Corporate Governance

In order to ensure the Board makes the appropriate decisions in the best interests of the Company and its stakeholders, it is essential that a good corporate governance structure is in place

Governance framework

The Board keeps all aspects of corporate governance under review by following an established governance framework. This framework continues to be refined as the Group expands internationally and grows financially.

In November 2023 the Quoted Company Alliance (“QCA”) published an updated framework for corporate governance. In line with the 12 month transition arrangements, the updated Code will be adopted by the Company for the financial year ending 30 June 2025. For this financial year, the Board has continued to adopt the original governance code for its framework as published by the QCA (the “QCA Code”). We strive to follow its guidance and principles by embedding them into how we develop our strategy, run our business model, manage risk, run our Board and how we engage with our various stakeholders. The table below directs you to some of the relevant sections covered elsewhere in this annual report that directly apply to the 10 QCA code principles:

1. The Group does not have a formal system of training for the Directors for their on-going roles, instead they are expected to keep up-to-date personally with matters relevant to their own positions through memberships of relevant professional societies, regular briefings and webinars from lawyers and accountants as well as other professional advisors and industry specialists. 
2. The Board has not established a Nominations Committee at this time, given the current early stage and size of the Group’s business and its Board. Accordingly, all matters relating to the appointment of directors are reserved for the full Board.
3. The Chief Financial Officer of the Group during the year also held the office of Company Secretary.  Given the current size of the Group’s business and its Board, separation of these two roles is not considered economically necessary at this time and it is the intention to continue to adopt this arrangement going forward.

Overview of the Board

The Board of PCI PAL Plc is made up of an independent Non-Executive Chair, two independent Non-Executive Directors, plus the CEO and the CFO, who are employed on a full-time basis. Details of the Board’s experience are shown on the Board of Directors' page, which describes the range of skills and insight that they bring to the Board. It is important that the Non-Executive Directors bring a wide range of skills to the Board to provide robust challenges to the Executive Directors and to ensure that shareholders’ interests are represented.

The Chief Financial Officer, William Good, left office on 15 July 2024 and Angus Reger (the Group Financial Controller) was appointed interim Chief Financial Officer. On 14 October 2024, as previously announced, Ryan Murray joined the Company as Chief Financial Officer and Company Secretary

The Board is collectively responsible for the long-term success of the Group. The CEO is responsible for setting the strategic direction of the Group and these plans are periodically presented by the executives to the Board.  The Non-Executives have suitable industry and public markets experience to provide input, guidance and advice to the Board as well as constructively challenge the Executives. During the year the CFO, as the Company Secretary, provides guidance on the protocols, legal processes and matters reserved for the Board, taking legal advice where appropriate. The goal is to achieve a successful and sustainable business. The Board has a specific list of matters and activities that can only be authorised by the full Board and has delegated other matters to the CEO. These matters are published on the Company website within the corporate governance section of the investor relation pages. 

Division of roles and responsibilities

The Chair is responsible for the leadership of the Board and ensuring the effectiveness of all aspects of its role. There are at least four quarterly formal meetings that include a detailed agenda that allows each Executive Director to report to the Board on performance of the business including risk analysis and monitoring. In addition, intra-quarter meetings are called to discuss single points of matter and each with a shorter agenda. These more frequent and shorter meetings allow the Board to consider specific points in a timely manner without having to wait for the quarterly meetings. Due to the very dynamic and fast growing nature of the Group’s business, there are typically a considerable number of these additional meetings. The Chair of the Board’s role and the Chief Executive’s role have been divided. The Chair sets the agenda for each meeting and ensures compliance with Board procedures and sets the highest standards of integrity, probity, and corporate governance throughout the Group. The Chief Executive is responsible for running the Group’s business by developing and proposing the Group’s strategy and overall commercial objectives. The Chief Executive also ensures that the Chair is notified on a timely basis of forthcoming matters that may affect the running of the Group that the Chair may not be aware of.

