Investor Relations

Corporate Governance

Last updated: 17 August 2018

Chairman’s Statement

As a listed company traded on the AIM market of the London Stock Exchange we recognise the importance of sound corporate governance throughout our organisation giving our shareholders and other stakeholders including employees, customers, suppliers and the wider community confidence in our business. We endeavour to deliver on our corporate Vision and Mission Statements in an ethical and sensitive manner irrespective of race, colour or creed. This is not only a requirement of a well-run public company but makes good commercial and business sense.

In my capacity as Executive Chairman, I have ultimate responsibility for ensuring the Board adopts and implements a recognised corporate governance code in accordance with our stock market listing. Accordingly, the Board have committed to the adoption of, and working to, the Quoted Companies Alliance (QCA) Corporate Governance Code 2018. The Chief Executive Officer (CEO) has responsibility for the implementation of governance throughout our organisation, commensurate with our size of business and worldwide operations.

The QCA Corporate Governance Code 2018 has ten key principles and we set out below how we apply those principles to our business and more detailed information is provided each year in our Annual Report.


Rt. Hon. Sir Tony Baldry
Executive Chairman

Mission Statement

“Westminster believes all citizens of the world have the right to personal safety and security and to be free from the threats of crime and terrorism particularly when travelling. The Mission of Westminster Group Plc. is therefore to improve security and the quality of life for people throughout the world, regardless of race, colour or creed and will do so by the provision of advanced security solutions and long term managed services. Westminster will endeavour to achieve this goal by acting in a professional and responsible manner, treating our employees, customers, suppliers and partners with equal courtesy and respect at all times.”

Vision Statement

“Our vision is to build a global business with strong brand recognition delivering advanced security solutions and long term managed services to high growth and emerging markets around the world, with a particular focus on long term recurring revenue business enhancing shareholder value.”

QCA Corporate Governance Code 2018

Principle 1

Business Model and Strategy

Business Description

Our vision is to build a global business with strong brand recognition delivering niche security solutions and long term managed services to high growth and emerging markets around the world, with a particular focus on long term recurring revenue business.

Our target customer base is primarily governments and governmental agencies, critical infrastructure (such as airports, ports & harbours, borders and power plants), and large scale commercial organisations worldwide.

Our business has evolved from a traditional UK focused security business to what can be described today as a truly international business.  Furthermore, our evolution continues as we expand our operations into new areas and new territories creating additional opportunities around the world in the provision of long term managed security services and security products.

We deliver our wide range of solutions and services through a number of operating companies that are currently structured into two operating divisions; Managed Services and Technology; both primarily focused on international business as follows:

Managed Services division:

Focusing on long term (typically 10 – 25 years) recurring revenue managed services contracts such as the management and operation of security solutions in airports, ports and other such facilities, together with the provision of manpower, consultancy and training services.

Technology division:

Focussing on providing advanced technology led security solutions encompassing a wide range of surveillance, detection, tracking, screening and interception technologies to governments and organisations worldwide.

These two divisions offer cost effective dynamics and vertical integration with the Technology division providing vital infrastructure and complex technology solutions and expertise to the Managed Services division. This reduces both supplier exposure and cost and provides us with increasing purchasing power. Our Managed Services division provides a long-term business platform to deliver other cost effective incremental services from the Company. Together these two divisions provide an opportunity to deliver long term, recurring revenue growth underpinned by a corporate infrastructure based on core values and risk mitigation through geographical spread and multiple revenue streams.

Strategy

In accordance with our vision, we operate world-wide with a focus on high growth and emerging markets where our expertise and technological reach can make a significant difference. Our client base is predominantly governments and governmental bodies, transportation organisations, non-governmental organisations (NGOs) and commercial & multi-national corporations worldwide.

Operating in emerging markets does present particular challenges with language and logistics, religious and cultural considerations and ethics. Doing business with governments and large corporations, particularly where large scale nationally important contracts are involved, can be a time-consuming process and this can all the more so in emerging markets where processes can be slow and bureaucratic due to the nature of governments and the inherent complexities of doing business in such markets. However, despite such challenges and is some cases because of them, emerging markets offer huge growth opportunities for our Company.

