Statement of Compliance with the QCA Corporate Governance Code

As Chairman of Versarien Plc I am pleased to report that the Board has adopted the Quoted Companies Alliance (QCA) Corporate Governance Code in line with the London Stock Exchange’s changes to the AIM Rules requiring all AIM-listed companies to adopt and comply with a recognised corporate governance code. This report sets out our current compliance and explains the reasons for any Code departures.

Principle 1: Establish a strategy and business model which promotes long-term value for shareholders

Versarien plc seeks to capitalise on innovative IP, transforming it into commercially viable products that can tackle the technological challenges faced by modern manufacturers. Its main technology products are graphene powders, graphene inks and other two-dimensional materials.

We do this through:

  • A continual deal flow either by establishing new license arrangements with research institutions or by identifying embryonic companies in early stages of development whose intellectual property fits with our definition of advanced materials technology;
  • Providing working capital facilities either from existing reserves, its public listing or via banking facilities;
  • Applying the management team’s experience to developing and commercialising the advanced materials technology; and
  • Providing the plant and equipment to get into production either via its existing production facilities or by funding new facilities.

We continue to Identify and acquire majority stakes in companies capable of commercialising graphene applications We are continually looking at potential acquisitions both in the UK and Europe to further expand our global presence and add to our range of 2-D materials.

We continue to sign application development agreements with customers and to build new relationships with global companies to incorporate graphene into their applications.

Principle 2: Seek to understand and meet shareholder needs and expectations 

The Company is committed to open communication with its shareholders to ensure that its strategy, business model and performance are clearly understood.  We do this via podcasts, investor roadshows, attending investor conferences, hosting open days and by regularly reporting news via LSE channels.

The AGM and open days are the main forum for dialogue between retail shareholders and the Board. The Notice of Meeting is sent to shareholders at least 21 days before the meeting. For each AGM resolution, the proxy results are announced at the meeting. The results of the AGM are subsequently published on the Company’s corporate website/released via the Regulatory News Service.

The Directors seek to build relationships with institutional shareholders. Meetings with them are attended by the CEO and CFO. The Chief Executive Officer and Chief Financial Officer make presentations to institutional shareholders and analysts each year immediately following the release of the full-year and half-year results.

The Board as a whole is kept informed of the views and concerns of major shareholders by the CEO. 

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long- term success

Apart from our shareholders, our suppliers, customers and our employees are considered to be our most important stakeholder groups. All group companies are ISO 9002 accredited which involves processes to monitor and record feedback from suppliers and customers. The Company intends to put in place Employee Engagement Surveys within the next 12 months.

The Group has in place an ethical policy which is applied at each Group company.

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation

The principal business and financial risks have been identified and control procedures implemented.  The Board acknowledges its responsibility for reviewing the effectiveness of the systems that are in place to manage risk and to provide reasonable but not absolute assurance with regard to the safeguarding of the Group’s assets against misstatement.

The key elements of the system of internal control are:

  • clear definition of delegated authorities;
  • preparation of annual budgets for Board approval;
  • close involvement of senior management in the day-to-day business of the Group; and
  • regular reporting of business performance to the Board and the review of results against budget.

All material contracts are required to be reviewed and signed by an Executive Director of the Company and reviewed by our legal advisors as appropriate.

The Company maintains Group Company Risk Registers with business continuity plans as part of its ISO 9002 accreditation to address key risks that have an immediate impact.

Our ethical policy deals with compliance with laws and regulations, fair dealing and business intelligence, improper payments, business entertaining and duty to report  violations.

Principle 5: Maintaining the Board as a well-functioning, balanced team led by the Chair

The Board comprises the Executive Chairman/Chief Executive Officer the Chief Financial Officer/Company Secretary and one Non-Executive Director. The Board considers that the Non-Executive Director brings an independent judgement to bear.

The roles of Chairman and Chief Executive are currently combined which allows the Board to maintain its vitally important first mover advantage with its relatively small number of employees .The Chairman/Chief Executive is conscious of his role in running the Board as opposed to the Company and regularly consults with the Company Secretary to ensure that appropriate Board protocol is maintained.

