INVESTORS

WANdisco plc Corporate Governance statement - April 2019

Corporate governance is a high priority for WANdisco plc (the Company). In accordance with the recent changes to the AIM Rules for Companies (the AIM Rules), the Company is required to maintain on its website details of a recognised corporate governance code, how the Company complies with its chosen code and an explanation of any deviations.

The Company has adopted the Quoted Companies Alliance Corporate Governance Code 2018 (the Code) and sets out how it complies within this statement. This statement has been approved by the board of the Company (the Board) on 23 March 2019. To ensure it reflects the most up to date corporate governance position within the Company, annual updates will be made to this statement.

In addition to this statement, further information around compliance with the Code will be in the Company's next annual report.

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

The vision of the Company is to shape the future of data infrastructure with its LiveData platform by enabling companies to put all of their data to work for a business at any time and at scale. The Company has a unique solution to the replication of continuously changing live data, at vast scale, between locations with guaranteed consistency.

The Company's unique technology ensures that real time data is:

  • always available as a shared logical pool of data;
  • always accurate, with full integrity and mathematical consistency;
  • always protected, with all nodes active no single source of failure; and
  • always run with a fundamentally lower cost structure than traditional IT infrastructure.

The Company's strategy is to focus on developing its indirect sales channels, in particular, the OEM channel, resellers and online marketplaces, co-development partnerships and consulting and systems integrator partners. These partnerships are significant as they allow the Company access to vast sales teams which add significant global and horizontal market reach, allow more bookings at lower costs and enhance the Company's brand.

A more comprehensive explanation of the Company's strategy and business model can be found in the most recent annual report.

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

The Company is committed to communicating effectively with shareholders to ensure that the Company's strategy and business model are clearly understood and shareholder views are noted. Accordingly, during the year, activities are regularly undertaken to engage with shareholders.

The Company communicates with shareholders through its full-year and half-year announcements and trading updates. The Company invites institutional shareholders and analysts to view the full-year and half-year announcements. The presentation slides and a webcast of the presentations are made available at www.wandisco.com/investors/reports-and-presentations on the day of announcement.

The Chief Executive Officer and the Chief Financial Officer regularly meet with institutional shareholders to foster a mutual understanding of objectives. In particular, an extensive program of meetings with analysts and institutional shareholders is held following the interim and preliminary results announcements. Feedback from these meetings and market updates prepared by the Company’s Nomad are presented to the Board to ensure it has an understanding of shareholders’ views. The other Non-executive Directors are available to shareholders to discuss strategy and governance issues.

The Company considers that the Annual General Meeting of the Company is a key forum in which the Board and shareholders have an opportunity to communicate. The Notice of the Meeting is sent to shareholders at least 21 days before the meeting.

Any significant developments of the Company are communicated via stock exchange announcements via RNS which can be found on the Company's website. The website also contains a range of corporate information on our business, results and financial performance, including copies of our Annual Report and Accounts, announcements and presentations.

To request any meetings or for general shareholder enquiries please contact: investor.relations@wandisco.com.

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

The Company is committed to wider stakeholder engagement as well as living up to its social responsibilities, viewing these as crucial to business success.

Aside from the Company's shareholders and customers, the Company's employees are a key stakeholder group and the Board closely monitors employee relations. The Company is committed to providing competitive employment conditions as well as challenging and stimulating work. The Company is keen to support all of its employees, for instance, the Company operates a mentoring scheme for those employees joining from university.

The Company has taken an active role in stakeholder engagement through education. The Company has initiated a number of creative schemes to inspire schoolchildren about the potential of data science. The Company also works closely with the University of Sheffield to advance dementia research using its unique technology.

The Company is acutely aware of the gender imbalance in technology companies and is taking active measures in order to combat this. For example, through improving maternity provision and by attending local events which aim to encourage more women into careers in engineering.

The Company holds regular “town hall” meetings throughout the year where the CEO and other members of the management team provide information on the current state of the technology, the health of the Company and other important information, including recognising employee achievements. These meetings also provide an opportunity for employees to ask questions, seek additional information and provide feedback.

