Corporate Governance

The Board of Directors are responsible for determining, implementing and reviewing the strategy, budgeting and corporate actions of the Group.

The Directors recognise the importance of sound corporate governance and have therefore adopted the Quoted Companies Alliance (QCA) code. The Directors have developed procedures to ensure that the Group complies with the QCA code, in line with its size and stage of corporate evolution. These procedures are set out below. Where the Group does not fully comply, the reasons for the non-compliance are explained and the alternative procedures put in place are also set out.

The QCA is constructed around ten broad principles and a set of related disclosures. The ten principles are:

DELIVER GROWTH

1. Establish a strategy and business model which promote long-term value for shareholders
2. Seek to understand and meet or exceed shareholder needs and expectations
3. Take into account wider stakeholder and social responsibilities and their implications for long-term success
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation

MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK

5. Maintain the Board as a well-functioning, balanced team led by the Chair
6. Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities
7. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
8. Promote a corporate culture that is based on ethical values and behaviours
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

BUILD TRUST

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

DELIVER GROWTH


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


In our annual report for the year to 31st March 2018, we explain the Group’s business model and strategy, including the key risks in execution and how we address those risks. The business model is designed to promote long term profitable growth and cash generation. In the long term our target is to achieve 1 million connections to our systems. We currently have over 250,000. This substantial increase will provide the level of profitable growth and cash generation that should increase the Group’s share price substantially. The Group has specific growth plans in place across the four sectors of its sales operations: Automotive, Insurance, Fleet and Optimisation. Progress against these plans is monitored by the Board.

2. Seek to understand and meet shareholder needs and expectations


John Watkins, as Executive Chairman, has long been the key link with shareholders. We believe this dual Chairman/CEO role is acceptable for a company of our size. John has been CEO for ten years and Executive Chairman for five years. This extended timescale brings wide experience and is not unreasonable for a company of our size.

However, we also recognised the need to supplement his position by appointing senior independent director Keith Evans as Deputy Chairman in 2017 to provide an independent focal point for shareholders. We believe this appointment goes some way to balancing John Watkins’ dual role of Chairman and CEO.

Both John and Keith, individually, hold face-to-face meetings with major shareholders throughout the year, to understand their views on, and expectations of, the Group’s performance.

John provides a detailed business update at the AGM, to which all shareholders are invited. At this update, shareholders are encouraged to give their views and ask questions. Updates are also provided on the half-year results.

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


The Board has established a system to obtain regular feedback from both internal (our workforce) and external (shareholders, customers, suppliers, regulators and others) stakeholders.

Internally

Regular meetings are held with the employees who are also kept up to date with the Group’s performance through monthly bulletins. Individual feedback is also gathered by the Group’s HR function, which reports directly to the monthly Management team and Board meetings.

Externally

As noted above, regular feedback is obtained from shareholders. There is in place a system of monitoring customer comments to assess our daily performance in satisfying their requirements. A Net Promoter Score (NPS) system is in place to monitor and record customer feedback. This information is considered by the Board at its monthly meetings. In addition, we regularly meet our key customers to identify their future requirements and to put to them our ideas on future products that would provide them with improved Returns on Investment (ROI). This has enabled us to develop the world-leading engineering products we now have, and to put in place longer-term engineering plans. Given the nature of our supply chain, we have to keep in regular contact with key suppliers to ensure continued component delivery to our high standards of quality. On the regulatory side we ensure that we meet all relevant regulatory requirements. The Board receives monthly updates on our compliance against a range of measures, including relevant ISO standards, Health and Safety standards, carbon dioxide and other emission standards. Given the nature of our products we have, more recently, put in place procedures to ensure that we are GDPR compliant.

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


The Board has ensured effective risk management is fully embedded throughout the organisation, as detailed in the Annual Report for the year to 31st March 2018. The Board receives a monthly assessment of performance against selected risks. This assessment is regularly discussed at Board meetings and improvements are monitored. In addition, the audit committee also considers the quality and effectiveness of the Group’s risk management procedures.

MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK


5. Maintain the Board as a well-functioning, balanced team led by the Chair


John Watkins is Chairman and CEO. We believe this is not inappropriate for a Group of our size. However, to balance this, Keith Evans has been appointed Deputy Chairman. As required by the QCA code, the Board has two independent non-executives, Keith Evans and Bill Duffy. The Board does not currently meet the requirements for a balance between executive and non-executive Board members. On the Board are the two founding directors, who still are key members of the Management Team. We believe they contribute substantially, given their long association with the company and, with over 10% of the shares in issue, they represent significant shareholders. Jon Furber, as CFO and Mark Watkins, as COO, are key directors of the Group and so are rightly on the Board. The appointment of Sean Morris as director provides him with the seniority needed to operate at the Board levels of our major customers.

The 2018 Annual Report details attendance at the Board and the various committees by director.

In addition, the independent directors also attend the monthly detailed management team meetings. This provides them with a greater understanding of the issues the group faces, so they are in a better position to provide advice and challenge. The 2018 Annual Report also details the key experience of each director. Between them, the Directors have substantial experience in all aspects of the business: Engineering (Hardware and Software), Manufacturing and Production, Marketing and Sales, Finance and City relations.

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


As noted in the 2018 Annual Report, the Board contains an appropriate mix of engineering, operational, selling and financial expertise. Part of the process of assessing performance is to ensure time is available for each board member to keep up to date in their specialisms. Part of the assessment of the performance of each director is a review of the training they undertake.

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


There is a formal process of individual director objective setting and regular assessment of progress against those objectives for each member of both the Group Board and the Senior Management Team. The process is overseen by John Watkins. In addition, the financial remuneration and bonuses of the Board and Management Team are directly linked to achieving pre-set objectives. Keith Evans has the responsibility to evaluate John Watkins’s performance. To do this, he takes soundings, particularly from fellow directors, senior management and major shareholders.

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


Our corporate culture is set out in detail on this website. We use every opportunity to promote these ethical values and behaviours.

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


We have a governance structure that is appropriate for a company of our size and corporate evolution. Our governance structures are explained below. As we grow, we recognise that the structure will need to evolve.

John Watkins, as Chairman and CEO, supported by Jon Furber FD, is responsible for relations with shareholders and the City, and takes overall responsibility for the Group’s strategy and operations. In summary, the other directors are:

Keith Evans is the senior independent director and Deputy Chairman.

Bill Duffy is an independent director.

Jon Furber, as CFO, is responsible for all the financial aspects of the company.

Mark Watkins is COO and responsible for all aspects of Operations and Engineering.

Tim Cowley is responsible for Product strategy and development.

Matt Cowley is responsible for Big Data.

Sean Morris is responsible for Automotive and Insurance.

Our processes are continually being improved. For example, our new factory space will allow us to run several lines at once (and undertake more detailed product testing), so providing better quality and lower costs. We are implementing a new ERP system to provide more timely management and financial information.

BUILD TRUST


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


The list of directors and their expertise and responsibilities is included in the March 2018 Annual Report, and on this website. The Board of Directors meets monthly. For this meeting reports are produced on Risks, Finance, Sales, Engineering and Operations. The Company Secretary also attends, and full minutes are taken.

The Board has established the following committees with formally designated rules and responsibilities. Each committee has a majority of non-executives.

Remuneration Committee

The function of this committee is to review and recommend compensation strategies in order to recruit and retain executive Board members of a sufficient calibre to deliver the Group’s business plan. Members are Keith Evans, John Watkins, and Bill Duffy.

The remuneration of John Watkins is set by Keith Evans and Bill Duffy and is based on their independent assessment of his performance, together with independent market information on the Chairman/CEO salaries for AIM-listed companies of similar size and peformance.

Audit committee

The function of this committee is to review the audited financial statements and the report of the Group appointed audits, and to oversee the procedures relating to risk reduction. They oversee the effectiveness of resultant corrective and/or preventative measures. Members are Keith Evans and Bill Duffy.

Nomination committee

The function of this committee is to meet as necessary to consider appointments to the Board of Directors and to co-ordinate succession planning. The Group operates a share dealing code for Directors. Members are John Watkins, Keith Evans and Bill Duffy.

The extended Management team meets monthly. This meeting is attended by all directors, including the two independent directors. Regular Operations and Engineering meetings are held. These are designed to ensure good communications between these teams. Sales meetings are held several times each month. Our sales teams are split between Automotive, Insurance, Fleet and Optimisation. We believe this split is most appropriate to ensure our sales teams have a deep understanding of the sectors in which they operate.

Conclusion


In summary, the Chairman sets the overall tone for the Corporate Governance processes, which are the building blocks for delivering the long-term objectives of profitable growth, cash generation and share price improvement.