Warpaint London plc -Statement of Compliance with the QCA Corporate Governance Code
The Board of Directors is responsible for the long-term success of the Company and, as such, devises the Group strategy and ensures that it is implemented. The board is determined that the Company protects and respects the interests of all stakeholders and, in particular, is very focused upon creating the right environment for its employees. We want a happy workplace and we want our employees to be fully and properly rewarded and to feel that they are an integral part of the Warpaint family. A reward structure is therefore in place, which includes the grant of share options, enabling members of staff to participate in the growth of the Company, as appropriate. We want our suppliers, who are an essential part of the Company, to also feel part of the Warpaint family and we work closely with them to ensure that this is the case. Above all, the Company wishes to ensure that shareholders obtain a good return on their investment and that the Company is managed for the long-term benefit of all shareholders and other stakeholders. Appropriate Corporate Governance procedures will ensure that that is the case and reduce the risk of failure.
Clive Garston, Chairman
Adoption of the Quoted Companies Alliance (QCA) Corporate Governance Code
The board of directors (“Board”) adopted the QCA Corporate Governance Code (“QCA Code”) on 25 September 2018. This was reviewed and updated on 30 June 2019. The Board believes that this is the most appropriate Code for the Company to adopt at this stage in its development. The QCA Code is built around ten broad principles and a set of disclosures. The Board has considered each principle individually and the extent to which it is appropriate in the circumstances. This Corporate Governance Statement sets out in general terms how the Company complies with the ten principles of the QCA Code at present and any proposals for further compliance. Annual updates will be provided on our compliance with the QCA Code and more information will be set out in the Company’s Annual Report for the year ended 31 December 2020.
Principle 1: Establish a Strategy and Business Model which promote long-term value for Shareholders
The Company is a producer and supplier of colour cosmetics. We are extremely creative and design-focused, aiming to provide our customers with an extensive range of high quality cosmetics at an affordable price, The Group is made up of two divisions.
The largest division sells own brand cosmetics under the lead brand names of W7 and Technic. W7 is sold in the UK primarily to retailers and internationally to local distributors or retail chains. The Technic brand is sold in the UK and continental Europe with a significant focus on the gifting market, principally to high street retailers and supermarkets. In addition, this division supplies own brand white label cosmetics produced for several major high street retailers. The Group also sells cosmetics using our other own brand names of Man’stuff, Body Collection, Vintage, Very Vegan, and Chit Chat.
The other division trades in close-out and excess inventory of branded cosmetics and fragrances from around the world.
In early 2018, the Board adopted a three-year strategic plan for the business. This is measured, monitored and reviewed annually and reset using market insight and trend information in line with the budget process. The plan is designed to drive shareholder value and has defined targets for sales, EBITDA, earnings per share and cash generation, these targets are currently under review whilst we work through the Covid-19 pandemic. The strategic plan was amended by the Board in 2020 and comprises of six key pillars:
1. Develop and build the Group’s brands and provide new product development that meets changing trend and consumer needs.
The Group continues to review, evaluate and develop the Groups brands which also provides the opportunity to give bespoke and exclusive solutions to both current and potential new customers. We continue to focus on developing new products that enhance the offering of the brand in the current categories that they participate, whilst at the same time launch the brand into new Categories. We have launched, for example, a range of W7 Skin Care products in 2020 into the fast growing Skin Care Sector, that is already being well received by customers and consumers alike.
and nurture the current core business
A major objective of the business will be to continue to develop and grow the presence of the Warpaint brands beyond their existing worldwide customer base. There is still however, significant potential to be realised in the current customer base. The Group intends to do this by supporting our customers with relevant new products; by using social media to draw consumers into partner stores; and by cross selling the Group’s brands where appropriate. Utilising this collaborative model has proven to be successful in a number of countries and will be further driven over the life of the three-year plan.
3. Grow Market Share in the UK
The business continues to focus on developing the presence of the Group’s brands in channels that our consumers shop in. This will increase accessibility and drive profitable market share growth. As a result of this strategy, the Group has successfully launched the W7 brand into Tesco and continues to have active discussions with other major retailers who are currently in channels that the Group is yet to materially supply to. Over 75% of the U.K. Market remains largely unexploited and expanding the U.K. customer base is a key focus of management. This is particularly opportune currently as retailers across all sectors increasingly seek to provide great value to their customers at affordable prices.
