Corporate Governance Statement
As a Chairman, my role is to manage the Board in the best interests of our stakeholders, to ensure that our shareholders’ views are communicated to the Board and to be responsible for ensuring the Board’s integrity and effectiveness. I recognise that my role also involves my responsibility over the correct implementation of the QCA Code into Mirada’s Corporate Governance practices.
The Company is managed by the Board of Directors, and it is the Board’s job to ensure that the Mirada Group is managed for the long-term benefit of all shareholders, with effective and efficient decision-making. Corporate governance is an important part of that job, reducing risk and adding value to our business.
In addition to each of the 10 principles listed further below, the following provides an overview of how the Company applies the QCA Code, in order to support the Company’s medium to long-term success:
The Board comprises three Executive and two independent non-Executive Directors. The Board considers, after careful review, that the non-Executive Directors bring an independent judgement to bear notwithstanding their length of service and are therefore both considered independent. The Board has decided to adopt voluntarily the practice that one third of the Directors stand for re-election on an annual basis.
Francis Coles, the non-Executive Chairman, is responsible for the running of the Board and corporate governance. José Luis Vázquez, the Chief Executive, has executive responsibility for running the Group’s business and implementing Group strategy. The Board meets at least four times per year and has a formal schedule of matters reserved to it. It is responsible for overall Group strategy, approval of major capital expenditure projects, approval of the annual and interim results, annual budgets and Board structure. It monitors the exposure to key business risks and reviews the strategic direction of all trading subsidiaries, their annual budgets, their performance in relation to those budgets and their capital expenditure. The Board delegates day-to-day responsibility for managing the business to the Executive Directors and the senior management team.
The Board believes that, given its size, there is sufficient opportunity for shareholders to raise any concerns they may have with the non-Executive Chairman, the Chief Executive, the Group Finance Director and the other Directors.
Our values are based on two cornerstones: our customers and our employees. The Board believes this is vital for creating a sustainable, growing business and is a key responsibility of the Group. This culture supports the Company’s objectives to grow the business through acquiring and retaining customers by attending to their needs from the very beginning of the sales process until successful delivery and during ongoing services provision and support. The Company recognises its employees as a key driver of success, and considers it crucial to recruit and retain the right people with the appropriate set of skills and values. Corporate Governance is an important part of that job, reducing risk and adding value to our business.
Even though the Company’s goal is to meet all the expectations set by the QCA Code, there is not currently a separate Company Secretary appointed. This decision is motivated by the size of the Company and the Board itself, and currently all the functions of a Company Secretary are being shared between the three Executive Directors: José Luis Vázquez, Gonzalo Babío and José Gozalbo.
Francis Coles, Chairman
Principle 1: Establish a strategy and business model which promote long-term value for shareholders
The Mirada Group strategy is focused around four key areas: market, product, sales, and business model, as explained fully within our Strategic Report section on pages 5 and 6 of our Report and Accounts for the year ended 31 March 2018.
The Group’s strategy is to extend its presence in the Digital TV markets, focusing on markets with high potential growth rates, for example the Latin American, Eastern Europe and South East Asian markets. The aim is to increase the number of customers being charged subscriber-based licence fees, as these revenues command higher margins and, as long as the customer’s subscriber base is growing, Mirada will continue to earn licence fees even from projects completed several years previously.
The key challenges to the business and how these are mitigated are detailed on pages 5 & 6 of our Report and Accounts for the year ended 31 March 2018.
Principle 2: Seek to understand and meet shareholder needs and expectations
The Mirada Group encourages two-way communication with both its institutional and private investors and deals with all queries received in a timely manner. The CEO talks regularly with the Group’s major shareholders and ensures that their views are communicated fully to the Board.
The Board recognises the AGM and the GMs as important opportunities to meet private shareholders. The Directors are available to listen to the views of shareholders informally immediately following the AGM. The Group has set up a dedicated email address for all investor queries.
Where voting decisions are not in line with the Company’s expectations the Board will engage with those shareholders to understand and address any issues.
Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success
The Mirada Group has identified the following key stakeholders and has implemented the following actions to cover their needs, interests and expectations:
1. Employees – company meetings, CEO letters, work council
2. Customers – corporate website, social media, international trade fairs, personal meetings, high- and low-level bilateral meetings
3. Sales Partners – internal blog, weekly industry press reviews, weekly follow-up conferences, marketing material
4. Shareholders – see principle 2
5. Technological Partners – corporate website, social media, international trade fairs, personal meetings, high- and low-level bilateral meetings
6. Compliance and corporate/regulatory advisers – periodic conference calls and meetings, advice requests as applicable
7. Banks – periodic meetings
The nature of Mirada’s business means that it is continuously seeking feedback on its products from customers and sales partners. The Company makes improvements and developments to its products and service offerings taking into account the feedback it receives.
Mirada identifies its employees as its key asset and puts a considerable amount of effort into ensuring employee satisfaction by such measures as improving work-life balance, providing fringe benefits, team building activities and many more.
Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation
The key risks to the business are set out on pages 4 & 5 of our Report and Accounts for the year ended 31 March 2018 and how these are mitigated.
The Board considers risk to the business at every Board meeting (at least 1 meeting is held per quarter) and the risk register is updated at each meeting. The Company formally reviews and documents the principal risks to the business at least annually. The Company has in place an anti-bribery and corruption policy as well as other policies and procedures which employees, management and agents are required to adhere to. Robust financial procedures and safeguards are in place regarding expenditure and accounting functions.
Both the Board and senior managers are responsible for reviewing and evaluating risk and the Executive Directors meet at least monthly to review ongoing trading performance, discuss budgets and forecasts and new risks associated with ongoing trading. The Directors consider that the policies and systems in place are effective and the Company’s annual audit provides an opportunity for any shortcomings to be identified and improvement measures put in place.
