The Directors recognise the importance of sound corporate governance and, following Admission, have undertaken to take account of the requirements of the QCA Guidelines to the extent that they consider it appropriate having regard to the Company's size, board structure, stage of development and resources.
The QCA Guidelines recommend that the board of directors should include a balance of executive and nonexecutive directors, such that no individual or small company of individuals can dominate the board's decision taking.
The Company will hold regular board meetings and the Directors will be responsible for formulating, reviewing and approving the Company's strategy, budget and major items of capital expenditure. The Directors have, conditional on Admission, established an Audit Committee, a Nomination Committee, a Disclosure Committee and a Remuneration Committee with formally delegated rules and responsibilities.
The Remuneration Committee, which will comprise Nick Mustoe (chairman), Adam Reynolds and Bill Murray, will meet twice each year. The committee will be responsible for the review and recommendation of the scale and structure of remuneration for senior management, including any bonus arrangements or the award of share options with due regard to the interests of the Shareholders and the performance of the Company.
The Audit Committee, which will comprise Bill Murray (chairman), Adam Reynolds and Nick Mustoe, will meet not less than twice a year. The committee will be responsible for making recommendations to the Board on the appointment of auditors and the audit fee and for ensuring that the financial performance of the Company is properly monitored and reported. In addition, the Audit Committee will receive and review reports from management and the auditors relating to the interim report, the annual report and accounts and the internal control systems of the Company.
The Nomination Committee, which will comprise Adam Reynolds (chairman), Bill Murray and Nick Mustoe, will meet at such times and frequency as necessary. The Nomination Committee will monitor the size and composition of the Board and the other Board committees and be responsible for identifying suitable candidates for Board membership.
The Disclosure Committee, which will comprise Nick Mustoe (chairman), Bill Murray and Adam Reynolds, will meet at such times as shall be necessary or appropriate to discharge its obligations and comply with applicable law and regulation. The committee will be responsible for overseeing the Company's compliance with its obligations under the Market Abuse Regulation and the AIM Rules for Companies in relation to the disclosure of inside information and price sensitive information.
The Board of Sosandar Plc seeks to follow best practice in corporate governance as appropriate for a company of our size, nature and stage of development. As a public company listed on AIM, we are cognisant of the trust placed in the Board by institutional and retail investors, employees and other stakeholders. We recognise the importance of an effectively operating corporate governance framework.
The Board has adopted the principles of the 2018 Quoted Companies Alliance Corporate Governance Code - ("the QCA Code") to support the Company's governance framework. The Directors acknowledge the importance of the ten principles set out in the QCA Code and this statement briefly sets out how we currently comply with the provisions of the QCA Code. The Board considers that it does not depart from any of the principles of the QCA code.
How we comply with the QCA Code in this area
1. Establish a strategy and business model which promote long-term value for shareholders
Sosandar PLC has clearly articulated its strategy and business model on pages 14 to 17 of its most recent annual report and accounts. A summary can also be found on the Company's website at https://www.sosandar-ir.com/content/about/about
Sosandar intends to build long-term shareholder value by targeting an underserved market of women looking for trend-led, affordable, quality clothing with a premium aesthetic. We design and manufacture clothing & footwear for all occasions with fashion forward styles designed to flatter. Our strategy is to build a loyal customer base, focusing on customer growth and retention, by taking advantage of the increasing convergence of e-commerce and media.
2. Seek to understand and meet shareholder needs and expectations
The Company recognises the importance of engaging with its shareholders and reports formally to them when its full-year and half-year results are published.
The Board also seeks to engage with shareholders to understand their needs and expectations, primarily through meetings with the Executive Directors, both individually as required (this mainly applies to institutional investors and/or those with significant shareholdings) and at annual general meetings, at which all shareholders are welcome.
The Joint CEOs and Executive Directors regularly present at private investment events during the year.
Investors may contact the Company directly through the investor enquiries email address noted on the Company's website [email protected]. Investors may also receive Investor Email Alerts from the Company by signing up at https://www.sosandar-ir.com/content/investors/alert
3. Take into account wider stakeholder and social responsibilities and their implications for long-term success
We recognise that we are responsible not only to our shareholders and employees, but to a wider group of stakeholders (including, inter alia, our customers and suppliers) and the communities in which we operate.
