Corporate Governance

The Company’s Corporate Governance information and documents.

 

Changes to the Corporate Governance regime

In line with the London Stock Exchange’s recent changes to the AIM Rules requiring all AIM -listed companies to adopt and comply with a recognised corporate governance code, the Board have adopted the Quoted Companies Alliance ( QCA ) Corporate Governance Code ( 2018 ).

The table below sets out how the Company applies the key governance principles defined in the QCA Code. Further information as to the application of the QCA Code will be provided in the Company’s next Annual Report and Accounts , and updated on the website here.

 

Chairman’s introduction

The Board recognises that good Corporate Governance is fundamental to effective management of the business and delivery of long term shareholder value. As such the Board is committed to ensuring that a strong Governance framework operates throughout the Group since this provides an essential foundation on which to build the future success of the Group.

Bob Holt OBE

Chairman

This page was last updated 26 September 2018.

 

Board and Committee terms of reference

Audit Risk Committee Terms of Reference

Nomination Committee Terms of Reference

Remuneration Committee Terms of Reference

Matters Reserved for the Board

 

Board of Directors

Bob Holt OBE, Chairman
Wendy Lawrence, Chief Executive Officer
Lisa Barter, Finance Director
Gloria Cooke, Clinical Quality Director
Michael Rogers, Non-Executive Director
Tony Bourne, Non-Executive Director
Don Baladasan, Non-Executive Director
John Charlton, Group Company Secretary

 

THE QUOTED COMPANY ALLIANCE (QCA) CODE

QCA Code Principles The QCA’s notes on application: What the Group does and why
  1. Establish a strategy and business model which promote long-term value for shareholders
The board must be able to express a shared view of the company’s purpose, business model and strategy. It should go beyond the simple description of products and corporate structures and set out how the company intends to deliver shareholder value in the medium to long-term. It should demonstrate that the delivery of long-term growth is underpinned by a clear set of values aimed at protecting the company from unnecessary risk and securing its long-term future. The vision of the Group is to build Totally into a leading out-of-hospital healthcare provider to help address the significant healthcare challenges faced by the UK now and importantly, for the future.

Our strategy is to deliver preventative and responsive care through our subsidiary businesses, across multiple disciplines in order to :

  • improve people’s health,
  • reduce healthcare reliance and promote self care,
  • to reduce readmission to hospitals
  • to reduce emergency admissions into hospitals.

We operate in a highly regulated sector, but one in which there is strong core market growth through an aging population, increase in lifestyle related diseases and an increasing demand for healthcare services. The business has invested heavily in Clinical Quality and Governance procedures to address the requirements of the NHS outsourced services sector in which the business operates. There remains significant scope for profitable expansion through organic growth, acquisitions and strategic partnerships.

Details of the Totally Group strategy and of the key challenges faced by the business (and their mitigation) are explained fully within the Strategic Report section on pages 1-20 of the Annual Report and Accounts for the period ended 31 March 2018.

  1. Seek to understand and meet shareholder needs and expectations
Directors must develop a good understanding of the needs and expectations of all elements of the company’s shareholder base.

The board must manage shareholders’ expectations and should seek to understand the motivations behind shareholder voting decisions.

Totally is an acquisitive business which has adopted a buy and build strategy within its core market as an out-of-hospital healthcare provider. The Board recognises the importance of active shareholder dialogue with both institutional and private shareholders, and this is led by the Chairman and Chief Executive. The Company’s most recent fund raise was significantly over-subscribed.

The Chairman and Chief Executive maintain an active dialogue with Institutional shareholders, under-pinned by Investor roadshows after each of the annual and interim results announcements. Investor views are formally reported back to the full plc Board.

The Board has recently undertaken a roadshow to enhance the Company’s profile with the retail investor market.

The AGM is a primary forum for meeting with private shareholders and there are opportunities to formally ask questions of the Board during the AGM or informally speak with the Board immediately following the AGM. At the most recent AGM, on 10 September 2018, voting intentions were received from 40.27% of the issued voting share capital with those voting in favour of all resolutions averaging 99%.

The Totally Investor Relations website contains current share price data, Regulatory news, Reports and Accounts, Constitutional documents and access to Institutional Research notes.

The Company Secretary is available to deal with all shareholder communications.

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

Long-term success relies upon good relations with a range of different stakeholder groups both internal (workforce) and external (suppliers, customers, regulators and others). The board needs to identify the company’s stakeholders and understand their needs, interests and expectations.

Where matters that relate to the company’s impact on society, the communities within which it operates or the environment have the potential to affect the company’s ability to deliver shareholder value over the medium to long-term, then those matters must be integrated into the company’s strategy and business model.

Feedback is an essential part of all control mechanisms. Systems need to be in place to solicit, consider and act on feedback from all stakeholder groups.

Our long term success depends upon our interaction with our wider stakeholder base – patients, commissioning groups, staff, regulators and the wider community.

