Flex Services Platform Solutions Success Stories Insights Investors About Login English CORPORATE GOVERNANCE INVESTORS THE BOARD CORPORATE GOVERNANCE AIM RULE 26 FINANCIAL CALENDAR COMPANY DOCUMENTS REGULATORY NEWS CONTACTS AND ADVISORS CHAIRMAN’S INTRODUCTION As Chairman of the board of Directors of essensys (“essensys” or the “Group”), it is my responsibility to ensure that essensys has both sound corporate governance and an effective board of directors (the “Board”). As Chairman, my responsibilities include leading the Board effectively, overseeing the Group’s corporate governance model, and ensuring that good information flows freely between Executive Directors and Non-Executive Directors in a timely manner. The Board is responsible for setting and approving the Group’s long-term objectives and overall strategy as well as overseeing performance. Corporate governance is an important part of that role, reducing risk and adding value to our business. The Board has adopted the Quoted Companies Alliance Corporate Governance Code (the “QCA Code”) as the basis of the Group’s governance framework. An overview of essensys’ compliance with the QCA Code principles as of the date of this statement is provided below. The Board is of the opinion that the Group complies with the QCA Code so far as practicable having regard to size, nature and current stage of the development of the Group. Application of the QCA Code supports the Group’s medium to long-term success whilst simultaneously managing risks and provides an underlying framework of commitment and transparent communications with stakeholders. There have been no changes to the Board or to the composition of the Board’s Committees during the year. Other governance related matters which have occurred during the year include the appointment of Berenberg as Joint Broker. Jon Lee, Chairman QCA COMPLIANCE TABLE 1 – ESTABLISH A STRATEGY AND BUSINESS MODEL WHICH PROMOTE LONG-TERM VALUE FOR SHAREHOLDERS essensys’ software is designed and developed to serve the specific requirements of flexible workspace providers, removing operational complexity and enabling them to operate and scale more efficiently. The Group remains focussed on the flexible workspace sector, expanding its software and services offering and growing its customer base internationally. Details of the Group’s strategy and business model are explained in the Strategic Report within the Annual Report and Accounts. The Group’s business model and strategy is expected to lead to long-term growth through the acceleration of flexible workspace opportunity, investment in organic growth to capture market opportunity, and demand from existing and new customers. The Board monitors exposure to key business risks and reviews the progress of the Group towards achievement of its strategic goals, budgets and forecasts. The principal risks faced by the Group are set out in the Annual Report. 2 – SEEK TO UNDERSTAND AND MEET SHAREHOLDER NEEDS AND EXPECTATIONS The Board is committed to providing shareholders with clear and transparent information on essensys’ financial position and strategy. We believe that a relationship of mutual trust between shareholders and the Board is essential for a well-governed company to achieve its business objectives. essensys seeks to provide effective shareholder communications through periodic financial reports, along with Regulatory News Service announcements and trading updates published on the Group’s website: https://essensys.tech/investors/. The Board as a whole regularly reviews the success of shareholder engagements and takes appropriate steps to improve engagement based on shareholder feedback. The Board also engages with shareholders through formal meetings such as the AGM, which provide an opportunity to meet, listen and present to shareholders. The Board is open to receiving direct feedback from shareholders and will act where appropriate. Beyond the AGM, the CEO meets regularly with investors to provide them with updates on the Group’s business, and the Executive Directors give regular briefings to analysts who cover the sector. The Company Secretary, ONE Advisory Limited (company.secretary@essensys.tech) is the first point of contact for such matters. 3 – TAKE INTO ACCOUNT WIDER STAKEHOLDER AND SOCIAL RESPONSIBILITIES AND THEIR IMPLICATIONS FOR LONG-TERM SUCCESS essensys recognises that it is responsible not only to its shareholders, but to a wider group of internal (members of staff) and external (customers, suppliers, regulators and others) stakeholders. essensys acts with integrity and values its people, from its members of staff to those who form the communities with which it engages. The Board has put in place a range of processes and systems to ensure there is close oversight and contact with its key resources and relationships. The Board is regularly updated on wider stakeholder engagement feedback to stay abreast of stakeholder insights into the issues that matter most to them and to essensys’ business. The Board takes account of such feedback during discussions relating to the Group’s strategy. essensys provides a customer support service and delivers regular updates on product and capability improvements directly through customer engagement sessions. It measures and monitors its response time to queries to ensure that customer issues are dealt with promptly and appropriately. As part of its customer engagement process, customers are regularly surveyed as to their experiences. 