Board meetings

Board meetings are scheduled a year in advance to ensure full attendance where possible and all Directors receive papers sufficiently in advance of meetings to enable due consideration. Following Board and Committee meetings, the Board receives copies of the minutes at the next Board meeting and can raise any queries or concerns with the Board or Committee Chairs.

Key matters dealt with by the Board in 2023 included: 

• Group budgets and five-year plan; 
• reviewing and monitoring the Group strategy and progress against business objectives; 
• operational and financial performance of the Group; 
• monitoring progress of projects being undertaken by the Group; 
• the approval of financial statements and dividend policy; 
• considering the risk registers and the outcome of the risk review, as reviewed in detail by the Audit Committee; 
• the approval of the half-year and full-year financial results, upon the recommendation of the Audit Committee; 
• the re-appointment of RSM UK Audit LLP as external auditor, upon the recommendation of the Audit Committee; 
• reviewing and approving the annual update to the Group’s approach to meeting the requirements of the Modern Slavery Act 2015; 
• reviewing and approving the Group’s anti-bribery policy; 
• Board and Committee evaluation, reviewing progress of actions from the 2022 evaluation; 
• approval of large contracts and bids; 
• approval of large capital expenditure projects; 
• Chair succession and recruitment; 
• Board and senior management succession planning and general recruitment and retention; 
• Committee reports and recommendations; 
• review of corporate governance reporting and the Group’s policies and procedures; 
• reviewing the IT strategy; 
• overview of HR insights and strategy and priorities; 
• reviewing the Company’s ESG sustainability strategy; 
• reviewing the findings of the 2023 Employee Opinion Survey; 
• monitoring the progress of the Customer Excellence programme and the Market Development programme; and 
• reviewing the Group’s product development roadmap and technological developments in the industry.

Board performance and effectiveness

Induction

The Company’s policy is for all new Directors to undertake a formal and comprehensive induction to the Group upon joining the Board. The induction process is undertaken by the Company Secretary and HR team. On acceptance of appointment, all Directors are provided with an induction pack, which includes: their appointment letter and terms; latest accounts and constitutional documents; the business plan; investor presentations; protocol for conflicts of interest; Directors’ duties; Group Share Dealing Code and Group policies; Board meeting procedures and matters reserved; Board minutes and papers from previous meetings; and meeting dates and contact details. Substantive induction to the Group’s businesses is provided through meetings with senior management and site visits to the Group’s operations.

Independent advice

All Directors are able to take independent professional advice in the furtherance of their duties, if necessary. In addition, the Directors have direct access to the advice and services of the Company Secretary and Chief Financial Officer.

Performance evaluation

The Board carries out an annual self-assessment of its performance. This includes evaluation of the performance and effectiveness of the Board and of its Committees. The process is led by the Chair and involves detailed questionnaires and one-to-one reviews of the feedback. The results of the evaluation are the subject of a full, robust, and open debate at a meeting of the Board, where actions for improvements are agreed. Progress against these actions is then monitored and reported on throughout the year. Currently, individual Directors do not get individually appraised and they do not formally appraise the Chair’s performance. However, the performance evaluation of the Committees on which the Non-Executive Directors sit is deemed appropriate for the evaluation of their performance. 

In 2022, the Board identified five areas of improvement against which progress has been made during the year especially improving communication for investors and demonstrating shareholder value and focusing on Synectics delivering profit recovery at or above market expectations in 2022 and 2023. 

This year’s Board evaluation took place in April. However, this focused on the previous tenure under Mr Coghlan rather than being forward-looking under Mr Wilson. Accordingly, the Board took the decision to delay the evaluation until later in the year when the Board had experienced further time under Mr Wilson’s leadership. Unfortunately, due to unforeseen circumstances, the delayed evaluation of the Board did not take place. Following the resignation of Mr Wilson and the appointment of an Interim Chair, the Board did not feel that it was appropriate to undertake the evaluation during an interregnum. 

Following the appointment of a new Chair, the Board evaluation will be put back on the agenda as a matter of priority.

Independence

The QCA Code recommends that an AIM company should have at least two independent Non-Executive Directors, but clarifies that independence is a Board judgement. Accordingly, the Board considers that Steve Coggins, due to his length of tenure, is not independent for the purposes of the QCA Code, but his greater depth of experience and knowledge facilitates challenge and provides support to the Executive Directors. He, together with Alison Vincent and Andrew Lockwood who fulfil the criteria of two independent Non-Executive Directors as recommended, form an effective team with a blend of skill sets which meet the needs of the Company and are fully committed to working for the benefit of all shareholders and stakeholders.

Succession planning

Retaining and developing our best people is critical to our success. During the year, the Executive team consisted of Paul Webb and Amanda Larnder. Together, they and the senior leadership team are responsible for formulation of the proposed strategic focus for submission to the Board, the day-to-day management of the Group’s businesses and its overall trading, operational and financial performance in fulfilment of the strategy, plans and budgets approved by the Board of Directors, as well as managing key business risks.

Appointments to senior management and Board positions are made following a robust search and selection process, typically with the assistance of specialist search agencies.

Succession planning for Board and senior management is a function of the Board, which fulfils the responsibilities of a Nominations committee. The functions of a Nominations Committee are undertaken by the Board as a whole. Where necessary and appropriate, a nominations sub-committee is appointed temporarily to fulfil specific tasks. Given the size of the Group, and the size and composition of its Board, the Directors believe it is both practical and beneficial for matters of Board composition and recruitment, Board performance evaluation, Executive and Non-Executive succession planning, and training and development to be undertaken by the Board as a whole. All such matters are regularly scheduled on the Board’s agenda and are discussed thoroughly and robustly, incorporating the detailed perspectives and experience of all Directors.

The Group aims to offer appropriate remuneration packages and incentive arrangements, together with an agile environment which encourages and rewards excellent performance, in order to mitigate this risk. In addition the Group actively reviews its succession planning objectives and, in recent years, has increased its focus on personal development reviews and the provision of relevant training for all members of staff.