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Investor relations

Proactis Holdings Plc

Proactis Holdings Plc is registered in England and Wales and operates worldwide. The Company was admitted to the AIM market of the London Stock Exchange in June 2006.

The investment information provided on these pages is disclosed for the purposes of Rule 26 of the AIM Rules for Companies. Download the Articles of Assocation

LAST UPDATED: 30 October 2018

Final Results to 31 July 2018

Introduction to Proactis

Share information

Share facts
 
Significant shareholders
 
Shareholder
 
% held
 

Artemis Investment Management 

14.86%
 

Mr Rodney Potts  

9.51%
 

Liontrust Asset Management

9.04%
 

Fidelity International

7.61%
 

GVQ Investment Management

7.11%
 

Didner & Gerge Fonder

6.87%
 

Investec Wealth & Investment

6.27%
 

Otus Capital Management

4.11%
 

Total shares in issue: 94,603,614

11.45% of the ordinary shares of the Company are not held in public hands.

Proactis Holdings Plc has not applied or agreed to have any of it securities admitted or traded on any other exchanges or trading platforms, other than the AIM market of the London Stock Exchange.

There are no restrictions on the transfer of Proactis Holdings Plc's AIM securities. Proactis Holdings Plc is subject to the UK City Code on Takeovers and Mergers.

This information was last updated on 1 October 2018.

Board members

X
Hampton has more than 30 years of corporate management, business development and international M&A experience.

He was President and Chief Executive Officer of Perfect Commerce for 10 years and was previously President of CorMine LLC, a leading procurement services BPO company that acquired Perfect Commerce in 2007.

Prior to CorMine LLC, he held various positions at Ferguson Enterprises and Wolseley PLC over 17 years, latterly as the President of the Corporate Sales Division. 
Hampton Wall, Chief Executive Officer
Hampton Wall


Chief Executive Officer
X
Tim is a fellow of the Institute of Chartered Accountants of England and Wales.

Over the last ten years, he has built up an expertise within the small cap AIM listed market with over 25 financial years' experience across 5-10 companies as consulting CFO, before joining Proactis on a full-time basis from January 2016. Prior to that, he held senior positions within corporate finance at KPMG and as Commercial Director at Mountain Warehouse.
Tim Sykes, Chief Financial Officer
Tim Sykes


Chief Financial Officer
X
Sean joined the Group as Director of Professional Services during 2005 from Azolve Limited, which he co-founded.

Previous roles include Director of Professional Services for Coda Group plc, UK Technical Director for BaaN, Head of Professional Services – Europe Silknet Limited and VP of Professional Services EMEA at Kana Communications. 
Sean McDonough, Chief Operating Officer
Sean McDonough


Chief Operating Officer
X
Mr Aubrey is the Chief Executive Officer of IP Group plc, a FTSE 250 company that specialises in commercialising intellectual property. He is also a non-executive chairman of Ceres Power Holdings plc, a manufacturer of advanced solid oxide fuel cells, a non-executive director of Avacta Group plc, an AIM listed company that develops new detection and diagnostic devises for the bio-pharmaceutical markets and a non-executive director of the Department of Business Innovation and Skills (BIS). Mr Aubrey is a fellow of the Institute of Chartered Accountants of England and Wales. Mr Aubrey is a member of the Remuneration Committee and the Chair of the Audit Committee.
Alan Aubrey, Non-Executive Chairman
Alan Aubrey


Non-Executive Chairman
X
Mr Potts was one of the founders and former Chief Executive of CODA Group plc, the global provider of accounting systems. He is a director of a number of technology ventures. Mr Potts is the Chair of the Remuneration Committee and a member of the Audit Committee.
Rodney Potts, Non-Executive Director
Rodney Potts


Non-Executive Director

Regulatory news


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Reports and documents

Most of the documents available for download are in the Portable Document Format (PDF). In order to view the PDF files, you will need to have the free Adobe® Acrobat® Reader installed on your computer.
Annual report and accounts 
Interim results
Preliminary results
Admission document

Please use the link below to view the admission document and certain other documents related to the fundraising, acquisition and re-admission to AIM.

