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Corporate Governance

Last updated 8 September 2020

Corporate Governance Code

Chairman’s Introduction

The Board is committed to effective corporate governance, appropriately aligned with the Group’s priorities to manage risk, promote a strong corporate culture and deliver a strategy for growth.

The Directors of the Board believe that an engaged Board and an effective committee structure facilitate the good governance of the entire Group and ensure an appropriate framework for its continued success and growth. The Board has established an Audit and Risk Committee, a Remuneration Committee and a Nomination Committee; each with formally delegated duties and responsibilities.

The role of the Chairman is to lead the Board and be responsible for its governance, performance and effectiveness. The Chairman sets the tone for the Company and ensures that the links between the Board and the executive team, as well as between the Board and the shareholders, are strong and efficient.

The Group operates an open and inclusive culture, and this is fundamental to the way that the Board conducts itself. The Directors believe that this culture, together with a very strong emphasis on integrity, business ethics and good corporate governance, ensure our ability to execute the strategy, to deliver the right outcomes for the Group’s clients, and deliver value for our shareholders and other stakeholders.

Corporate Governance Code

In recognising the importance of high standards of corporate governance, integrity and business ethics, we continue to apply the Quoted Companies Alliance Corporate Governance Code (the “QCA Code”). Further information on how the Board applies the recommendations of the QCA code, and on the Group’s governance structure, is provided in Alpha’s Annual Report 2020.

The Directors recognise the need to continue to develop our governance structure and processes in ways that reflect the evolving needs of the Group’s shareholders, employees, clients and wider stakeholders, and in order to ensure they support the growth and strategic progress of the Group. In doing so, we are committed to maintaining our compliance with the principles of the QCA code and providing clear disclosures relating to the changes and developments that we make.

Ken Fry

Chairman

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

The business model and strategy of the Group are set out in full on pp 20‒25 of the Annual Report 2019. The business model and strategy, and any amendments thereto, are developed by the Chief Executive Officer and the executive team (represented in the Alpha Global Management Board); and approved by the Board. The Board oversees the execution of the Group strategy by the executive team.

The Group’s proven business model is premised upon delivering growth through the cross-sell and upsell of its high-quality services to existing clients; and selling its services to new clients in new jurisdictions. The Group organises its service proposition around specialist practice areas, which enable it to target and meet the demands of relevant stakeholders in a range of client segments. The service offering is currently defined by 12 business practices.

The Group’s strategy is to continue to grow and achieve a larger share of its chosen markets by building on its successful service offering. The geographic expansion of Alpha’s business practices is a key component of that growth strategy. The strategy is focussed around the following main growth objectives: 1. Expanding the existing business practices; 2. Rolling out the proven practice model globally; and 3. Making selective acquisitions.

The key risks to the Group’s business organisation are described on pp 31‒34 of the Annual Report 2019. The Group manages risk closely in order to limit any potential adverse effects on the implementation of its strategy, its performance and the interests of its shareholders. It does this by ensuring that there is a framework in place to identify and monitor risks and uncertainties, and deploying the appropriate mitigating actions (which are described alongside each risk in the Annual Report 2019).

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

Maintaining a good, consistent engagement with shareholders is given a high priority by the Directors of the Board. The principal methods of communication with shareholders are the Annual Report & Accounts, the interim and full-year results announcements, the Annual General Meeting and the Group’s investor website.

The Global Chief Executive Officer and the Chief Financial Officer, both Directors of the Board and members of Alpha’s executive team, meet regularly with institutional investors, and analysts who publish performance information about the Group, to ensure that its corporate objectives, strategies and operational developments are clear and understood. The Chairman and Non-Executive Directors are available to discuss any matters that shareholders wish to raise and discuss. The Global Chief Executive Officer and the Chief Financial Officer act as the main point of contact for shareholders (company.secretary@alphafmc.com).

