Skip to main content

Corporate Governance

Zytronic plc and its operating subsidiary Zytronic Displays Ltd, utilise the following three core values to serve as the guidelines for our conduct as an organisation and for the behaviour of our employees.

Our Principles

Integrity

Building relationships of mutual respect with colleagues, customers, suppliers, advisors and investors, ensuring that we conduct ourselves at all times in an open, honest and ethical manner.

Quality

Providing customer satisfaction through the continual improvement of our products, processes and the capabilities of our employees, through innovation, development and training.

 

Performance

Driving towards profitable growth and increasing shareholder value through the balance of short term demands and long term strategies.

In-line with these core values Zytronic Displays Ltd operate Quality Management and Environmental Management Systems which comply with and are certified to the requirements of the BS EN ISO9001:2015 and BS EN ISO14001:2015 standards respectively.

Corporate Governance and Audit Committee

Corporate Governance

The Board intends to comply with the principles of good governance and the recommendations of best practice as set out in the Combined Code so far as is practicable and appropriate for an AIM company of its size and, in this connection, the Board shall take into account guidance issued by the Quoted Companies Alliance.

The Board normally meets at least five times a year and is responsible for formulating, reviewing and approving strategy, budgets, significant capital expenditure and senior personnel appointments. The Board comprises a Non- Executive Chairman, one Non-Executive Director and two Executive Directors. The Non-Executive Director and Chairman are independent of the executive management.

The Executive Directors and the subsidiary’s senior management meet regularly to review and consider operational matters.

Following admission to AIM, the Directors established an audit committee and a remuneration committee, each of which operates within defined terms of reference. The audit committee meets at least twice a year, whilst the remuneration committee meets at least once.

Audit Committee

The audit committee’s primary responsibility is to ensure that the financial performance, position and prospects of the Company are properly monitored and reported on, and for meeting the auditors and reviewing their reports relating to accounts and internal controls. The committee comprises David Buffham (Chairman) and  Tudor Davies.

David Buffham was appointed Chairman of the Audit Committee on the 21st September.  Tudor Davies who has an accountancy background remains on the Committee and the Board considers the balance of skills to be appropriate to the Company.

Share Dealing

In addition, the Company has adopted a dealing code for all Directors including subsidiary Directors in terms no less exacting than the Model Code for Directors’ Dealings as set out in the Listing Rules of the UK Listing Authority and will take all reasonable steps to ensure compliance by the Board and any relevant employees.

CORPORATE GOVERNANCE In line with the London Stock Exchange’s recent changes to the AIM Rules requiring all AIM-listed companies to adopt and comply with a recognised corporate governance code, the Board has adopted the Quoted Companies Alliance Corporate Governance Code (QCA Code). Details of how we comply with the QCA Code principles in broad terms can be found below in our Statement of Compliance with the QCA Code.

 

Tudor Davies

Chairman

Reviewed 27/09/2018

 

Statement of Compliance with the QCA Corporate Governance Code 

Principle
Overview
Application
1
Establish a strategy and business model which promote long-term value for shareholders. The Board believes it fully complies with this principle.

The Board acknowledges that they need to express a shared view of the Company’s purpose, business model and strategy.

This view must go beyond the simple description of products and corporate structures by setting out how the Company intends to deliver shareholder value in the medium to long-term and demonstrating 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.

