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. The Company is in compliance with the AIC Code.
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
- 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 exposures.
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.