The Company’s third Annual General Meeting will take place on Wednesday 23 September 2020. If, and when, voting decisions are not materially in line with the Company’s expectations, the Board will seek to engage with shareholders to understand and address any issues informing those decisions.

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

In line with the corporate social responsibility disclosure on pp 38‒47 of the Annual Report 2019, the Board upholds its commitment to being a socially and ethically responsible Company.

The executive team, represented in the Global Management Board, oversees the social and ethical framework, and is responsible for reviewing operational processes for managing social, environmental and ethical risk. In this respect, the Global Management Board reports into the Board of Directors, to ensure that any significant risks to the longer-term success of the business arising from such matters are adequately mitigated and addressed. The Board believes that the risk of impact to the long-term success of the Group is low, and satisfactorily managed, based upon its line of business and geographical footprint.

The Board recognises the need to maintain effective working relationships across a wide range of stakeholders. The business model identifies the different client segments with which the Group operates, which includes asset managers, asset owners, wealth managers and those who support the industry, such as third-party administrators. Other stakeholder groups include vendors, industry bodies, regulatory authorities and competitors. The Group maintains a strong dialogue with all key stakeholders; the Executive Directors of the Board, supported by the entire executive team, manage those relationships on a day-to-day basis and encourage the exchange of feedback, knowledge and perspectives about the Group. The newest offices in Singapore and Switzerland were launched in response to client requests for the Group to provide local support in those locations.

The success of the Group’s business model is founded upon its high-performing consulting team. The Board and the executive team are committed to providing an open, interactive and collaborative working environment; and there are opportunities throughout the year for employees to submit their feedback about any aspect of the working environment, the business organisation and the corporate goals. Employee feedback helps the Group to understand and focus its attentions on what matters to its employees. Feedback is also sought from the Group’s contractors at regular points during the delivery engagements on which they are working to capture any key learning points or general recommendations about the delivery framework.

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

The Board has overall responsibility for the determination of the Group’s risk management objectives and policies. In this respect, the objective of the Board is to set policies that seek to reduce ongoing risk as far as possible, without unduly affecting the Group’s competitiveness and flexibility. The Board believes that this approach serves the interests of creating sustainable shareholder value while also protecting the Group’s corporate culture.

The operational functions of the Group are carried out within a practical and effective risk management framework. The Global Management Board has responsibility and authority for identifying and managing risk effectively, across the business. Any decisions made by the Global Management Board in this respect are reviewed by the Board.

The identified material operational, financial and industry risks facing the Group are also reported to the Board. A summary of the principal risks and uncertainties, as well as mitigating actions, are provided on pp 31‒34 of the Annual Report 2019. The Board formally reviews and documents the principal risks to the business at least annually.

Processes to embed risk management throughout the Group continue to be reviewed and changes will be implemented as appropriate.

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

The Board comprises six Directors: four Non-Executive Directors and two Executive Directors. In line with QCA code guidance, two of the Non-Executive Directors, one of whom is the Chairman, are independent.

The Non-Executive Directors of the Board have been selected with the objectives of increasing the breadth of skills and experience of the Board, and bringing constructive challenge to the Executive Directors. The Non-Executive Directors are also responsible for the effective running of the Board’s committees and ensuring that the committees support the strategic priorities of the Board.

The Group has determined that the composition of the Board and its committees brings a desirable range of skills, personal qualities and experience for delivering the strategy, based upon the size and nature of the business of the Group. All Directors are subject to re-election by shareholders at the Annual General Meeting within a three-year period of their appointment. Any Directors appointed during the financial year must be formally elected at the Annual General Meeting following their appointment.

