The Quoted Company Alliance Code (The QCA Code)
The directors are fully supportive of good corporate governance and have chosen to apply The QCA Code. The reasons for this include: it helps to put into practice a worthwhile, effective and flexible governance model; it encourages positive engagement with all our stakeholders and it is one of the foundations of a sustainable corporate growth strategy.
The QCA Code is constructed around ten broad principles and a set of disclosures. Each principle, together with its application (as set out by QCA) and what we do and why (Implementation) is set out below:
Principle 1: Establish a strategy and business model which promotes long-term value for shareholders.
Application: The board must be able to express a shared view of the company’s purpose, business model and strategy. It should go beyond the simple description of products and corporate structures and set out how the company intends to deliver shareholder value in the medium to long-term. It should demonstrate 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.
Implementation: Feedback’s strategy is explained fully within the Strategic Report section on pages 19-27 of the Company’s annual report and accounts for the year ended 31 May 2022.
The Company is focused on the following area:
Principle 2: Seek to understand and meet shareholder needs and expectations.
Application: Directors must develop a good understanding of the needs and expectations of all elements of the company’s shareholder base. The Board must manage shareholders’ expectations and should seek to understand the motivations behind shareholder voting decisions.
Implementation: The Company places a great deal of importance on communication with its stakeholders and is committed to establishing constructive relationships with investors and potential investors in order to assist it in developing an understanding of the views of its shareholders. The Company seeks to provide effective communication through interim and annual reports, along with Regulatory News Service (RNS) announcements on the Company website.
The Board is committed to maintaining good communication and constructive interaction with all shareholders through our half year and annual reports as well as RNS releases. We also use the Company’s website to keep shareholders up to date on financial and general news.
Feedback encourages two-way communication with its investors and responds quickly to queries received. The Company has an email address (firstname.lastname@example.org) where shareholders can communicate with the Board. The directors meet regularly and proactively with private and institutional shareholders and other key stakeholders, including after the announcement of full-year and half-year results, and are responsible for ensuring that their expectations are understood by the Board. The Company’s Annual General Meetings also provide opportunities for dialogue between the Board and the Company’s shareholders and enable the directors to ensure they have a sound understanding of shareholder sentiment. The Board welcomes direct feedback from stakeholders and acts on this where appropriate. The key contacts for shareholder liaison are Dr Tom Oakley and Anesh Patel.
Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success.
Application: 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 needs to identify the company’s stakeholders and understand their needs, interests and expectations. Where matters that relate to the company’s impact on society, the communities within which it operates or the environment, have the potential to affect the company’s ability to deliver shareholder value over the medium to long-term, then these matters must be integrated into the company’s strategy and business model. Feedback is an essential part of all control mechanisms. Systems need to be in place to solicit, consider and act on feedback from all stakeholder groups.
Implementation: The Board considers the interests of shareholders and all relevant stakeholders in line with section 172 of the Companies Act 2006. The Board recognises that the long-term success of the Company is reliant upon the ongoing support of its shareholders and the efforts of its stakeholder groups, both internal and external. The Board has put in place a range of processes and systems to ensure that there is close oversight and contact with its key resources and relationships. Engaging with the Company’s stakeholders is core to the Company’s strategy and is considered to be a driver of long-term shareholder value. The Board’s understanding of stakeholders is factored into boardroom discussions, including how to address their specific needs and concerns regarding the potential long-term impacts of the Company’s strategic decisions. The Board regularly reviews the Company’s principal stakeholders and how it engages with them.
Feedback is committed to being a responsible employer in all aspects of our business. This is evidenced and underpinned by our vision and values and in particular: satisfied customers, operational excellence, improving product design and innovation, and an engaged workforce. We are focused on our employee wellbeing and endeavour to respond swiftly to our prestigious customer base.
Through monitoring its customer base, the Company is able to identify its key relationships on which the business relies and is able to ensure feedback is obtained from those relevant persons. It obtains this feedback by regular dialogue and face to face meetings. Products have been enhanced as a result of evaluating customers’ comments.
