Vision Media Group International | Corporate Governance
Principles of Corporate Governance
The company's board of directors appreciates the value of good corporate governance not only in the areas of accountability and risk management but also as a positive contribution to business prosperity. It believes that corporate governance involves more than a simple "box ticking" approach to establish whether a company has met the requirements of a number of specific rules and regulations. Rather the issue is one of applying corporate governance principles (including those set out in the Corporate Governance Guidelines for AIM companies published by the Quoted Companies' Alliance in July 2005) in a sensible and pragmatic fashion having regard to the individual circumstances of the Group's business. The key objective is to enhance and protect shareholder value.
Board structure
The Board is responsible to shareholders for the proper management of the Group. A statement of directors' responsibilities in respect of the accounts is set out in the annual report. Brief biographical details of the directors are available on the board page.
The Non-Executive Director has a particular responsibility to ensure that the strategies proposed by the Executive Directors are fully considered. The Non-Executive Director is considered by the Board to be independent of management and free of any relationship which could materially interfere with the exercise of his independent judgement. The Non-Executive Director receives a fee for his services. Eric Anstee is also considered to be the Senior Non Executive Director.
To enable the Board to discharge its duties, all directors have full and timely access to all relevant information and there is a procedure for all directors, in furtherance of their duties, to take independent professional advice, if necessary, at the expense of the Group. The Board has a formal schedule of matters reserved to it and meets monthly. It is responsible for overall Group strategy, approval of major capital expenditure projects and consideration of significant financing matters. Both the Executive and Non Executive Directors have attended all meetings which they were eligible to attend during the year.
On 12 April 2007, Eric Anstee joined the board and is currently the only Non Executive Director on the Board. At that date he also agreed to take on the role for a limited period of Finance Director on a part time basis, pending the appointment of someone full time. Because of the precarious funding of the Company since that date this has not been possible. It is, however, the intention of the Board to rectify this as soon as possible after funding and the future of the company is secure. At this stage of the Group's development, the Board as a whole considers this to be appropriate as well as having only one Independent Director in view of the cost implications, but will make further non executive appointments to the Board as soon as practical.
The following committees, which have written terms of reference, deal with specific aspects of the Group’s affairs:
- the Remuneration Committee is responsible for making recommendations to the Board on the Company's framework of executive remuneration and its cost. The committee determines the contract terms, remuneration and other benefits for each of the executive directors, including performance related bonus schemes, pension rights and compensation payments. The Board itself determines the remuneration of the Non-Executive Director(s). Eric Anstee chairs the committee which is constituted with Michael Cottman, Executive Chairman and himself, which meets at least twice per annum including immediately before the submission of the annual and interim financial statements to the board. The report on directors' remuneration is set out in the annual report.
- The members of the Audit Committee are Michael Cottman and Eric Anstee (who now chairs the committee). Its prime tasks are to review the scope of external audit, to receive regular reports from Baker Tilly UK Audit LLP, and to review the half-yearly and annual accounts before they are presented to the Board, focusing in particular on accounting policies and areas of management judgement and estimation. The committee is responsible for monitoring the controls which are in force to ensure the integrity of the information reported to the shareholders. The committee acts as a forum for discussion of internal control issues and contributes to the board's review of the effectiveness of the Group's internal control and risk management systems and processes. It advises the Board on the appointment of external auditors and on their remuneration for both audit and non-audit work, and discusses the nature and scope of the audit with the external auditors.
It reviews and monitors the independence of the auditors especially with regard to non-audit work. The Audit Committee has met twice during the year to consider the reports of the auditors immediately before the submission of the annual and interim financial statements to the Board.
No formal Nomination Committee exists in view of the stage of growth of the Group. Instead, appointments to the Board are considered by the Executive Chairman and other Executive Directors, and discussed with the Non Executive Director. Appointments are made after an evaluation of the skills, knowledge and expertise required to ensure that the Board as a whole has the ability to ensure that the Group can continue to compete effectively in its market place.
Internal control
The directors are responsible for the Group's system of internal control and reviewing its effectiveness. The Board has designed the Group's system of internal control in order to provide the Directors with reasonable assurance that its assets are safeguarded, that transactions are authorised and properly recorded and that material errors and irregularities are either prevented or would be detected within a timely period. However, no system of internal control can eliminate the risk of failure to achieve business objectives or provide absolute assurance against material misstatement or loss.
The key elements of the control system in operation are:
- the Board meets regularly with a formal schedule of matters referred to it for decision and has put in place an organisational structure with clear lines of responsibility defined and with appropriate delegation of authority;
- there are procedures for planning, approval and monitoring of capital expenditure and information systems for monitoring the Group's financial performance against approved budgets and forecasts.
The Audit Committee will receive reports from the external auditors on a regular basis and from Executive Directors of the Group. During the year, the Audit Committee has reviewed the effectiveness of the system of internal control as described above. The Board receives periodic reports from all committees.
There are no significant issues disclosed in the report and financial statements for the year ended 31 December 2007 and up to the date of approval of the report and financial statements that have required the Board to deal with any related material internal control issues.
The Directors confirm that the Board has reviewed the effectiveness of the system of internal control as described during the year. The Board has considered whether the Group's internal controls processes would be significantly enhanced by an internal audit function and has taken the view that at the Group's current stage of development, this is not required. The Board will continue to review this matter each year.
Relations with shareholders
The Group values its dialogue with both institutional and private investors. Effective two-way communication with fund managers, institutional investors and analysts is actively pursued and this encompasses issues such as performance, policy and strategy. During the year the Directors have had meetings with analysts and institutions and will continue to do so on a regular basis.
There is also an opportunity, at the company's Annual General Meeting for individual shareholders to raise general business matters with the full Board and notice of the Company's Annual General Meeting is circulated to all shareholders at least 21 days before such meeting. The Chairman of the Audit and Remuneration Committee will be available at the Annual General Meeting to answer questions.
The Annual Report is to be published on the company's website (www.visionmediagroupplc.com), which also includes previous financial reports and other announcements made during the year.