The time commitment required of all Non-Executive Directors is currently three days per month. The Executive Directors are committed on a full-time basis. The Board is satisfied that each of the Directors is able to commit sufficient time to the Group’s business and can fulfil the obligations fully. The Board and committee schedule is planned in advance of the financial year ahead in order to facilitate attendance and ensure that the appropriate discussion time is available. A record of the number of meetings of the Board during the last financial year, and the attendance by each Board member, is provided below:

Board member Eligible to attend Attendance
Ken Fry (Chairman) 9 9
Euan Fraser 9 9
Penny Judd 9 9
Nick Kent 9 9
John Paton 9 9

The Group believes that the successful functioning and effectiveness of the Board is premised upon a number of key factors, in addition to Board composition:

  • Suitable operations (agenda, frequency of meetings, monitoring of attendance);
  • Access to the appropriate advice and administrative services – via the Company Secretary and external resources as required;
  • Thorough induction of new Directors to the Board and its committees; and
  • Performance assessment of the Board as a unit and of its members individually.

The Chairman and the Board hold these factors in the highest regard and commit to performing an annual evaluation to review and assess their application in practice.

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

As a provider of specialist consultancy services to the asset and wealth management industry, and an AIM-quoted company, Alpha requires a range of skills, capabilities and competencies to be represented on its Board, including experience in public markets, financial services, governance and audit, the consulting sector and business operations. The Board is satisfied that its members have the appropriate balance of backgrounds, knowledge and personal qualities in order to meet this requirement and to be able to deliver on its core objectives.

Biographical details of the Directors, including a summary of their relevant experiences and how they ensure that their skillsets remain up to date, are provided in the Directors section of the website and on pp 60‒61 of the Annual Report 2019.

The Nomination Committee is responsible for overseeing the selection of Board members that are equipped with the correct range of experience, knowledge, integrity and ethics. Throughout the year, the Directors have access to the advice and services of the Company Secretary. The Company Secretary also fulfils an administrative role with regards to the filings to Companies House.

In order to fulfil their duties, the Directors of the Board are entitled to take independent professional advice at the expense of the Company. The Board members may seek the advice of the Group’s legal advisers, external auditor and the Nominated Adviser (NOMAD) on matters within the Board or the committee’s terms of reference, or to provide recommendations on specific corporate or governance events.

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

The objectives of the Board are to review, formulate and approve the Group’s strategy, budgets and corporate activities, and to oversee the Group’s progress towards its goals. The Group has a process for evaluating the performance of the Board, of its committees and of the individual Directors, including the Chairman, in respect of these objectives.

During the year, each of the areas discussed as part of the FY 19 evaluation have been considered and the Board has monitored progress regularly. In particular, as explained in the Annual Report 2020, the Directors agreed that, as the business has continued to grow in scale and complexity, it would be beneficial to seek an additional independent Non-Executive Director with experience in the financial services sector to enhance the skills and experience on the Board and further increase Board independence. Further details about the selection process and appointment of Jill May as an independent Non-Executive Director with effect from 1 July 2020 can be found in this section of the Annual Report 2020.

Given the decision to appoint an additional Non-Executive Director, the Directors agreed that the Board evaluation process for FY 20 would be conducted by way of one-to-one discussions between the Chairman and each member of the Board, rather than a full Board evaluation process. The Chairman held calls with the Directors during March 2020 and the conclusions from these conversations confirmed that the Board continues to function effectively as a unit and in committees. Some minor improvements to Board processes were identified and have been actioned.

It is intended that a full Board evaluation will be carried out during FY 21. The process will be conducted by the Chairman with reference to the competencies set out by the Nomination Committee pursuant to each Board role. As part of this process, any training and personal development needs will be identified.

The Nomination Committee may use the results of the evaluation process when reviewing the composition of the Board for selecting any new Board members, and in succession planning for the Directors of the Board as well as key executive team members. When considering succession planning for the Board Directors and senior executives, the Nomination Committee takes into account the challenges and opportunities facing the Company and wider Group, along with skills and expertise that may be required in the future. During FY 20, contingency and succession plans for the members of the Board, particularly the Executive Director roles, continued to be an area of focus. The Committee also carried out a review of the management structure of the Group’s business to accommodate further growth and scale.