Read more
Notice of AGM

AGM 2017 notice
Download

AGM 2017 proxy form
Download

Contacts and advisors

Tim Sykes 

Chief Financial Officer

Riverview Court
Castle Gate
Wetherby
LS22 6LE
UK

T: +44 (0)1937 545 070
E: InvestorContact@proactis.com
Auditors

KPMG LLP
1 The Embankment
Neville Street
Leeds
LS1 4DW
UK
Financial PR advisors

Newgate Communications
Sky Light City Tower
50 Basinghall Street
London
EC2V 5DE
UK
Lawyers

Walker Morris
Kings Court
12 King Street
Leeds
LS1 2HL
UK
Registrars 

Link Asset Services
Northern House
Woodsome Park, Fenay Bridge
Huddersfield
HD8 0GA
UK

Analysts

finnCapp Research Library 
 
View
 
Regaining its stride - Progressive Equity Research - 31/10/18 
 
View
 
Update on trading and Dutch deal announced - Progressive Equity Research - 9/8/18 
 
View
 
H1 solid but short-term headwinds building - Progressive Equity Research - 24/4/18    
 
View
 
Doubling and delivering - Progressive Equity Research - 12/2/18
 
View
 
Going for scale - Progressive Equity Research - 12/1/18
 
View
 
Setting the stage - Progressive Equity Research - 12/10/17
 
View
 
Powering on - Progressive Equity Research - 13/9/17 
 
View
 
Execution engine - Progressive Equity Research - 26/4/17 
 
View
 

Corporate governance

All members of the board believe strongly in the value and importance of good corporate governance and in their accountability to all of Proactis’ stakeholders, including shareholders, staff, customers, partners and other suppliers. In the statement below, the Board explains its approach to governance, and how the board and its committees operate.

The corporate governance framework which Proactis operates, including board leadership and effectiveness, board remuneration, and internal control is based upon practices which the board believes are proportional to the size, risks, complexity and operations of the business and is reflective of the Group’s values.  The Board has decided to adhere to the Quoted Companies Alliance’s Corporate Governance Code (“QCA Code”) for small and mid-size quoted companies (revised in April 2018 to meet the new requirements of AIM Rule 26).

The QCA Code is constructed around ten broad principles and a set of disclosures. The QCA itself has stated what it considers to be appropriate arrangements for growing companies and asks companies to provide an explanation about how they are meeting the principles through the prescribed disclosures. The Board has considered how it applies each principle and the extent to which the board judges these to be appropriate in the circumstances.  The Board provides a summary of those areas where the Group does not fully comply and an explanation of the approach taken in relation to each below.

Following the transformational acquisition of Perfect Commerce LLC on 4 August 2017 and the acquisition of Esize Holdings BV on 6 August 2018, which added significantly to the size and diversity of the Group’s operations and its workforce as well as its geographical reach, a substantial shift was required in the way the Group is managed in order to align all employees to a common purpose, behaviour and objectives. 

This has been addressed primarily through the creation of an organisational structure that enables the promotion of the Group’s values to all staff through the Executive Leadership Team whilst delivering the Group’s integration plan.

The first phase of the integration plan is complete but the generic process is ongoing and iterative and in the last twelve months has seen, amongst others, the following corporate governance developments:
  • A global operational re-organisation of the business to create a territory led customer focused Group supported by an centralised platform of services designed to deliver product, technical infrastructure and marketing and other corporate services to consistent standards that can be relied upon by the Group and its customers;
  • Establishment of an Executive Leadership Team (“ELT”) that can efficiently and effectively communicate through the business to drive the Group’s strategy but also to establish robust operational and financial systems and processes for the identification of risk as well as subsequent deployment of policy and management of that risk as determined by the Board, that are consistently applied throughout the Group;
  • Launch of the new Proactis brand identity during June 2018 which defines the Group’s market positioning and deliverables and also provides direction for our people; and
  • Commencement of a corporate entity level re-organisation designed to rationalise the number of trading entities in the Group enabling a simplification of the contractual process with the Group’s customers, its Business Partners and its staff; and
  • A recruitment programme to bring new and diverse independent challenge to the Board.
The Board will continue to develop its governance procedures and processes in the coming year.

