Case study – Governance documentation review

As part of an annual review of governance arrangements, the board and committees of a listed company wished to review and update the schedule of matters reserved to the board and committee terms of reference.  The Company Secretary lacked the resource to complete the project within the required timescales and asked for assistance.

A comprehensive review of all documents was undertaken. Drawing upon our knowledge of the Company and its board processes, our experience of what works well in a practical sense, and updated guidance, changes to the UK Corporate Governance Code and best practice, we ensured that the resultant recommendations were both practical and reflective of the highest standards.

A covering note to the board and committees was also prepared describing the rationale for the proposed changes, which ranged from updates to procedures to ensure that practical arrangements for meetings were as efficient as possible to more substantial alterations to the remit of the committees to better reflect shareholder priorities and expectations.  The board and committees were happy to adopt the recommendations made.

Case study – Governance framework review

A client wished to substantially review all governance arrangements.  Having worked with the board for some time, it was decided that it would be beneficial to engage an independent consultant to bring ‘fresh eyes’ to existing arrangements and to enable us to participate in the review as Company Secretary rather than as the reviewer.

Recommendations were made by the independent consultant and, after board debate, were broadly adopted, albeit in amended form.  Implementation of certain of the recommendations required changes to be made to the articles of association and we undertook to prepare those changes but, at the same time, made other recommendations for additional amendments that could be introduced to the Articles.

A summary of the board’s recommendations on the changes to the Articles as well as other changes to process, and the rationale for the proposals, was prepared as the basis for a successful member consultation.  Implementation of the board’s procedural changes were made over a period of months, with those changes that were dependent on the Articles being updated being made after the planned AGM.

Case study – Year end support

A small, listed client operating with a lean head office team required additional support with its year end processes.  Working closely with the finance team, we took the lead on the ‘front half’ of the report and accounts, preparing the reports, ensuring they were reviewed by relevant contributors at the appropriate time to create a consistent and informative narrative about the company, its business, governance and prospects.

As well as playing the Company Secretary’s normal key role in the review and approval of the preliminary results, investor presentation and report and accounts by the audit committee and board, we liaised with the registrars, printers and mailing house to ensure that the project was brought to a successful conclusion to the all-important project deadline.

Case study – Governance relations

A listed client’s operations and decisions were consistently guided by a strongly embedded set of clear ethical values but increased investor interest in environmental, social and governance (ESG) matters and the introduction of s172 reporting highlighted the need for a more systematic approach to consideration and recording of such issues in order to facilitate better communication to stakeholders.

Changes to board reporting and schemes of delegation were introduced to ensure the expectation that the values of the Group would always be central to decision making was expressly stated. Consideration of ESG matters was more closely reported in minutes and tracked through a dedicated schedule in order to create a library of evidence that could readily be drawn upon in external reporting and stakeholder dialogue.

Case study – Executive remuneration delivery

The review of remuneration policy is a significant project. Indigo recommends it starts with a review of existing remuneration consultants to ensure the remuneration committee are comfortable with the level of support and information to carry out the policy review effectively and to make any changes needed to support the Group’s strategy.  The review of policy itself needs to be well planned, with remuneration committee meetings held at appropriate points in the project in order to steer the next stage and our assistance with planning and managing the project ensures a smooth process.  Indigo can also help with the shareholder consultation once progress has been made on considering the way forward on key elements of the policy.  Once outcomes have informed final proposals, Indigo can prepare the report to shareholders for inclusion in the annual report and accounts.

Case study – Appointed company secretary

A prospective client approached the Indigo team to explore options for company secretarial support. The role had previously been carried out by the CFO but, as a listed company, they wanted to separate the responsibilities and bring in more specialist resource.

Following discussions with the CFO and others to understand what was required and how internal resources could dovetail with Indigo’s provision, a flexible scope of services was agreed After a short handover, all records and responsibilities were successfully transferred.