Totally operates within a heavily regulated sector with our work subject to independent audit and review by Clinical Commissioning Groups and the Care Quality Commission. Our performance is subject to open and transparent monitoring which is then available for local communities and the wider public to review. Given the nature of the work undertaken by the Group a robust Clinical Governance framework is important for the operation of the business. Following our move into the Urgent Care Sector, with the acquisition of Vocare, we continue to see major improvements in the results of the inspection regime undertaken by the Care Quality Commission.

The Board maintains regular dialogue with staff through monthly newsletters and formal and informal staff meetings which provide opportunities to receive feedback on issues affecting the Group.

  1. Embed effective risk management, considering both opportunities and threats, throughout the organization
The board needs to ensure that the company’s risk management framework identifies and addresses all relevant risks in order to execute and deliver strategy; companies need to consider their extended business, including the company’s supply chain, from key suppliers to end-customer.

Setting strategy includes determining the extent of exposure to the identified risks that the company is able to bear and willing to take (risk tolerance and risk appetite).

Risk management is a core focus of the Board and this is reviewed in depth at each Board Meeting. Detailed feedback is received from each operating subsidiary, and external bodies, at the meetings. The Group’s Risk registers are also reviewed.

The Board’s assessment of Principal Risks and Uncertainties, separated into Business risks and Macro risks is contained on pages 20-21 of the Annual Report for the period ended 31 March 2018. Within that section the Board has identified those key actions which will seek to mitigate those risks.

Operational risk and any new business risk identified is addressed by the Executive directors at their regular monthly meetings.

The results of the inspection regime undertaken by the Care Quality Commission provide an opportunity for the Board to review the effectiveness of the Group’s risk management and related control systems.

 

MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK

QCA Code Principles The QCA’s notes on application: What the Group does and why
  1. Maintain the board as a well-functioning, balanced team led by the chair
The board members have a collective responsibility and legal obligation to promote the interests of the company, and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the chair of the board.

The board (and any committees) should be provided with high quality information in a timely manner to facilitate proper assessment of the matters requiring a decision or insight.

The board should have an appropriate balance between executive and non-executive directors and should have at least two independent non-executive directors. Independence is a board judgement.

The board should be supported by committees (e.g. audit, remuneration, nomination) that have the necessary skills and knowledge to discharge their duties and responsibilities effectively.

Directors must commit the time necessary to fulfill their roles.

The Board of Directors comprises of a Non-Executive Chairman, 3 other Non-Executive Directors and 3 Executive Directors led by the Chief Executive Officer. The Board considers that all Non-Executive Directors are independent having taken into account their shareholdings, length of service and their separation from the day-to-day running of the business. Full details of Board Directors may be found on the Company’s website and at pages 26-27 of the Annual Report for the period ended 31 March 2018.The Board considers that there is appropriate balance between Executive and Non-Executive members.

The Chairman leads the Board in all matters of Corporate Governance.

The Board is supported by Audit, Remuneration and Nominations Committees, membership of which is made up of the Non-Executive Directors. There is a formal Schedule of Matters Reserved for the Board, details of which, together with the Terms of Reference of all Board Committees may be found on the Company’s website.

There is a regular and timely information flow to all Directors concerning the Group’s operational and financial performance ahead of scheduled Board meetings.

All Directors have access to the advice and services of the Company Secretary and are able to take independent professional advice in the execution of their duties, at the Company’s expense.

Meetings and attendance in the 15 month period ended 31 March 2018

Executive directors work on a full-time basis for the company. Non-executive directors are expected to spend on average a minimum of two days a month on company activities in addition to preparation for and attendance at board and sub-committee meetings. The Chairman will spend additional time per month on company business.

 

  1. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
The board must have an appropriate balance of sector, financial and public markets skills and experience, as well as an appropriate balance of personal qualities and capabilities. The board should understand and challenge its own diversity, including gender balance, as part of its composition.

The board should not be dominated by one person or a group of people. Strong personal bonds can be important but can also divide a board.

As companies evolve, the mix of skills and experience required on the board will change, and board composition will need to evolve to reflect this change.

The Board considers that there is currently an appropriate balance between sector, financial and public markets skills and experience at Board level. Directors biographies can be found on pages 26-27 of the Annual Report for the period ended 31 March 2018. Directors keep their skillsets up to date by attending relevant seminars and industry specific events.

The Nominations Committee of the Board considers matters of Board and Senior Management appointment and succession. Where new appointments are considered the search for candidates is carried out having due regard for merit against appropriate criteria and for matters including gender diversity.

The Board seeks advice as required from the Company’s nominated adviser, brokers, lawyers and accountants. The Company Secretary is available to assist all directors with matters regarding corporate governance, corporate actions and share dealing enquiries.

  1. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
The board should regularly review the effectiveness of its performance as a unit, as well as that of its committees and the individual directors.

The board performance review may be carried out internally or, ideally, externally facilitated from time to time. The review should identify development or mentoring needs of individual directors or the wider senior management team.

