Jersey does not have its own corporate governance regime and as a Jersey registered company, the Company is not mandated to have a corporate governance framework. However, it is the Company's policy to comply with the best practice on good corporate governance. The Group recognises that effective governance is a fiduciary responsibility fundamental to its long-term success. The Board places great value on a management structure that incorporates effective checks and balances, proper procedures for managing risks attached to opportunities, and accountability towards stakeholders with regard to the policies pursued.
Role of the Board
The Board has determined that its role is to consider and determine the following key matters, which it considers are of strategic and operational importance to the Group:
- the overall objectives for the Group and the Group's strategy for fulfilling those objectives within an appropriate risk framework;
- any shifts in strategy that may be appropriate in light of market conditions;
- the capital structure of the Group including consideration of any appropriate use of gearing both for the Group and in any joint ventures or similar arrangements in which the Group may invest from time to time;
- the engagement of the Investment Manager, Administrators and other appropriately skilled service providers and the monitoring of their effectiveness through regular reports and meetings;
- the key elements of the Group's performance including Net Asset Value and distributions;
- compliance with company law and regulatory obligations, including the approval of the financial statements and the recommendation as to dividends (if any).
The directors bring independent views to the board and a diversity of experience including chartered surveying, civil service, banking, law, administration, treasury, financial accounting, corporate finance and fund management to add to the Board's effectiveness, particularly in the area of property, performance of emerging markets, corporate strategy, governance and risk.
The directors take decisions objectively and in the best interests of the Group being collectively and individually responsible for its success. They are accountable to shareholders and take into consideration the need to foster the Group's business relationships with other stakeholders in discharging their obligations.
The Board has conducted a self-assessment exercise for the year ended 31 March 2013 and will continue to do so annually. The Board members have reaffirmed their independence wherever appropriate other than as disclosed elsewhere in the financial statements.
The Board ensures during its meetings that strategic matters are considered as well as matters of particular concern to shareholders. The operational obligations of the Board have been delegated through appropriate arrangements to the Investment Manager and the Administrators, as all members of the Board are non-executive. The independent directors of the board meet separately at least once a year to review the performance of the Board as a whole.
The Board holds at least four meetings annually and also meets as and when required from time to time to consider specific issues reserved for decision by the Board.
Committees of the Board
Audit Committee will now be "Audit and Risk Committee"
Remuneration Committee will now be "Remuneration and Nomination Committee"
Audit and Risk Committee
The Audit & Risk Committee (ARC) is comprised entirely of independent directors: George Baird (Chairman), Christopher Wright, Richard Boléat and Malcolm King who are each considered to have the requisite expertise in matters of finance and accounting. George Baird is also Chairman of the Audit & Risk Committee of K2 Property Limited. The ARC meets at least three times a year and, if required, meetings can also be attended by the Investment Manager, the Administrator and the Independent Auditors.
The ARC is responsible for ensuring that the financial performance of the Group is properly monitored, controlled and reported on. The ARC's primary responsibilities are to review accounting policies and the financial statements, understand and agree the key underlying principles, engage in discussions with external auditors and ensure that an effective internal control framework exists. The duties of the ARC are covered under the terms of reference of the ARC and include:
Remuneration and Nomination Committee
- To oversee the selection process of external auditors and make recommendations to the Board in
respect of their appointment, re-appointment and remuneration;
- To ensure the integrity of the financial statements;
- To monitor and review the independence of the auditors, their objectivity and effectiveness, taking
into consideration relevant professional and regulatory requirements;
- To keep under review the effectiveness of internal financial controls;
- To ensure that a member of the ARC attends the Annual General Meeting of the Members;
- To oversee the effectiveness of the processes and controls used by the Company to monitor and
manage risk within the parameters adopted by the Board;
- To review the Company's major risk exposures and the steps taken to monitor and control such
The Remuneration and Nomination Committee comprises Sir Nigel Broomfield, Shazaad Dalal and David Hunter. This committee is responsible for the terms and remuneration of the directors and the incentive policies of the Group as a whole.