4 – EMBED EFFECTIVE RISK MANAGEMENT, CONSIDERING BOTH OPPORTUNITIES AND THREATS, THROUGHOUT THE ORGANISATION The Board is responsible for determining the nature and extent of significant risks that may have an impact on essensys’ operations, and for maintaining a risk management framework. The Board has carried out a robust assessment of the principal risks and uncertainties affecting essensys’ business, considered how these could affect operations, performance and solvency and what mitigating actions, if any, can be taken. The principal risks identified are set out in a risk register which includes the risk description, risk owner, a description of the control mechanism and the mitigating action. The Annual Report outlines the principal risks to the business. Whilst a review of the risk register is a scheduled item on the annual calendar of Board agenda items, risks and opportunities are continually considered when the Board is considering the business and strategy of the Group. The Audit Committee has been delegated responsibility for monitoring the Group’s risk management systems, to ensure an effective system of financial controls is maintained to support timely and accurate reporting of financial information for review by the Board and the Group’s external auditors. An internal audit function is not yet considered necessary as the day-to-day controls exercised by the Executive Directors and senior management team are considered sufficient for the Group’s stage of development. However, the Board will continue to monitor the need for an internal audit function. During the current financial year, the Group commissioned an independent audit of certain internal controls. The Audit Committee will monitor progress in implementing the recommended actions arising from this process. 5 – MAINTAIN THE BOARD AS A WELL-FUNCTIONING, BALANCED TEAM LED BY THE CHAIR The Board is currently comprised of two Executive and four Non-Executive Directors. Jon Lee is the independent Non-Executive Chairman and there are three other independent Non-Executive Directors, namely Charles Butler, Elizabeth Sandler and Alexandra Notay. Mark Furness (Chief Executive Officer) and Alan Pepper (Chief Financial Officer) are the Group’s Executive Directors. The Executive Directors work full time for the business. The Board is satisfied that it has a suitable balance between independence on the one hand, and knowledge of the Group on the other. The Directors 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 Chairman. Details of the Group’s committees including their composition are set out below. The Group has effective procedures in place to monitor and deal with conflicts of interest. The Board is aware of the other commitments and interests of its Directors, and changes to these commitments and interests are reported to and, where appropriate, agreed with the rest of the Board. 6 – ENSURE THAT BETWEEN THEM THE DIRECTORS HAVE THE NECESSARY UP-TO-DATE EXPERIENCE, SKILLS AND CAPABILITIES The composition of the Board has been designed to provide a variety and balance of different skill sets, which includes significant experience in technological innovation, financial and real estate sectors, other listed plc companies and acquisitions. Through this extensive experience, the Board and individual Directors are well-positioned to set out the strategic aims of the Group, drive and uphold the Group’s values and ethical standards as well as meeting their obligations to shareholders interests. The Board is also supported by an experienced and capable senior management team operating within a clearly laid out framework of delegated decision-making. The Directors are satisfied that the balance of Executive and Non-Executive Directors is appropriate and that no individual or group may dominate the Board’s decisions. The Board considers that each of the Directors has the experience and knowledge to constructively challenge the Group’s strategy and to provide the necessary guidance, oversight and advice to enable the Board to operate effectively. The Group believes that the current balance of skills in the Board as a whole reflects a very broad range of commercial and professional skills. The Chairman and other Non-Executive Directors communicate with each other as necessary and meet, informally, without the presence of the Executive Directors from time to time during the year. Additionally, they each maintain ongoing communications with Executives between formal Board meetings. Biographies of the current Directors are available on the essensys (https://essensys.tech/investors/the-board/). In addition to their general Board responsibilities, Non-Executive Directors are encouraged to participate in meetings or in matters when their individual areas of expertise may be of value. The Executive Directors will be subject to the Group’s performance and development review process through which their performance against predetermined objectives will be reviewed and their personal and professional development needs considered. The Directors will be encouraged to raise any personal development or training needs with the Chairman. In order to keep Director skill sets up to date, the Board uses third parties to advise the Directors of their responsibilities including receiving advice from the Group’s external lawyers and NOMAD. The Board’s composition, skills and diversity is considered in relation to succession planning. The Company Secretary assists the Chairman with maintaining high standards of corporate governance. 