Over the years we have built up an extensive international network of agents and partners, some of whom have become strategic investors, who provide business development assistance to our sales team, in-country knowledge and logistical support together with arranging meetings, translations where required and assisting with client negotiations. This network provides us with a cost effective, scalable global footprint in our chosen markets. This network together with the support we receive from the British Government and in-country diplomatic missions around the world means Westminster is well placed and structurally organised to benefit from the many opportunities we are developing within these markets.

In addition, we operate one of the world’s largest security product and solution websites which generates high levels of enquiries for our products and services.

We are not a manufacturer and are product agnostic which enables us to provide the most appropriate product or solution to address our clients’ needs. We do however have strong working relationships with a great many leading and niche product manufacturers around the world enabling us to offer a broad and extensive range of solutions. We continually monitor market and technology advancements and regularly review our supplier and manufacturer base.

Principle 2

Understanding Shareholder Needs and Expectations

The Board is committed to maintaining good communications and having a constructive dialogue with both its institutional and private shareholders. Whilst recognising that much of the Company’s business, being high level security, is confidential in nature and what can be discussed is often limited, the Company endeavours to maintain a dialogue and keep shareholders informed though its public announcements and its corporate website.The Company website also allows shareholders and prospective shareholders to register for automatic news alerts for both regulatory announcements and non-regulatory news.

The Company encourages all shareholders to attend its Annual General Meeting where they can meet and question the Directors and express ideas or concerns. The Directors undertake presentations and roadshows to institutional investors as appropriate and periodically participate in recorded interviews that are available to view on the corporate website. Shareholders are welcome, by appointment, to visit the Company’s corporate headquarters in Banbury to meet and talk with Directors, subject to commercial confidentiality and regulatory restrictions. In addition, shareholder communication is answered, where possible or appropriate, by Directors or the Company’s Financial PR advisors, Walbrook PR or the Company’s broker, SP Angel.

Principle 3

Stakeholder and Social Responsibilities

Stakeholder Relations:

The Board recognises that the Company’s continued growth and long-term success is largely reliant on its relations with its stakeholders, both internal (employees and shareholders) and external (customers, suppliers, agents, business partners and advisors etc).

As a service-based business, our employees are a key factor in delivering successful growth and as such the Company fosters an open and friendly dialogue throughout its workforce. The Company undertakes employee reviews and assessments to identify and assist employees with training and career progression. The Company endeavours to keep its workforce informed on the Company’s progress and holds regular meetings both formal and informal via social events. The Company also operates an internal intranet system to help keep employees informed on key issues.  Employees also participate in the Company’s share option scheme giving them a stake in the Company’s long-term success.

The Company also maintains a regular dialogue with its external stakeholders particularly its agents and business partners around the world which help drive business development. The Company works closely with its advisors to ensure it operates in conformity of its listing regulations as well as the social, legal, religious and cultural requirements of the countries in which it operates. The Company’s customers and prospective customers are of course crucial to the growth and long-term success of the Company and as such the Company is a ‘sales-led’ business with a high priority given to customer service and interaction. The Company maintains a wide portfolio of products from a multitude of manufacturers and a key element of the Company’s success is being able to offer current and new technologies. In this respect, the Company maintains a regular dialogue with key suppliers and is continually monitoring new developments and assessing new suppliers.

Social Responsibilities:

As a Company, we take our corporate social responsibilities very seriously, particularly as we operate in emerging markets and in some cases in areas of poverty and deprivation. The Company has a formal Social Responsibility Policy which can be found here

Contained within and integral to our Social Responsibility Policy we have the following statement:

Social Responsibility Statement:

“We recognise ISO 26000 as a reference document that provides guidance for integration / implementation of social responsibility / socially responsible behaviour. In accordance with the principles of ISO 26000 we will endeavour to:

  1. be accountable for our actions and activities;
  2. be transparent about our activities and decisions that affect society, the economy and the environment;
  3. operate in an ethical manner in all our business operations;
  4. be mindful of and respect our stakeholder interests, both internal stakeholders (employees and shareholders) and external (customers, suppliers, agents, business partners and advisors etc.);
  5. respect the rule of law wherever we operate;
  6. respect international norms of behaviour wherever we operate;
  7. respect human rights in whatever we do and wherever we operate.

We recognise that Social Responsibility is a process that will develop and evolve with practice and time and one in which all our employees have a role to play.”

