Share this pagePrint this page

Corporate Governance

 

Management Engagement Committee Terms of Reference

 

Approved on 20 February 2013

 

Function

  • The function of the Management Engagement Committee is to ensure that the Company's investment management agreement is competitive and reasonable for the shareholders, along with the Company's agreements with all other third party service providers. The Committee shall also review the performance of the Investment Manager and the other third party service providers on a periodic basis.

Membership

  • The Committee shall be appointed by the Board and shall consist of not less than three members all of which shall be independent non-executive Directors of the Company. A quorum shall be three members.
  • Only members of the Committee have the right to attend Committee meetings. However, external advisers may be invited to attend for all or part of any meeting, as and when appropriate.
  • The Committee shall meet as and when required and no less than once a year.

Meeting

  • The Committee shall meet as and when required and no less than once a year.

Secretary

  • The Company Secretary shall be the secretary of the Committee and shall attend the annual meeting.

Authority

  • The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary.

Responsibilities

  • The responsibilities of the Committee shall be:-

a) to review the terms of the investment management agreement between the Company and the Investment Manager, and to ensure that the terms are competitive, fair and reasonable for the shareholders;


(b) to review and make recommendations on any proposed amendment or material breach of the investment management agreement;


(c) to review the performance of the Investment Manager including the on-going suitability of the investment manager to manage the assets of the Company, on at least an annual basis; and


(d) to review performance of, and the terms of the Company's arrangements with, other third party service providers (exclusive of the review of the Company's appointed auditors which falls under the remit of the audit committee) and to ensure that the terms are competitive, fair and reasonable for shareholders.

 

Reporting

  • The Committee Chairman, or in his absence the elected Chairman of the relevant meeting, shall report on the issues raised at the meeting and make relevant recommendations to the Board at the earliest opportunity.
  • The Secretary shall circulate the minutes of meetings of the Committee to all members of the Board.

Membership (as at 1 February 2013)
Alan Clifton (Chairman)
John Aston
Veronique Bouchet
David Clough
Jim Horsburgh

 


 

Nomination Committee Terms of Reference


Approved on 18 July 2012


Function

  • The function of the Nomination Committee is to consider and make recommendations to the Board on the Board's composition and balance.

Membership and Attendance

  • The Committee shall be appointed by the Board and shall consist of not less than three members all of which shall be independent non-executive Directors of the Company. A quorum shall be three members.
  • The Chairman of the Committee shall be appointed by the Board.
  • Only members of the Committee have the right to attend meetings. However, external advisers may be invited to attend for all part of any meeting, as and when appropriate.
  • In the event that the Committee considers the appointment of a successor to the Chairman of the Board, the Committee shall elect a chairman other than the present Chairman, for those purposes alone, from among the other independent members.


Meetings

  • The Committee shall meet as and when required and no less than once a year.

Secretary

  • The Company Secretary shall be the secretary of the Committee and shall attend all meetings of the Committee.

Authority

  • The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary.

Responsibilities


The responsibilities of the Committee shall be:-

 

In accordance with the adopted procedure for the appointment of new Directors:-

(a) to evaluate the balance of skills, knowledge and experience on the Board of Directors and to prepare a description of the role and capabilities required for a particular appointment. In the case of the appointment of a Chairman, to prepare a job specification;


(b) to select potential candidates to fill vacancies on the Board of Directors for recommendation to the Board;


(c) to interview, or arrange for suitable Directors to interview, suitable candidates for Directors;

 

(d) prior to appointment of a Director, the committee should seek to ensure the candidates disclose any other/future business interests that could result in a conflict of interest;


(e) ensure that on appointment to the Board, any new Directors receive a formal letter of appointment outlining what is expected of them in terms of time commitment, Committee service and involvement outside of Board meetings;


(f) ensure all newly appointed directors receive an appropriate induction; and


(g) make a statement in the Company's Annual Financial Report about its activities, the process used to make appointments and explain if external advice or open advertising has not been used..


In addition the Committee shall also:-

(h) periodically review the terms of appointment of the non-executive Directors;


(i) consider whether a Senior Independent Director should be appointed and, if appropriate, to identify and recommend to the Board suitable candidates for the role;


(j) satisfy itself that processes and plans are in place with regard to succession planning of the Board, taking into account the challenges and opportunities facing the Company, and what skills and expertise are therefore needed on the Board in the future;


(k) undertake a formal and rigorous evaluation of the Board's performance and that of its Committees and individual Directors;


(l) consider the re-election by shareholders of any Director under the retirement by rotation provisions or under the UK Listing Authority's Listing Rules; and


(m) consider other issues, as requested and defined by the Board.

