Corporate Governance Policy
In general, the Directors support the principles of openness, integrity and accountability advocated by the Combined Code of the London Stock Exchange although they are concerned about the possible cost burden on small quoted companies of full compliance. An ongoing process for identifying, evaluating and managing the significant risks faced by the Group is in place. That process is regularly reviewed by the Board and accords with the Internal Control Guidance for Directors on the Combined Code produced by the Turnbull working party. The Directors are responsible for the Company's system of corporate governance and the key components of this system, which apply to the principles set out in Section 1 of the Combined Code, described below.
The Board of Directors, currently comprising four Executive Directors, meets regularly throughout the year. The Board does not include any Non-Executive Directors as the Directors are of the opinion that the present size of Total Systems plc does not justify the appointment of Non-Executive Directors. Similarly, the functions of Chairman and Chief Executive are combined but the policy is kept under review.
The Board leads and controls the company by taking responsibility for overall strategy, reviewing potential acquisitions and commercial partnership arrangements, approving major capital expenditure projects and giving consideration to significant financial matters. It reviews strategic direction, rolling annual budgets, progress against rolling half-year and full-year forecasts and long-term strategies. The Board exercises tight management control and it has always been the philosophy of the Group that all significant decisions affecting the operations or financing of the business are taken by the whole Board.
The Board has a standing agenda and a formal schedule of matters specifically reserved to it for decision.
The Board is supplied with monthly management accounts, including rolling forecasts, key performance indicators and comparison with the previous year's performance. Board papers will normally also include other documents which relate to matters included in the agenda in order to ensure that members of the Board are given the fullest opportunity for consideration of matters to be debated at meetings.
Candidates for appointment to the Board are interviewed by the whole Board. Any appointments to the Board require unanimous approval of all Directors at a formal Board Meeting. There is no Nominations Committee for appointments to the Board.
It has not been the practice of the Board to have either an Audit Committee or a Remuneration Committee. The Directors consider remuneration levels to have been maintained at a modest level. The Directors consider that the small size of the Board is appropriate to a Group such as Total Systems plc and the Board as a whole has the appropriate experience and expertise to provide effective corporate governance in these areas without the need for these committees.
Compliance with the provisions of the Combined Code
Having reviewed the Group’s corporate governance practices, the Directors consider that during the year they comply with the code provisions set out in Section 1 of the Combined Code except for the following matters:
- The role of Chairman and Chief Executive is combined.
- There are no non-executive Directors.
- There is no Audit, Remuneration or Nomination Committee.
- There is no formal process for evaluation of Board members.