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

The Board regards highly the importance of promoting ethical responsibility and good conduct within the Company. The Board is conscious of its role in fostering a culture of inclusion, responsibility and openness. The Group is an equal opportunities employer and encourages diversity at all levels.

These values are embedded in the Group’s leadership and throughout the organisation. They are described in further detail on pp 38‒47 of the Annual Report 2019. The culture of integrity is promoted in the Employee Handbook, which all employees must attest to, and is reinforced through the regular activities and initiatives of the corporate social responsibility team. They are overseen and sponsored by the entire executive team.

The executive team reports into the Board on any changes or risks impacting the Group’s values and behaviours. The Board is ultimately responsible for ensuring a corporate culture that is embedded globally and is consistent with the Group’s objectives, strategy and business model.

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

The Group operates an effective, streamlined governance framework. In this framework, the Board supports the executive team, represented by the Global Management Board, in developing and executing the Group’s strategy. Any decisions between and within these governance structures are reached through an open and constructive dialogue.

The Chairman leads the Board and is responsible for its governance structures, performance and effectiveness. This includes ensuring that the dynamics of the Board are functional and productive, and that no individual Director dominates discussion or decision making. The Chairman is also responsible for ensuring that the links between the Board and the executive team, and the Board and the shareholders, are strong and efficient. Meanwhile, the Global Chief Executive Officer is responsible for the day-to-day management of the Group’s global operations and for implementing the strategic goals agreed by the Board. The Company Secretary is the main Board point of contact for shareholders.

In order to fulfil the Group’s objectives and facilitate effective decision making, the Board has established the following committees:

  • an Audit and Risk Committee to monitor the quality of the Group’s internal controls, and to ensure that the financial performance of the Group is properly measured and reported on;
  • a Remuneration Committee to review the performance of the Executive Directors, the Chairman and the executive team, and make recommendations to the Board on matters relating to their remuneration and terms of service; and
  • a Nomination Committee to review regularly the composition and succession planning of the Board, and to lead the process of Board appointments.

The Board has an agenda of regular business, financial and operational matters for discussion, as well as a review of each committee’s area of work. The Board is ultimately responsible for making any key strategic or business decisions. Members of the executive team may be invited to attend meetings of the Board in order to facilitate those governance processes; in other instances, the executive team is represented by the Chief Executive Officer, who communicates all their relevant views and information. The Board has adopted terms of reference that set out which matters are specifically reserved for its decision and cannot be delegated to any committees.

The Group’s corporate governance framework will continue to be reviewed to ensure that it meets the evolving needs, size and nature of the business, and changes will be implemented as appropriate. The effectiveness of the governance structures and processes is assessed as part of the annual Board evaluation.

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

To support the Group’s objectives, the Board has established an Audit and Risk Committee, a Remuneration Committee and a Nomination Committee. The responsibilities of these individual committees are provided below as well as in the reports of the committees on pp 64‒73 of the Annual Report 2019. From time to time, separate committees may be set up by the Board in order to consider and address specific issues, if the need arises.

The Group places a strong emphasis on the standards of good corporate governance and maintaining an effective engagement with its shareholders and key stakeholders, which it considers to be integral to longer term growth and success. The principal methods of communication with shareholders are the Annual Report & Accounts, the interim and full-year results announcements, the Annual General Meeting and the website. The website is updated regularly with information regarding the Group’s activities and performance, and users can register to be alerted of new announcements, reports and events, including Annual General Meetings.

The Group’s reports and presentations can be found here.

Notices of Annual General Meetings of the Company can be found here.

The results of voting on all resolutions in Annual General Meetings are also 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% of independent shareholders.

The Board receives regular updates on the views of the Group’s wider stakeholders from the Executive Directors; in particular, clients and employees. The Executive Directors have a close special knowledge of the interests of these stakeholders, which they receive by maintaining an open dialogue with market participants and undertaking employee feedback both on an anonymous and peer group basis.