However, if the Board’s strategy is achieved it believes that the roles should be split at the appropriate point in time and in any case, the position will be reviewed within the next 12 months.

The Board is conscious that it does not have a suitable balance between independence on the one hand, and knowledge of the Company on the other and is taking steps to recruit an additional independent non-executive director. In the meantime the Board continues its practice of ensuring matters reserved for the Board are fully discussed and only proceed with unanimous consent.

All Directors are encouraged to use their independent judgement and to challenge all matters, whether strategic or operational. The Group holds regular board meetings and each director is asked to disclose any conflicts of interest.

Principle 6: Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities

The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and experience and time to perform its duties.  Board members are able to attend such courses or training, as they feel appropriate, to keep up to date. Directors receive regular and timely information on the Group’s operational and financial performance with information being circulated to the Directors in advance of meetings. The business reports monthly on its headline performance against its agreed budget.

All Directors retire by rotation at regular intervals in accordance with the Company’s Articles of Association. The Company’s Articles of Association require that one-third of the Directors must stand for re-election by shareholders annually in rotation and that any new Directors appointed during the year must stand for election at the AGM immediately following their appointment.

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

Principle 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

There is presently no formal process for independent review of directors’ performance other than as part of the Remuneration Committee annual review. Over the next 12 months we intend to implement formal review procedures.

Principle 8: Promote a culture that is based on ethical values and behaviours

The Board aims to lead by example and do what is in the best interests of the Company, its stakeholders and shareholders. The Executive Directors strive to act in a manner which is professional and ethical and has published its ethical policies for all employees to observe and comply with.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

Board programme

The Board meets at least eight times each year in accordance with its scheduled meeting calendar.

The Board sets direction for the Company through a formal schedule of matters reserved for its decision and annually sets a schedule of dates for Board Meetings.

The Board and its Committees receive appropriate and timely information prior to each meeting; a formal agenda is produced for each meeting, and Board and Committee papers are distributed prior to meetings taking place.

Any Director may challenge Company proposals and decisions are taken democratically after discussion. Any Director who feels that any concern remains unresolved after discussion may ask for that concern to be noted in the minutes of the meeting, which are then circulated to all Directors.

Any specific actions arising from such meetings are agreed by the Board or relevant Committee and then followed up by the Company’s management.

Roles of the Board, Chairman and Chief Executive Officer.

The Board is responsible for the long-term success of the Company. There is a formal schedule of matters reserved to the Board. It is responsible for overall Group strategy; approval of major investments (whether Capex or Opex); approval of the annual and interim results; annual budgets; dividend policy; and Board structure.

It monitors the exposure to key business risks and reviews the strategic direction of all trading subsidiaries, their annual budgets and their performance in relation to those budgets.

The roles of Chairman and Chief Executive are currently combined which allows the Board to maintain its vitally important first mover advantage with its relatively small number of employees . However, if the Board’s strategy is achieved it believes that the roles should be split at the appropriate point in time.

All Directors receive regular and timely information on the Group’s operational and financial performance. Relevant information is circulated to the Directors in advance of meetings. The business reports monthly on its headline performance against its agreed budget, and the Board reviews the monthly update on performance and any significant variances are reviewed at each meeting.

Executive team

The Executive Team consists of Neill Ricketts and Christopher Leigh with input from the divisional managers. They 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 that strategy, as well as plans and budgets approved by the Board of Directors. It also manages and oversees key risks, management development and corporate responsibility programmes. The Chief Executive Officer reports to the plc Board on issues, progress and recommendations for change with the Board as a whole being the final arbiter.

Board committees

The Board is supported by the Audit and Remuneration committees. Each committee has access to such resources, information and advice as it deems necessary, at the cost of the Company, to enable the committee to discharge its duties.  Board Nominations are dealt with by the Board as a whole.

Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

The Company communicates with shareholders through the Annual Report and Accounts, full-year and half-year announcements, the Annual General Meeting (AGM), release of news via LSE channels and by regular podcasts and one-to-one meetings with large existing or potential new shareholders and by open events with private shareholders.

Neill Ricketts

Chairman and Chief Executive