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

The Board is responsible for the Company's risk management and believes that effective risk management underpins the delivery of the Company's strategy and objectives. The risk management process involves the identification and prioritisation of key risks, together with appropriate controls and plans for mitigation, which are then reported to the Board as part of the quarterly management reporting procedures.

The Group’s internal financial control and monitoring procedures include:

  • clear responsibility on the part of line and financial management for the maintenance of good financial controls and the production of accurate and timely financial management information;
  • the control of key financial risks through appropriate authorisation levels and segregation of accounting duties;
  • detailed monthly budgeting and reporting of trading results, balance sheets and cash flows, with regular review by management of variances from budget;
  • reporting on any non-compliance with internal financial controls and procedures; and
  • review of reports issued by the external auditor.

The Audit Committee is responsible for ensuring that the Company's financial statements are in compliance with appropriate accounting standards, the law and the AIM Rules. In addition, the Audit Committee monitors and reviews the effectiveness of the Company’s internal controls. Given the Company's size and development, the Board does not consider it necessary to have an internal audit function - however, this decision is regularly reviewed.

Furthermore, the Board considers that the frequency of Board meetings and the level of details presented in those meetings in relation to the operation of the Company provide an appropriate risk management process.

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

The Board is comprised of three Executive Directors (including the Chairman) and three Non-executive Directors, two of which are independent.

For part of the year there was only one Independent Non-executive Director (Karl Monaghan), whereas the QCA Code states that the Company should have at least two. This was resolved on 19 November 2018 following the appointment of Bob Corey.

David Richards fulfils the role of Chairman and CEO of the Company, taking on both roles following the resignation of the prior Chairman. Bob Corey was appointed in on 19 November 2018 as Senior Non-executive Director and Vice-Chairman to better balance the roles of CEO and Chairman.

The Board is satisfied that there is a suitable balance between independence and knowledge of the Company within the Board. A record of each Director's attendance at Board meetings is contained in the most recent annual report available on the investor website.

The Chairman and the Company Secretary work together to ensure that Board papers are clear, accurate, delivered in a timely manner to Directors and of sufficient quality to enable the Board to discharge its duties. Specific business-related presentations are given by members of the Executive Team when appropriate and external speakers also attend Board meetings to present on relevant topics. As well as the support of the Company Secretary, there is a procedure in place for any Director to take independent professional advice at the Company’s expense in the furtherance of their duties, where considered necessary.

The Company expects all Non-executive Directors to devote such time as is necessary for the proper performance of their duties. Furthermore, Directors are expected to attend all Board meetings and Committee meetings of which they are members.

The Board is supported by the Audit, Remuneration and Nomination Committees.

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

The Directors have a broad range of experience and skills. Full biographical details of the Directors are included on the Company website.

Directors are subject to re-election at the AGM following their appointment. In addition, at each AGM one-third (or the whole number nearest to one-third) of the Directors retire by rotation.

The Board regularly reviews the composition of the Board to ensure that is has the necessary up-to-date experience, skills and capabilities.

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

The Board evaluates the performance of the Board with reference to all aspects of its operation on an ongoing basis. This includes but is not limited to: the appropriateness of its skill level; the way its meetings were conducted and administered (including the content of those meetings); the effectiveness of the various Committees; whether corporate governance issues were handled in a satisfactory manner; and whether there is a clear strategy and objectives.

In addition, each Director’s performance is appraised through the normal appraisal process. Save for the Chairman and Chief Executive Officer, who was appraised by the Non-executive Directors, the Executive Board members are appraised by the Chairman and Chief Executive Officer. The Non-executive Directors are appraised by the Chairman and Chief Executive Officer.

The Chairman, and now with the Vice-Chairman’s advice and counsel, continuously monitors how Board members participate and contribute to the Board and its activities. Of particular importance is ensuring that members of the Board are committed to the Group and its shareholders and stakeholders, and that actions and decisions are mode with those commitments in mind. Changes to the composition of the Board have been, and will continue to be made, to ensure the Board operates effectively and with these goals in mind.