Sosandar Plc is committed to the highest standards of corporate social responsibility in its activities, as outlined in more detail in the annual report and accounts.
We outsource manufacturing to 16 subcontractors around the world including India, China, Turkey and Spain. All suppliers are asked to confirm they adhere to the ethical trade guidelines. The breadth of strong supplier relationships mitigates the risk of over reliance on a small number of specific contacts. The output from suppliers is regularly reviewed to ensure continued success.
We provide frequent new product ranges to ensure constant newness for our customers. Our in-house designers react quickly to changing customer demand to ensure the company is on the cutting edge of fashion, while tailoring garments to fit customers.
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation
The Board has identified what we believe to be a sensible approach to risk management for a company of our size.
We outline the Company's approach to risk management and the principal risks we face, along with what we do to mitigate those risks, in detail on pages 26 and 27 of our annual report and accounts.
The Company receives regular feedback from its external auditors on the state of its risk management and internal controls.
This area is subject to regular review as our business and the risks we face evolve.
5. Maintain the board as a well-functioning, balanced team led by the chair
The Board includes a balance of Executive and Non-Executive Directors, with four Non-Executive Directors compared to three Executive Directors.
The Board's activities are supported by Nomination, Audit and Remuneration Committees.
All the Directors have appropriate skills and experience for the roles they perform at the Company, including as members of Board Committees.
Directors are subject to re-election at least every three years in accordance with the articles of association.
The Company is satisfied that the current Board is sufficiently resourced to discharge its governance obligations on behalf of all stakeholders and will consider the requirement for additional Non-Executive Directors as the Company fulfils its growth objectives.
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
The Board currently comprises three Executive and four Non-Executive Directors with an appropriate balance of sector, financial and public market skills and experience.
More details of the skills and experience of the Directors are provided in the annual report and accounts as well as the website.
The experience and knowledge of each of the Directors gives them the ability to constructively challenge the strategy and to scrutinise performance.
The Board has access to external advisors where necessary.
The Board and Committees receive training as appropriate. In particular, the members of the Audit Committee receive technical updates from the Company's external auditors to keep them abreast of the latest accounting, auditing, tax and reporting developments.
The Directors also receive regular briefings and updates from the Company's NOMAD in respect of continued compliance with, inter alia, the AIM Rules and the Market Abuse Regulation.
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
Evaluation of the performance of the company's board has historically been implemented in an informal manner.
From 2018 however, the Nomination Committee will formally review and consider the performance of each director at or around the time of publication of the company's annual report.
The review will look at director performance during the year, which will include but not limited to: financial targets; adherence to company policies, effectiveness of management as well as attendance and contribution at company meetings.
On an ongoing basis, board members maintain a watching brief to identify relevant internal and external candidates who may be suitable additions to or backup for current board members.
8. Promote a corporate culture that is based on ethical values and behaviours
The Board believes that the promotion of a corporate culture based on sound ethical values and behaviours is essential to maximise shareholder value.
The Company carefully assesses each of the companies it works with to ensure the requisite standards and values are in place. All new supplies are must confirm in writing that they adhere to the Ethical Trading Initiative base code www.ethicaltrade.org/eti-base-code.
The Company's policies set out its zero tolerance approach towards any form of modern slavery, discrimination or unethical behaviour relating to bribery, corruption or business conduct.
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board
The roles and responsibilities of specific Directors and Board Committees are available on our website.
The Board meets formally at least six times per year.
Each Committee has terms of reference outlining the specific responsibilities delegated to it.
The terms of reference of each Committee can be found on in the corporate governance section of the Company website.
The appropriateness of the Board's structures and processes are reviewed through the ongoing evaluation process by the Nomination Committee, which will evolve in parallel with the Company's objectives, strategy and business model as the Company develops.
10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
The Company communicates progress throughout the year through Regulatory News Service announcements and in more detail in its interim financial statements and annual report and accounts. All historical annual reports and other governance related material, including notices of all general meetings, since the Company's formation, are available on the Company's website.
Results of shareholder votes are made public on the Company's website after the meetings concerned.
Page last updated: 26 November 2019