Statement of corporate governance

At Belvoir we recognise that high standards of corporate governance underpin our continuing success.

Introduction to governance

High standards of corporate governance continues to be a key priority for the Board of Belvoir Lettings.  We continually review the framework within which we operate and the processes implemented to ensure that they reflect the complexities of our business and, whilst acknowledging our size, are also capable of adding value as the business grows. 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.

The Board sets out the overall strategic direction for Belvoir, regularly reviews management performance and ensures that the Group has the right level of resources available to support our strategic goals. The Board is satisfied that the necessary controls and resources are in place such that these responsibilities can be properly addressed.

Within Belvoir we promote a culture of good governance in dealing with all key stakeholders: our franchisees, our employees, our customers and our shareholders. Our corporate governance structures and processes and how they have been applied throughout the year are reported upon in the annual report.

 

Mike Goddard
Chairman, Belvoir Lettings plc

The Board ensures that the Company adopts proper standards of corporate governance and that the principles of best practice as set out in the QCA Code. Set out below is a summary of how the Company is applying the key requirements of the Code.

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 QCA Code identifies ten principles to be followed in order for companies to deliver growth in long term shareholder value, encompassing and efficient, effective and dynamic management framework accompanied by good communication to promote confidence and trust.  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.  The 10 principles are grouped as follows:

SECTION ONE  DELIVER GROWTH

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

Principle 2      Seek to understand and meet shareholder needs and expectations

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

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

SECTION TWO  MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK

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

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

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

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

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

SECTION THREE  BUILD TRUST

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



Our business, Our business model and Our strategy are clearly set out in our Annual Report and on our website.

Our business 

Our business model 

Our strategy 

Keeping investors informed is an essential part of the Company’s corporate communications strategy and is achieved by means of an active investor relations programme.  The aim is to ensure that the Company’s business model, strategic goals and future prospects are clearly understood by the investment community.  The Company operates a high level of transparency with regards to its operations by providing consistent information across all channels of communication.  The Board places a high emphasis on shareholder engagement and, through an open and transparent dialogue with shareholders, aims to ensure that shareholders’ objectives and views on the Company’s performance are understood. 

The Company reports formally to shareholders when its preliminary and interim results are published. Our Chief Executive Officer and our Chief Financial Officer 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.  The Chairman makes himself available to major shareholders on request and periodically attends meetings with and gives presentations to investors and analysts as required.

The Chief Financial Officer reports to the Board on all investor engagement and circulates investor feedback following the preliminary and interim roadshows to ensure that shareholders’ views are communicated to the Board as a whole. The Board is also provided with the analyst’s reports when published. This process ensures that the Chairman and both Non-Executive Directors are kept informed of major shareholders’ opinions on strategy and governance, and for them to understand any issues or concerns.

All shareholders will receive at least 21 clear days’ notice of the Annual General Meeting, which is normally attended by all Directors. Shareholders are invited to ask questions during the meeting and to meet with Directors after the formal proceedings have ended. The Annual Report details our key shareholder engagements.

The Group’s corporate website aims to provide investors with the required information to fully understand the business, including the annual and interim report, and to potentially make an investment decision.  The website is regularly reviewed and updated to reflect new information.

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, Cantor Fitzgerald Limited.

Our main stakeholder groups as being our franchisees, employees, clients and shareholders.   The Group recognises the increasing importance of corporate social responsibility and endeavours to take it into account when operating our business in the interests of all stakeholders, including the communities in which we conduct our activities.  ‘Our business model’ identifies how the Company delivers value to key resources and relationships on which the business relies (franchisees, employees, customers, shareholders).  The ‘Our People’ section highlights how highly we view our franchisees and staff.

Franchisees.  Engagement with our franchisees is paramount to operating a successful and effective franchise network.  Franchisees participate in regional and national networking groups in order to share experiences, discuss business strategies and to give feedback to the franchisor.  All franchisees are supported by a business development manager and have access to senior managers within the Group with whom they can voice specific concerns and issues.

Employees.  The CEO of each business unit conducts two company meetings during the year sharing progress on company performance and giving employees the opportunity to ask questions.  In addition, employees have an annual appraisal meeting and a series of individual meetings with their line manager during the year.  Feedback from employees is a key part of the employee review process. 