4. Grow market share in the US and China
The U.S. and China continue to provide a major growth opportunity for the Group. In the US, the Group continues to investigate the optimal route to market through using online direct to consumer solutions, through established agency channels and/ or direct to retailers. In China, the Group are conducting business locally through our local distributor and Chinese subsidiary company. We are also continuing to register products for sale in China in order to grow our total offering and increase sales. This has led to the development of relationships with distributors in the region who have the capability to drive sales of the W7 brand there.
5. Develop the online/ e-commerce strategy for brand development and sales
We continue to develop and build our major brands by utilising brand ambassadors, influencers and make-up artists to engage actively with our target audience. We want to ensure that consumers are adequately inspired and educated on how the Group’s products can be used to experiment and achieve different looks. The aim of these activities is to create an interactive community of consumers and drive recommendation. Developing the social media strategy also directly impacts the Groups online sales strategy strategy reflecting the demographic of the Group’s customers, with 45% of W7’s target customers buying cosmetics online. Opportunities exist to make one of the Group’s brands exclusively available online.
6. Develop the appropriate organisational structure, people strategy and organisational efficiency
We continue to review the businesses’ structures, resources and capabilities with the objective of delivering the three-year strategic plan, communicating the plan to ensure that all employees are engaged, and rewarding employees suitably for doing a good job.
Principle 2: Seek to understand and meet Shareholder needs and expectations
The Company remains committed to communicating openly with all of our shareholders, both private and institutional. This enables the Company to ensure that its strategy, business model and performance are clearly understood. It also enables the Company to appreciate the needs and expectations of shareholders and respond to queries promptly and comprehensively. Due to the uncertainty in trading conditions created by the corona virus pandemic and as previously announced the Board has decided not to recommend a final dividend for the year ended 31 December 2019. The payment of dividends will be reconsidered when trading conditions return to normal and in the light of the Group’s cash resources and forward orders at that time.
All individual investor queries should be addressed to the Company Secretary at firstname.lastname@example.org
The Board recognises that the AGM is an important opportunity to meet private shareholders. Each substantially separate issue is the subject of a separate resolution at the AGM and all shareholders have the opportunity to put questions to the Board. All board directors endeavour to attend AGMs and answer questions put to them which may be relevant to their responsibilities. In addition, the directors are available to listen informally to the views of shareholders immediately following the AGM. For each vote, the number of proxy votes received for, against and withheld is announced at the meeting. The results of the AGM are published on the Company’s corporate website.
The Chief Executive Officer, the Managing Director and the Chief Financial Officer make presentations to institutional shareholders and participate in Investor Presentations both following the announcement of the full-year and half-year results and, at other times throughout the year. Not every executive officer participates in every investor presentation. The Chairman will participate in these presentations in future where appropriate and is always available to speak with shareholders. Dialogue with individual institutional shareholders also takes place in order to understand and work with these investors to seek to comply with their investor principles where practicable. The Board responds to and will take account wherever possible of recommendations made by proxy adviser companies.
Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success.
The key stakeholders for the Group are customers, distributors, suppliers, employees, shareholders and the community in which we live. Whilst interactions take place at all levels of the Group, the directors are aware of the importance of the relationships with key stakeholders and feedback is utilised wherever possible to sustain these relationships in order to drive the long term success of the business. Business relationships with the following stakeholders are described below.
Feedback with trade customers is initially directed through dedicated account managers followed by engagement with our administration teams. For end user customers feedback is garnered through the peer to peer review site Yotpo, and social media such as Facebook, Twitter, Instagram and Pinterest. The Group’s customers frequently contact the company in writing and through the website www.w7cosmetics.co.uk where they are also able to leave comments. We endeavour to respond to all customers who contact us. Trends in the cosmetic business are dynamic and swift reaction to feedback is vital in introducing new products and updating our product range.
We seek to strengthen our relationships with our distributors to garner feedback and provide support with regular meetings, attendance at trade shows and maintaining close contact with them through our sales representatives. Our distributors provide feedback on product suitability including in regions of the world such as the Middle East where there may be cultural sensitivities in the product packaging and branding. Different regions may also call for particular colour mixes and shades and such feedback enables us to optimise and tailor products in these regions. The aim is to align the interests of the distributor with those of the Group.