This page was last updated on 28 September 2018. 
Board composition and compliance

The QCA Code requires that the boards of AIM companies have an appropriate balance between executive and non-executive directors of which at least two should be independent. During the period under review Proactis has not complied with this requirement as it does not have any independent non-executive directors, both Alan Aubrey (Chairman) and Rodney Potts (Non-executive Director) not being considered independent.  However, Proactis is presently in the final stages of recruitment of an independent non-executive director as Chair of the Remuneration Committee and has the intention, subsequently, to recruit a further independent non-executive director as Chair of the Audit Committee.

The Board considers that the size of the Group does not justify the establishment of a formal nominations committee, and consequently all of the directors have played an active part in the search for an independent non-executive director and this will continue to be the case in the Board’s search for a further independent non-executive director. The Board used an external recruitment consultant as part of this search exercise and the Board has emphasised the importance of diversity, to address the gender balance of the Board, as part of this process. 

Board evaluation

For many years the Board has supported the QCA Code’s principle to review regularly the effectiveness of the Board’s performance as a unit, as well as that of its committees and individual directors. Whilst reviews have been of an informal nature historically, this has served the Company well and, ultimately, has led to the Board’s decision to re-introduce to the Board an independent non-executive director as Chair of the Remuneration Committee and who’s duties will include a more formal process of review which may include the use of external facilitators in future evaluations.
 
The following paragraphs set out Proactis’ compliance with the ten principles of the QCA Code: 

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

The purpose of the Group is to deliver organisations the benefits of digital transformation applied to the area of indirect spend.  The Group’s strategy is to grow organically by providing its customers with fast and efficient access to world-leading technology and complementary services delivered to current day operational and security standards that enable those customers to trade digitally and to access efficiency, effectiveness and compliance gains.  The business model is to build long-term contractual relationships with its customers that enable the Group to confidently invest in its technology over the long-term to deliver an ever-improving value proposition.  This business model is designed to deliver a growing, profitable and valuable business with strong operating cash flow dynamics to drive ongoing product development to maintain its competitive advantages over other providers.
 
The Board supplements this strategy through a targeted M&A programme designed to accelerate growth whilst not diluting its own valuation qualities.
 
The key challenges that the Group faces include:
  • Delivering competitive advantage in product and technology – regulatory drivers or good practice in the standards of procurement and data security processes adopted by large organisations is ever increasing and, when allied to the rapid pace of technological change, presents product design and technological challenges to providers.  The Board believes that only the largest providers will, ultimately, be able to sustain the cost of development required to maintain the pace of change.  The Group is in a strong position to leverage its investment in product and technology across its global operational reach.
  • M&A process – the Group has undertaken a substantial programme of M&A over recent years which has delivered substantial growth beyond the market rate and has delivered a full product suite.  Whilst not a necessity going forward, the Board intends to continue its programme of M&A if it is possible to identify good quality M&A opportunities and then to execute transactions and integration processes that deliver shareholder value.
  • Recruiting and retaining skilled staff – the Group’s ability to execute its strategy is dependent on the skills and abilities of its staff.  The Board undertakes ongoing initiatives to promote good staff engagement including ensuring that remuneration packages are competitive in the market.
The Board believes that the Group has the right strategy in place to deliver strong growth in revenue over the medium to long term.  Further, the Board expects operating margins to improve further as the fixed element of the Group’s overhead base is leveraged which will further drive strong operating cash flows providing the Group with scope to maintain its leading position in product development.  This will enable us to deliver sustainable shareholder value. 

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

Investor relations are managed by the CEO with support from other executives from time to time, notably the CFO.  During the period under review the following activities were pursued to develop a good understanding of the needs and expectations of all constituents of the Group’s shareholder base:
 
Date Description Participants
July 2017 Presentations to institutional investors regarding fundraising CEO, CFO
August 2017 EGM Full Board
October 2017 Preliminary results roadshow CEO, CFO
November 2017 New investor roadshow CEO. CFO
December 2017 AGM Full Board
February 2018 Trading update CEO, CFO
April 2018 Interim results roadshow CEO, CFO
July to August 2018 Open office shareholder visits CFO
September 2018 Capital markets day CEO, Executives

The Group is committed to communicating openly with its shareholders to ensure that its strategy and performance are clearly understood. The Board communicates with shareholders through the Annual Report and Accounts, full-year and half-year announcements, trading updates, the annual general meeting (“AGM”) and through numerous open office days where we encourage shareholders’ participation in face-to-face meetings. In addition to the structured roadshows following the release of full year and interim results, each of which was expanded to include a greater number of existing and potential new investors, the Board has promoted its AGM as a forum to present to and meet with investors, delivered its first capital markets event during September 2018 and presents at investor exhibitions and conferences. A range of corporate information (including all Proactis’ announcements) is also available to shareholders, investors and the public on the Group’s website.