Reporting procedures

  • The Committee Chairman, or in his absence the elected Chairman of the relevant meeting, shall report on the issues raised at the meeting and make relevant recommendations to the Board at the earliest opportunity.
  • The Secretary shall circulate the minutes of meetings of the Committee to all members of the Board.


Membership (as at 1 February 2013)


Alan Clifton (Chairman)
John Aston
Veronique Bouchet
David Clough
Jim Horsburgh

 


 

 

Schedule of Matters Reserved for Consideration and Decision by the Board


Approved by the Board on 20 February 2013


Function


The role of the Board is to provide entrepreneurial leadership within a framework of prudent and effective controls which enables risk to be assessed and managed. The Board should set the Company's strategic aims, ensure that the necessary financial and human resources are in place for the Company to meet its objectives and review management performance.


The Board should set the Company's values and standards and ensure that its obligations to its shareholders as a whole and others are understood and met.


The Company does not have executive management. The Board's exercise of its responsibilities is achieved through a small number of key third party appointments, notably:

An investment manager (SVLS)
An administrator and Company Secretary (BNP Paribas)
A provider of accounting services (HSBC)

The responsibilities and delegated authorities of these third parties are set out in service agreements between the Company and each party.


Matters reserved for the Board are all those matters which are not delegated to these third parties through these service agreements. The items set out below outline specific Board reserved matters but are not intended to provide an exhaustive list and are subject to amendment by the Board from time to time

 

Companies Act Requirements

  • Approval of all financial reports, statements and announcements.
  • Approval of the dividend policy, payments and recommendations.
  • Approval of significant changes in accounting policies or practices.
  • Appointment, remuneration and removal of the Company Secretary.
  • Approval of the auditors' remuneration and consideration of the Audit Committee's recommendations for the appointment or removal of the auditors.
  • Resolution and corresponding documentation to be put forward to shareholders at a General Meeting or Annual General Meeting.
  • Review and authorisation of Directors conflicts of interest.

Stock Exchange and Financial Services Authority

  • Approval of all circulars and listing particulars.
  • Approval of all press releases.

Board Membership and Board Committees

  • All matters concerning the appointment, remuneration and terms and conditions of service of directors to the Board and to all committees of the Board upon recommendation from the Nomination Committee also acting within the maximum level of fees permitted by the Company's Articles of Association.

Management

  • Appointment, remuneration, contract of engagement and review of performance of the investment manager and of any third parties with whom there are service arrangements.
  • Approval of the Company's long term objectives with whom there are service arrangements.
  • Investment and borrowing restrictions, valuation of unquoted investments and authorisation of underwriting other than in the course of acquiring an investment.
  • Changes relating to the Company's capital structure and its Investment Trust and PLC status.
  • Changes in the Company's operating and control structures.
  • To propose changes to the Company's benchmark to shareholders.
  • To review the level of Directors' fees and propose any changes.
  • To consider any nominations for new directors.

Corporate Governance Code Recommendations

  • Reviewing all aspects of the performance of the Board and its committees, and reviewing the Company's corporate governance arrangements.
  • Any contract, which is material strategically or by reason of size, entered into either in the ordinary, or not in the ordinary course, course of business of the Company.
  • Treasury Policy.

Miscellaneous

  • Directors and officers liability insurance.
  • Charitable, political and other donations.
  • Prosecution, defence or settlement of litigation.
  • Approval of this schedule of matters reserved for the Board decisions.

 

 

Audit Committee Terms of Reference

 

Approved by the Board on 10 April 2013.


Function

  • The function of the Audit Committee is to ensure that the Company maintains the highest standards of integrity in financial reporting and internal control.


Membership

  • The Committee shall be appointed by the Board and shall consist of not less than three members all of which shall be independent non-executive Directors of the Company. At least one member of the Committee should be considered by the Board to have recent and relevant financial experience. A quorum shall be two members.
  • The Chairman of the Committee, who shall not be the Chairman of the Board, shall be appointed by the Board.
  • Only members of the Committee have the right to attend Committee meetings. However, external advisers may be invited to attend for all or part of any meeting, as and when appropriate.
  • The external auditors will be invited to attend the Committee on at least on occasion per year and as required can also meet directly with members of the Board without other third parties being present.

