CHAIRMAN’S INTRODUCTION


The Board and its Committees are responsible for corporate governance and determining, implementing and reviewing the strategy, budgeting and corporate actions of the Group. The Board is always looking to deliver high standards of Corporate Governance using its knowledge and the framework put in place to help achieve this. This ensures that the duties to shareholders, employees and other stakeholders are understood and delivered as expected.

GOVERNANCE PRINCIPLES


The Directors recognise the importance of sound corporate governance and have therefore adopted the Quoted Companies Alliance (QCA) code, which is reviewed annually. 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.

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

Trakm8 Holdings PLC is a leading supplier of fleet, insurance and automotive solutions that helps drive the reduction of risk, fuel consumption and insurance premiums, while improving productivity, safety and compliance.

The principle aim of the Group is to increase use of its IP owned hardware and AI based algorithms driving continual growth in its connections and therefore its SaaS recurring revenues.

Despite the short-term impact of Covid-19, in the long term our target is still to achieve 1 million connections to our systems. We currently have over 264,000. 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 its two business units: Insurance and Automotive and Fleet and Optimisation. Progress against these plans is monitored by the Board.

Principle 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 thirteen years and Executive Chairman for eight 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 meetings with major shareholders throughout the year, to understand their views on, and expectations of, the Group’s performance.

John provides ad hoc updates to other shareholders as required.

Principle 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 and quarterly ‘town hall’ meetings. 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.

Principle 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 risk management framework section of our annual report.

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.

Principle 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 independent non-executives, Keith Evans and Penny Searles. This is complemented with the non-executive directorship of Nadeem Raza, who cannot be considered to be independent due to him being the CEO and principle shareholder in Microlise which is a substantial shareholder in the Company.

However, the Board still 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 8% of the shares in issue combined, they represent significant shareholders. Jon Edwards, CFO and Mark Watkins as COO are key directors of the Group and so are rightly on the Board.

Details of attendance at the Board and the various committees by directors can be found later in this report.

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.


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

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.

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

There is a continuous 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.

In evaluating the general performance of the Board, a number of factors are reviewed including the attendance, involvement and challenge raised at meetings as well as attendance at Board and Committee meetings where applicable. In addition, where matters arise from each meeting these actions are followed up effectively with updates reported back to the relevant forum.

In considering succession planning for the Board, the Company nurture the best talent through coaching and training ensuring that where available internal promotion is encouraged across the Group. This includes appointment to the Board should the opportunity arise and should they be required the Group’s recruitment and appointment processes are used.

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

Our corporate culture is driven and underpinned by our company values:

  • Integrity, Quality and Pride in our thoughts and our actions
  • Innovation in our design, manufacture and delivery of remarkable solutions
  • Commitment in our support of customers, partners, colleagues and shareholders
  • Teamwork in our mentoring, ownership and passion to win
  • Fun and celebration in our work and in our success

All employees have these values explained to them when joining and continually reinforced by their colleagues, mentors and management whenever possible. All members of the Group are encouraged to raise and suggest new ideas that help deliver these values either through their line management or via our regular management meetings.

The Group’s mission continues to benefit the environment and our commitment to this is also shown through our continued efforts in maintaining our ISO14001 certification.


Principle 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 Edwards CFO, 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 non-executive director and Deputy Chairman.
  • Nadeem Raza is a non-executive director.
  • Penny Searles is an independent non-executive director.
  • Jon Edwards, 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 AI

Our processes are continually being improved. For example, our investment in new plant and equipment for our factory has enhanced our product testing, so providing better quality and lower costs.

Principle 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 are included in this Governance report, and on our website (www.trakm8.com). The Board of Directors meets monthly. For this meeting reports are produced on Risks, Finance, Sales and Marketing, Engineering and Operations. The Legal Counsel also attends, and full minutes are taken.

The Board maintains dialogue with its shareholders through the annual report and accounts, interim report, other regulatory announcements, the AGM and one-to-one meetings with both existing and potential shareholders. Interaction, views and feedback is also sought through discussions at the end of the AGM directly from shareholders and also from our corporate brokers.

BOARD OF DIRECTORS AND COMMITTEES 

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

Nominations 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. John Watkins chairs the committee with Keith Evans, Nadeem Raza and Penny Searles as members.

Audit and Risk Committee

The Audit and Risk Committee is responsible for ensuring that the Group’s financial performance is properly monitored, controlled and reported. Keith Evans chairs the committee with John Watkins, Nadeem Raza and Penny Searles as members. The CFO and other Directors attend as required.

The committee and the external auditor have safeguards to avoid a potential compromise of auditor’s objectivity and independence. These include the adoption of a policy that segregates the supply of audit and non-audit services and requires committee approval for the supply of services such as tax services and acquisition related due diligence.

The key issues considered by the Audit and Risk Committee included revenue recognition, capitalisation of development costs, valuation of accrued income and impairment review of Goodwill.  The Audit and Risk Committee also reviewed in detail financial projections in concluding on its Going Concern assertion.

Remuneration committee

The Remuneration Committee’s terms of reference include making recommendations on Directors’ compensation packages to ensure that the Group enjoys and retains an appropriate level of motivated resources. The Committee engages with external consultants as and where it is deemed beneficial.

The Group has adopted and operates a share dealing code for Directors and employees in accordance with the requirements of the market abuse regulation. John Watkins chairs the committee with Keith Evans, Nadeem Raza and Penny Searles as members.

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.

These disclosures were last reviewed on 23rd June 2023

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