Corporate Governance Report

Board Independence

At the balance sheet date all Non-Executive Directors were considered independent. Prior to the appointment of a Director, the proposed appointee is required to disclose any other business interests that may result in a conflict of interest. In addition, the Board carries out a review of all current Directors’ business interests annually to assess the continued independence of Non-Executive Directors.

The following appointments are held by the Executive Directors:

Simon Neal - Trustee of the St Matthieu’s Trust, School Governor of FCJ Primary School and Director of Lola Investments Limited.

These are not considered to present a conflict of interest.

Membership of the Audit & Risk Committee and the Remuneration & Nomination Committee is comprised solely of Non-Executive Directors, to ensure independence from the Executive Team, who attend by invitation only. Committee members are authorised to obtain, at the Company’s expense, professional advice on any matter within their terms of reference and to have access to sufficient resource to carry out their duties. A report from the Chair of the Audit & Risk Committee is provided on pages 44-45 and a report from the Chair of the Remuneration & Nomination Committee is provided on page 46-49.

Meetings

The Board and its Committees meet regularly and are responsible for setting and monitoring strategy, reviewing performance and risk management, examining business plans, capital and revenue budgets, formulating policy on key issues, taking decisions on major development proposals, sales and acquisitions, reporting to the Shareholder and securing Shareholder approval where necessary prior to entering into legally binding commitments. Board papers are circulated prior to each meeting to ensure informed discussion on the matters at hand.

The Board met six times during 2022.

In addition to formal Board meetings, the Deal Advisory Panel meet when required, and regular communication is maintained between the Board members and the Executive Team. The Chair and Board members attend quarterly meetings with the Shareholder, and in July 2022 the annual Strategy Day was held.

* Retired as non-Executive Director and SID on 20 December 2022

** Appointed as SID on 20 December 2022

*** Appointed as non-Executive Director on 22 September 2022

**** The Board selected Fiona Smith as a “Board Apprentice” and approved her 12 month appointment on 13th May 2021. Fiona attended all Board, Audit & Risk Committee and Remuneration & Nomination Committee meetings as an observer until the end of her appointment.

Board Effectiveness

In accordance with the Board’s Terms of Reference, an annual performance assessment of the Board, Committees and of the Chair is made, together with recommendations for areas of improvement.

This annual performance assessment considers Board composition, diversity and how effectively members work together to achieve objectives. It also considers whether each director continues to contribute effectively. The Board’s policy is to carry out an externally facilitated evaluation every three years and an internal one on an annual basis. Altair Partners Limited (Altair) was appointed in 2022 to conduct an independent board effectiveness review in accordance with good governance practice.

During 2022 the Board considered and started to implement the recommendations of the Altair report, which it will continue to do in 2023. Recommendations generated by the 2021 internal evaluations were also implemented during 2022.

The external review undertaken by Altair involved each member of the Board, and other regular Board meeting attendees, completing a detailed questionnaire compiled by Altair, followed by individual interviews. Outcomes were collated and summarised, and a formal report of observations and recommendations was presented by Altair to the Board, following which actions were discussed and determined by the Board and Committees.

The findings of the assessment were that the Board is strong, professional and collaborative in approach and cohesive and inclusive, with a wide range of skills. It is considered an effective decision maker, which prioritises well and is prepared to challenge where required.

While the overall findings were positive, outcomes and actions were identified for the Board to consider as it consistently strives to improve and demonstrate high standards of corporate governance. The outcomes fell into four broad areas of: Board Transition, Board Purpose, ESG and Relationships.

The actions agreed were:

• To ensure a smooth transition as longestablished members, including the Chair, transition off the Board;

• To review the purpose of the Board and its terms of reference;

• Building on our Strategy, to continue to develop the Company’s approach to ESG, including determining how to embed ESG considerations in all Company decisions;

• To review and enhance the Company’s relationship management approach.

Risks and Mitigations

The Board has overall responsibility for the maintenance of the Company’s system of internal control, including its effective operation and for reviewing its appropriateness, following any change to business operation(s). The role of management is to implement Board policies on risk and control. The system of internal control is designed to manage, rather than eliminate the risk of failure to achieve business objectives.

The Audit and Risk Committee establishes procedures to manage risk, oversee the effectiveness of the Company’s risk management systems, internal financial controls and internal control framework, to identify, assess, manage and monitor key financial and business risks. The Committee determines the nature and extent of the principal risks the Company is willing to take, to achieve its long-term strategic objectives, and makes appropriate recommendations to the Board.

The key procedures which the Board has established to manage risk and to provide effective controls cover:

• Strategy & Management;

• Financial Reporting and Control;

• Staff performance and development;

• Major contract approval;

• Joint venture oversight;

• Communication;

• Stakeholder relations;

• ESG.