Meetings

  • The Committee shall meet at least twice a year. Meetings may be held more frequently if the Committee deems necessary or if required by the Company's auditors.
  • The Company's auditors will be advised of the timing of Committee meetings and invited to meetings when appropriate and the Committee will have access to the auditors at any time if it so requires.

Secretary

  • The Company Secretary shall be the secretary of the Committee and shall attend all meetings of the Committee.

Authority

  • The Committee is authorised by the Board to investigate any activity within its terms of reference and to seek any information it may require. It is authorised to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary. The Committee is further authorised to publish in the Company's Annual Financial Report details of any issues that cannot be resolved between the Committee and the Board.

Role and Responsibilities

  • The responsibilities of the Committee shall be:-

Financial Statements


(a) to monitor the integrity of the financial statements of the company, and any formal announcements relating to the company's financial performance, reviewing significant financial reporting judgements contained in them;
(b) to review and, if appropriate, recommend to the Board, the Company's annual and interim reports;

 

Internal Control


(c) to monitor and review annually whether an internal audit function is required;


(d) to monitor the Company's accounting and financial internal control systems, and to monitor the internal control systems of the Investment Manager and other third party service providers, and to make recommendations on any improvements to such systems;


(e) to monitor the Company's procedures for ensuring compliance with regulatory and financial reporting requirements and its relationship with the relevant regulatory authorities;


(f) to review the Company's compliance with the AIC Code of Corporate Governance, on an annual basis;

 

(g) to review the Company's risk map on an annual basis;

 

External audit and relationship with the external auditor

 

(h) to discuss any matters arising from the audit and recommendations made by the auditors;


(i) to make recommendations to the Board, for it to put to the shareholders for their approval in general meeting, in relation to the appointment, re-appointment and removal of the external auditor and to approve the remuneration and terms of engagement of the external auditor;


(j) to review and monitor the external auditor's independence and objectivity and the effectiveness of the audit process, taking into consideration relevant UK professional and regulatory requirements;


(k) to develop and implement policy on the engagement of the external auditor to supply non-audit services, taking into account relevant ethical guidance regarding the provision of non-audit services by the external audit firm and to report to the Board, identifying any matters in respect of which it considers that action or improvement is needed and making recommendations as to the steps to be taken;


(l) to review the Audit Plan and the auditors fees on an annual basis; and


(m) to consider other issues, as requested and defined by the Board.


Reporting procedures

  • The Committee Chairman, or in his absence the elected chairman of the relevant meeting, shall report on the issues raised at the meeting and make relevant recommendations to the Board at the earliest opportunity.
  • The Secretary shall circulate the minutes of meetings of the Committee to all members of the Board.

Membership (as at 1 February 2013)
John Aston (Chairman)
Veronique Bouchet
Alan Clifton
David Clough
Jim Horsburgh

 


 

 

Valuation Committee Terms of Reference

 

Approved by the Board on 8 July 2009


Function

  • The function of the Valuation Committee is to ensure that the Company's investment portfolio valuations continue to accurately reflect their current fair value, calculated in accordance with the Company's valuation and accounting policies.


Membership

  • The Committee shall be appointed by the Board and shall consist of not less than two members. A quorum shall be two members.
  • The Chairman of the Committee shall be determined each time the Committee meets.

Meetings

  • The Committee shall meet as and when required throughout the year.

Secretary

  • The Company Secretary shall be the secretary of the Committee and shall attend all meetings of the Committee.

Authority

  • The Committee is authorised by the Board to investigate any activity within its terms of reference and to seek any information it may require. It is authorised to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary.

Responsibilities

  • The responsibilities of the Committee shall be:-

Financial Statements


(a) review the valuation of quoted companies within the Company's investment portfolio, ensuring that they are valued at the relevant bid or closing prices as appropriate to the listed market in accordance with the company's valuation and accounting policies;
(b) review the valuation of unquoted companies within the Company's investment portfolio, ensuring that individual valuations accurately reflect their current fair value, calculated in accordance with the Company's valuation and accounting policies; and

(c) review and approve announcements made to the market in respect of both items above, as necessary.

 

Reporting Procedures

  • The elected chairman of each meeting shall report on the issues raised at the meeting to the Board at the earliest opportunity.
  • The Secretary shall circulate the minutes of meetings of the Committee to all members of the Board.

Membership (as at 1 February 2013)
Alan Clifton
John Aston
Véronique Bouchet
David Clough
Jim Horsburgh