The Board is accountable to shareholders for the creation and delivery of strong, sustainable performance and the creation of long-term shareholder value. The Board meets regularly and is responsible for organising and directing the affairs of the Company and the Group in a manner that will promote the success of the Company and is consistent with good corporate governance practices and for ensuring that, in carrying out its duties, the Company and the Group meets legal and regulatory requirements. The Board is also responsible to the Financial Services Authority for ensuring compliance with the Group’s UK regulatory obligations.
The business of the Company is managed by the directors, who may exercise all the power of the Company, subject to the Company’s articles of association, relevant law and any directions as may be given by the Company in general meeting. The directors may delegate any of their powers or discretions to committees consisting of one or more members of their body and (if thought fit) one or more other persons co-opted so long as the majority of committee members are directors.
Unless authorised in advance by the Board of Directors, and with the respective director abstaining from any such authorisation, a director shall not vote in respect of any contract or other proposal in which he or she (or any person connected with the director) has a material interest otherwise than by virtue of his or her interests in securities of the Company. However, a director shall be entitled to vote in certain limited circumstances which are set out in full in the articles of association.
The Board has formally adopted a procedure for dealing with conflicts or potential conflicts of interest. The Board is satisfied that the procedure for dealing with conflicts is robust and operating effectively.
The directors shall restrict the borrowings of the Company so as to secure that the aggregate amount of all monies borrowed by the Group and owing to persons outside the Group shall not at any time, without the previous sanction of an ordinary resolution
of the Company, exceed a sum equal to twice the aggregate of: (i) the amount paid up on the issued share capital of the Company; and (ii) the amount standing to the credit of the reserves of the Group (subject to certain adjustments).
The Company can authorise the directors to allot further securities by ordinary resolution. A resolution seeking to authorise the directors to allot securities is being put to the Company’s Annual General Meeting on 19 May 2011. Details of this resolution and the other resolutions being put to the 2011 Annual General Meeting are set out in the Notice of the Annual General Meeting that accompanies this Annual Report. The directors may offer, allot, grant options over or otherwise dispose of shares to such persons, at such times and for such consideration and upon such terms and conditions as the directors may determine, provided that no shares shall be issued at a discount.
Subject to the provisions of the Companies Act 2006, the Company may purchase its own shares. Authority was given at the 2010 Annual General Meeting for the Company to make market purchases of up to 2.1 million shares. That authority expires at the conclusion of the 2011 Annual General Meeting. A renewal of this authority is being sought at the 2011 Annual General Meeting. In 2008, the Company, under such an authority, acquired 150,000 shares, to be held in Treasury, at an average price of £4.53 per share. In December 2010, the 150,000 shares were transferred out of Treasury for nil consideration into the Vitec Employee Benefit Trust (the Vitec EBT). The Vitec EBT holds shares in the Company to meet awards of shares to the employees under the various share plans the Company has in place. Following the transfer, the Company holds no shares in Treasury.
The Board had six scheduled meetings during the year ended 31 December 2010 and one meeting at short notice. There is a formal schedule of matters and levels of authority which are delegated to the executive directors, with all other matters and powers being reserved to the Board or to its Committees. Full details of matters reserved to the Board may be viewed on the Company’s website. At several Board meetings, the directors are joined by other senior executives apart from the executive directors, principally members of the Operations Executive, to gain a greater and more detailed understanding of the Group’s operations. This practice will continue in the future. In addition, at least one Board meeting a year is held at an operational business, enabling the Board to view operations and meet management.
During the year, all directors attended the six scheduled Board meetings. Apart from the scheduled Board meetings, there was one Board meeting held at short notice. Due to short notice, Will Wyatt and Simon Beresford-Wylie were unable to attend this meeting. Despite this, each of the directors unable to attend that meeting had been briefed on the proposal being put to that meeting and had given their feedback and support to the proposal to the Chairman in advance of the meeting.
Throughout the year ended 31 December 2010, the Board consisted of a Chairman (Michael Harper), a Group Chief Executive (Stephen Bird), a Group Finance Director (Richard Cotton) and four independent non-executive directors (Simon Beresford-Wylie, Nigel Moore, Maria Richter and Will Wyatt).
