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On behalf of the Board, I am pleased to present our Corporate Governance Statement for the year ending 31 October 2019. As a Board we are committed to high standards of corporate governance in order to deliver long-term shareholder value. I am pleased to report that the Group remained in compliance with the QCA Corporate Governance Code for Small and Mid-size Quoted Companies published in April 2018 (“the Code”) throughout the year. This report describes how the principals of the Code were complied with. Further details relating to going concern and long-term viability can be found in the Group Strategy on pages 8 to 9.

1. Establish a strategy and business model which promote long term value for shareholders

Wynnstay is committed to sustained development within the agriculture sector and will strive for continued growth by acquisition and organic
development of the business. In so doing, the Group will optimise the return to all stakeholders in the business. In order to achieve this ambition, the Group recognises that it must excel in terms of value, quality and the development of its products, services and people. The Group strives to become the “Supplier of Choice” for its customer base. Fuller details of the operational strategy of the business can be found in the latest published Strategic Report.

2. Seek to understand and meet shareholder needs and expectations

The Board appreciates that the diverse shareholder base of the Group may have differing objectives for their investment in the business, and therefore the importance of ensuring that non-executive directors (“NED”) in particular, have an up to date understanding of these perspectives is well recognised. Directors will therefore routinely engage with both institutional and private investors and will seek out opinions on unusual or potentially controversial matters before adopting policy changes or tabling shareholder resolutions. The Board will always review written feedback reports from investors following financial results “roadshows” and will also always consider information received from institutional voter advisory firms. Philip Kirkham is the nominated independent NED who makes himself available to shareholders who may require independent Board contact.

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

The Directors recognise the importance of managing the business in a responsible, fair and ethical manner, and strive to engender such values in every aspect of the Group’s operations. The Board monitors developments in sustainable farming practices and where possible looks to incorporate these into the Group’s product offering. Examples of these include sustainably sourced protein in animal feed and supporting our customers to maximise production efficiency through precision farming techniques. Employee feedback is obtained in a number of ways, including senior management roadshows and team meetings. See our Corporate Social Responsibility statement on page 39. Customer feedback is sought via both sales colleagues and senior management and sales related metrics and reviewed through our CRM system. Supplier feedback is obtained via both purchasing colleagues and senior management.

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

Principal risks and uncertainties, along with our mitigating actions, are described in the Strategic Report. The Board retains ultimate responsibility for determining our risk appetite and overseeing management strategies

The Group does not currently have a formal internal audit function and at present the Board believes that existing management resource is suffi cient to adequately control the Group in its current size, however this matter continues to be actively reviewed.

The key procedures within the control structure include:

• Managers at all levels in the Group have clear lines of reporting responsibility within a clearly defined organisational structure;
• Comprehensive financial reporting procedures exist, with budgets covering profits, cash flows and capital expenditure being prepared and adopted by the Board annually. Actual results are reported monthly to the Board and results compared with budgets and last year’s actual. Revised forecasts are prepared as appropriate; and
• There is a structured process for appraising and authorising capital projects with clearly defined authorisation levels.

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

The Board is comprised of three executive directors, four independent non-executive directors and a company secretary which provides an appropriate balance. The roles of Chairman and Chief Executive are separated. The Chairman is responsible for the Board, he is a non-executive and is elected by the whole Board on an annual basis. Jim McCarthy was elected Chairman in November 2013 and has been re-elected each year to date. The Senior Independent director supports the other directors by acting as a confidential “sounding board” and also leads engagement with shareholders who may require independent Board contact. The Chief Executive is responsible for the operating performance of the Group. The Company Secretary acts as a trusted adviser to the Chair and the Board with specific duties in relation to both legal and regulatory compliance and reports directly to the Chair on governance matters. All members are able to take independent professional advice on matters associated with the Company at the Company’s expense. A formal schedule of matters requiring Board approval is maintained and regularly reviewed and covers items such as Group strategy, approval of budgets and financial results, dividend policy, major capital expenditure, corporate governance and Board appointments and comprehensive briefing papers are circulated prior to each meeting. The Board usually meets once per month with additional meetings when necessary. The Board met each month during the year and all members attended each meeting. We confi rm that all the non-executive directors are considered to be suitably independant

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

Brief biographies of the directors can be found in this annual report. TThe executive directors all have considerable experience in the agricultural supply industry and have spent much of their careers with the Group, providing a significant degree of management continuity. The non-executives bring a range of business and commercial expertise to the Board, including direct agriculture and specialist merchanting experience. Steve Ellwood is Audit Committee Chair and has recent and relevant fi nancial oversight experience roles at HSBC and Smith & Williamson. The Board is satisfied that it has an appropriate balance of sector, financial and public markets skills and experience and is not dominated by any one person or group of people.

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

The Chairman is responsible for the periodic performance reviews of the Board, its sub-committees and non-executive directors. Stakeholder feedback is sought and acted upon. The results of a Board effectiveness evaluation were considered in November 2018. Executive training has been undertaken during the year to enhance leadership and communication skills.

Following the appointment of a new CEO during the year, the Board arranged executive development training for specific directors and certain senior managers of the Group with Cranfield School of Management. This provides ideal personal development support for a period of time, away from the day to day pressures of managing the business.

8. Promote a corporate culture that is based on ethical values and behaviours

The Board operates a policy of collective responsibility with regard to its decision making, with the Chairman being responsible for the smooth functioning of its activities. The Chairman will ensure that each member of the Board is given fair and equal opportunity to clearly express their respective views on all matters, and that the executive directors are adequately able to communicate reasonable commercial views on matters under debate. The Board is satisfied that BDO LLP has adequate policies and safeguards in place to ensure that external auditor objectivity and independence is maintained.

9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board

The Board is supported by Shore Capital and Corporate Limited who are consulted on matters when appropriate.

Board Committees:

Audit Committee

The committee meets to provide oversight of the financial reporting process, the external audit process including maintaining auditor objectivity and independence in relation to non-audit services, the Group’s system of internal controls, compliance with laws and regulations and risk management. The Committee met twice during the year and all members attended.

Remuneration Committee

The committee meets to consider remuneration policy for executive directors and senior managers and the supervision of employee benefit structures throughout the Group. The Committee met twice during the year and all members attended.

Nomination Committee

Meets as required to consider senior appointments. There were no meetings during the year. The Board is satisfied that the Group’s governance structures and processes are appropriate to its size, complexity and appetite and tolerance to risk and keeps these structures under review as the Group develops over time. The Board regularly monitors developments to Corporate Governance regulations and processes and will regularly review the continuing suitability of the QCA code.

10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

During the year the Audit Committee considered the matters described under Principal 9 and also the implementation of IFRS 9 ‘Financial Instruments’, IFRS 15 ‘Revenue from Contracts with Customers’, the use of the going concern assumption in the preparation of the financial statements and the results of the annual goodwill impairment review. Arrangements for maintaining a dialogue with shareholders and other relevant stakeholders are described under Principals 2 and 3. Members of the Board are available at the Annual General Meeting which is a well attended occasion and includes a presentation on the financial results of the Group. Close relationships are maintained with Shore Capital and Corporate Limited who are our nominated Advisor and Stockbroker who are able to facilitate further opportunities for stakeholder engagement.

Jim McCarthy
Chairman
21 January 2020