Freed up from the company secretarial and board support responsibilities, the CFO had more time to support delivery of the business’ ambitions for growth. The appointment of an independent corporate governance professional provided additional assurance to the chair and fellow directors that the company’s governance was now better supported.

Each board review assignment we undertake is unique, reflecting each client’s individual strategic priorities and current governance challenges. However, the principles we apply to all board review assignments never change. These principles are aligned with those of the Chartered Governance Institute’s Code of Practice for Board Reviewers.

Principle 1 – competence and capacity

Our reviewers are drawn from our qualified team of Chartered Governance Professionals, each of whom possesses a wealth of direct governance experience gained over years of supporting and working with boards. The strength and depth of our team enables us to draw upon the most appropriate individuals to lead and support each client board review, in particular taking account of factors such as their particular expertise and capacity to devote sufficient time and attention to the exercise. In allocating team members to each review, our overriding consideration is ensuring we offer the best service to our clients so that the outcomes of their review are optimised.

Principle 2 – independence and integrity

Independence is so important to us, we incorporated it into the heart of our brand: Indigo: Independent Governance.

With all our client work, we are constantly vigilant for issues that could compromise our independence, integrity and unbiased output. Each client engagement is assessed on its own merits but we pay particular attention to scenarios that could compromise our independence, or perceived independence, such as the provision of additional services to a board review client or an extended period of engagement.

Principle 3 – client engagements

As a business, we are always client focussed, attentive and clear. This is particularly important for board reviews, where two-way transparency and honesty are so essential to creating a successful and meaningful outcome. It is essential that the terms of, and objectives for, each review are agreed upfront and that the client has faith in our approach, our respect for their confidentiality and our willingness to provide honest feedback. Our pre-engagement discussions are designed to tease out these issues and to ensure that we are the right adviser for the assignment.

Principle 4 – client disclosure

We are proud to be associated with the clients we work for and to have our work acknowledged through public disclosures. And we support full and frank disclosures of board reviews as providing important and useful information on the governance of organisations for investors and other stakeholders. But we are also mindful of the reliance that others may place on those disclosures and therefore require that clients undertake to provide us with opportunities to review any narrative they intend to publish on their board review process and its outcomes.

Case study – Independent board reviews

The board of a listed company was looking for an external provider for its annual board evaluation. They wanted someone who would bring an independent but knowledgeable perspective to the process.  The timescale and available options for the review were discussed in order to agree a process that best suited the board’s aspirations for the exercise and delivered a report to allow the board to discuss and agree its post-review action plan in good time before it needed to report to shareholders on the process in its annual report and accounts.

Having produced a bespoke report which highlighted those areas where any concerns had been raised indicating the need for more discussion,  the board’s consideration of the outcomes was independently facilitated by a member of the Indigo team . This was done in order to identify appropriate actions the board could take to further improve its effectiveness.

Case study – Board support

The board of a large private company had previously been supported by an in-house company secretary who also performed other roles and who did not have a background in corporate governance and company secretarial practice.  Management wanted to continue to utilise existing in-house resources for certain aspects of their board support whilst supplementing those resources with some external expertise.

With Indigo’s flexible approach, a solution was designed which ensured that the board would be fully supported by an experienced company secretary whilst also enabling in-house members of staff to continue to perform certain administrative functions.

Case study – Induction, development and training

A client wished to overhaul director induction and development processes.  Using the existing induction process as a starting point, we sought feedback from directors who had been through that process and concluded that experiences were inconsistent and the process, whilst comprising most of the elements needed, was not as well supported as it could be.  We reviewed the content of the existing induction process and identified some limited gaps that could be addressed. We also reviewed the prioritisation and recommended timetable for the programme and considered how we could strengthen the process to ensure that new board members were adequately supported.  We also added some optional elements to provide a menu of additional opportunities that might not be deemed necessary by all new board members but might be valued by some.