7 – EVALUATE BOARD PERFORMANCE BASED ON CLEAR AND RELEVANT OBJECTIVES, SEEKING CONTINUOUS IMPROVEMENT During the year, the Board conducted a formal Board and committee evaluation process. All directors completed a confidential survey providing feedback on various aspects of the Board and Committee’s performance. Detailed feedback was provided to, and considered by, the Board and each Committee. The survey sought Directors’ feedback on areas including: effectiveness in setting strategy; rigour and extent of debate; balance and objectivity of decision making; responsiveness to new events and new information; appropriateness of the Board composition and sufficiency of skills to discharge duties; Board size and composition; and The contribution of individual directors. The evaluation findings indicated that the Board, its committees, the Chairman and each of the Directors continued to work effectively, although some areas of further development were identified. Recommendations and actions included: increasing the number of detailed business area reviews as Covid-19 restrictions ease; seeking additional opportunities to engage with members of the senior management team; and continuing to improve the quality and timely publication of meeting papers. The Chairman uses the output of the Board evaluation and individual Director performance reviews to further develop the performance of the Board. The Company Secretary remains available to provide advice on governance matters. The Group considers succession planning in respect of the Board and members of senior management, as appropriate, as part of its annual review of Board effectiveness. Succession planning is reviewed on an ongoing basis alongside the evaluation of the capabilities of the senior management team and the Directors. During 2021, a performance review of the Executive Directors will be undertaken by the Remuneration Committee. The Non-Executive Directors will meet, without the Chairman present, to evaluate the Chairman’s performance, taking into account input from all the Directors. 8 – PROMOTE A CORPORATE CULTURE THAT IS BASED ON ETHICAL VALUES AND BEHAVIOURS The Board promotes a corporate culture that is based on sound ethical principles and behaviours. The Board recognises that the tone set by its decisions regarding strategy and risk may impact the corporate culture of the Group as a whole and on the way that employees and other stakeholders behave, which in turn will impact the performance of the Group. The Group operates in a manner that encourages an open and respectful dialogue with employees, customers and other stakeholders and the Board considers that sound ethical values and behaviours are crucial to the ability of the Group to achieve its corporate objectives. The Group is committed to the highest standards of personal and professional ethical behaviour, and this must be reflected in every aspect of the way in which the Group operates. The Board places great importance on this aspect of corporate life and seeks to ensure that this flows through all that the Group does. The Directors believe that the Group has transparent and communicative culture facilitating comprehensive dialogue and feedback and enabling positive and constructive challenge, and suggested solutions for improvement. The Group promotes a healthy corporate culture through an Employee Handbook, which includes an anti-bribery policy and personal conduct policy, and regular employee engagement activities. Any fundamental breach of the Employee Handbook will be reported to the Board. The Group undertook an employee survey and established an Employee Consultation Group to obtain feedback regarding the Group’s actions and plans in relation to the Covid-19 pandemic. These types of engagement are expected to continue in future. The Group has a whistleblowing policy which emphasises the importance to the business that any fraud, misconduct or wrongdoing by staff or officers of the Group is reported and properly dealt with. The policy applies to all employees and officers of the Group. Other individuals performing functions in relation to the Group, such as agency workers and contractors, are encouraged to use it. essensys is accredited to ISO 9001 (Quality Management System) and ISO 27001 (Information Security Management System). In addition, the terms of reference of the Audit Committee include the following responsibilities relevant to the Group’s culture: reviewing the adequacy of the Group’s whistleblowing arrangements; reviewing the Group’s systems and controls for the prevention of bribery and fraud; and receiving reports on non-compliance. 