Suppliers are visited at least annually and regular contact maintained at other times through trade shows, meetings and other close communications. The Group’s principal suppliers are made to feel part of the organisation with an open and honest dialogue encouraged so that feedback can be communicated and a rapid response provided. Following the acquisition of Retra, the Group has retained an office in Hong Kong enabling more frequent visits and enhanced supplier contact. A strong relationship with the Group’s suppliers is vital to the long term success of the Company.
The Company places enormous importance on the contributions of its employees and aims to keep them informed of developments in the Company through a combination of meetings and electronic communication. The Group operates an open-door policy, everyone is known by name to the senior managers and executive directors with the Chief Executive Officer and the Managing Director engaging daily with employees across the business. Communication is encouraged both on an informal basis and through regular departmental meetings, where input from colleagues is welcomed in any area. Communication channels within the business are key and the open-door policy and regular meetings aid this.
Feedback from employees led to the introduction of flexible working and pay surrounding the daily breaks at the warehouse at Iver, and input from employees guides and influences the seasonal opening times at both Iver and Silsden. As part of a Group consultation in 2019, employees were again given the opportunity to purchase additional holiday and where practicable, consideration is given to flexible working.
The means of engagement with shareholders is detailed in Principle 2 above.
· Community and Environment
Wherever possible we employ staff from the local area and encourage the use of car sharing and public transport to reduce the impact on local roads. We manage the times of our incoming and outgoing deliveries in order to limit any disturbance to residents in the local area. As a rule, we use local trade’s people for goods and services creating employment and income within the area. We often support local charities, including South Bucks Hospice and provide donations of our products for local school fairs and fetes, these requests coming via our local suppliers. In 2019, members of the Retra New Product Development team visited local schools to talk to pupils about innovation and design as part of their business learning challenges.
In terms of the environment, the business consumes significant amounts of cardboard and paper and the Group utilises a regular local recycling collection service. The Group’s products and packaging use paper and cardboard which enables the Group, the wholesaler and end user to recycle the waste effectively. In 2019, the Group initiated a drive to reduce the amount of plastic used in the packaging of the Company’s products, utllising sustainable or recycled packaging where feasible.
Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation
The Company is exposed to a variety of risks that can have financial, operational and regulatory impacts on our business performance. The Board recognises that creating shareholder returns is the reward for taking and accepting risk. The effective management of risk is therefore critical to supporting the delivery of the Group’s strategic objectives.
The assessment and management of risk is primarily the function of the executive officers, most specifically the Chief Executive Officer for strategic and business risk and the Chief Financial Officer for financial risk. The Group maintains a formal risk register and where appropriate, matters of risk are referred to the Board for consideration. In addition, the Financial Controller reports to the Board each month, including on key risk issues. The principal risks identified by the Board are as follows:
The Group is exposed to a variety of risks that can have financial, operational and regulatory impacts on our business performance. The Board recognises that creating shareholder returns is the reward for taking and accepting risk. The effective management of risk is therefore critical to supporting the delivery of the Group’s strategic objectives.
Currency / Foreign Exchange
Due to the Group’s goods being manufactured overseas and its extensive export business, it both generates revenues and incurs manufacturing costs in foreign currencies. As a result, the Group is exposed to the risk that adverse exchange rate movements cause the value (relative to its reporting currency) of its revenues to decrease, or costs to increase, resulting in reduced profitability. We have improved our processes in the year within our hedging policy to ensure it remains robust while we continue to increase our international business. In 2019 the Group formed an FX Committee, comprising the Chief Executive Officer, the Managing Director, the Chief Financial Officer and the managing director of Retra, to formally assess and manage the Group’s ongoing FX requirements.
Reliance on Key Suppliers
In 2019 one key supplier from China was responsible for approximately 20% (2018:24%) of the Group’s own brand ranges of colour cosmetics. If there were some catastrophic event that reduced or stopped the supply from this key supplier then the Directors are able to place orders with other existing suppliers. However, this would take several months to implement and such an event would therefore have a material adverse effect on the Group’s financial position, results of operations and future prospects.
Our supply base in China was temporarily affected by the Covid-19 virus at the start of 2020 with all our suppliers closed for a month. Whilst causing some initial delays to deliveries normal operating levels were soon resumed and there was no material impact on our inventory levels. We have started to look at sourcing product from other countries if the quality, speed to market and pricing can be matched.