This view is set out in the Annual Report and Financial Statements on pages 10-13 of the 2017 report.
2
Seek to understand and meet shareholder needs and expectations. The Board believes it fully complies with this principle.
The Directors have developed a good understanding of the needs and expectations of all elements of the Company’s shareholder base. The Board acknowledges it must manage shareholders’ expectations and should seek to understand the motivations behind shareholder voting decisions.
Communication with shareholders is given high priority. There is regular dialogue with major and/or institutional shareholders, including presentations after the Company’s announcements of the half-year and full-year results in May and December, respectively.   Presentations are also made to analysts and journalists at those times to present the Group’s results and report on developments. This assists with the promotion of knowledge of the Group in the investment marketplace and with shareholders. The financial statements include a review of the business and future developments. These financial statements, the presentations and other financial information relating to the Group are available on this website at https://www.zytronicplc.com/investor-information/finance-performance/.
Following the half-year and year-end presentations of results, the Executive Directors report to the Board on the feedback received from journalists, analysts and shareholders. In addition, the Company’s Nomad produces a feedback report from those meetings which is made available to all Directors. The Board considers the feedback presented to ensure the Company is discharging its responsibilities to its shareholders. The Executive Directors also report to the Board on any meetings with shareholders or institutional investors that may take place at other times of the year.The Board uses both the annual report and financial statements and the Annual General Meeting to communicate directly with private and institutional investors and welcomes their participation. The Chairman aims to ensure that the Chairmen of the audit and remuneration committees are available at the Annual General Meeting to answer questions.   Details of resolutions to be proposed at the Annual General Meeting can be found in the Notice of Annual General Meeting which is presented within the Annual Report and Accounts.   Should there be significant shareholder objection to any of the proposed resolutions then the Board ensures it contacts the shareholder to understand the motive behind the voting decision. The Board then considers this decision when making future decisions.                                                                                                                                                                                                                                                                                                                                                                                                    The primary point of contact at the Company for the shareholders is the Company Secretary, Claire Smith, who can be reached via telephone (+44 191 414 5511) or email at info@zytronicplc.com                                                                                                                                 In addition, the Independent Director is available to shareholders if they have any concerns which contact through the normal channels of the Chairman, the Chief Executive or the Group Finance Director has failed to resolve or for which, such contact is inappropriate.
3
Take into account wider stakeholder and social responsibilities and their implications for long term successThe Board believes it fully complies with this principle.

The Board understands that 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 has identified the Company’s stakeholders and understand their needs, interests and expectations and also acknowledges within its strategy and business model matters that relate to the Company’s impact on society, the communities within which it operates or the environment.

The Board takes stakeholder feedback very seriously and has implemented systems to garner the views from both its internal and external stakeholders.

We commit to the following to ensure the Company is discharging its responsibilities to its stakeholders.

Customer engagement

Our work streams are project orientated and we therefore rely heavily on customer engagement and feedback on delivering exceptional products tailored exactly to our customers’ requirements.   We do not sell one standard product and therefore our relationships with our customers pre and post sale are essential to the future business development. We continue to advise and support our customers following a sale in order to assist with the integration of our sensors into their final products. We often provide troubleshooting advice on areas that are not related to our core business, but to assist the customer. Other than delivering exceptional quality, it is because of this engagement and level of support that our customers come back to us for new and innovative future projects.

 

Supplier engagement

We have very good relationships with our suppliers and we work in conjunction with them to ensure our raw materials are delivered to our exact specification in the quantities in which we require. As a Company whose USP is the quality and durability of its products we must ensure the components of our product meet the requirements of ourselves and our customers. We also liaise with our suppliers on the development of new materials to ensure the relationships continue to strengthen. The Company does not engage with suppliers who do not abide with the Modern Slavery Act guidance and we do not buy conflict materials. We also prohibit the use of child labour in our supply chain.

Employee engagement

We strive to create the right conditions for all members of our organisation to give their best, are committed to our goals and values, and are motivated to contribute to the organisational success, with an enhanced sense of wellbeing. We ensure we communicate with our employees on a regular basis and we consider their feedback and knowledge when making changes to our processes.   We have a good mix of long serving employees and newer recruits which brings a good perspective when it comes to business development.

Training

Employee training and development is one of the key factors to our success. Comprehensive training programmes allow us to advance workplace safety, productivity and satisfaction, as well as creating an informed and inspired workforce who can contribute to the advancement of our touch technology. We regularly review this across all departments to ensure that we continue to meet the needs of the business and also to assist in succession planning.

 

Apprenticeships

We are committed to training and have embarked on an apprenticeship scheme to train our engineers of the future. We believe this will help to mitigate against a possible skills gap in the future and encourage future apprentices to join our Company.

 

Diversity

We pride ourselves on our diversity. Varying characteristics of our employees include, but are not limited to: religious and political beliefs, gender, ethnicity, education, socio-economic background, sexual orientation and geographic location.

 

Environmental policy

At Zytronic we are committed to working towards a cleaner and greener future for all.

We endeavour to comply with all relevant environmental legislation and regulation. It is our goal to attain higher standards of environmental performance where practical and appropriate.

We are fully compliant with BSI Environmental Management System ISO 14001:2015.