The Company also has an Anti-Bribery Policy and a Whistleblowing Policy in place in order to discourage unethical business conduct in the Company and to protect the interests of its workforce.
Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation.
Application: The board needs to ensure that the company’s risk management framework identifies and addresses all relevant risks in order to execute and deliver strategy; companies need to consider their extended business, including the company’s supply chain, from key suppliers to end-customer.
Setting strategy includes determining the extent of exposure to the identified risks that the company is able to bear and willing to take (risk tolerance and risk appetite).
Implementation: The Board recognises the need for an effective and well-defined risk management process, and it oversees and regularly reviews the current risk management and internal control mechanisms.
The Board is responsible for providing entrepreneurial leadership of the Company within a framework of prudent and effective controls which enable risks to be managed and assessed against the Company’s strategic aims. The Company maintains a risk register to identify strategic risks to the business and plans in place to mitigate those risks.
The Board has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks in a timely manner. The Board ensures that corrective action is taken and that risks are identified as early as practically possible, as well as being responsible for reviewing the effectiveness of internal financial controls. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. Although no system of internal financial control can provide absolute assurance against material misstatement or loss, the Group’s system is designed to provide reasonable assurance that problems are identified on a timely basis and dealt with appropriately. In addition, members of the Board attend industry conferences and seminars to keep abreast of sector risks and industry changes. The Group continues to review its system of internal control to ensure compliance with best practice, while also having regard to its size and the resources available.
The Board considers business risk at every Board meeting. This includes risks associated with its key customers and suppliers, ongoing trading performance and budgets. The risk register is prepared and updated by the management team and is reviewed by the Board at board meetings. The management team hold regular meetings (at least three a month) when they review the risk register and ensure that it is updated and accurately reflects the risks to the Company. The management team consists of the Company’s key managers and executive Directors. The risks identified are evaluated by cause, impact on the Company, likelihood, and seriousness, mitigating actions, timelines, and responsibilities.
The Audit Committee has delegated responsibility to the Company’s management to ensure an effective system of financial control is maintained for timely and accurate reporting of consolidated financial statements and related financial information for review by the Board and the Company’s external auditors. The Committee will maintain effective working relationships with the Board of directors, management, and the external auditors and monitor the independence and effectiveness of the external auditors and the audit, in order to determine the adequacy and efficiency of internal control and risk management systems.
An internal audit function is not yet considered necessary as day-to-day control is sufficiently exercised by the Company’s executive directors. However, the Board will continue to monitor the need for an internal audit function.
Further details on the Group’s approach to risk management and the principal risks and uncertainties to the Group can be found on pages 21-25 of its annual report and accounts for the year ended 31 May 2022.
Principle 5: Maintain the Board as a well-functioning, balanced team led by the chair.
Application: The board members have a collective responsibility and legal obligation to promote the interests of the company, and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the chair of the board. The board (and any committees) should be provided with high quality information in a timely manner to facilitate proper assessment of the matters requiring a decision or insight. The board should have an appropriate balance between executive and non-executive directors and should have at least two independent non-executive directors. Independence is a board judgement. The board should be supported by committees (audit, remuneration, nomination) that have the necessary skills and knowledge to discharge their duties and responsibilities effectively. Directors must commit the time necessary to fulfil their roles.
Implementation: The company is controlled by the Board of Directors chaired by Professor Rory Shaw with two executive directors, Dr Tom Oakley as Chief Executive Officer (CEO) and Anesh Patel as Chief Financial Officer (CFO). The company currently has three additional non-executive directors providing the necessary balance and oversight to the company. Since Professor Rory Shaw has been an employee of the Group in the last five years, the Board undertook a formal review of Professor Shaw’s status as an independent non-executive director and concluded that he remains independent. This will be reassessed by the Board again for the next financial year. All non-executive directors were considered to be independent for the purposes of the QCA Code during the period under review. The biographies of each member of the Board can be found on pages 17-18 of the Group’s annual report and accounts for the year ended 31 May 2022 and on the PLC team page.