In considering refreshment of the Board and succession planning, the Board will have regard to ongoing developments and trends including in relation to matters such as diversity in its broadest sense. As noted in Principle 6, Directors are subject to re-election at the AGM following their appointment and in addition, at each AGM one-third (or the whole number nearest to one-third) of the Directors retire by rotation.

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

The Board is responsible for the long-term success of the Group. It sets the Group’s values, standards and strategic aims and oversees implementation within a framework of prudent and effective controls, ensuring only acceptable risks are taken. It provides leadership and direction and is also responsible for corporate governance and the overall financial performance of the Group.

Through regular in-person and telephonic board meetings the Chairman and Vice-Chairman communicate with the Board to ensure the Group’s goals are being met and are being updated or revised to meet the ever-changing landscape. These meetings give the Board the opportunity to discuss and address ethical values and behaviours important to the Board and the industry and community as a whole and to determine if any additional changes, actions, policies or procedures are necessary.

In addition to these policies, as noted in Principle 3, the Company is committed to providing competitive employment conditions with challenging work and is seeking to address the gender imbalance in the industry in which it operates.

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

Since the appointment of Bob Corey on 19 November 2018 as Vice Chairman and Senior Independent Non-executive Director, the Board is comprised of two Non-executive Directors, who are considered to be independent of the management and are free to exercise independent judgement. They have never been employees of the Company and receive no other remuneration from the Company other than Directors' fees.

Each new Director, on appointment to the Board, is briefed on the activities of the Company. Professional induction training is also given as appropriate. The Chairman briefs Non-executive Directors on issues arising at Board meetings if required and Non-executive Directors have access to the Chairman at any time. Ongoing training is provided as needed. Directors are updated on a frequent and regular basis on the Company’s business.

As part of good governance, the Board has a schedule of matters reserved for its decision, which include the following matters:

  • ensuring that the necessary financial and human resources are in place to meet its obligations to its shareholders and others;
  • the approval of acquisitions and disposals of businesses;
  • major capital expenditure and annual financial budgets; and
  • setting the Company's dividend policy.

An Executive Committee supports the Board in implementing strategy and reports relevant matters to the Board for its consideration and approval. This Executive Committee comprises three Executive Directors and nine members of senior management.

To assist the Board in carrying out its functions, the Board delegates certain responsibilities to its three principal committees, the Nomination, Audit and Remuneration Committees.

Audit Committee

Bob Corey is Chairman of the Audit Committee and the other members consist of Karl Monaghan and Grant Dollens.

Amongst other responsibilities, the Audit Committee is responsible for monitoring and ensuring the truth and fairness of the Company's financial statements before submission to the Board for approval, ensuring compliance with appropriate accounting standards, the law and the AIM Rules.

The Audit Committee meets twice a year and often interacts with the external auditor.

Nomination Committee

David Richards is the Chairman of the Nomination Committee and the other members consist of Bob Corey, Grant Dollens, Karl Monaghan and Erik Miller.

The Nomination Committee is responsible for reviewing the structure, size and composition of the Board and recommending any changes required, succession planning and identifying and nominating board candidates for vacancies as and when they arise. The Committee is also responsible for reviewing the results of any Board performance evaluation process.

The Nomination Committee meets at least twice a year.

Remuneration Committee

Karl Monaghan is the Chairman of the Remuneration Committee and the other members consist of Bob Corey and Grant Dollens.

The Remuneration Committee's primary purpose is to assist the Board in determining the Company's remuneration policies, reviewing the performance of Executive Directors and make recommendations to the Board on matters relating to their remuneration and terms of service.

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

The Company maintains a dialogue and communicates with its shareholders through full year and half year trading announcements, shareholder meetings (including the AGM), the Company website which provides a range of corporate information on the business, results and financial performance and through meetings, roadshows and conferences.

Results from all general meetings are communicated to shareholders via the stock exchange announcements via RNS and on the Company's website.

Any shareholder enquiries can be directed to investor.relations@wandisco.com.