 

Recycling

We promote environmental awareness throughout the Group and have introduced a number of activities which include the recycling of paper, cardboard, plastics, cans, bottles, metals, etc. Since introducing these recycling activities, Zytronic has reduced pollution into the environment by diverting 95% of its waste away from landfill with the remaining 5% being used as RDF fuel.

 

 

4
Embed effective risk management, considering both opportunities and threats, throughout the
organisation. 
The Board believes it fully complies with this principle.

The Board ensures that the Company’s risk management framework identifies and addresses all relevant risks in order to execute and deliver strategy;The Company considers extended business, including the Company’s supply chain, from key suppliers to end-customer. When setting strategy, this includes determining the extent of the Company’s risk tolerance and risk appetite.

 

Risk management and the application of this principle is set out in the Annual Report and Financial Statements. on pages 15-17 of the 2017 report.
5
Maintain the board as a well-functioning, balanced team led by the chair. The Board believes it fully complies with this principle.

The Board members acknowledge that they have a collective responsibility and legal obligation to promote the interests of the Company and are collectively responsible for defining corporate governance arrangements.However, the Chair, Tudor Davies acknowledges that the ultimate responsibility for the quality of, and approach to, corporate governance lies with him.

The Board and its committees are provided with high quality information in a timely manner to facilitate proper assessment of the matters requiring a decision or insight.

The Company’s Board considers its current mix of executive and independent non-executive directors to present an appropriate balance but keeps this matter under regular review and evaluation and is mindful of the directors committing the time necessary to fulfil their roles.

The Board are supported by committees (e.g. audit and remuneration) that have the necessary skills and knowledge to discharge their duties and responsibilities effectively.

 

The application of this principle is set out in the Directors’ Report in the Annual Report and Financial Statements. The Board have addressed some of these principles in the 2017 report and will add further detail into the 2018 report, which is due to be published around December 2018.
6
Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities. The Board believes it fully complies with this principle.

The Board acknowledges it 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 understands and challenges its own diversity, including gender balance, as part of its composition and keeps all elements of its composition under regular review and evaluation to ensure it evolves to reflect the mix of skills and experience required.

 

The application of this principle is set out in the Directors’ Report in the Annual Report and Financial Statements. The Board will address this matter in the 2018 report.
7
Evaluate board performance based on clear and relevant objectives, seeking continuous improvement. The Board believes it partially complies with this principle.

The Board regularly reviews the effectiveness of its performance as a unit, as well as that of its committees and the individual directors. The Board performance review is carried out internally and attempts to identify development or mentoring needs of individual directors or the wider senior management team, along with succession planning issues and additional skills requirements.

 

The Chairman believes the Board has performed effectively over the year. The key strategic issues and risks have been discussed in an open and honest forum with decisions being made based on the factual data presented. Each Board member has a particular area of expertise and has utilised this to provide insightful comment and contribution to the business demands of the Company. The Company is mindful of succession planning and has discussions on this matter.The Board does not have a formal evaluation process in place as it feels it has a good balance of skills and expertise, however all members are regularly challenged and assessed at the Board meetings.

8
Promote a corporate culture that is based on ethical values and behaviours. The Board believes it fully complies with this principle.
The Board embodies and promotes a corporate culture that is based on sound ethical values and behaviours. Corporate values guide the objectives and strategy of the Company and are entrenched in every aspect of the business, including recruitment, promotions, training and engagement.

We have three core values which serve as the guidelines for our conduct as an organisation and for the behaviour of our employees:

Integrity

Building relationships of mutual respect with colleagues, customers, suppliers, advisers and investors, ensuring that we conduct ourselves at all times in an open, honest and ethical manner.

 

Quality

Providing customer satisfaction through the continual improvement of our products and processes and the capabilities of our employees, through innovation, development and training. We work with both our customers and suppliers to meet theirs and our needs in delivering exceptional products tailored exactly to our customers’ requirements.

 

Performance

Driving towards profitable growth and increasing shareholder value through the balance of short term demands and long term strategies whilst considering our impact on our wider stakeholder group.

 

The Company regularly assesses these principles to ensure they are being maintained across all areas of the business and reacts if necessary to any changes it is required to make to continue to comply. The Chairman will include a corporate governance section in his statement in the 2018 Annual Report and Financial Statements.