9 – MAINTAIN GOVERNANCE STRUCTURES AND PROCESSES THAT ARE FIT FOR PURPOSE AND SUPPORT GOOD DECISION- MAKING BY THE BOARD The Board generally meets formally once a month and otherwise as required. The Chairman’s principal responsibilities are to ensure that the Group and its Board are acting in the best interests of shareholders, and leadership of the Board is undertaken in a manner which ensures that the Board retains integrity and effectiveness, with the right Board dynamic and ensuring that all important matters, in particular strategic decisions, receive adequate time and attention at Board meetings. The CEO has, through powers delegated by the Board, responsibility for leadership of the management team in the execution of the Group’s corporate strategies and for the day-to-day management of the business. The CEO can be assisted in his duties by the other Executive Directors. The CEO is also the principal contact for liaison with shareholders and, together with the CFO, all other stakeholders. The independent Non-Executives Directors are tasked with constructively challenging the decisions of executive management and satisfying themselves that the systems of business risk management and internal financial controls are robust. The Executive Directors seek regular counsel from the Non-Executive Directors outside of Board meetings. The formal schedule of Matters Reserved for the Board includes matters relating to: strategic aims and objectives and approval of budgets; structure and share capital; financial reporting and controls and dividend policy; maintenance of a sound system of internal controls and risk management; banking and financing arrangements; significant contracts; communication with shareholders; and changes to Board structure and composition. The appropriateness of the Board’s structures and processes will be reviewed through the ongoing Board evaluation process and on an ad hoc basis by the Chairman (see Principle 7). These will evolve in parallel with the Group’s objectives, strategy and business model as it develops, to include a regular assessment of governance arrangements. Board Committees The Board has delegated specific responsibilities to the Audit Committee and the Remuneration Committee. Each committee reports to the Board and has written terms of reference setting out its duties, authority and reporting responsibilities. The terms of reference are periodically reviewed to ensure that they remain appropriate and to reflect any changes in legislation, regulation or best practice. The Board has not established a Nominations Committee as the Board considers that a separately established committee is not yet necessary, as its functions and responsibilities can be adequately and efficiently discharged by the Board as a whole. The Board will review the need for a Nominations Committee as the Group evolves and one will be established if, and when, it is considered appropriate. Audit Committee The Audit Committee is chaired by Charles Butler and its other members are Jon Lee and Alexandra Notay. The Audit Committee is responsible for ensuring that the financial performance, position and prospects for the Group are properly monitored, controlled and reported on and for meeting the auditors and reviewing their reports relating to accounts and internal controls. Remuneration Committee The Remuneration Committee is chaired by Elizabeth Sandler and its other members Alexandra Notay and Jon Lee. The Remuneration Committee is responsible for reviewing performance of Executive Directors and determining the remuneration and basis of service agreements. The Remuneration Committee also determines the payment of any bonuses to Executive Directors and the grant of options. The Governance Report in the Annual Report sets out further details of the Group’s governance structure and the roles and responsibilities of the Directors, the Board and its committees. 10 – COMMUNICATE HOW THE COMPANY IS GOVERNED AND IS PERFORMING BY MAINTAINING A DIALOGUE WITH SHAREHOLDERS AND OTHER RELEVANT STAKEHOLDERS. The Board is committed to maintaining effective communication and having constructive dialogue with its shareholders and other relevant stakeholders. The Group’s website is updated on a regular basis and users have the ability to view developments in the Group’s business by way of corporate presentations as well as the financial statements as they become available. As noted under Principle 2, the Executive Directors are in regular communication with shareholders to share information regarding the Company and to understand the views of shareholders which are communicated to the Board by the Executive Directors as appropriate. The latest Corporate Documents can be found here: https://essensys.tech/investors/company-documents/ All 2020 AGM resolutions passed comfortably. The Board maintains that, were a resolution to be passed at a GM with 20% or more votes cast against, the Board would seek to understand the reason for the result and take suitable action where appropriate. Last reviewed on 10 June 2021 London Aldgate Tower 2 Leman Street London E1 8FA New York Nelson Tower 450 7th Avenue New York 10123 Los Angeles 2450 Colorado Av Santa Monica California 90404 Hong Kong PCCW Tower 36th Floor 979 King’s Road Hong Kong essensys plc is a public limited company registered in England and Wales. Registered Office: Aldgate Tower, Leman Street, London, E1 8FA. essensys Inc is a Delaware company. Registered Office: 450 7th Avenue, New York, NY 10123. Access our Complaints Policy, Code of Practice & Compliance © 2021 essensys. All Rights Reserved. Terms and Conditions Privacy and Cookie Policy Covid-19 Support