All products are manufactured in facilities approved by relevant authorities. The ingredients in each product are compliant with and meet the relevant standards required by the markets to which the products will be sold into. There is however always the risk that an end user could have an allergic or other reaction to an individual product leading to the possibility of compensation claims and potentially damaging the good reputation of the Group’s brands. The directors have every colour cosmetic item independently checked by a qualified chemist for compliance with EU legislation and maintain adequate product and public liability insurance so as to ensure that any claims have little impact on the Group’s profitability.
The Group has one customer in Spain with over 90 stores. In 2019 this customer represented 10.7% (2018: 9.7%) of own brand and close-out revenues, we currently have an excellent working relationship with this customer. Significant goodwill in our own brands has been built up by this customer. The directors believe that, should the customer decide not to sell our brands, a large amount (if not all) of the existing business will be taken up by other retailers in Spain.
Spain has been badly affected by the Covid-19 outbreak and has been in a long period of lockdown. Our large customer in Spain remains closed awaiting permission to reopen, in the meantime they have an active online business that we continue to supply. As stated above if this customer were to fail as a consequence of Covid-19 the business will be taken up by other retailers in Spain.
The Group, half of its operations and assets are at one location in Iver, with the other half based in Silsden; if a fire were to befall either of the premises occupied by the Group, half of its assets might be destroyed or damaged and – although the Group has insurance cover in place – the Group’s business, financial results and prospects might be negatively affected by such an event.
The UK Brexit referendum decision to leave the EU has led to a period of economic and political uncertainty, which is likely to continue until the exit process has concluded and possibly thereafter. Brexit may continue to dampen consumer demand and impact Group customers on the UK High Street. The Group is closely watching developments in the Brexit process and adapting its strategy as the effect of Brexit becomes clearer. In particular, we are planning to have the ability to serve our European customers from a Euro Hub and have formed in the year a wholly owned subsidiary Warpaint Cosmetics (ROI) Limited in the Republic of Ireland specifically for this purpose and to help protect us against potential UK/EU cross-border disruption. We have external expert advisers who provide us with additional support when needed.
There is an increasing risk that cybercrime will cause business interruption, loss of key systems, loss of online sales, theft of data or damage to reputation. The Group regularly review and invest in the development and maintenance of our IT infrastructure, systems and security. We have in place disaster recovery and business continuity plans that are tested annually.
The Covid-19 pandemic or another similar virus pandemic will cause major disruption to the business. Staff will be absent either through illness or from isolation measures, the business strategy will be affected, delayed and perhaps will require reassessment, capital markets and foreign exchange markets will become volatile, and the supply chain and our customer base may temporarily close down. In a pandemic situation we will follow Government guidelines and enable staff to work remotely where possible, until such time that they can return to work with new workplace safety measures in place, we will explore and examine liquidity continuity measures and implement business continuity plans. The business protects against foreign exchange and credit risk through various financial instruments such as the forward purchase of foreign exchange and credit insurance of certain customer receivable balances, particularly those deemed higher risk. Our initial response to Covid-19 was to enhance our review of risks facing the Group and focus on cash spend and ensure there was sufficient cash resource to secure the long term finances of the Group.
Maintain a Dynamic Management Framework
Principle 5: Maintaining the Board as a well-functioning, balanced team led by the Chair
The Board currently comprises of the Chairman, Clive Garston two non-executive directors, Paul Hagon and Keith Sadler, and four Executive Directors, Sam Bazini, Eoin Macleod, Neil Rodol and Sally Craig who is also the Company Secretary.
On 6 February 2020, Ward & Hagon Management Consulting LLP ("Ward & Hagon") was appointed to provide additional strategic resource and to assist the Company in implementing its strategic growth plans. Paul Hagon, a non-executive director, is a partner of Ward & Hagon and as part of the Ward & Hagon appointment, he will fulfil the role of Interim Strategy and Business Development Director, a non-board role for an initial period of one year. During this period he remains a non-executive member of the Board, but will not be independent. Although the UK Corporate Governance Code 2018 does not apply to the Company, under this code the Chairman would not be deemed independent and the Board has therefore decided that only one of the non-executive directors, Keith Sadler, is presently independent. It is anticipated that Paul Hagon will revert to being an independent director on the expiry of the Ward & Hagon appointment. No single director is dominant in the decision-making process.