Independent non-executive directors

The three Non-Executive Directors are deemed to be independent. In reaching this conclusion, the Board has explicitly considered the prior consulting relationship of Simon Wilson with the Company, when he provided consulting advice to the Board and senior management in its market entry to, and expansion in, North America during the period 2017 to 2019. As part of his compensation for those services at the time, Mr Wilson was granted 250,000 options, the details of which are included in the Directors’ Report. The Non-Executive Directors are required to be available to attend Board meetings and to deal with both regular and ad-hoc matters and are expected to commit sufficient time to fully discharge their responsibilities. All Non-Executive Directors have confirmed and demonstrated that they have adequate time available to meet the requirements of the role and that they have no conflicts of interest.

Board meetings

All board meetings held during FY24, including authorised sub-committee meetings for specific delegated matters as well as Audit and Remuneration Committee meetings, are separately identified below including attendance information:

Directors’ meeting attendance 2023/24

* = attended by invitation of the Chair of the Committee

** = during the year James Barham and William Good held short notice Board meetings as an authorised committee of the Board, typically formally dealing with the exercise or granting of share options once sanctioned by the full Board

Directors can formally attend meetings either: in person, or remotely by conference call or by video conferencing. A hybrid approach to board meetings using a mix of face to face and/or video conference was again adopted in the financial year and is expected to continue in this mixed format going forward. Wherever possible all Directors attend in the same manner, e.g. all in person or all by video to ensure optimal interaction and discussion.

Committees

The Board has established two committees to assist in its considerations and to make recommendations to the Board.  These committees are the Audit Committee and the Remuneration Committee, the terms of reference for each are published in full on the company website under the Corporate Governance section.  A detailed report of their work can be found in the relevant reviews below.

Articles of Association

Under the articles of association, the Board has the authority to approve any conflicts or potential conflicts of interest that are declared by individual Directors; conditions may be attached to such approvals and Directors will generally not be entitled to participate in discussions or vote on matters in which they have or may have a conflict of interest.

All Directors are subject to election by the shareholders at the first Annual General Meeting following their appointment, and to re-election thereafter every three years.

The Group maintains appropriate insurance cover in respect of legal action against the Directors.

Experience, skills and capabilities

The Directors have a broad range of experiences, as shown in the Board of Directors section, allowing the Board to assess and monitor a full spectrum of risks and requirements of the Group. Where required the Directors will take further advice from professional advisors such as lawyers, accountants, functional and industry experts, remuneration and tax specialists. Each Director has the full authority of the Board to take any advice they feel necessary to undertake their individual roles.

The Board has authorised the creation of an advisory committee (the “PAC”). The charter of the advisory committee and role of each member is to provide additional breadth of market, industry and functional perspectives to the CEO and the Board of Directors as a whole to help the Company navigates its future path. The Board believes that being able to engage over time with excellent industry expertise through the PAC, will enhance the Board’s ability to fulfil its responsibilities in the areas of strategy and risk management and to more fully address the dynamics of PCI Pal’s fast-developing global opportunity and marketplace.

Evaluation of Board performance

Board members are appointed with full consideration of the knowledge and skills that they will contribute to the Board and are aligned to both the current and anticipated needs of the Company at that time. The Chair ensures that the development of the Board is addressed by reviewing the Board composition annually in consultation with the other Board members, as well as overseeing an evaluation of its performance annually. In FY24 this evaluation was undertaken for the CEO and the non-executive directors by an external specialist organisation via an interactive online questionnaire and the feedback was delivered by the Chair followed by a full and open discussion among the Board members. No new significant recommendations were made.

The Chair routinely reviews the management and performance of the Board Committees and will address any performance concerns directly with the Chair of, and/or participants of, that Committee.

The Board is satisfied that it has an appropriate balance between independence and knowledge of the business to allow it to discharge its duties and responsibilities effectively but will continue to review the composition of the Board regularly.

The Group does not have a formal system of training for the Directors for their on-going roles, instead they are expected to keep up-to-date personally with matters relevant to their own positions through other relevant professional roles, memberships of relevant professional societies, regular briefings and webinars from lawyers and accountants as well as other professional advisors and industry specialists. In addition, the Board receives regular presentations by senior management and/or outside advisors on operational and strategic matters with high relevance to the Company. The goal of these presentations and associated discussions is to enhance and build a deeper knowledge, and understanding of, the business in particular for the non-executive directors.