Private shareholders: The AGM is the principal forum for dialogue with private shareholders, and the Board encourages all shareholders to attend and participate.  The Notice of Meeting is sent to shareholders at least 21 days before the meeting.  The chairs of the Board and all committees, together with all other directors whenever possible, attend the AGM and are available to answer questions raised by shareholders.  Shareholders vote on each resolution by way of a poll. 

The Board was aware that the introduction of the Markets in Financial Instruments Directive II (MiFID II) regulations at the start of 2018 would create potential issues for investors gaining access to research on public companies.  In advance of the MiFID II regulations coming into force, the Board commissioned Progressive Equity Research to produce and provide private investors with independent research on the Group.  This research can be downloaded from Proactis’ website as can the research written by finnCap, the Group’s house broker and NOMAD.

Institutional shareholders: The Board seeks to build a mutual understanding of objectives with institutional shareholders. The Group CEO and CFO make presentations to institutional shareholders and analysts immediately following the release of the full-year and half-year results.  The Group communicates with institutional investors frequently through a combination of formal meetings, participation at investor conferences, roadshows and informal briefings with management.  The majority of meetings with shareholders and potential investors are arranged by the broking team within the Group’s nominated advisor, finnCap Limited.  Following meetings, anonymised feedback is provided to the Board from all fund managers met, from which a greater understanding of sentiment, expectation and intention can be assessed.

In addition, the Group reviews analysts’ notes to achieve a wide understanding of investors’ views.  This information is considered by the Board and has contributed to the preparation of the Group’s investor relations strategy.

The Group has engaged with Progressive Equity Research and has commissioned the preparation of research that is accessible to all shareholders from the Group’s website at www.proactis.com.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success
 
Stakeholder Reason for engagement How we engage Recent impacts
Customers The Group’s success is dependent upon fulfilling customer requirements and its competitive advantage is maintained through understanding the forward needs of our customers and delivering solutions for those needs in the Group’s product roadmap. The Group seeks feedback on its solutions in order to understand and measure its performance through a Customer Advisory Board but and through its Customer Account Management processes.  It takes forward requests for new solutions and enhancements to existing solutions. These processes have led to the Group being a recognised leader in certain commercial verticals and public sector.  The short-term product roadmap is shaped largely from customer led requests with the long-term product roadmap being more “general market informed” but with detailed reference to internal and external research prior to any investment decision.
Staff The Group’s ability to fulfil customer requirements and develop and enhance its technologies relies on having talented and motivated staff.  Motivation is possible where staff are engaged and where there is a congruence of objectives with those of the business.  Good two-way communication is an essential element of aligning objectives. The Group’s interaction with its staff managed centrally and delivered locally to be sensitive to local custom and law.  The ELT and other media are used to communicate through the organisation with an open invitation to staff to ask questions of management that are not answered in the briefings. During the year, the Group has created policies designed to secure the business from the risk of key employee loss.  It has aligned principles on contractual benefits where sensible and economic.  The Board has taken the decision to publish gender pay information (at least internally) as part of its determination to provide equal opportunities and pay to all its staff.
Business partners Business partners are an essential element of the Group’s go-to-market strategy, providing the Group with a long standing stream of new business and recurring revenues. The Group employs Business Partner Managers who are key staff members, enabling our Business Partners to be successful with through a mutually supportive relationship where the Business Partners have access to all elements of the Group’s operations. The Group has created a partner development programme, initiated in the UK (which is the only territory with present expertise in this channel to market), and designed to create a broader profile of Business Partners with the objective of creating collaborative relationships to drive incremental business into the Group.
Shareholders The Group must be supported by its shareholders if it is to execute its strategy fully.  See Principle 2, above. The Board believes That the Group has successfully engaged with its shareholders in the past but that it needs to improve this further over to regain confidence. The Group has engaged with its shareholders regularly during the year to try to keep them informed of issues that the Group has faced but has also taken counsel from them in order to inform some of the content and presentational aspects of the Group’s communications to enable shareholders to gain better insight into the group’s performance.
Communities It is important to be perceived as a reputable business that makes a positive contribution to local economies and is attractive as an employer and partner. Multiple activities to support fundraising for local charities and good causes. Participation in apprenticeship and other schemes to support and provide opportunities to young people. The Group is planning the initiation of an apprenticeship scheme.
Regulatory bodies The Group is required to comply with law and  many regulatory standards from many regulatory bodies in many territories including but not limited to general corporate law, technology operating standards and corporate governance regulation. The Board has a framework in place designed to capture changes in regulation and operating standards across all of its territories including the membership of trade bodies, the use of outside counsel and expert advisory services and the employment of skilled staff with responsibility to remain current in their understanding of regulatory change. The EU regulations around GDPR have been a significant driver of activity during the year as law came into being during the year which was the culmination of much activity in the years prior to this law change.   The FCA is shaping the design of the Group’s Accelerated Payment Facility which it is intending to bring to market in due course. 