Westminster Group Foundation:

The Board is proud of the support and assistance the Company provides in many of the regions in which it operates, and the Board is grateful to our employees and other individuals and organisations for their generous support and contributions to our registered charity, the Westminster Group Foundation. We work with local partners and other established charities to provide goods or services for the relief of poverty or advancement of education or healthcare making a difference to the lives of the local communities in which we operate. For more information or to make a donation please visit www.wg-foundation.org

Principle 4

Risk Management

As an entrepreneurial business operating in emerging markets there is clearly an elevated risk which is balanced by potentially greater rewards. The Board is mindful of and monitors both its corporate risks and individual project risks. Risks are categorised by both probability and impact and appropriate measures identified to monitor and mitigate any potential impact.

Project risks are dealt with on a case by case basis and monitored through the life cycle of the project as risks change and new risks appear. Project risks and mitigation will be part of regular project management meetings. The project manager for any given project will have responsibility for maintaining the project risk register.

The Company’s corporate risks, risk monitoring, and risk management procedures are regularly reviewed by the Risk Committee and the Company’s risk register updated as necessary. The Company Secretary will have responsibility for maintaining the corporate risk register. The Risk Committee Chairman will be responsible for ensuring the risk register is regularly reviewed and will report on status and updates at Board meetings. The Company provides a risk report in its Annual Report each year.

Principle 5

Board Structure

The Company operates in complex and challenging technological and geographical areas and as such has put in place a board structure that can best provide the strategic advice and leadership required. The board structure consists of a PLC Board, and Operational Board and an International Advisory Board. The current members of each board may be found here.

The PLC Board contains a balance of Executive and Non-Executive Directors, including an Executive Chairman who is responsible for dealing with the strategic direction and long-term success of the Company. The Board will meet every two months or at any other time deemed necessary for the good management of the business and at a location agreed between the Board members. The Non-Executive Directors, Sir Malcolm Ross, James Sutcliffe and Patsy Baker, are all considered independent directors not-with-standing Sir Malcolm Ross’s length of service and former role as Chairman.

The Operational Board comprises of the Group CEO and other Executive and Divisional Directors as deemed appropriate and is responsible for the day to day running of the business. The Operational Board will meet weekly or at any other time deemed necessary for the good management of the business and at a location agreed between the Board members. The Operational Board reports to the PLC Board.

The International Advisory Board assists and advises the Company and its subsidiaries on various international issues including governmental and client liaison, cultural, ethnic and religious sensitivities, compliance with legal issues, financing and general business development.

Principle 6

Board Composition, Experience and Dynamics

The Company operates in complex and challenging technological and geographical areas and the Board is mindful that in order to deal effectively with the challenges of the business and to maximise its growth opportunities it has to incorporate a broad range of skills and diversity.

The current composition of the Board may be found here.

The Board maintains a skills, diversity and experience matrix which is detailed below, and which will be periodically reviewed at Board meetings to evaluate current and future requirements.

The Board and its committees will also seek external expertise and advice where required.

Board Diversity & Experience Matrix

Board Diversity & Experience Matrix

Board Diversity & Experience Matrix – Click To Enlarge

Principle 7

Board Evaluation

The Board considers evaluation of its performance and that of its committees and individual directors to be an integral part of corporate governance to ensure it has the necessary skills, experience and abilities to fulfil its responsibilities. The goal of the Board evaluation process is to identify and address opportunities for improving the performance of the board and to solicit honest, genuine and constructive feedback.

The Board considers the evaluation process is best carried out internally at the Company’s current size, However the Board will keep this under review and may consider independent external evaluation reviews in due course as the Company grows.

The internal evaluation process includes:

  1. Board Evaluation
Review:Period:
Board composition in terms of skills, experience and balanceAnnually or as required
Board cohesionAnnually or as required
Board operational effectiveness and decision makingAnnually
Board meetings conduct and content and quality of informationAnnually or as required
The Board’s engagement with shareholders and other stakeholdersAnnually
The corporate vision and business planAnnually
  1. Committee Evaluation
Review:Period:
Board Committees’ composition in terms of skills, experience and balanceAnnually or as required
Board Committees’ Terms of ReferenceAnnually
Board Committees’ effectivenessAnnually
  1. Individual Director Evaluation
Review:Period:
Executive Director performance in executive roleAnnually
Executive Director performance and contribution to the BoardAnnually
Non-Executive Director performance and contribution to the BoardAnnually
Non-Executive Director’s independence and time servedAnnually
All Directors’ attendance at Board and Committee meetingsAnnually

The Board will, as a whole or in part as appropriate, undertake the evaluation process aided by the Chairman, CEO and independent Non-Executive Directors or external advisors as necessary. The Chairman is responsible in ensuring the evaluation process is ‘fit for purpose’, as well as dealing with matters raised during the process. The Chairman will keep under review the frequency, scope and mechanisms for the evaluation process and amend the process as required.