The Board recognises it is healthy for membership of the Board to be periodically refreshed and as such normally requires nonexecutive directors to retire after serving for a nine-year term. Accordingly, planning for the retirement and succession of Jason Starr has begun with a target date of a transitional replacement being during FY25.

Promotion of corporate culture

The corporate culture is at the heart of the Group – Security is Job Zero but it is Team First.

We have an established corporate and social responsibility policy as detailed in the Corporate and Social Responsibilities report.

Every new member of staff takes part in an induction programme which includes a full briefing on the Company, the Company handbook and an overview of departments. There is also an opportunity to meet key personnel across the business and we take this opportunity to lay out the Company’s requirements on the moral, ethical and behavioural standards expected by the Company and its employees. Every employee is given the opportunity to undertake further training at the Company’s expense, so as to align individual development with the long-term growth and success of the business.

Performance of individuals and teams is monitored monthly, and we also provide annual Personal Development Reviews to best align employees and managers on performance, career goals and associated development requirements.

The Group has a “no fault” policy to errors thereby actively encouraging employees to highlight any errors that have occurred and to allow the business to establish a solution to the error and to put in place any changes in systems and procedures designed to stop the error reoccurring.

Most new employee positions are also advertised to all employees within the Group and where possible we will look for opportunities to prepare and promote existing employees to more senior positions, before offering a position to a new externally hired person. We continued to evolve our departmental structure in the face of the continuing expansion of the Group. The CEO has established a senior leadership team to assist in the delivery of the future strategy of the Group, and they in turn are supported by a newly formed Management Team which is aimed at encouraging cross departmental communication of key matters.

The Company invests in various software systems to support a remote-first working policy allowing all employees to have the simple ability to interact with colleagues or managers. Managers can use technology to performance monitor and engage with their people.

Maintain governance structures

The Directors review a management reporting pack each month focused upon financial and operating metrics and performance against financial budgets and other operating targets. These are discussed with the Executive Directors. More detailed Board reports are prepared by management on a quarterly basis, which cover both financial statements as well as operational and strategic topics considered important and timely to the business. The board also receives periodic deep dive presentations on the operations of the business from members of the Senior Leadership and Management teams.

Taken together, these reports, evolving organisational structure, and regular Board meetings enable the Directors to fulfil their duties of stewardship.

Simon Wilson
Non Executive Chair
22 October 2024

BOARD OF DIRECTORS

The Directors of the company have been delegated clear, individual responsibilities, in line with their skill sets and experience. Each director reports regularly to the full board on the performance of the company in relation to their areas of responsibility.

ATTENDANCE

Full details of the directors attendance at meetings are published in the annual report and accounts for the year.

DIVERSITY AND GENDER BALANCE

The Board is confident both that the opportunities in the Company are not excluded or limited by any diversity issues (including gender) and that the Board nevertheless contains the necessary mix of experience, skills and other personal qualities and capabilities necessary to deliver its strategy.

MATTERS RESERVED FOR THE BOARD OF DIRECTORS

1. Constitution

1.1    The Board has established a committee of the Board known as the Remuneration Committee.

1.2    The Terms of Reference for the Committee outlined below are defined by the Board and may be amended by the Board at anytime.

2. Membership

2.1    The Board is responsible for the appointment of members to the Remuneration Committee, for setting the term of members’ appointments and for the revocation of any such appointments.

2.2    The Remuneration Committee shall comprise not less than two members, all of whom shall be independent Non-Executive Directors, providing this is possible. The quorum shall be two Committee members one of whom should be the Committee Chairman unless he/she is unable to attend. All members of the Committee shall be advised of the business to be transacted at any meeting even if they are unable to be present

2.3    The Chairman of the Committee shall be a Non-Executive Director. No one other than members of the Committee is entitled to be present at Committee meetings, unless by invitation by the Chairman. The Board Chairman or Group Chief Executive may be in attendance except when issues regarding their own remuneration are discussed.  The Committee’s independent remuneration consultants may also attend meetings.