Clients.  The Group takes the fair treatment of tenants very seriously.  Through our network of lettings agents, all our tenants have access to a property ombudsman, and all our franchisees are required to operate a client money protection scheme for tenant deposits.  Our Chief Executive Officer, Dorian Gonsalves, was a director on The Property Ombudsman until July 2018, and our Non-Executive Director, Michael Stoop, is currently Vice-Chairman of The Property Ombudsman.

Corporate Social Responsibility.  The Group believes that both the local and wider communities in which it operates should benefit from its presence.  Job creation and nurturing young talent is a key part of our responsibility as a local employer.  As such we have invested in training places for five apprenticeships over the past two years.  The Group organises a series of events to raise funds for its chosen charity.  These events are usually underpinned by a key team challenge; in 2017 this entailed a ‘5k tough mudder’ event and in 2018 nine members of staff raised over £3,000 for The Multiple Sclerosis Society taking on the Yorkshire three peak challenge.  In addition the Central Office enters a team into the annual Grantham swimarathon which raises funds for local charities and good causes. The Group also encourages its franchisees to undertake their own charity activities and each year the three most successful fundraisers win an award.

The Board has overall responsibility for the Group’s internal control systems and for monitoring their effectiveness. The Board, with the support 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.

Our approach to risk management is clearly set out in our Annual Report and on our website.

Risk management

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.  A comprehensive budgeting process is completed once a year with the full involvement of the senior management team.  This is reviewed and approved by the Board. The Group’s results, compared with the budget, are reported to the Board on a monthly basis.  In addition, the Operations Board, comprising the Executive Directors and the Managing Directors of each Group subsidiary, meets on a regular basis to review trading performance, discuss budgets and forecasts and any new risks associated with ongoing trading, the outcome of which is reported to the Board.

The Group maintains appropriate insurance cover in respect of actions taken against the Directors because of their roles, as well as against material loss or claims against the Group. The insured values and type of cover are comprehensively reviewed on a periodic basis.

Independence

The Board comprises a Chairman, three Executive Directors and two independent Non-Executive Directors, which meets the QCA Code requirement for determining board independence.  As a significant shareholder, the Chair, Mike Goddard, is not considered to be independent.  At every AGM one-third of the Directors must retire by rotation. 

Meetings

The Board has nine scheduled meetings a year, but meets more frequently if required, and has full and timely access to all relevant information to enable it to carry out its duties.  The Audit Committee Meeting has three and the Remuneration Committee has two scheduled meetings per year.  During 2018 there have been two Nominations Committee Meetings.  To enable the Board to discharge its duties, all Directors receive appropriate and timely information in advance of Board and Committee meetings.  All Directors have access to the advice and services of the Chief Financial Officer and Company Secretary.   In addition, there are processes in place enabling Directors to take independent advice at the Company’s expense in the furtherance of their duties. 

Time commitments

Chair and Non-Executive Directors: not less than 24 days

Chief Executive Officer and Chief Financial Officer: full time

Executive Director (Mark Newton): 80% of full time

Attendance record

Each year the attendance record is reported in the Annual Report.

The Company believes that the board has an appropriate balance of property sector, financial and public markets skills and experience, as well as an appropriate balance of personal qualities and capabilities, with no one dominant person or group.  The Nomination Committee regularly reviews the composition of the Board to ensure that it has the necessary breadth and depth of skills to support the ongoing development of the Group.  Board members are encouraged to undertake further training as might be pertinent to their role on the Board.  During the year, Directors received updates from the Company Secretary and the Company’s advisers on corporate governance matters.

Biographical details of each of the directors, detailing relevant experience, skills and personal qualities and capabilities

Board composition, roles and diversity

Throughout the year the Board comprised a Chairman, three Executive Directors and two Non-Executive Directors. At every AGM one-third of the Directors must retire by rotation. Notwithstanding their small shareholdings, both Non-Executive Directors are considered to be independent.

The Board has ten scheduled meetings a year, but meets more frequently if required, and has full and timely access to all relevant information to enable it to carry out its duties.

The Board reserves for itself a range of key decisions such as strategy, acquisitions, significant contracts and internal controls, to ensure it retains proper direction and control of the Group, whilst delegating authority to individual Directors who are responsible for the Executive management of the business.