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

The Board retains a risk register for the Group that identifies key risks in the areas of corporate strategy, finance, customers, staff, technology and operations.  This is reviewed at least annually as part of the Group’s strategic planning process.  It is expected that new risks arising will be identified through the management framework designed by the Board (the ELT) and those risks will be communicated to the Board where necessary with precautionary or remedial action taken as appropriate.  The ELT consists of experienced personnel, the enterprise class application software environment and in business more generally.

The Board’s responsibility in relation to Internal Control is described on page 36 of its Annual Report for the year ended 31 July 2017 (which is available from the Group’s website).

Within the scope of the annual audit, financial risks specifically are evaluated in detail, including in relation to foreign currency, interest rates, liquidity and credit.

Principle 5:  Maintain the board as a well-functioning, balanced team led by the chair

The members of the Board have a collective responsibility and legal obligation to promote the interests of the Group and are collectively responsible for defining corporate governance arrangements.  Ultimate responsibility for the quality of, and approach to, corporate governance lies with the chair of the Board.

The Board consists of five directors of which three are executive and two are non-executives, The Board does not consider the non-executives independent on the basis of their tenure and Rodney Potts holds a significant shareholding in the Company.  Whilst the non-executives are not independent the Board considers that their contributions are invaluable as they have intimate knowledge of the business and sector, complemented by Alan Aubrey’s significant public company experience.  The Board also considers that, whilst not formally independent, they both demonstrate independence of character and judgement and this is evidenced through active challenge at Board meetings.  The Board acknowledges that independence is also a skill set that complements the overall balance of the Board and it intends to appoint two additional independent non-executive directors as Chair of the Remuneration Committee and Chair of the Audit Committee in due course, where the Board will consider age, skills, background, ethnicity and gender as part of this process in order to promote greater diversity.  The Board is supported by two committees: audit and remuneration.  The Board does not consider that it is of a size at present to require a separate nominations committee, and all members of the Board are involved in the appointment of new directors.

Under the Articles of Association of the Company, one third of the Directors is subject to retirement by rotation or, if their number is not three or a multiple of three, the number nearest to but not less than one third, shall retire.  Each retiring director is eligible for re-election.  Each Director must retire at the third Annual General Meeting following their last appointment or re-appointment.

Non-executive directors are required to attend 8-10 board and board committee meetings per year and to be available at other times as required for face-to-face and telephone meetings with the executive team and investors.  All executive directors are contracted on a full-time basis.

Board meetings held during the period under review and the attendance of directors is summarised below:
 
  Commitee meetings
  Board Meetings Audit Remuneration Nomination
  Possible Attended Possible Attended Possible Attended Possible Attended
Executive Directors                
Hamp Wall 2 2 - - - - - -
Sean McDonough 9 9 - - - - - -
Tim Sykes 9 9 - - - - - -
Non-executive Directors                
Alan Aubrey 9 9 1 1 2 2 1 1
Rodney Potts 9 8 1 1 2 2 1 1


The Board has a schedule of matters for regular business and each Board committee has compiled a schedule of work to ensure that all areas for which the Board has responsibility are addressed and reviewed during the course of the year.  The Chair is responsible for ensuring that, to inform decision-making, directors receive accurate, sufficient and timely information.  The Company Secretary compiles the Board and Committee papers which are circulated to directors prior to meetings and provides minutes of each meeting.  Every director is aware of the right to have any concerns minuted and to seek independent advice at the Group’s expense where appropriate.

