The Board of Purplebricks Group plc seeks to follow best practice in corporate governance as appropriate for a company of our size, nature and stage of development. As a public company listed on AIM we are cognisant of the trust placed in the Board by institutional and retail investors, employees and other stakeholders. We recognise the importance of an effectively operating corporate governance framework and as such the Board has adopted the principles of the 2018 Quoted Companies Alliance Corporate Governance Code (the "QCA Code”) to support the Company's governance framework. The Directors acknowledge the importance of the ten principles set out in the QCA Code and this statement briefly sets out how we comply with the provisions of the QCA Code.
|QCA Code principle||QCA Code guidance||What we do|
|1. Establish a strategy and business model which promote long-term value for shareholders||The board must be able to express a shared view of the company’s purpose, business model and strategy. It should go beyond the simple description of products and corporate structures and set out how the company intends to deliver shareholder value in the medium to long-term. It should demonstrate that the delivery of long-term growth is underpinned by a clear set of values aimed at protecting the company from unnecessary risk and securing its long-term future.||The Company’s business model is explained in detail in the Strategic Report section of our Annual Report and Accounts for the year ended 30 April 2020 (the “Annual Report”). The Annual Report also contains a summary of the principal risks to the Company and our business on pages 16 and 17of the Annual Report.|
|2. Seek to understand and meet shareholder needs and expectations||Directors must develop a good understanding of the needs and expectations of all elements of the company’s shareholder base. The Board must manage shareholders’ expectations and should seek to understand the motivations behind shareholder voting decisions.||
The Chairman, CEO, CFO and Investor Relations regularly meet with existing and potential shareholders and ensure that their views are reported to the Board. The Company’s Nominated Adviser and Broker also liaise with institutional investors to ensure that the Board is appraised of their views. Axel Springer, our largest shareholder, maintains one Non-Executive director to the Board as part of their strategic investment.
The Company’s policy of engagement with shareholders seeks to ensure that the Company’s strategy and proposals are understood by shareholders but in the event that voting decisions were not in line with the Company’s expectations, the Board would seek to engage with those shareholders to understand and address any issues.The Company responds promptly to ad hoc shareholder enquiries and views the AGM as an important opportunity to meet private shareholders.
|3. Take into account wider stakeholder and social responsibilities and their implications for long-term success||
Long-term success relies upon good relations with a range of different stakeholder groups both internal (workforce) and external (suppliers, customers, regulators and others). The board needs to identify the company’s stakeholders and understand their needs, interests and expectations.
Where matters that relate to the company’s impact on society, the communities within which it operates or the environment have the potential to affect the company’s ability to deliver shareholder value over the medium to long-term, then those matters must be integrated into the company’s strategy and business model.
Feedback is an essential part of all control mechanisms. Systems need to be in place to solicit, consider and act on feedback from all stakeholder groups.
The Company is founded on the principle of delivering fairness in and transparency of pricing to the consumer. As set out in the Annual Report, this has its foundations in acompany that cares about its people and that has a progressive and fun working environment.
As the Company has grown and become subject to increasing regulation, we have sought to maintain close relationships with relevant regulators and build cooperative relationships. We proactively meet regulators and act promptly on advice or guidance that they give.
The Company is asset light and considers that, compared to the traditional estate agency model, it has a low environmental impact. We have begun to monitor our impact on the environment in accordance with regulatory guidelines.
The Company’s culture means that senior management and Directors are accessible to all employees for informal feedback which is then considered and acted on in the relevant forum. The Company conducts an annual employee engagement survey and also encourages informal feedback through internal social media.
The Company encourages customers to provide feedback directly through our Local Property Experts and also through independent review websites such as TrustPilot and Feefo. We continually monitor this feedback, as well as any feedback on social media, and act on it as appropriate.
|4. Embed effective risk management, considering both opportunities and threats, throughout the organisation||
The board needs to ensure that the company’s risk management framework identifies and addresses all relevant risks in order to execute and deliver strategy; companies need to consider their extended business, including the company’s supply chain, from key suppliers to end-customer.
Setting strategy includes determining the extent of exposure to the identified risks that the company is able to bear and willing to take (risk tolerance and risk appetite).
The Company formally reviews the principal risks to the business annually and the key risks, and how these are mitigated, are set out on pages 16 and 17 of the Annual Report.
The Board meets ten times a year to review trading performance and discuss budgets and forecasts and new risks associated with ongoing trading.
The Company keeps its approach to risk management under review and intends to adopt a formal approach whereby risk will be owned by executive management and overseen by the Audit Committee.
|5. Maintain the board as a well-functioning, balanced team led by the chair||
The board members have a collective responsibility and legal obligation to promote the interests of the company, and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the chair of the board.
The board (and any committees) should be provided with high quality information in a timely manner to facilitate proper assessment of the matters requiring a decision or insight.
The board should have an appropriate balance between executive and non-executive directors and should have at least two independent non-executive directors. Independence is a board judgement.
The board should be supported by committees (e.g. audit, remuneration, nomination) that have the necessary skills and knowledge to discharge their duties and responsibilities effectively.
Directors must commit the time necessary to fulfil their roles.
The Company is controlled by the Board of Directors. Paul Pindar, the Non-Executive Chairman, is responsible for the running of the Board and defining the Company’s approach to corporate governance with the assistance of the Company Secretary and senior management. Vic Darvey, as CEO, has executive responsibility for running the Company’s business and implementing the Company’s strategy.
All Board members receive regular information relating to the Company’s operational and financial performance in advance of Board meetings and at least monthly. Draft minutes of the Board meetings are circulated to the Directors prior to being agreed. All Directors have direct access to the advice and services of the Company Secretary and are able to take independent professional advice in the furtherance of their duties (either in relation to their duties as Directors or as a member of a Board Committee) at the Company’s expense.
The Board comprises two executive directors and fivenon-executive directors (including the Chairman). The Board considers that two of the non-executive directors are independent.
The Board has a formal schedule of matters reserved to it and is supported by the Audit, Remuneration and Nomination Committees. The Board is satisfied that the Committees have the necessary breadth of skills and knowledge to discharge their duties and responsibilities effectively. The Schedule of Matters Reserved and Committee Terms of Reference are available on the Company’s website.
|6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities||
The board must have an appropriate balance of sector, financial and public markets skills and experience, as well as an appropriate balance of personal qualities and capabilities. The board should understand and challenge its own diversity, including gender balance, as part of its composition.
The board should not be dominated by one person or a group of people. Strong personal bonds can be important but can also divide a board.
As companies evolve, the mix of skills and experience required on the board will change, and board composition will need to evolve to reflect this change.
All Directors are selected via a highly competitive and rigorous process which enables the Company to ensure that it has the appropriate breadth of skills and experience. The Company carefully considers the skills required to ensure the business can perform to its maximum potential.
The Directors possess a very wide breadth of experience gain in industry and commerce.
|7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement||
The board should regularly review the effectiveness of its performance as a unit, as well as that of its committees and the individual directors.
The board performance review may be carried out internally or, ideally, externally facilitated from time to time. The review should identify development or mentoring needs of individual directors or the wider senior management team.
It is healthy for membership of the board to be periodically refreshed. Succession planning is a vital task for boards. No member of the board should become indispensable.
|The Board is aware of the need to challenge its effectiveness and diversity going forward, but as a relatively young Board in terms of appointment has not engaged a third party to review the effectiveness and operation of the Board and its Committees, in accordance with the Financial Reporting Council’s Guidance on Board Effectiveness.|
|8. Promote a corporate culture that is based on ethical values and behaviours||
The Board should embody and promote a corporate culture that is based on sound ethical values and behaviours and use it as an asset and a source of competitive advantage.
The policy set by the Board should be visible in the actions and decisions of the chief executive and the rest of the management team. Corporate values should guide the objectives and strategy of thecompany.
The culture should be visible in every aspect of the business, including recruitment, nominations, training and engagement. The performance and reward system should endorse the desired ethical behaviours across all levels of thecompany.
The corporate culture should be recognisable throughout the disclosures in the annual report, website and any other statements issued by the company.
|While the Board makes decisions based on sound ethical values and behaviours, the Board does not currently promote a policy driven culture of ethical values. To date this has not been necessary as the Company is young and has had a small number of employees. As the Company grows, the Board will seek to formalise the Company’s values and drive these throughout all aspects of its business.The Board is constantly reviewing this position and will not hesitate to introduce certain policies if required.|
|9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board||
The company should maintain governance structures and processes in line with its corporate culture and appropriate to its:
The governance structures should evolve over time in parallel with its objectives, strategy and business model to reflect the development of the company.
The Company’s governance structures are set out on pages 25 and 26 of the Annual Report.
As the Company grows and its business becomes increasingly complex, the Board keeps the Company’s corporate governance arrangements under review.
|10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders||
A healthy dialogue should exist between the board and all of its stakeholders, including shareholders, to enable all interested parties to come to informed decisions about the company.
In particular, appropriate communication and reporting structure should exist between the board and all constituent parts of its shareholder base. This will assist:
It should be clear where these communication practices are described (annual report or website).
|Please see the responses to Principles 2 and 3.|