its activities.

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.

The operation of a profitable business is a priority and that means investing for growth as well as providing returns to its shareholders. 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’, and also facilitate the setting of goals to achieve continuous improvement.

The Group aims to conduct its business with integrity, respecting the different cultures and the dignity and rights of individuals in the countries where it operates. The Group supports the UN Universal Declaration of Human Rights and recognises the obligation to promote universal respect for and observance of human rights and fundamental freedoms for all, without distinction as to race, religion, gender, language or disability.

The Group has the aim that communities in which it operates should benefit directly from its presence through the wealth and jobs created, and the investment of its time and money in the community. The Group organises an annual charity golf tournament, known as “The Pinmar Golf”, which has now been running for 29 years. The funds raised are distributed through The Pinmar Golf Charity Fund mainly to smaller local charities, and often to those organisations providing support to children. Donations are also made to industry-related causes such as marine conservation and, most recently, in respect of hurricane relief in the Caribbean. Further details of The Pinmar Golf event may be found here.

Feedback from employees is received from employee representatives who meet with management on a regular basis to discuss business-related issues. As a result, the Group has planned additional training in a number of areas for its employees, and additional capital expenditure on certain items of equipment has been made.

The Group encourages feedback from its customers through engagement with individual customers and relevant advisors throughout a project. As a result, our quotes now include a schedule which clarifies the inclusions and exclusions of our scope of work so that the client has a clear understanding of the agreed services.

Health and safety

The Directors are committed to ensuring the highest standards of health and safety, both for employees and for the communities within which the Group operates. The Group’s Chief Operating Officer is the person with overall responsibility for health and safety matters.

The Group seeks to meet legal requirements aimed at providing a healthy and secure working environment to all employees and understands that successful health and safety management involves integrating sound principles and practice into its day-to-day management arrangements and requires the collaborative effort of all employees. All employees are positively encouraged to be involved in consultation and communication on health and safety matters that affect their work.

Environment

The Directors are committed to minimising the impact of the Group’s operations on the environment. The Group recognises that its business activities have an influence on the local, regional and global environment and accepts that it has a duty to carry these out in an environmentally responsible manner. It is the Group’s policy to endeavour to meet relevant legal requirements and codes of practice on environmental issues so as to ensure that any adverse effects on the environment are minimised. It strives to provide and maintain safe and healthy working conditions, and to keep its entire staff informed of its environmental policy whilst encouraging them to consider environmental issues as an everyday part of their role.

The Coating division has recently obtained the new ISO 14001:2015 certificate, confirming the Company’s continued leadership in our industry with regard to environmental matters. This international standard is used by large and small organisations across the world and is an excellent framework to assist with the implementation of an environmental management system which helps organisations reduce their environmental impact whilst growing their business.

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, maintains a system of internal controls to safeguard shareholders’ investment and the Group’s assets, and has established a continuous process for identifying, evaluating and managing the significant risks the Group faces.

Further details of the principal risks and how they are mitigated are contained in the 2017 Annual Report and Financial Statements. The Company’s internal control and risk management process is also contained in the 2017 Annual Report and Financial Statements.

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 the Executive Directors meet 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.

MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK

5. Maintain the Board as a well-functioning, balanced team led by the chair

The Chairman, Stephen Murphy, 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 the other Non-Executive Director. The Company is satisfied that the current Board is sufficiently resourced to discharge its governance obligations on behalf of all stakeholders and will consider the requirement for additional Non- Executive Directors as the Company fulfils its growth objectives.

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 the Company Secretary, who are responsible for ensuring that the Board procedures are followed, and that applicable rules and regulations are complied with. In addition, procedures are in place to enable the Directors to obtain independent professional advice in the furtherance of their duties, if necessary, at the Company’s expense.

The Board is responsible to the shareholders and sets the Group’s strategy for achieving long-term success. It is ultimately responsible for the management, governance, controls, risk management, direction and performance of the Group. Further details of the composition of the Board, time commitment required from the Directors and the Directors’ attendance records for the year ended 31 December 2017 at Board and Committee meetings are set out in the 2017 Annual Report and Financial Statements.

6. Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities

The Board currently comprises three Executive and two Non-Executive Directors with an appropriate balance of sector, financial and public market skills and experience. The skills and experience of the Board are set out in their biographical details. The experience and knowledge of each of the Directors gives them the ability to constructively challenge the strategy and to scrutinise performance. The Board also has access to external advisors where necessary.

Throughout their period in office the Directors are continually updated on the Group’s business, the industry and competitive environment in which it operates, corporate social responsibility matters and other changes affecting the Group by written briefings and meetings with senior executives. They are reminded by the Company Secretary of these duties and are also updated on changes to the legal and governance requirements of the Group, and upon themselves as Directors, on an ongoing and timely basis.