Board meetings are open and constructive, with every director participating fully. The Board meets on a monthly basis to ensure that the Company is fulfilling all its regulatory and compliance plc obligations, and, in order to be efficient, the directors meet formally and informally both in person and by telephone. Prior to each Board meeting, directors are sent an agenda and Board papers adequately in advance of every meeting, to facilitate proper assessment of any matters requiring a decision or insight. Additional information is provided when requested by the Board or individual directors.
The non-executive directors maintain ongoing communications with the executive between formal Board meetings. The non-executive directors are required to spend a minimum of one day a month on company business, or as much time necessary to fulfil their duties above this. The non-executive chairman is required to spend a minimum of one day a week on company business, or as much time necessary to fulfil his duties above this.
In common with other organisations of a similar size, the executive directors are heavily involved in the day-to-day running of the business. The Board is responsible for setting and approving the Group’s long-term objectives and overall strategy as well as overseeing performance and approving major items of capital expenditure.
The Board retains full responsibility for the direction and control of the Group. The Board receives monthly board papers which cover operational, financial, and key stakeholder up to date information. Board minutes are recorded and approved at the next meeting. All Board members are well versed in their roles and responsibilities. All directors have direct access to the advice and services of the Company’s professional advisers, enabling them access to all required information in the furtherance of their duties.
In addition, one-third of the Board is required to retire and seek re-election at the AGM, in accordance with good governance.
Principle 6: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
Application: The board 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 should understand and challenge its own diversity, including gender balance, as part of its composition. The board should not be dominated by one person or a group of people. Strong personal bonds can be important but can divide a board. As companies evolve, the mix of skills and experience required on the board will change, and board composition will need to evolve to reflect this.
Implementation: The Company’s Board of Directors bring a vast amount of experience from a range of industries including accounting and finance, technology, and medicine. The Company believes that the current balance of skills in the Board as a whole reflects a broad range of personal, commercial, and professional skills, providing the ability to deliver the Company’s strategy for the benefit of shareholders over the medium and long-term. Directors are encouraged to maintain up-to-date skillsets by attending training, conferences, and networking events.
The Board is satisfied it has a suitable balance between independence on the one hand, and knowledge of the Company on the other. All directors are encouraged to use their independent judgement and to challenge all matters, whether strategic or operational, enabling the Board to discharge its duties and responsibilities effectively. Biographical details of the directors can be found on the Company’s website.
ONE Advisory Limited acts as Feedback’s Company Secretary and has been given the responsibility for ensuring that Board procedures are followed and that the Company complies with all applicable rules, regulations and obligations governing its operation, including assistance with Board and shareholder meetings and compliance with the UK Market Abuse Regulation (MAR). ONE Advisory also supports the Board in its development of the Company’s corporate governance responsibilities, obligations under the MAR and compliance with the AIM Rules.
The Nomination Committee, chaired by Rory Shaw, oversees the process to bring forward candidates, for the approval of the Board. Suggested changes to the Board are carefully evaluated by all Board members, and all appointments are made against objective criteria, on merit, ensuring that the Board has the appropriate skill set and experience, as a whole.
The Board have sought professional legal, HR and NOMAD advice as and when appropriate to do so, given the level of skills, knowledge, and experience of each Board member. Each Director ensures that their skillset is up to date by attending events, reading appropriate journals and news bulletins, and maintaining a regular dialogue with other skilled professionals.
Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continual improvement.
Application: The board should regularly review the effectiveness of its performance as a unit, as well as that of the committees and the individual directors. The board performance review may be carried out internally or, ideally, externally facilitated from time to time. The review should identify development or mentoring needs of individual directors or the wider senior management team. It is healthy for membership of the board to be periodically refreshed. Succession planning is a vital task for boards. No member of the board should be indispensable.