Hagon will remain as a member of the Remuneration Committee, but has stepped
down as Chairman. Keith Sadler will chair the Remuneration Committee in
addition to chairing the Audit Committee until the expiry of the Ward &
The Board considers its composition to be appropriate at this stage of the Company’s development, but this remains constantly under review as the Group grows in size. At this stage in the Company's development the Board does not consider that having a Senior Independent Director is appropriate but this will also remain under review.
The Board of directors is responsible for the long-term success of the Company. This includes formulating, reviewing and approving the Group’s strategy, budgets, major items of capital expenditure and acquisitions, and reporting to the shareholders. Dialogue occurs regularly between the Chairman and other Board members and between the directors themselves outside of scheduled meetings. Meeting agendas include review and approval of minutes recorded, matters arising, a review of material operational matters relating to Group’s businesses and other special items for discussion or consideration. Board papers are circulated in advance to allow directors adequate time for consideration.Board Meetings
The Board met 16 times during the financial year ended 31 December 2019. It is intended that the Board will meet at least ten times a year to review, formulate and approve the Group’s strategy, budgets, corporate actions and oversee the Group’s progress towards its goals with at least one meeting on the premises of its subsidiary Retra, providing the Board an opportunity to meet with its senior management and be involved with the business of the wider Group. In addition, the Board held a focused, dedicated meeting on strategy on 27 January 2020 and intends to continue to schedule similar meetings annually.
There were eleven in person board meetings and five telephone board meetings held during the year. Eoin Macleod was unable to attend two in person meetings due to business commitments. In the event that directors are unable to attend a meeting, their comments on papers submitted may be discussed in advance with the Chairman enabling their contribution to be included in the wider board discussion.
The executive directors are each required to commit at least the following number of days per week to their roles: The Chief Executive Officer and Managing Director, five days; the Chief Financial Officer, four days and the General Counsel & Company Secretary, two days. The non-executive directors are required to provide such time as is required to fully and diligently perform their duties. All Board members are expected to attend all meetings of the Board and the committees on which they sit, wherever possible.
Audit, Remuneration and Insider Committees
The Audit Committee comprises three non-executive directors: Keith Sadler (Chair), Clive Garston and Paul Hagon. In the year to 31 December 2019, the Remuneration Committee comprised three non-executive directors: Paul Hagon (Chair), Clive Garston and Keith Sadler. Paul Hagon has subsequently stepped down as Chairman of this committee (although he remains a member) and Keith Sadler has assumed the role of Chairman of the Remuneration Committee. The Insider Committee comprises one non-executive director and two executive directors: Clive Garston (Chair), Sam Bazini and Neil Rodol.
During the financial year ended 31 December 2019, the Audit Committee met twice, the Remuneration Committee twice and the Insider Committee did not meet during the year. From time to time separate committees are set up by the Board to consider specific issues when the need arises. Due to the size of the Group, the directors have decided that issues concerning the nomination of directors will be dealt with by the Board rather than a committee, but will regularly reconsider whether a Nominations Committee is required.
Principle 6: Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities
The Board retains a range of financial, commercial and entrepreneurial experience and there is a good balance of skills, independence, diversity and knowledge of both the Company and the sectors in which it operates including cosmetics, retailing, finance and computing, innovation, international trading, e-commerce, marketing and public markets. The non-executive directors have been appointed on merit and for their specific areas of expertise and knowledge. This enables them to bring independent judgement on issues of strategy and performance and to debate matters constructively.
The Board seeks external advice from time to time to enable it to effectively perform its duties including from its lawyers, accountants, nominated adviser and corporate broker, financial PR advisers and insurance brokers. Advice has been sought from h2glenfern Limited in connection with a review of executive compensation across the Group with a view to the recommendation and adoption of incentive arrangements (including share options) which reward success and enhance the performance of the Group. All directors have access to the advice and services of the General Counsel & Company Secretary, who is responsible for ensuring that Board procedures are followed and that the Company complies with applicable rules, regulations and obligations.
The skills brought to the Board are as follows:
Clive Garston (Chairman)
Corporate Finance, Public Companies and Markets, Corporate Governance
Sam Bazini (Chief Executive Officer)
Co-Founder of W7, Entrepreneurship, Industry Knowledge and Experience
Eoin Macleod (Managing Director)
Co-Founder of W7, Entrepreneurship, Industry Knowledge and Experience
Neil Rodol (Chief Finance Officer)
Financial skills, Industry and Public Company Experience
Sally Craig (General Counsel & Company Secretary)
Legal, Company Secretarial and Public Company Experience
Keith Sadler (Non-Executive Director)
Financial Skills, Communications, Public Companies
Paul Hagon (Non-Executive Director)
Retail and Wholesale Business Experience, Strategic Planning
Directors attend seminars and other regulatory and trade events where appropriate to ensure that their knowledge industry sector contacts remains current.