Having designed the new process, we identified elements that could be made available to all board members by way of a refresher on certain elements and made recommendations on additional training that could be introduced to supplement existing director development activities.

As the first new director undertook their induction programme, we made sure to prompt them for periodic feedback so that any suggested improvements could be built into subsequent iterations of the process.

Case study – Company secretarial resource

The company secretary of a listed company was satisfied that its board was well supported and that compliance with the listing regime and related regulation was already properly covered by the in-house team.  However, ensuring Companies Act compliance for the Group’s growing list of subsidiary companies was increasingly burdensome in terms of maintenance of records, Companies House filings and the statutory books.

Indigo was able to offer a tailored solution, carrying out a health check on the existing company records as part of the project to transfer them onto Indigo’s systems and streamlining processes going forward.  By providing read-only access to the Group’s statutory registers, the in-house team retained access to the management information they needed, whilst the strain on internal resource was significantly reduced.

Case study – Group entity reviews

A listed group of companies had grown, frequently through acquisition, and now had many subsidiaries. Their records, registers and filings had not previously been managed using an electronic system and documents were a mixture of paper and electronic copies.

To improve access to subsidiary records, Indigo reviewed the paper archives and converted them to PDF documents, organised and stored electronically in a secure library. As part of the review, we carried out a comprehensive ‘health check’ to identify discrepancies and gaps in their records, providing solutions to ensure everything was complete and up to date. Some subsidiaries had unwieldy share capital structures and solutions were constructed with the group to refine them.

The group was presented with a logically organised, electronic archive, enabling the team to locate information remotely. By moving records to an electronic format, transferring all statutory registers to Indigo’s entity management system, permanent efficiencies and enhancement to compliance and controls have been achieved.

Case study – Corporate action

A listed client received a takeover offer which, after due consideration and having taken appropriate advice, the board recommended to shareholders.  As a project which ‘came out of the blue’, we reacted swiftly to support the board with numerous meetings at short notice, liaising with other advisers to ensure that the complex regulatory requirements were both fully understood and met.  We took the lead on practical arrangements for stock exchange announcements and offer document drafting, printing and mailing and ensured that employee communications, including on the implications for individual employee share incentives, were drafted in a readily understandable way.  Liaising with the company’s registrars, we made the arrangements for the required shareholder general meeting and fully supported the Chairman through that process.

At every stage in this multi-faceted, complex and short notice project, we stood beside the board and management to take the right steps at the right time and to transition to the new ownership model smoothly and successfully.

Case study – Transactional services

A tax adviser recommended specific share capital structure changes to one of his family-owned corporate clients as part of a transition of its ownership to the next generation.  We prepared all the documentation needed to make the necessary changes, suggesting alternative mechanisms where appropriate to achieve the desired outcome, and ensuring there was complete clarity on the process before all parties signed up to the new arrangements.

We subsequently completed all Companies House filings, updated the statutory registers and ensured that a complete record of the transaction was available for the company’s records.

Case Study – International Subsidiary Service

We were approached to provide additional resource for the company secretarial function of a listed multi-national business.  Liaising directly with international colleagues but always keeping the central company secretarial team well informed, we quickly worked our way through an initial backlog of outstanding tasks before establishing efficient longer-term arrangements to ensure future matters were dealt with in a timely manner.  Alongside this work, a review of statutory records was undertaken to ensure the Group’s entity management system was accurately and comprehensively populated with up-to-date information on all subsidiaries.  As a result of this work, the Group’s subsidiary governance was made more robust and confidence was provided that controls were appropriately implemented and working as intended.

Case study – Contract tender management

Indigo suggested that a client’s long-standing contract with its registrar should be reviewed and benchmarked against alternative providers. Having analysed and produced a short summary of the extent of registration activities, requests for proposals were sent to a shortlist of registrars, including the incumbent. With assurance that Indigo colleagues had successfully managed transfers of share registers in the past, the client was able to negotiate the best deal with confidence.