Where deficiencies are identified these will be addressed in a constructive manner. Where necessary individual Directors will be offered mentoring and training. If deficiencies are identified within the Board as a whole, then changes or additions to the Board will be considered in conjunction with the Nominations Committee.

The evaluation process will be focused on the improvement of Board performance, through open and constructive dialogue and the development and implementation of action plans. The Board will report on its evaluation and actions in its Annual Report.

Succession planning is a vital task for boards and the management of succession planning represents a key measure of the effectiveness of the Board and a key responsibility of both the Nominations Committee and wider Board.

Principle 8

Corporate Culture

The Board recognises that a corporate culture based on sound ethical values and behaviours is an asset and provides competitive advantages. The Company operates in international markets and is mindful that respect of individual cultures is critical to corporate success. In accordance with the Company’s stated mission it endeavours to conduct its business in an ethical, professional and responsible manner, treating our employees, customers, suppliers and partners with equal courtesy and respect at all times.

We recognise ISO 26000 as a reference document that provides guidance for integration / implementation of social responsibility / socially responsible behaviour. The Company is also independently certified to and operates an ISO 9001 Quality Assurance programme and is working towards ISO 14001 – Environmental Management.

The Company also supports the local communities in which it operates indirectly through various charities and organisations and directly through the its own registered charity the Westminster Group Foundation.

Principle 9

Governance Structure

The PLC Board sets the Company’s strategic aims and ensures that necessary resources are in place in order for the Company to meet its objectives. All members of the PLC Board take collective responsibility for the performance of the Company and all decisions are taken in the interests of the Company. Whilst the PLC Board has delegated the operational management of the Company via the Operational Board to the Executive Directors and other senior management, there are detailed specific matters subject to decision by the PLC Board of Directors. These include acquisitions and disposals, joint ventures and investments, projects of a capital nature and all significant contracts. The Non-Executive Directors have a particular responsibility to constructively challenge the strategy proposed by the Executive Directors; to scrutinise and challenge performance; to ensure appropriate remuneration and that succession planning arrangements are in place in relation to Executive Directors and other senior members of the management team. The senior executives enjoy open access to the Non-Executive Directors.

The Chairman is responsible for leadership of the board and ensuring its effectiveness on all aspects of its role. The Chairman with the assistance of the Chief Executive Officer sets the Board’s agenda and ensures that adequate time is available for discussion of all agenda items, in particular strategic issues.

The Chairman promotes a culture of openness and debate by facilitating the effective contribution of Non-Executive Directors in particular and ensuring constructive relations between Executive and Non-Executive Directors. The Chairman is also responsible for ensuring that the directors receive accurate, timely and clear information.

The Chief Executive Officer (CEO) is responsible for running the business and implementing the decisions and policies of the Board. The CEO is also responsible for ensuring the Company’s communication with shareholders is timely, informative and accurate with due regard to commercial sensitivity and regulatory requirements.

The Chief Financial Officer (CFO) is responsible for the Company’s finances and the Operations Director is responsible for the operations and technical requirements of the Company. The role of Company Secretary is undertaken separately to that of the CFO.

The Non-Executive Directors are appointed not only to provide independent oversight and constructive challenge to the Executive Directors but also chosen to provide strategic advice and guidance. This is particularly important given the Company operates internationally in challenging markets.

All directors are able to allocate sufficient time to the Company to discharge their duties. There is a formal, rigorous and transparent procedure for the appointment of new directors to the PLC Board. The search for PLC Board candidates is conducted, and appointments made, on merit, against objective criteria and with due regard for the benefits of diversity on the Board.

The Board is responsible for ensuring that a sound system of internal control exists to safeguard shareholders’ interests and the Company’s assets. It is responsible for the regular review of the effectiveness of the systems of internal control. Internal controls are designed to manage rather than eliminate risk and therefore even the most effective system cannot provide assurance that each and every risk, present and future, has been addressed. The key features of the system that operated during the year are described below.