Principle 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
The Group’s performance is reported monthly against headline performance and agreed budgets and reviewed by the Board (as a minimum) at each monthly board meeting. The Board challenges the executive directors and senior management on performance against budgets, forecasts and key business milestones. The Board have adopted a set of KPI’s against which the performance of the Company and therefore the Board, can be measured.
The Company remains at a relatively early stage in its development as a quoted company and is yet to adopt a formal performance evaluation procedure for the Board and directors individually. This will remain under review and the Board will consider the implementation of performance evaluations facilitated by external advisers for the Board, both individually and as a group, to ensure the efficient and productive operation of the Board. As the business of the Group grows, the expertise required at management level is expanded and developed although there are no prescribed procedures for succession planning at Board level.
Principle 8: Promote a culture that is based on ethical values and behaviours
The Board maintains a corporate culture consistent with the Group’s strategic objectives which aims to promote an ethical and responsible business.
The corporate culture is monitored by the Chief Executive Officer who appraises the board of any issues arising. In addition, the Board receives monthly reports from the Financial Controller on HR and employee matters. The culture is implemented through a number of policies on Anti-Bribery, Whistleblowing, Modern Slavery, Employment and the Environment which are described below and regularly reviewed:
The Group has in place an anti-bribery and anti-corruption policy which sets out its zero-tolerance position and provides information and guidance to those working for the Group on how to recognise and deal with bribery and corruption issues. During the period to 31 December 2019 there were no incidents for consideration.
The Group’s ’whistleblowing’ procedures ensure that arrangements are in place to enable employees and suppliers to raise concerns about possible improprieties on a confidential basis. Any issues raised are investigated and appropriate actions are taken. Should any significant issue arise they are highlighted to the Board.
Modern Slavery and Human Trafficking
The Group has relationships with businesses around the world and is opposed to modern slavery and human trafficking wherever it may occur. The Group’s processes and supply chains are examined and reviewed at least annually to ensure that slavery and human trafficking are prevented in its business and supply chains. Compliance with the Modern Slavery Act 2015 or equivalent anti-slavery, human trafficking laws are mandatory in all supply contracts. The Group’s statement pursuant to the Modern Slavery Act 2015 which contains further information, is available at www.warpaintcosmetics.com
Employees and Equal Opportunities
The Group’s employment policy is set out in the Directors’ Report. At senior management level there are twelve female managers and seven male managers. Throughout the Group, the proportion of female to male employees is approximately 67% to 33%.
The business consumes significant amounts of cardboard and paper and the Group utilises a regular recycling collection service. The Group’s products and packaging use paper and cardboard which enables the Group, the wholesaler and end user to recycle the waste effectively. We are reviewing our products and packaging, with a view to reducing the amount of plastic used and utlilising sustainable or recycled packaging where feasible, and aim to be a market leader in this area.
Product Testing, Manufacture and Materials
The Group does not test any of our cosmetic products on animals and cosmetic animal testing has been officially banned in Europe since 2013. The Board is aware that in other parts of the world there is still a requirement to test on animals. Wherever and whenever we come across this requirement and are given no choice, we withdraw from our sales activity in the territory concerned. We are keen for cruelty free alternatives to animal testing to become compulsory and animal testing overall to be ceased globally.
Suppliers provide Good Manufacturing Practice Certificates for all of the factories used in the manufacture of the Group’s goods. The Group’s main suppliers also produce for worldwide brands, and comfort is taken from the public ethical and sustainability stance around the world of these brands. The Group’s suppliers are encouraged to share with us the results of their BSCI and Sedex audits when they have taken place.
such as TBTO (preservative) and other ingredients of concern are not added to
our colour cosmetic products and we ensure all raw materials comply with the
strict regulations applicable in the EU, USA and Canada.
Along with local charities and events, the Company supports national charities including Save The Children - Christmas Jumper Day and MacMillan Cancer - Coffee Morning. We invite our employees to choose charities and events that are close to their hearts and we collaborate with them. These events are often put out on our social media and are linked to the charity to raise their profile. In 2019 the Group supported a number of charities based in the local area.
Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board
The Board is responsible for the long-term success of the Company. There is a formal schedule of matters reserved to the Board for its decision. These include formulating, reviewing and approving the Group’s strategy, budgets, major items of capital expenditure and acquisitions, and reporting to the shareholders.
The Board aims to meet ten times each year for regular Board meetings, which are scheduled prior to the commencement of each financial year. These meetings are scheduled to coincide with the announcement of the Company’s annual and half yearly accounts and throughout the remainder of the year at regular monthly intervals. These are supplemented by additional meetings where required for business including informal business reviews, to review budgets and focus on strategy. Dialogue occurs regularly between directors outside of scheduled meetings.
A formal agenda is produced for each meeting and for in person board meetings which includes the review and approval of minutes recorded, matters arising, a review of material operational matters relating to Group’s businesses and other special items for discussion or consideration. Board papers are circulated to board and committee members in advance to allow directors adequate time for consideration. Any specific actions arising from such meetings are agreed by the Board or relevant Committee, circulated after the relevant meeting by the Company Secretary and then followed up by the Company’s management.
The business reports monthly on its headline performance against its agreed budget, and the Board reviews the monthly update on performance and any significant variances are reviewed at each scheduled meeting. The Board challenges the executive directors and senior management on performance against budgets, forecasts and key business milestones. Monthly updates on performance are reviewed at each formal board meeting. The Board have adopted a set of KPI’s against which the performance of the Company and therefore the Board, can be measured.
The Company’s Articles of Association require that one-third of the directors must stand for re-election by shareholders annually in rotation and that any new directors appointed during the year must stand for election at the AGM immediately following their appointment.
Roles of the Chairman, Chief Executive Officer, Managing Director, Chief Financial Officer and General Counsel & Company Secretary
The Chairman is responsible for running the business of the Board and for ensuring appropriate strategic focus and direction. The Chief Executive Officer is primarily responsible for implementing and driving the Group strategy once it has been approved, investor relations and overseeing the management of the Company through the executive team. The Managing Director is responsible for driving sales operations and profitability.
The Chief Financial Officer works closely with the Chief Executive Officer and the Managing Director and is primarily responsible for the provision of monthly financial information to the Board, control of working capital, overseeing the audit and preparation of all Group company statutory accounts and consolidated Interim Statements along with the overall financial management of the Group and its processes. The executive officers are responsible for formulation of the proposed strategic focus for submission to the Board, the day-to-day management of the Group’s businesses and its overall trading, operational and financial performance in fulfilment of that strategy, as well as plans and budgets to approved by the board of directors.
The General Counsel and Company Secretary is responsible for the oversight of legal issues and regulatory compliance along with executive share schemes, investor queries, HR matters, insurances and policy implementation. In addition, she assists the Chairman and other committee chairs in ensuring all meetings of the Board and committees are informed and effective.
Audit, Remuneration and Insider Committees
The Board has established the Audit Committee, Remuneration Committee and Insider Committee with formally delegated duties and responsibilities and with written terms of reference. The full terms of reference of each committee can be found as follows:
Audit Committee here
Remuneration Committee here
Insider Committee here
From time to time separate committees are set up by the Board to consider specific issues when the need arises. Due to the size of the Group, the directors have decided that issues concerning the nomination of directors will be dealt with by the Board rather than a committee, but will regularly reconsider whether a nominations committee is required.
Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
The Company’s principal means of communication with shareholders is through the Annual Report and Accounts, the full-year and half-year announcements and the Annual General Meeting (AGM). Investor queries may be addressed to the Company Secretary at email@example.com
A range of corporate information (including all Company announcements) is also available to shareholders, investors and the public on the Company’s corporate website here
In addition, the Board receives regular updates on the views of shareholders through briefings and reports from the Executive Directors, the Company’s brokers and PR Advisers. The Chief Executive Officer, the Managing Director and the Chief Financial Officer make presentations to institutional shareholders and participate in Investor Presentations both following the announcement of the full-year and half-year results and, at other times throughout the year. Not every executive officer participates in every investor presentation. The Chairman will participate in these presentations in future where appropriate and is always available to speak with shareholders. Dialogue with individual institutional shareholders also takes place in order to understand and work with these investors to seek to comply with their investor principles where practicable.
This Statement was updated on 13 July 2020.