It is healthy for membership of the board to be periodically refreshed. Succession planning is a vital task for boards. No member of the board should become indispensable.

Over the last 12 month period, and following the transformational Vocare acquisition, some 50% of the Board composition has altered. Following this period of change, the Board will now undertake a formal, external led, Board evaluation process. This process will take into account the Financial Reporting Council’s Guidance on Board Effectiveness.

There is a performance evaluation of all Directors before being proposed for re-election to ensure that their performance continues to be effective and that in the case of Non – Executive Directors their continuing independence and time commitment to the role is demonstrated.

The Nominations Committee of the Board considers matters of Board and Senior Management appointment and succession, having due regard to any shortage in skills identified during board evaluation processes.

  1. Promote a corporate culture that is based on ethical values and behaviours
The board should embody and promote a corporate culture that is based on sound ethical values and behaviours and use it as an asset and a source of competitive advantage.

The policy set by the board should be visible in the actions and decisions of the chief executive and the rest of the management team. Corporate values should guide the objectives and strategy of the company.

The culture should be visible in every aspect of the business, including recruitment, nominations, training and engagement. The performance and reward system should endorse the desired ethical behaviours across all levels of the company.

The corporate culture should be recognisable throughout the disclosures in the annual report, website and any other statements issued by the company.

Page 3 of the Annual Report for the period ended 31 March 2018 sets out Totally’s mission and values, all of which underpin how the Group is run. This culture is consistent with the Company’s strategy, further details of which are set out within the Strategic Report section on pages 1-20 of the Annual Report and Accounts for the period ended 31 March 2018, including details of the key risks and challenges faced by the Group.

 

Given the nature of the Group’s activities, Totally plc is fully compliant with all NHS requirements for :

Information Governance

Information Security

Common assurance framework

IT management

Quality management

In addition, the Company has formalised Whistleblowing, Anti-Bribery and Slavery and Human Trafficking policies. These policies enable the Directors to ensure that ethical values and behaviours are recognised and respected.

  1. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board
The company should maintain governance structures and processes in line with its corporate culture and appropriate to its:

  • size and complexity; and
  • capacity, appetite and tolerance for risk.

The governance structures should evolve over time in parallel with its objectives, strategy and business model to reflect the development of the company.

The Corporate Governance section, on pages 22-35 of the Annual Report for the period ended 31 March 2018, gives full details of the company’s governance structures and the roles of the various Board committees. Terms of Reference for the committees and details of matters reserved for the Board are available on the Company’s website. The Directors consider that the Group has an appropriate governance framework for its size now and as it grows (both organically and by acquisition) but they will consider the evolution of this framework on an annual basis.

 

Build trust

QCA Code Principles The QCA’s notes on application: What the Group does and why
  1. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
A healthy dialogue should exist between the board and all of its stakeholders, including shareholders, to enable all interested parties to come to informed decisions about the company.

In particular, appropriate communication and reporting structures should exist between the board and all constituent parts of its shareholder base. This will assist:

  • the communication of shareholders’ views to the board; and
  • the shareholders’ understanding of the unique circumstances and constraints faced by the company.

It should be clear where these communication practices are described (annual report or website).

Reports from each board committee are contained within pages 29 – 34 of the Annual Report for the period ended 31 March 2018.

The Board maintains an active dialogue with institutional and private shareholders and employees – both employee shareholders and others.

Regular Institutional shareholder dialogue is led by the Chairman and Chief Executive. Company produced Results Presentations are available on the lnvestor Relations section of the Company’s website, along with Research notes produced by external parties.

The AGM is an important opportunity for the Board to listen to the views of private shareholders. These may be expressed by formal questions to the Board during the AGM process, or informally in conversation after the AGM.

There is feedback to the full Group Board of any shareholder dialogue that has taken place since the preceding Board meeting.

At the most recent AGM voting intentions were received from 40.27% of the issued voting share capital with those voting in favour of all resolutions averaging 99%.

Going forward, the Company’s website will display:

  • the results of voting on all resolutions in future general meetings (including annual general meetings), including any actions to be taken as a result of resolutions for which votes against have been received from at least 20 per cent of independent shareholders; and
  • historical annual reports and other governance-related material, including notices of all general meetings over the last five years.

The Company did not include all of the annual report and accounts disclosures required by the QCA code in the Company’s annual report and accounts for the financial period ended 31 March 2018.  As set out in the 2018 report and accounts, the Company observed the requirements of the Corporate Governance Code for Small and Mid-Size Quoted Companies as far as they were relevant in the context of the Group’s size, stage of development and resources.

At the time of publication of the 2018 report and accounts, the QCA had recently updated its corporate governance code and the Group stated it was its intention to follow the updated code in the 2019 financial year. Accordingly, the Company intends to include the annual report and accounts disclosures required by the QCA code in the Company’s annual report and accounts for the financial year ended 31 March 2019.