Will Wyatt is also the Senior Independent Director. With effect from 4 February 2011, Richard Cotton ceased to be a director of the Company. The Company has appointed Nick Humby as Interim Chief Financial Officer to oversee the finance function pending the appointment of a permanent replacement. The search for this replacement by the Nominations Committee has commenced.
The non-executive directors bring independent character and judgement to bear on strategic matters, the performance of the Group, the adequacy of resources and standards of conduct. The Board considers that Simon Beresford-Wylie, Maria Richter, Nigel Moore and Will Wyatt are independent in accordance with the recommendations of the Combined Code. The roles of the Chairman (who is non-executive) and of the Group Chief Executive are separate and they each have a clear written division of responsibilities approved by the Board. Full details of this may be viewed on the Company’s website.
The Group Chief Executive is responsible for the day-to-day operational performance of the business. The Operations Executive supports the Group Chief Executive in this duty and comprises the following senior executives of the Group:
•Joop Janssen – Chief Executive, Videocom Division
•Francesco Bernardi – Imaging and Staging Division
•Jerry Gepner – Services Division
•Martin Green – Head of Business Development
•Jon Bolton – Group Company Secretary
•Cathy Walkington – Group Head of HR
•Steve Shpock – Chief Executive, IMT
Directors, having notified the Chairman, are able to take independent professional advice at the Company’s expense in furtherance of their duties. All new directors are given an extensive induction to the Group, including meeting with senior executives and advisors and visiting the Group’s principal operations. Non-executive directors are also encouraged to visit the Group’s operations on a continuing basis to further develop their understanding of the Group’s business. All directors have access to the advice and services of the Group Company Secretary. The Company Secretary is responsible for advising the Board, through the Chairman, on all governance matters.
Ongoing training for new directors and existing directors is available at the request of the director. Each director receives details of relevant training and development courses from both the Group Company Secretary and from external bodies such as KPMG and Towers Watson. The requirement for training is regularly discussed at meetings of the Board and of its Committees with tailored training sessions. The Group Company Secretary maintains a register of training undertaken by directors to facilitate this discussion.
The papers supplied for consideration by the Board are provided on the basis that it gives all Board members adequate time to read and, where appropriate, ask questions prior to the meeting about the information supplied. The information includes sufficiently detailed budgets, strategy papers, reviews of the Group’s financial position and operating performance and annual and half-yearly reports. Each Board member receives on a monthly basis management reports including a Group Chief Executive’s Report, Group Finance Report and Group Company Secretary’s Report plus a Health and Safety Report covering the ongoing performance of the business. Further information is supplied from time to time as and when requested by the Board.
All meetings of the Board and its committees (Audit, Remuneration and Nominations) are minuted. Minutes are circulated to all directors attending meetings and tabled for approval at the subsequent meeting.
The Board has an Audit Committee, a Nominations Committee and a Remuneration Committee. Each Committee has formal terms of reference which may be viewed on the Company’s website. The terms of reference and the effectiveness of the Board and of each Committee are reviewed at least annually and changes made where necessary. Any issues arising from the reviews of effectiveness are summarised and tabled at subsequent Board meetings at which they are discussed and action plans agreed.
Performance evaluations of each of the directors took place during 2010 in accordance with the provision contained in the Combined Code. In the case of the executive directors, this evaluation is undertaken by the Chairman and the non-executive directors regularly throughout the year against achievement of specific objectives. Evaluation of the Chairman was carried out by the Senior Independent Director taking into account the views of the other Board members. Evaluation of each of the other non-executive directors was carried out by the Chairman. Each evaluation was carried out by using written questionnaires and the results were discussed individually with each of the relevant non-executive directors. Evaluations of the effectiveness of the Board and each of the Committees were also carried out by the full Board and the relevant Committee members respectively. The 2010 evaluation process concluded that the Board, its Committees and individual members were performing to a good standard with robust Board processes, governance and controls. Key areas identified for attention in 2011 concerned succession planning at Board and executive level and development of senior talent within the business. The Board has decided that in 2011 it will conduct an externally facilitated evaluation in accordance with the recommendations of the UK Corporate Governance Code. The key output from this will be reported in the 2011 Annual Report.