Implementation: The Directors consider that the Company and Board are not yet of a sufficient size for a full Board evaluation to make commercial and practical sense. Therefore the Board accepts that the Company does not comply with this aspect of the QCA Code. The chairman is currently responsible for informally reviewing both the Board’s performance and that of its individual members, annually, and highlighting any issues identified. In frequent Board meetings/calls, the directors can discuss any areas where they feel a change would be beneficial for the Company, and the company secretary remains on hand to provide impartial advice. As the Company grows, it intends to re-consider the need for a formal Board evaluation.
The Board considers succession planning and composition to be crucial elements of ensuring the continued success and long-term prosperity for the Company. The Board has delegated responsibility to the Nomination Committee for such succession planning recommendations.
Principle 8: Promote a corporate culture that is based on ethical values and behaviours.
Application: The board should embody and promote a corporate culture that is based on sound ethical values and behaviours and use it as an asset and a source of competitive advantage. The policy set out by the board should be visible in the actions and decisions of the chief executive and the rest of the management team. Corporate values should guide the objectives and strategy of the company. The culture should be visible in every aspect of the business, including recruitment, nominations, training and engagement. The performance and reward system should endorse the desired ethical behaviours across all levels of the company. The corporate culture should be recognisable throughout the disclosures in the annual report, website and any other statements issued by the company.
Implementation: The Company does not have a formal set of ethical values and behaviours. However, the Company endorses a ‘no-blame’ culture and has an ‘open door’ policy with regular staff meetings and management meetings. Management conduct regular one-to-one meetings with all staff, through which they are able to support staff in ensuring the Company’s values are being recognised and reflected and assist in any staff training needs. The directors and management are committed to developing a high standard in both ethical behaviours and values and are very supportive of employee wellbeing. The Company prides itself on being at the forefront for inclusion with the opportunity for all staff to have one-to-one meetings with non-executive directors at periodic all-staff meetings.
Large parts of the Company’s activities are centred upon an open and respectful dialogue with shareholders, contractors, regulators, and other stakeholders. Therefore, the importance of sound ethical values and behaviours is crucial to the ability of the Company to successfully achieve its corporate objectives. The Board places great importance on this aspect of corporate life and seeks to ensure that this flows through all that the Company does. The directors consider that at present the Company has an open culture facilitating comprehensive dialogue and feedback and enabling positive and constructive challenge.
The Group has implemented, inter alia, the following policies to help ensure the highest standards of personal and professional ethical behaviour are adhered to:
The Strategic Report and s172(1) statement contained in the Group’s annual report and accounts for the year ended 31 May 2022 provide further detail on the policies in place to promote and support ethical behaviour and the Group’s values, and how these align with the Group’s objectives, strategy, and business model.
Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision making by the board.
Application: The Company should maintain governance structures and processes in line with its corporate culture and appropriate to its size, complexity, capacity and tolerance for risk. The governance structures should evolve over time in parallel with its objectives, strategy and business model to reflect the development of the company.
Implementation: The Board is committed to, and ultimately responsible for, high standards of corporate governance, and has chosen to adopt the QCA Code. The Board reviews the Company’s corporate governance arrangements regularly and expect to evolve these over time, in line with the Company’s growth. The Board delegates responsibilities to its Committees and individual members as it sees fit. The appropriateness of the Board’s structures and processes are reviewed periodically through the board evaluation process and, if required, on an ad hoc basis, so reflecting the changing requirements of the Company.
The chairman, chief executive, chief financial officer, and non-executive directors have clearly defined roles and responsibilities, with the role of the chairman being to lead the Board and ensure it is operating effectively in approving and monitoring the strategic direction of the Company. The CEO has, through powers delegated by the Board, the responsibility for leadership of the management team in the execution of the Group’s corporate strategies and policies and for the day-to-day management of the business.