With effect from July 2017, the roles of Chairman and Chief Executive Officer have been separated and are no longer held by the same individual. There is a clear division of responsibilities at the head of the Company between the running of the Board and the running of the Group’s operations.

The role of the Chairman is to manage the Board in the best interests of its stakeholders, to ensure that shareholders’ views are communicated to the Board and to be responsible for ensuring the Board’s integrity and effectiveness.

The role of the Chief Executive Officer is to manage the Group on a day-to-day basis, to ensure that Board decisions are implemented effectively and to develop and propose Group strategy to the Board.

The Board considers the current Board structure appropriate for the Company. There are processes in place enabling Directors to take independent advice at the Company’s expense in the furtherance of their duties and to have access to the advice and services of the Company Secretary.

Composition and roles

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The QCA Corporate Governance Code provides that the Board should be balanced between Executive and Non-Executive Directors and should have at least two independent Non-Executive Directors.

Board diversity

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As of 28 September 2018

The Board is developing a process, which will be implemented during the remainder of 2018 and 2019, for evaluation of its own performance, that of its committees and individual Directors, including the Chairman. Evaluation criteria include Controls and Procedures, Strategic Aims, Entrepreneurial Leadership and Communications and Relationships.

Annual performance evaluations of both Executive Directors and Non-Executive Directors identify and record achievements and areas for improvement in relation to annual objectives and performance of their role, in order to consider effectiveness. Objectives for the forthcoming year are defined along with identification of how achievements will be met, target dates and details of resource constraints or issues to ensure that actions are planned and taken as a result of the evaluation process.

The Committees conduct a self-assessment of their performance during the year, measuring their performance against their Terms of Reference.

The Nomination Committee may utilise the results of the evaluation process when considering the adequacy of the composition of the Board and for succession planning, and make recommendations to the Board for any senior appointments. All members of the Board participate in the recruitment of members to the Board.

The Board seeks to maintain the highest standards of integrity and probity in the conduct of the Group’s operations.  Our corporate strategy is to leverage our expertise as a property franchisor to deliver both network growth and value for shareholders, underpinned by highly professional franchisees and sound business ethics.

Our value set and codes of conduct are enshrined in the written policies and working practices adopted by all employees and franchisees in the Group. 

The Board has overall responsibility for promoting the success of the Group. The Executive Directors have day-to-day responsibility for the operational management of the Group’s activities. The Non-executive Directors are responsible for bringing independent and objective judgment to Board decisions.

There is a clear division of responsibilities at the head of the Company between the running of the Board and the running of the Group’s operations.

The role of the Chairman is to manage the Board in the best interests of its stakeholders, ensuring that shareholders’ views are communicated to the Board and that the Non-executive Directors are properly briefed on matters, and to be responsible for the Board’s integrity and effectiveness, ensuring that no individual or group dominates the Board’s decision-making.  The Chairman has overall responsibility for corporate governance matters in the Group.

The role of the Chief Executive Officer is to manage the Group on a day-to-day basis, to ensure that Board decisions are implemented effectively and to develop and propose Group strategy to the Board.

The role of Company Secretary is undertaken by the Chief Financial Officer.  Whilst the QCA Code provides that an Executive Director should not also perform the function of Company Secretary, Louise George is a qualified Company Secretary with the skills and integrity to deliver this function alongside her finance role.  Given the size and complexity of the company, the Board regards this dual function as entirely justifiable.

The Board reserves for itself a range of key decisions such as strategy, acquisitions, significant contracts and internal controls, to ensure it retains proper direction and control of the Group, whilst delegating authority to individual Directors who are responsible for the Executive management of the business.

Board Committees

The Group places a high priority on regular communications with its various stakeholder groups and aims to ensure that all communications concerning the Group’s activities are clear, fair and accurate. The Group’s website is regularly updated and users can register to be alerted when announcements or details of presentations and events are posted onto the website.

Historical Annual Reports 

Historical presentations to investors 

Interviews with the Chief Executive Officer

Professional advisers and registrars

Notices of General Meetings of the Company

The results of voting on all resolutions in future general meetings will be posted to the Group’s website, including any actions to be taken as a result of resolutions for which votes against have been received from at least 20 per cent of independent shareholders.