The Board papers are driven by the Schedule of Matters which is reviewed monthly by the Executive Directors to identify reportable issues.  Routine reports are provided on progress against the Group’s strategic objectives, financial performance, investor relations, organisational transition and operational non-compliance.

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

All five members of the Board bring relevant sector experience in technology and all, except for the Chief Executive Officer, have significant public markets experience.  Two members are chartered accountants.  The Board does not have any diversity representation which it is looking to address through its appointment of additional independent non-executive directors in due course but believes that its blend of relevant experience, skills and personal qualities and capabilities is sufficient to enable it to successfully execute its strategy.  Directors attend seminars and other regulatory and trade events to ensure that their knowledge remains current.

Brief biographies are included on the Group’s website and within its Annual Report & Accounts where details related to remuneration and tenure are provided.

No significant matters of a corporate governance nature arose during the period covered by the 2017 Annual Report nor subsequently to the date of this statement on which it was considered necessary for the Board or any of its committees to seek external advice, although the Board consults with its Nominated Adviser and other professional advisers on routine matters arising in the ordinary course of its business.

The current CFO is also the Company Secretary.  The Board considers that, at present, both roles can be undertaken successfully by the CFO but this situation is monitored by the CEO with a view to a separation of the roles ultimately being required as the Group continues to expand its operations.

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

The Board evaluation process is led by the Chair and is continuous.  As the Group has grown, the Board has identified the need to recruit additional independent non-executive directors to facilitate more rigorous corporate governance in order that Proactis remains attractive as an investment proposition for institutional investors.  As part of the Perfect Commerce acquisition that completed on 4 August 2017, the Board committed to the review of the composition of the independent non-executive element of the Board, in order to assist with the next stage of the enlarged Group’s growth.  This exercise is now complete and has resulted in the commencement of a search process with the intention to recruit two further independent non-executive directors.  The first independent non-executive director will Chair the Remuneration Committee and will work closely with the Chair of the Board to review the effectiveness of the Board evaluation process, including the consideration of whether external facilitators might be used. 

The evaluation process considers effectiveness in a number of areas including general supervision and oversight, business risks and trends, succession and related matters, communications, ethics and compliance, corporate governance and individual contribution.

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

The Group’s long-term growth is underpinned by its ability to develop long-term relationships with its customers through the provision of world-leading technology and complementary services over an extended period of time which can only be achieved with through the display of the highest ethical values and behaviours.  These ethical values and behaviours as demonstrated by the group’s relationships with its customers is mirrored with its dealings with its staff, its business partners and its shareholders and other stakeholders. 

The continued execution of the Group’s M&A strategy makes it more difficult to define one culture as the Group is an aggregation of many cultures.  The transformational acquisition of Perfect Commerce LLC in August 2017 and the fundamental restructuring of the operations of the Group since that time leaves the Group, presently, coming toward the end of a period of significant change.  The Group’s culture is being redefined through its brand and its people as it emerges as a single entity across multiple territories.  The Board plays a full part in the redefinition of that culture through its behaviours and its actions and the executive team is responsible for mirroring those behaviours and actions within the business.  This has included the following activities:
  • The bringing together of the multiple brand names in the market to one single brand name, Proactis;
  • The definition of the brand itself, creating an expectation of what a customer, or any other stakeholder, should expect from Proactis;
  • The recruitment process includes an assessment of the candidate’s ability to live to the brand; 
  • The initiation of structured appraisal processes on a consistent basis, where possible, for all team members; 
  • The coordination of the territory based Human Resources functions across the Group to create a consistency of content within the appraisal, where possible; and
  • The promotion of the concept of transparency and openness by the controlled removal of all internal management offices as part of a rolling office refit programme.  This process will take several years to complete but has already has positive behavioural outcomes.
Principle 9:  Maintain governance structures and processes that are fit for purpose and support good decision-making by the board

The Board provides strategic leadership for the group and operates within the scope of a robust corporate governance framework.  Its purpose is to ensure the delivery of long-term shareholder value, which involves defining the Group’s strategic objectives, reviewing the plans designed to deliver those strategic objectives and the monitoring of performance against those plans.  The Board retains a formal Schedule of Matters that is referred to each month during the process of the preparation of Board papers.  It also has approved terms of reference for its audit and remuneration committees to which certain responsibilities are delegated. The Chair of each committee reports to the Board on the activities of that Committee.

