QCA CODE & APPLICATIONS

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.

 

1. Deliver Growth - Establish a strategy and business model which promotes long-term value for shareholders

APPLICATION:
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.

WHAT WE DO AND WHY:
The Board and Management have established four strategic goals for the Group:

To deliver strong earnings growth for our shareholders. The Group intends to grow significantly through a strategy of recruitment , growing organically and acquiring businesses which are earnings accretive. Coupled with prudent cost control, the Board believes this will result in a higher share price over time. We continue to recruit client advisors, focussing on candidates with the right skills and who share our strong commitment to client service.

Continuous improvement in the Client experience. We will continue to invest in improving the client experience through delivering excellent service. As a smaller business, we are able to deliver a more personal approach than some of our larger competitors and we believe this gives us a competitive advantage in the UK.

Build our brand: Kingswood. The UK wealth market is excessively fragmented and brand awareness among consumers is generally low. We believe that there is a substantial market opportunity to build a national brand for quality wealth planning advice and investment management. Our new brand, Kingswood, is distinctive, memorable and approachable. www.kingswood-group.com

Maintain the highest standards of corporate governance and risk management. The directors recognize the importance of sound corporate governance and have chosen to apply the Quoted Companies Alliance Corporate Governance Code (“the QCA code”). For management purposes, the Group has organized its activities into two operating divisions; Investment Management and Financial Planning. The Group’s other activity of providing execution only broking services are included within Investment Management.

2. Seek to understand and meet shareholder needs and exceptions

APPLICATION:
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.

WHAT WE DO AND WHY:
The Group encourages two-way communication with both its institutional and private investors and responds quickly to all queries received. The Chief Executive regularly communicates with the Group’s major shareholders and ensures that their views are similarly communicated fully to the Board. The Board recognises the AGM as an important opportunity to meet private shareholders. The Directors are available to listen to the views of shareholders informally immediately following the AGM. Where voting decisions are not in line with the company’s expectations the Board will engage with those shareholders to understand and address any issues. The Chief Executive is the main point of contact for such matters.

3. Take into account wider stakeholder and social responsibilities and their implications

APPLICATION:
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.

WHAT WE DO AND WHY:
Kingswood identifies six stakeholders relevant to our business – Regulators, Shareholders, Employees, Clients, Suppliers and the Wider Communities in which we operate. Our strategy to meet our wider stakeholder and social responsibilities has five key themes of corporate strategy.

Viability – continued viability through innovation, efficiency, growth and financial capacity
Visibility – transparency in our dealings with each of our stakeholder groups
Leadership – effective governance and leadership within our business
Equality and Diversity – covered in more detail in Principle 8.
Support – appropriate support for all stakeholders

Examples: We hold regular Board meetings to determine and agree strategy and to assess MI data re performance in dealing with customers, suppliers and regulatory matters. All meetings are minuted.

We hold weekly Executive team meetings to ensure the executive is up to date on regulatory changes and general compliance including strategy acquisitions, financial performance, products and investment performance, operations and human resources.

We have a commitment to digital inclusion for all our stakeholders with particular emphasis on clients and employees.

We hold regular leadership meetings with the senior employees in our business to share insights and feedback on customer requirements as well as up to date information on our financial services industry including our competitors. We have annual assessments of staff to assess ongoing competence, performance in relation to business goals.

We have a training and induction programme for new and existing staff and we encourage and subsidize the taking of professional exams. In the wider community we encourage volunteering and support charities and causes in local communities and we encourage the participation of staff on boards of school governors.

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

APPLICATION:
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).

WHAT WE DO AND WHY:
The Board has appointed a Risk and Compliance Committee. The Board considers the composition of the Committee appropriate for the size and breadth of the Group’s business. The Committee is authorized and empowered by the Board to, inter alia, provide oversight and advice to the Board in relation to current and potential risk exposure and future compliance/risk strategy, review the Group’s risk profile relative to current and future risk appetite, monitor risk and make recommendations to the Board regarding all elements of the Group’s compliance with regulatory and legal obligations. The Group utilizes various means and processes to ensure that it is in compliance with the rules set out by the appropriate authorities including the maintenance of a Risk Register which identifies and measures what risks the subsidiaries are exposed to and what control mechanisms are in place to mitigate these risks.

5. Maintain a dynamic management framework - maintain the board as well-functioning, balanced team led by the chair

APPLICATION:
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, nomination and remuneration) that have the necessary skills and knowledge to discharge their duties and responsibilities effectively.

Directors must commit the time necessary to fulfill their roles.

WHAT WE DO AND WHY:
The current Company Board comprises, the Group CEO Gary Wilder, three directors and seven non-executive directors. Biographical details of the current directors can be found at the “Board of Directors” section at www.kingswood-group.com. The Company Board recognises that the current balance of three executives and seven non-executive directors is not appropriate for the long term and consideration will be given to addressing this balance.

All directors receive regular and timely information on the group’s operational and financial performance, principally through board meetings. Relevant information is circulated to the directors in advance of meetings. Notwithstanding, the Company Board considers that all non-executive directors bring an independent judgement but recognise that there are six fully independent directors, Jonathan Freeman, Robert Suss, David Hudd, Kenneth “Buzz” West, Lindsey McMurray and Howard Garland. The directors provide the appropriate time necessary to fulfil their roles.

The Board has a formal schedule of matters reserved to it and is supported by the Audit, Nomination and Remuneration and Risk and Compliance Committees. The respective committee Terms of Reference are available below.

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

APPLICATION:
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.

WHAT WE DO AND WHY:
The Nomination Committee of the Board oversees the process and makes recommendations to the Board on all new Board appointments. Where new Board appointments are considered the search for candidates is conducted, and appointments are made, on merit, against objective criteria and with due regard for the benefits of diversity on the Board, including gender. The Nomination Committee also considers succession planning. Click here for the various committees and their composition.

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

APPLICATION:
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.

WHAT WE DO AND WHY:
Internal evaluation of the Company Board, the Committees and individual directors is undertaken on an annual basis in the form of peer appraisal, questionnaires and discussions to determine the effectiveness and performance. Individual directors and others with responsibilities on the Subsidiary Board and the Committees registered with the Financial Conduct Authority (FCA) will also be subject to the FCA’s Training and Competence Regime. In addition the continued independence of Jonathan Freeman, Robert Suss, Kenneth ‘Buzz’ West, David Hudd, Lindsey McMurray and Howard Garland is assessed annually. ​

All directors receive regular and timely information on the group’s operational and financial performance, principally through board meetings. Relevant information is circulated to the directors in advance of meetings. The Company Board recognises that the current balance of three executives and seven non-executives is not appropriate for the long term and consideration will be given to addressing this balance. Notwithstanding, the Company Board considers that all non-executive directors bring an independent judgement but recognises that it has at least three fully independent directors.

​The Board has a formal schedule of matters reserved to it and is supported by the Audit, Nomination and Remuneration and Risk and Compliance Committees. The respective committee Terms of Reference are available here.

 

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