2.4   The Committee should consult the Chairman and/or the Group Chief Executive about their proposals relating to the remuneration of other Executive Directors. The Company Secretary shall produce such papers as are appropriate and/or requested, in a timely manner, and take minutes of the Committee’s meetings except when issues regarding their own remuneration is discussed or the Committee Chairman otherwise deems inappropriate. 

2.5    The Remuneration Committee is authorised by the Board to obtain legal, remuneration or other professional advice from both inside and outside the Group as and when required, at the Company’s expense, and to appoint and secure the attendance of independent external consultants and advisors if it considers this beneficial.

3. Frequency of meetings

3.1    Meetings of the Remuneration Committee shall be held as necessary but not less than twice a year and at such other times as the Chairman of the Committee shall require.

3.2    The Chairman of the Committee shall report to the Board after each meeting. The minutes of the meetings shall be circulated to all members of the Committee and of the Board.

4. Duties

4.1    The Committee shall:

1. determine and agree with the Board the broad policy for the remuneration of the Group Board Executive Directors and other members of the executive management referred to below.
2. have delegated authority to set individual remuneration arrangements for the Group Chief Executive and other Group Executive Board Directors that provide motivation and promote the achievement of company objectives.
3. review and approve the level and structure of remuneration for senior management. The Committee shall determine which colleagues are “senior management” for this purpose – as at the date of adoption of these terms this covers any executive whose salary exceeds that of any Executive Director or who is considered to be part of the Senior Leadership Team.
4. in determining remuneration for those referred to above, the Committee shall review and approve - relative positioning of the remuneration package; - individual base salaries and increases; - annual and long-term incentive/bonus arrangements and review the relevant targets for performance related schemes; pension arrangements.

4.2    The Committee shall approve the service contracts of each Executive Director, including termination arrangements.

4.3    In determining remuneration policy and packages, the Committee shall have regard to all relevant codes, laws and regulations.

4.4    The fees and other payment arrangements for Non-Executive Directors are matters for consideration by a sub-committee of the Board, consisting of the Chairman, the CEO and CFO. Fees and other payment arrangements for the Chairman shall be considered by a subcommittee consisting of the Chairman of the Remuneration Committee, the CEO and the CFO. Both sub-committees shall make recommendations to, and for the approval by, the Board as a whole.

5. Other Matters

5.1    The Chairman of the Committee shall be available to answer questions at the Annual General Meeting on remuneration issues with regard to the Group Board and senior management and generally on remuneration principles and practice.

5.2    The Chairman of the Remuneration committee shall provide a remuneration report as part of the Annual Report. The report shall include a description of the Remuneration Polices adopted and an account of key decisions made, and remuneration paid in the fiscal year. Acceptance of this report will be put to a single vote at the Annual General Meeting. The vote shall be considered to be advisory only.

5.3    The Committee shall undertake any other duties as directed by the Board. 

The Group does not have a formal system of training for the Directors for their on-going roles, instead they are expected to keep up-to-date personally with matters relevant to their own positions through memberships of relevant professional societies; regular briefings from lawyers and accountants as well as other professional advisers.

In light of the Company’s recent rapid growth, substantive change in its business and operating model, and changes in its executive leadership and board composition, the Board conducted its first formal evaluation of effectiveness during FY 20. Simon Wilson, the newly appointed director and Chairman conducted the evaluation using a mixed methodology of an anonymous survey tool, direct one-on-one conversations, and frank and open group discussion among all board directors together. The exercise was designed to evaluate the effectiveness of the operation of the board as a whole; the board’s individual committees; as well as the contributions of each individual director. The objective of these assessments is to enable the board, its committees and its directors to set out down a path of continuous and incremental improvement of our governance at all levels. As part of the goal for continuous improvement, the evaluation of board effectiveness will be on-going periodic assessment process.

The broad conclusions of this initial evaluation were that there were a number of areas where improvements in effectiveness could be made, and an acknowledgment that the work of the board naturally expands over time in the face of change, growth and complexity of the business. For example, in terms of the organisation of board meetings, focus and balance of agenda topics, increased attention to forward looking matters, deepening of non-executive directors’ knowledge of operational aspects of the new Cloud business, and expansion of committee work.