The Audit Committee monitors the integrity of financial statements, oversees risk management and control, monitors the effectiveness of the internal audit function and reviews external auditor independence.

The Remuneration Committee sets and reviews the compensation of executive directors including the setting of targets and performance frameworks for cash- and share-based awards.

The Executive Board, consisting of the executive directors, operates as a management committee, chaired by the CEO, which reviews operational matters and performance of the business, and is responsible for significant management decisions while delegating other operational matters to individual managers within the business.

The Chairman has overall responsibility for corporate governance and in promoting high standards throughout the Group. He leads and chairs the Board, ensuring that committees are properly structured and operate with appropriate terms of reference, ensures that performance of individual directors, the Board and its committees are reviewed on a regular basis, leads in the development of strategy and setting objectives, and oversees communication between the group and its shareholders.

The CEO provides coherent leadership and management of the Group, leads the development of objectives, strategies and performance standards as agreed by the Board, monitors, reviews and manages key risks and strategies with the Board, ensures that the assets of the Group are maintained and safeguarded, leads on investor relations activities to ensure communications and the Group’s standing with shareholders and financial institutions is maintained, and ensures that the Board is aware of the views and opinions of employees on relevant matters.

The Executive Directors are responsible for implementing and delivering the strategy and operational decisions agreed by the board, making operational and financial decisions required in the day-to-day operation of the Group, providing executive leadership to the Group’s management team to enable them to deliver the Group’s business whilst promoting positive behaviours and sponsoring talent. 

The Independent Non-Executive Directors will contribute independent thinking and judgement through the application of their external experience and knowledge, scrutinise the performance of management, provide constructive challenge to the executive directors and ensure that the Group is operating within the governance and risk framework approved by the board.

The Company Secretary is responsible for providing clear and timely information flow to the Board and its committees and supports the Board on matters of corporate governance and risk.

The matters reserved for the board are:
  • Strategy and management;
  • Structure and capital;
  • Financial reporting and controls;
  • Internal controls;
  • Material contracts;
  • Communication;
  • Board membership and other appointments;
  • Remuneration;
  • Delegation of authority;
  • Corporate governance matters;
  • Policies; and
  • Other matters including political donations, appointment of principal professional advisers, matters of litigation, insurance, pension scheme rules and the Schedule of Matters itself.
The board has approved the adoption of the QCA Code as its governance framework against which this statement has been prepared and will monitor the suitability of this code on an annual basis and revise its governance framework as appropriate as the group evolves.

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

In addition to the investor relations activities described above, the following audit and remuneration committee reports are provided.

Voting results are published after each general meeting through regulatory newswire and voting is generally passed by a poll.  Going forward, the Board intends to publish its proxy voting results so as to disclose voting results in a more transparent way.
Audit Committee Report

During the year, the Audit Committee has continued to focus on the effectiveness of the controls throughout the Group.  The Audit Committee consists of Alan Aubrey, Chair, and Rodney Potts. The committee met once, and the external auditor and CFO were invited to attend that meeting.  Consideration was given to the auditor’s pre- and post-audit reports and these provide opportunities to review the accounting policies, internal control and the financial information contained in both the annual and interim reports.
Remuneration Committee Report

The remit of the Remuneration Committee is to determine the framework, policy and level of remuneration, and to make recommendations to the board on the remuneration of executive directors.  In addition, the committee oversees the creation and implementation of all-employee share plans.  The Remuneration Committee consists of Rodney Potts, Chair, and Alan Aubrey. The committee met twice.

In setting remuneration packages, the Committee ensured that individual compensation levels and total board compensation were comparable with those of other AIM-listed companies and were consistent with the sector that Proactis operates in.  This process was underpinned by the use of an external consultancy that provided a report with its recommendations of the structure and quantum of the remuneration packages.  The Remuneration recommended to the Board and the Board has implemented those recommendations.  A summary of the structure and quantum of the remuneration packages is set our in the Directors Remuneration Report in the Group’s Annual Report available on the Group’s website.

Hubwoo SA



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