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

The Board is committed to a formal annual Board evaluation and this will be conducted by way of a questionnaire and Chairman interviews during 2018, the current Board only having been formed in July 2017. The outcome of this evaluation will be published in the 2018 Annual Report and Financial Statements. The performance of the Board, its Committees and that of the individual Directors is, however, monitored by the Chairman on an ongoing basis.

The Nomination Committee is responsible for succession planning of the executive leadership team and makes recommendations to the Board for the re-appointment of any Non-Executive Directors if and when necessary. Succession planning is reviewed on an ongoing basis alongside the capability of the senior management and Directors.

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

The Group adopts a policy of equal opportunities in the recruitment and engagement of staff as well as during the course of their employment. It endeavours to promote the best use of its human resources on the basis of individual skills and experience matched against those required for the work to be performed.

The Group recognises the importance of investing in its employees and, as such, the Group provides opportunities for training and personal development and encourages the involvement of employees in the planning and direction of their work. These values are applied regardless of age, race, religion, gender, sexual orientation or disability.

The Group recognises that commercial success depends on the full commitment of all its employees and commits to respecting their human rights, to provide them with favourable working conditions that are free from unnecessary risk and to maintain fair and competitive terms and conditions of service at all times.

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

The Chairman, Stephen Murphy, 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 the other Non-Executive Director. Remy Millott, as 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.

There is a formal schedule of matters reserved for decision by the Board in place which enables the Board to provide leadership and ensure effectiveness. Such matters include business strategy and management, financial reporting (including the approval of the annual budget), Group policies, corporate governance matters, major capital expenditure projects, materials acquisitions and divestments and the establishment and monitoring of internal controls.

The appropriateness of the Board’s composition and corporate governance structures are reviewed through the ongoing Board evaluation process and on an ad hoc basis by the Chairman together with the other Directors, and these will evolve in parallel with the Group’s objectives, strategy and business model as the Group develops.

Board Committees

The Board has established Audit, Nomination and Remuneration Committees.

The Audit Committee has Richard King as chairman, and has primary responsibility for monitoring the quality of internal controls, ensuring that the financial performance of the Group is properly measured and reported on, and for reviewing reports from the Group’s auditors relating to the Group’s accounting and internal controls, in all cases having due regard to the interests of shareholders. The Audit Committee meets at least twice a year. Stephen Murphy is the other member of the Audit Committee. A report on the duties of the Audit Committee and how it discharges its responsibilities is provided in the 2017 Annual Report and Financial Statements.

The Remuneration Committee has Stephen Murphy as chairman, and reviews the performance of the Executive Directors, and determines their terms and conditions of service, including their remuneration and the grant of options, having due regard to the interests of shareholders. The Remuneration Committee meets at least twice a year. Richard King is the other member of the Remuneration Committee. Details of the activities and responsibilities of the Remuneration Committee are set out in the 2017 Annual Report and Financial Statements.

The Nomination Committee has Stephen Murphy as chairman, and identifies and nominates, for the approval of the Board, candidates to fill board vacancies as and when they arise. The Nomination Committee meets at least once a year. Richard King is the other member of the Nomination Committee. Details of the activities and responsibilities of the Nomination Committee are set out in the 2017 Annual Report and Financial Statements.

The terms of reference of each Committee can be downloaded below:

BUILD TRUST

10. Communicate how the Company is governed and is performing

On Admission on 5 July 2017, the Board established a Nomination Committee, an Audit Committee and a Remuneration Committee. The work of each of the Board Committees undertaken since Admission to the end of 31 December 2017 is detailed in the 2017 Annual Report and Financial Statements. The work undertaken by each of the Board Committees during 2018 will be reported on in the 2018 Annual Report and Financial Statements.

The results of the proxy votes received in relation to the 2018 AGM are available on the Company’s website.

The Board maintains a healthy dialogue with all of its stakeholders. Throughout the course of the financial year the Board communicates with shareholders directly and also uses an external service provider to canvass shareholders on any views, concerns and expectations they may wish to express indirectly.

Last Reviewed: 31 August 2018


Share Dealing Code

The Directors understand the importance of complying with the AIM Rules and applicable legislation relating to dealings by directors and certain other employees of the Group in the Company’s shares and has established a share dealing code. The Directors believe that the share dealing code adopted by the Board is appropriate for a company quoted on AIM and is compliant with Rule 21 of the AIM Rules relating to dealing policies. The Company and the Directors have taken all reasonable steps to ensure compliance by the Company’s directors and relevant employees.

The Company is subject to the City Code on Takeovers and Mergers.


Anti-Bribery Policy

The Group believes that it has robust policies and procedures for combating bribery and corruption. Please click on the link below to view the Group’s Anti-Bribery Policy: