The Power Of Talent

Our network spans 4 continents

The quality and performance of our people sets us apart

Investors  Corporate Governance


For the year ended 31 January 2016

Harvey Nash holds the principles of good corporate governance at its core.

Throughout the year ended 31 January 2016 and to the publication of the Annual Report 2016, the Group has been in compliance with the Code provisions set out in the UK Corporate Governance Code (2012).

The Code can be found on the FRC website and further details of how we have complied with the Code can be found in the statement of internal control as set out in the Annual Report.


Board of Directors

Throughout the financial year there were three Executive and four Non-Executive Directors. A list of Directors, their biographies and roles are set out here. The Board members with executive responsibility were the Chief Executive Officer, Group Finance Director, and European Managing Director. There were no changes to the composition of the Board’s members during the year.

Simon Wassall and David Bezem stood for re-election at the Annual General Meeting on 30 June 2016.

The Board meets at least eight times a year and has a fixed schedule for reviewing the Group’s operating performance. In addition, other meetings are arranged as required to deal with specific issues or transactions. The Board also has a schedule of matters and responsibilities specifically reserved to itself, the main items of which include:

  • approval of the published financial results and other statements
  • appointments to the Board and Board Committees
  • annual approval of the Group Strategic Plan and Budget
  • approval for acquisitions, mergers and disposals
  • approval for new businesses which require start-up capital
  • approval of capital expenditure and leasehold agreements over certain thresholds
  • approval of material contracts over certain thresholds and those not in the ordinary course of business
  • approval of treasury policy and significant financing arrangements
  • recommendation of the proposed level and payment of dividends

Board and Committee Attendance



Number of meetings



Group Board

 Nomination Committee

 Remuneration Committee

 Audit Committee

Total number of meetings

11

1

3

3

Non-Executive Directors

Julie Baddeley

11/11

1/1

3/3

-

David Bezem

11/11

1/1

3/3

3/3

Ian Davies

11/11

1/1

3/3

3/3

Kevin Thomas 

11/11

1/1

3/3

3/3

Executive Directors

Albert Ellis

11/11

1/1

-

-

Richard Ashcroft

11/11

-

-

-

Simon Wassall

11/11

-

-

-

 

The division of responsibilities between the Chairman and Chief Executive is clearly established, set out in writing and agreed by the Board. There is a strong non-executive representation on the Board, including Ian Davies, the Senior Independent Director. The Non-Executive Directors meet regularly during the year without the Executive Directors and provide effective balance and challenge.

The Executive Directors are responsible for the overall operational and financial management of the Group within the framework set out by the Board. The Executive Council sits below the Group Board and executes the day to day running of operations. The Executive Council comprises senior operational management, including the Executive Directors.

Outside the formal schedule of matters reserved for the Board, the Chairman and Non-Executive Directors make themselves available for consultation with the executive team as often as necessary.

The Senior Independent Director and the Company Secretary monitor procedural compliance. The appointment and removal of Directors is a matter for the Board as a whole. Independent professional advice and training are available to all the Directors. The Senior Independent Director is available for consultation with shareholders through the Company Secretary. The Executive Directors meet with the Company’s major shareholders and other potential investors on a regular basis and report to the Board on those meetings.

On joining the Board, a new Director receives appropriate induction including meetings with other Directors and senior management, the opportunity to visit the Group’s key operations and meeting the Group’s principal advisers.

The Board has a policy of providing reasonable funding for independent professional advice for all Directors in furtherance of their duties as Directors of the parent Company, and continued professional development.

The Board discusses and reviews its performance and membership regularly and sets its objectives annually. As part of this process, the Board, including the Chairman, considers whether it has sufficient time to discharge its responsibilities effectively. The Directors’ profiles and other commitments are set out here.

The Board engaged an independent external advisor, Socia, to review the Board performance in the current year. Socia has no other relationship to the Group beyond evaluating the Board. The evaluation process provided the opportunity for the Board to reflect on how after a period of significant development in the business, the changes have affected the dynamics, constitution and operation of the Board.

The evaluation included:

  • meeting with the Chairman and the Company Secretary to agree objectives of the evaluation
  • interviews with each member of the Board
  • observation of a Board meeting
  • reviewing the Board composition, expertise and dynamics
  • assessment of succession planning and appraisal processes

Socia provided the Board with an evaluation report, which included feedback on performance against each of the Code provisions and suggested actions to improve the Board's performance. The findings of this evaluation process were that the Board operates in a professional manner and was compliant with the principles and the spirit of the UK Corporate Governance Code as appropriate to the business. A number of recommendations were made, including how the Board could approve its approach to strategy development. These recommendations have been adopted and will be monitored during the current year. The summary results from the evaluations were presented at the Board meeting in November 2015.

In relation to non-reserved matters, the Board is assisted by a number of committees with delegated authority. The defined terms of reference for each committee are available within the Investors section of the Group’s website.


Audit Committee

The Audit Committee meets at least twice a year with the Group’s senior financial management and the External Auditor to review the interim and annual financial statements, the accounting policies of the Group, its internal financial control procedures and compliance with accounting standards.

The members of the Committee during the year were Ian Davies (Chairman), David Bezem and Kevin Thomas. The Board considers that the members of the Committee both individually and as a whole have sufficient recent and relevant financial experience to discharge its function.

The Audit Committee Report on pages 53 to 55 includes details of the Audit Committee policy, practices and engagement with the External Auditor.


Remuneration Committee

The Remuneration Committee meets at least twice a year. The members of the Committee during the year were David Bezem (Chairman), Julie Baddeley, Ian Davies and Kevin Thomas.

The Remuneration Committee determines and approves the policy, remuneration and long-term incentive arrangements of the Company’s Executive Directors and the Chairman. The Chief Executive Officer may be invited to attend meetings of the Committee, but does not participate in discussions of his own remuneration arrangements.

The remuneration of the Non-Executive Directors, excluding the Chairman of the Board, is set by the Executive Directors. The remuneration of the Chairman of the Board is set by the Remuneration Committee excluding the Chairman.

The Remuneration Report on pages 34 to 52 includes details of remuneration policy, practices and the remuneration of the Directors.


Nomination Committee

The Group has a Nomination Committee, which provides a transparent process and procedure for the appointment of new Directors to the Board. The members of the Committee during the year were Julie Baddeley (Chairman), Ian Davies, David Bezem and Albert Ellis.

The Committee’s terms of reference include:

  • responsibility for identifying and nominating candidates for appointment to the Board
  • evaluating the balance of skills, knowledge and experience required on the Board
  • succession planning

In making appointments, the Nominations Committee takes account of the diversity of experience, gender, background and the composition of the Board.

The Committee considers succession plans for the members of the Group Board over the short and longer term, keeping in mind the balance of skills, experience and background required to ensure the Group’s commitment to deliver sustainable shareholder value is met. The Committee considers the requirements of the Board and seeks to maintain a balance between innovation and experience when considering the required composition of the Board.

The Group remains committed to maximising career opportunities through significant investment in training and professional development at all levels of the Group. The Committee supports internal development programmes to build the skills required of future Board Directors and leaders amongst relevant employees.

The terms and conditions for the appointment of Non-Executive Directors are available for review at 110 Bishopsgate, EC2N 4AY during normal business hours and 15 minutes before an AGM.


Relations with Shareholders

The Board maintains regular dialogue with its major shareholders and City analysts by conducting formal presentations, being readily available for discussion and providing information as required. During the year, the Chief Executive Officer and Group Finance Director met significant shareholders to update them in person regarding results and key developments concerning the Group and to understand any issues and concerns they may have. The views of shareholders and market perceptions are regularly communicated to the Board via verbal briefings. The Company produces Annual and Interim Reports for shareholders and the Company’s website contains up-to-date information on the Group’s activities.


Constructive use of the Annual General Meeting

Shareholder attendance and participation at the AGM is welcomed. Amendments to the Company’s Articles of Association require shareholder approval at the AGM. The Company proposes separate resolutions on each substantially separate issue and the proxy appointment forms for each resolution provides shareholders with the option to direct their proxy to vote either for or against a resolution or to withhold their vote. The Company’s registrars ensure that all valid proxy appointments received for the AGM are properly recorded and counted and a schedule of proxy votes cast is made available to all shareholders attending the meeting. There is also full disclosure of the voting outcome on the Company’s website as soon as practicable after the AGM. Shareholders are given the opportunity to raise issues formally at the AGM or informally with Directors after the meeting. All Directors normally attend the Annual General Meeting and the Chairs of the Committees are available to answer questions at the AGM. The notice of the AGM and related papers are sent to shareholders at least 20 working days before the meeting.


Internal Control

The Directors have overall responsibility for ensuring that the Group maintains a system of internal controls, for monitoring their effectiveness to provide them with reasonable assurance regarding the reliability of financial information used within the business and for publication, and that assets are safeguarded. There are inherent limitations in any system of internal control and accordingly even the most effective system can only provide reasonable, and not absolute, assurance against misstatement or loss.

The Board identifies and appraises risks, and maintains control and direction over appropriate strategic, financial, and organisational structure matters with formally defined lines of responsibility and delegation of authority. There are established procedures for planning and capital expenditure, for information and reporting systems, and for monitoring the Group’s business and its performance. The Board has delegated to executive management the implementation of the systems of internal financial control within an established framework that applies throughout the Group, and is responsible for reviewing the Group’s whistleblowing procedures.

The Directors believe the following to be the key procedures established to provide internal financial control:

  • the operation of authorisation procedures
  • appropriate segregation of duties
  • clearly delegated responsibilities
  • close involvement of senior management in day-to-day activities
  • setting of detailed annual budgets with reporting of variance analysis on a monthly basis
  • the operation of an Audit Committee, supported by an internal audit function
  • an established whistleblowing policy, the governance of which is overseen by the Audit Committee

The Board considers a significant failing to be any item that would lead to a material misstatement of the financial statements. In considering whether an item represented a significant failing, qualitative aspects of any failing would also be considered, as would the potential for the failing to affect the wider Group. While there were no significant weaknesses identified, any actions required as a result of non-significant weaknesses were discussed and actions agreed and monitored at the Audit Committee meetings held during the year. Further details of the assessments and actions are provided in the Audit Committee Report. The internal audit function, which is not wholly independent of Group Finance, was reviewed by the Audit Committee during the year.

The Directors have reviewed the systems of internal financial control in operation during the year and up to the date of approval of the Annual Report. No significant concerns were raised. The process is regularly reviewed and a full evaluation of the Group’s risk management and internal control systems is performed at least annually. This process accords with the Internal Control: Revised Guidance for Directors on the Combined Code.