The non-executive directors are tasked with constructively challenging the decisions of executive management and satisfying themselves that the systems of business risk management and internal financial controls are robust. The executive directors seek regular counsel from the non-executive directors outside of Board meetings.
Whilst the Board has not formally adopted appropriate delegations of authority setting out matters reserved to the Board, there is effectively no decision of any consequence made other than by the directors. All directors participate in the key areas of decision-making, including the following matters:
The Board delegates authority to three Committees to assist in meeting its business objectives whilst ensuring a sound system of internal control and risk management. The Committees meet independently of Board meetings.
An Audit Committee is in place comprising three of the non-executive directors. During the period under review the Committee was chaired by Philipp Prince, with Tim Irish, and Adam Denning being members. Philipp Prince is a chartered accountant who has an extensive background in finance and experience in senior commercial and CFO roles. The Audit Committee’s purpose is to ensure that the audit process is rigorous and consistent.
A summary of the work undertaken by the Audit Committee is detailed on page 40-41 of the Group’s annual report and accounts for the year ended 31 May 2022. The terms of reference for the Audit Committee can be found here
A Remuneration Committee is in place comprising the non-executive directors and where appropriate, the chief executive and/or the chief financial officer. During the period under review the Remuneration Committee was chaired by Tim Irish, with Rory Shaw, Phillip Prince, and Adam Denning being members. The Committee’s purpose is to regularly review the remuneration package of all directors and senior employees and make recommendations to the Board on matters relating to their remuneration and terms of employment. The Remuneration Committee also makes recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any share option scheme or equity incentive scheme in operation from time to time.
A summary of the work undertaken by the Remuneration Committee is detailed on pages 42-44 of the Group’s annual report and accounts for the year ended 31 May 2022. The terms of reference for the Remuneration Committee can be found here
The Nomination Committee consists of the Non-Executive Directors, and it is chaired by Rory Shaw. The Nomination Committee meets as required, has responsibility for reviewing the size and composition of the Board, and for identifying and nominating, for the approval of the Board, candidates to fill Board vacancies as and when they arise.
Principle 10: Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.
Application: A healthy dialogue should exist between the Board and all of its stakeholders, including shareholders. To enable interested parties to come to informed decisions about the company. In particular, appropriate communication and reporting structure should exist between the board and all constituent parts of its shareholder base. This will assist: the communication of shareholders’ views to the board; and the shareholders’ understanding of the unique circumstances and constraints faced by the company. It should be clear where these communication practices are described (annual report or website).
Implementation: The Company encourages two-way communication with its stakeholders and responds quickly to queries received. The chief executive has historically participated in interviews on investor information channels and RNS announcements are regularly produced to provide up to date operational as well as statutory and Board news. General meetings are held where the Board is present to speak formally as well as informally to shareholders. The communications issued are available on the website.
The Company retains a broker and PR advisers, contact details of whom are included on announcements. Shareholders and stakeholders are able to contact the Company’s advisers to arrange meetings with management when convenient. The Board also recognises the AGM as an important opportunity to meet private shareholders. The directors are available to listen to the views of shareholders informally, immediately following the AGM.
The annual report and accounts and the notices of all general meetings for the last five years are contained on the Company’s website at Reports and presentations.
The Company provides outcomes of all resolutions proposed at general meetings of the Company in a clear and transparent manner and seeks to engage with shareholders when results are not in line with Board expectations.
The advisory vote on the Company’s Remuneration Report (the “Report”) was passed by shareholders at the Company’s AGM in October 2022 with support of 58% of votes in favour of the resolution. The Board acknowledges that this represents a more than 20% vote against the resolution. Following the vote, the Company will seek to understand in more detail the views of shareholders.
This disclosure was last updated on 22 February 2023.
Feedback plc is a specialist medical imaging technology company providing innovative software and systems. Find out more here.
Feedback plc is listed on the AIM market of the London Stock Exchange under the ticker FDBK. More information here.