Examples of action already taken by the Board as a result of this evaluation process include; deep dive subject matter presentations by a variety of senior management, regularly scheduled closed board sessions where the non-executive directors can discuss matters openly without management present, more extensive and scheduled committee activities, use of outside advisors, rationalization of information provided by management to the Board, and active and timely assessment of the effectiveness of each individual board and committee meeting.

SUCCESSION PLANNING

The Board does not carry out a formal assessment of succession planning for its members, but does so informally from time to time.

SECTION 172(1) STATEMENT – BOARD ENGAGEMENT WITH OUR STAKEHOLDERS

Section 172 (1) of the Companies Act 2006 requires a Director of a Company to act in the way he or she considers, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole. In doing this, section 172(1) requires a Director to have regard, among other matters, to:

• the likely consequences of any decision in the long-term;
• the interests of the Company’s employees;
• the need to foster the Company’s business relationships with suppliers, customer and others;
• the impact of the Company’s operations on the environments and in the local community
• the desirability of the Company maintaining a reputation for high standards of business conduct; and
• the need to act fairly with members of the Company.

The Directors give careful consideration to the factors set out above in discharging their duties under section 172(1). The stakeholders we consider in this regard are the people who work for us, buy from us, supply to us, own us, regulate us, and live in the communities we serve and the world we all inhabit.

Interaction with the Board

The Board receives updates from the Executive Management on various metrics as well as feedback and survey results in relation to employees and customers. The Board also periodically receives updates from other members of the management team on issues concerning customers, the environment, communities, suppliers, employees, regulators, governments, and investors, which it considers in its decision-making process under section 172(1). In addition to this, the Board has open authority to understand the interests and views of the Group’s stakeholders by engaging with them directly as appropriate.

Our stakeholders

As our organisation grows and expands geographically, the Board has recognised that it is important to have professional and clear communication channels in place with our key stakeholders.

Reputation

It is the Group’s policy to manage and operate worldwide business activities in conformity with applicable laws and regulations as well as with the highest ethical standards. Both the Group’s Board of Directors and Executive Management are committed to full compliance with applicable law and regulations in all jurisdictions in which we operate, and to maintain the Company’s reputation for integrity and fairness in business dealings with third parties.

Further information on how the Board operates and discharges its duties can be found in the Corporate Governance report, the Environmental Social and Governance Report and the Statement of Corporate and Social Responsibilities above.

Key Board matters discussed in financial year

During the year the Board spent a significant amount of time and resources continuing to defend the patent case litigation launched in 2021 by Sycurio Limited in the UK and US. In May 2024, the Court of Appeal upheld the original ruling of the High Court in favour of the Company and dismissed all claims brought by Sycurio against the Company and instructed the interim award of £1.1 million to be released from Escrow and paid to the Company.

A confidential settlement was reached with Sycurio that resolved all remaining aspects of the litigation in both the U.K. and the U.S.

The Strategic Report for the Group was reviewed and approved by the Board of Directors on 22 October 2024.

Signed by Order of the Board

James Barham
Chief Executive Officer
22 October 2024

GOVERNANCE COMMITTEES

GOVERNANCE COMMITTEES

The Board of directors have established the following committees:

• An Audit Committee
• A Remuneration committee

The Board has not established a nominations committee responsible for overseeing the recruitment of Board directors and succession planning as they believe the Company is too small to warrant such a requirement.

Audit Committee

The Chairman of the Committee is Carolyn Rand

The terms of reference of the audit committee can be downloaded here.

Remuneration Committee

The Chair of the Committee is Jason Starr.

The terms of reference of the remuneration committee can be downloaded here.

The committee is responsible for setting the terms and conditions of employment for the executive directors and meet on two occasions during the year.

The current policy is to set remuneration in accordance with market conditions in order to attract, retain and motivate the executive board.

The committee reviews Group performance and arising from those reviews may determine performance related bonuses.

No director is involved in deciding his or her own remuneration level or performance related bonuses.

The fees for non-executive directors are set at smaller turnover AIM quoted market rates to attract individuals with the necessary experience and ability to make a substantial contribution to the Group’s affairs and its continued development.