Maintain a dynamic management framework
Principle 5: Maintain the Board as a well-functioning, balanced team led by the chair
The Board intends to include the following information in its next annual report (YE 31 March 2019):
– Identity of the directors who are considered to be independent
– Description of the time commitment required from directors (including non-Executive Directors)
– Details of the number of meetings of the Board (and any committees) during the year together with the attendance record of each director
The Board Meetings are held four times per year. The Remuneration and Nomination Committee and the Audit Committee meetings are held as often as necessary, and at least twice per year.
The Company is controlled by the Board of Directors. Francis Coles, the non-Executive Chairman, is responsible for the running of the Board and José Luis Vázquez, the Chief Executive, has executive responsibility for running the Group’s business and implementing Group strategy.
All Directors receive regular and timely information about the Group’s operational and financial performance. Relevant information is circulated to the Directors in advance of meetings. In addition, minutes of the meetings of the Directors are circulated to the Group Board of Directors. All Directors are able to take independent professional advice in the furtherance of the duties, if necessary, at the Company’s expense.
The Board comprises three Executive Directors and two independent non-Executive Directors. The Board considers that all non-Executive Directors bring an independent judgement to bear notwithstanding the varying lengths of service.
The Board performs formal meetings of the Audit, Remuneration and Nomination Committees on a regular basis.
Principle 6: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
Biographies for each director are included on the Company’s website. The Directors bring a mixture of relevant sector, public company and financial experience to the Board such that it has the capabilities to deliver the Company’s strategy. The Nomination and Remuneration Committee of the Board oversees the hiring process and makes recommendations to the Board on all new Board appointments. Where new Board appointments are considered the search for candidates is conducted, and appointments are made, on merit, against objective criteria. Whilst there is not currently a balance of genders on the Board, the Company’s directors look to appoint individuals with complementary skills and experience to fulfil the Company’s strategy, regardless of gender.
The Nomination and Remuneration Committee also considers succession planning.
The directors keep their skillsets up to date by attending industry and qualification relevant seminars and training sessions.
The directors seek advice from their corporate advisers (including the Company’s nominated adviser, lawyers and accountants) as necessary.
The Board carries out an evaluation of its performance annually, taking into account the Financial reporting Council’s Guidance on Board Effectiveness.
Principle 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
The Board carries out an evaluation of its performance annually, taking into account the Financial reporting Council’s Guidance on Board Effectiveness.
All Directors undergo a performance evaluation before being proposed for re- election to ensure that their performance is and continues to be effective, that where appropriate they maintain their independence and that they are demonstrating continued commitment to the role.
Appraisals are carried out each year with all Executive Directors.
All continuing Directors stand for re-election every three years.
Going forward the Company intends to provide an overview of how this evaluation process is carried out including details of the criteria against which board, committee, and individual effectiveness is considered. The Company will also provide a summary of the results of this evaluation process and details of any action taken.
Principle 8: Promote a corporate culture that is based on ethical values and behaviours
Ethical values and behaviours are one of the key elements of Board members’ appraisals. It also forms an important part of every employee’s appraisal process, with a special focus on employees with direct contact with customers and vendors. This appraisal process allows the Board to determine that ethical values and behaviours are recognised and respected.
Company values are also included in the welcome package that every new employee receives upon joining the Company, which is also available for everyone on the Company’s Intranet.
Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board
Francis Coles, the non-Executive Chairman, is responsible for the running of the Board and José Luis Vázquez, the Chief Executive, has executive responsibility for running the Group’s business and implementing Group strategy. Mr Vázquez also takes responsibility for the Company’s liaison with shareholders.
Audit and Risk Committee
The audit and risk committee is responsible for ensuring that the financial performance of the Group is properly reported on and monitored, including reviews of the annual and interim accounts, results announcements, internal control systems and procedures and accounting policies. The Committee regularly evaluates the relevant financial, commercial and operational risk factors for the business. The Audit and Risk Committee also reviews the appointment of the external auditor, their independence, the audit fee, and any questions of resignation or dismissal. The Audit and Risk Committee comprises of Mr. Coles (Chairman) and Mr. Earl, and meets as often as required and at least twice annually.
Nomination and Remuneration Committee
The role of the Nomination and Remuneration Committee is to assist the Board in fulfilling its responsibilities in respect of establishing appropriate remuneration levels and incentive policies for employees, Executives and Directors, including all share compensation. The Committee evaluates the adequacy of new candidates for the Board and top Executives of the Company. The Nomination and Remuneration Committee comprises of Mr. Coles (Chairman) and Mr. Earl, and meets as often as required and at least twice annually.
The Board continues to monitor its governance framework on an ongoing basis. As the Company grows, the Directors will consider engaging the services of external governance advisers and developing areas such as internal audit.
Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.
The Company encourages two-way communication with both its institutional and private investors and responds quickly to all queries received. The CEO talks regularly with the Group’s major shareholders and ensures that their views are communicated fully to the Board.
The Board recognises the AGM and other GMs as important opportunities to meet private shareholders. The Directors are available to listen to the views of shareholders informally, immediately following any General Meeting.
The Company intends to include reports from the Audit Committee and the Nomination and Remuneration Committee in its annual report for the year ended 31 March 2019.
Going forward, the Company intends to disclose the outcome of all shareholder votes on its website and in the case of 20% of independent votes being case against a resolution, provide an explanation of the actions that will be taken to enable the Board to understand the reasons for this result and any future actions it will take to address such concerns.
The Company’s website contains historic annual reports and notices of general meetings over the past five years.