 

 

9
Maintain governance structures and processes that are fit for purpose and support good decision-making by the board. The Board believes it fully complies with this principle.

The Company maintains governance structures and processes in line with its corporate culture and appropriate to its:· size and complexity; and · capacity, appetite and tolerance for risk.

The Company’s governance structures are evolved over time in parallel with its objectives, strategy and business model to reflect the development of the Company.

 

Directors’ Responsibilities

The Board comprises a Non-Executive Chairman, one Non-Executive Director and two Executive Directors. The Non-Executive Director and Chairman are independent of the executive management. The Executive Directors and the subsidiary’s senior management meet regularly to review and consider operational matters.

 

The Board’s responsibilities include setting annual budgets, reviewing trading performance, approving significant capital expenditure, ensuring adequate funding, setting and monitoring strategy, examining major acquisition possibilities and reporting to shareholders. Between meetings there is regular informal discussion between the Chairman, Chief Executive, Group Finance Director and Non-Executive Director. The Non-Executive Director and the Non-Executive Chairman have a particular responsibility to ensure that the strategies proposed by the Executive Directors are fully considered.

 

The Chairman’s primary responsibility is to facilitate Board discussion on the key drivers for value creation and risk management with the business as well as the effective running of the Board.

 

The Executive Directors have day to day responsibility of the business operations alongside the subsidiary Company Directors, which also includes engagement with shareholders and stakeholders and Company secretarial matters.  The Company will continue to evolve its governance matters in line with the Company’s plans for growth.

 

Board Committees

Following admission to AIM, the Board established an audit committee and a remuneration committee, each of which operates within defined terms of reference.

 

Audit Committee

The audit committee is chaired by David Buffham. The other member is Tudor Davies, the Non-Executive Chairman. The audit committee meetings are also attended, by invitation, by the other Directors.  The committee provides a forum for reporting by the Group’s external auditors.

 

The audit committee is responsible for reviewing a wide range of matters including the half year and annual financial statements before their submission to the Board and monitoring the controls which are in force to ensure the integrity of the information reported to the shareholders. The audit committee advises the Board on the appointment of external auditors and on their remuneration both for audit and non-audit work and discusses the nature, scope and results of the audit with the auditors.

 

The audit committee keeps under review the cost effectiveness of the auditors. It also reviews the extent of the non-audit services provided by the auditors and reviews with them their independence and objectivity. The Chairman of the audit committee reports the outcome of audit committee meetings to the Board and the Board receives minutes of the meetings. There has previously been no Audit Committee report presented in the Annual Report and Financial Statements, but the Board and the Board will include this in the 2018 report.

 

Remuneration Committee

The remuneration committee is chaired by David Buffham, the Independent Non-Executive Director. The other member is Tudor Davies, the Non-Executive Chairman. The committee is responsible for determining the remuneration for the Executive Directors and the subsidiary Directors. 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 determines the remuneration of the Chairman and the Non-Executive Director. The Remuneration Committee Report is shown in the 2017 Annual Report and Financial Statements on pages 26-28.

 

Nominations Committee

The Board feels that given the size and structure of the Company there is no need for a Nominations Committee and collectively considers the responsibilities of a Nominations Committee instead.

 

Insider Trading

The Company has appropriate policies and procedures in place to guard against insider trading by employees, including Directors and is mindful of its responsibilities under the Market Abuse Regulation.

 

10
Communicate how the company is governed and is performing by maintaining a dialogue with shareholders
and other relevant stakeholders. The Board believes it fully complies with this principle.
The methods in place to ensure a healthy dialogue exists between the Board and all of its stakeholders,
including shareholders, to enable all interested parties to come to informed decisions about the
Company is described under principles 2. and 8.The Board has established a network of communication and reporting structures between itself and all
constituent parts of its shareholder base to assist the communication of shareholders’ views to the
Board and the shareholders’ understanding of the unique circumstances and constraints faced by the Company.

The Company’s Annual and Interim Results can be found here. Presentations to shareholders are also included in this section.

These pages include details of all proxy votes received and the number of shares voted for and against all resolutions put to shareholders at Annual General Meetings held throughout the year.

AGM Voting Results

 

 

 

Official Member of the Quoted Companies Alliance

Back to top