The Board has established the following committees to assist with oversight and governance:

Audit Committee

The Audit Committee is chaired by James Sutcliffe, and also comprises Sir Malcolm Ross, Sir Tony Baldry and Roger Worrall (secretary). It oversees and reviews the Company’s financial reporting and internal control processes, its relationship with external auditors and the conduct of the audit process together with its process for ensuring compliance with laws, regulations and corporate governance. It is composed entirely of non-executive directors but other individuals such as the Company’s CFO and CEO and representatives of the finance team may be invited to attend all or any part of any meeting when deemed appropriate. The Company’s external auditors will be invited to attend meetings of the Committee on a regular basis.

There is currently no internal audit function in view of the size of the Group, although this is kept under annual review.

Terms of reference available here.

Remuneration Committee

The Remuneration Committee is chaired by Sir Malcolm Ross and also comprises Patsy Baker and James Sutcliffe. The Remuneration Committee is responsible for establishing a formal and transparent procedure for developing policy on executive remuneration and to set the remuneration packages of individual Directors. This includes agreeing with the Board the framework for remuneration of the Chief Executive, all other executive Directors, the Company Secretary and such other members of the executive management of the Company as it is designated to consider. It is furthermore responsible for determining the total individual remuneration packages of each Director including, where appropriate, bonuses, incentive payments and share options.

The Committee’s policy is to provide a remuneration package which will attract and retain Directors and management with the ability and experience required to manage the Group and to provide superior long-term performance. It is the aim of the Committee to reward Directors competitively and on the broad principle that their remuneration should be in line with the remuneration paid to senior management of comparable companies. There are four main elements of the remuneration package for Executive Directors: base salary, share options, benefits and annual bonus

Terms of reference available here.

Risk Committee

The Risk Committee is chaired by James Sutcliffe and also comprises Sir Tony BaldryPeter Fowler, Martin Boden and Roger Worrall (secretary). The purpose of the Risk Committee (the “Committee”) is to perform centralised oversight and policy setting of risk management activities and to provide communication to the Board of Directors (the Board) of the Westminster Group (the Company) regarding important risks and related risk management activities. The Committee’s key areas of responsibility are:

  • Oversight of risk;
  • Adherence to internal risk management policies and procedures;
  • Compliance with risk-related regulatory requirements; and
  • External risk assessments in relation to the company’s international business

Terms of reference available here.

Nomination Committee

The Nominations Committee is chaired by Patsy Baker and also comprises Sir Malcolm RossJames Sutcliffe and Peter Fowler. The Nominations Committee leads the process for Board Appointments and is responsible for review of the board size, structure and composition (both executive and non-executive) including any potential new applicants to ensure the board contains the right balance of skills, knowledge and experience to manage and grow the business. The Nominations Committee will make recommendations to the Chairman of the Board on any proposed or suggested changes to the Board with a view on the leadership needs of the business including succession planning.

Terms of reference available here.

Disclosure Committee

The Disclosure Committee is chaired by Patsy Baker and also comprises James SutcliffePeter Fowler and Roger Worrall (secretary). The Disclosure Committee is responsible for oversight and monitoring of the Company’s disclosure obligations and to ensure compliance with Market Abuse Regulations (MAR) and London Stock Exchange rules.

Terms of reference available here.

Principle 10

Stakeholder Communication

The Board is committed to maintaining good communication and having constructive dialogue with all of its stakeholders, including shareholders, providing them with access to information to enable them to come to informed decisions about the Company. The Investor Relations section of the Company’s website provides all required regulatory information as well as additional information shareholders may find helpful including: Share Services, information on Board Members, Advisors and Significant Shareholdings, a historical list of the Company’s Announcements, its Financial Calendar, Corporate Governance information, the Company’s publications including historic Annual Reports and Notices of Annual General Meetings, together with Share Price information and interactive Charting facilities to assist shareholders analyse performance.

Results of shareholder meetings and details of votes cast will be publicly announced through the regulatory system and displayed on the Company’s website with suitable explanations of any actions undertaken as a result of any significant votes against resolutions.

Information on the work of the various Board Committees and other relevant information are included in the Company’s Annual Report.