Introduction

The Board establishes the Group’s values and standards and ensures that its obligations to shareholders and other stakeholders, including customers, employees, communities and suppliers are understood and met.

To support the Company’s governance framework, the Board has adopted the principles of the 2018 Quoted Companies Alliance Corporate Governance Code (the ‘QCA Code’). Details of the Company’s compliance with the ten principles of the QCA Code are outlined below. The Board aims to achieve substantial compliance with the new QCA Corporate Governance Code 2023 throughout FY2025 and will report on this in the next fiscal year.

A full copy of the QCA Code is available from the QCA’s website: www.theqca.com

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

SysGroup’s business strategy is to be the technology partner of choice specialising in the delivery and management of cloud, data and security services to power Artificial Intelligence (‘AI’) and Machine Learning (‘ML’) transformation. The Group offers an integrated set of modern technologies that collectively meets customers’ end-to-end data needs including connectivity, cloud hosting, delivery, analytics and governance of customer data, as well as a security layer for users and applications.

The business has a solid track record of acquiring and integrating managed IT services businesses, with its acquisitions supported by a Company-wide sales and marketing, customer support and billing platform. The acquisition strategy remains core to the Company’s growth strategy, focusing on (i) expanding capabilities in certain areas of technology expertise and (ii) acquiring companies or businesses that have interesting and relevant customer bases. The acquisition strategy will also continue to supplement the organic growth of the business.

To support this strategy, during the year the Company made significant investments in both technology and people. SysGroup has transformed its senior management team reducing it from thirteen to eight members, with six external appointments. The new management team has a strong track record in managing rapid growth, executing acquisitions and building sales teams and, based on this and the breadth of the skills within the business, the Board believes that the strategy will deliver shareholder value in the medium to long term.

2. Seek to understand and meet shareholder needs and expectations

Throughout the year the Executive Directors meet with investors to discuss matters relevant to the Company. The Directors recognise the importance of engaging with shareholders to ensure that shareholder needs and expectations are considered and addressed appropriately. The AGM is a forum which the Board welcomes shareholders to attend, providing an opportunity for them to address the Chairmen of the Board Sub-Committees as well as other Board members.

The Company’s website contains key information for shareholders and other stakeholders including the Annual Report and Interim Announcement and other key communications. Additionally, the Group uses social media to provide key updates on the business, its strategy and progress.

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

Our stakeholders help to shape our strategy and are critical to our success. Understanding our stakeholders assists the Board in performing its duty under s172 of the Companies Act 2006, which requires considering the interests, concerns, and potential impact on each stakeholder group. This understanding is achieved through executive board papers, customer feedback, and surveys.

Throughout the organisation, there is a culture of customer focus and outstanding service underpinned by innovation, entrepreneurialism and high performance.

The Group selects suppliers on their service offering, the quality of their products or services and competitive pricing. Long-term relationships are especially valuable as they enable us to collaborate with suppliers to identify value-creating opportunities. New suppliers undergo thorough on-boarding diligence, and the Group ensures timely monthly payments, through a regular monthly payments process, to suppliers.

The Group’s employees are key stakeholders in the success of the business. We aim to recruit high-calibre individuals and invest in their ongoing development through internal and external training. The Group offers competitive remuneration and benefits packages. We believe that having a contemporary workplace environment is crucial for attracting, retaining and motivating our employees. Over the past twelve months we have invested in expanding and enhancing our Manchester and London offices to ensure our workplaces are vibrant and energizing places to work.

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

The principal risks and uncertainties of the Group are described in the Annual Report & Accounts (a copy of which can be downloaded from the Company’s website).

At the Board meetings the Board are updated on any significant issues that have arisen and the actions that management have taken to address them.

The Directors acknowledge their responsibility for the Company’s and Group’s systems of internal controls, which are designed to safeguard the Group’s assets and ensure the reliability of financial information for both internal use and external publication. Overall control is achieved through financial reporting processes and systems that are appropriate to the size and complexity of the Group’s operations and by ensuring the workforce is sufficiently trained.

The Senior Leadership Team is responsible for monitoring and addressing the key risks of the business. Any significant issues are escalated as high priority to the Executive Directors.

As the Group continues to grow, the risks of the business and risk management framework will remain subject to regular review.

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

The Board comprises six Directors; two Executive Directors (including the Executive Chairman) and four Non-Executives Directors. The Board’s mix of experience and skillsets supports the Company in achieving its strategic goals. Heejae Chae serves as the Executive Chairman, a role the Board considers appropriate for the foreseeable future whilst Heejae develops and drives the strategy of the Group and enhances governance standards.

The Board of Directors meets regularly, usually monthly, and at least six times a year. Additional Board meetings are held outside the regular calendar, and these may be attended by telephone conference/video communication. The Board maintains regular contact with its advisers and seeks to ensure that it develops an understanding of the views of the Company’s major shareholders.

The Board has delegated authority to its sub-committees; the Audit Committee, the Remuneration Committee, and the Nomination Committee. Membership of these Committees comprises Independent Non-Executive Directors, except for the Nomination Committee which is chaired by Heejae Chae. Each Committee has a set of Terms of Reference which outlines the Committees’ scope of responsibilities.

The Board is satisfied that it has a suitable balance between Executive and Non-Executive Directors and is sufficiently resourced to discharge its duties and responsibilities effectively.

The Company has effective procedures in place to monitor Directors’ conflicts of interest, which are reported to and dealt with by the Board.

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

The composition of the Board brings a diverse balance of skills, experience and knowledge required for the business to achieve its strategic goals. Appointments are carefully considered and skillsets and experience profiled against the specific requirements of the Group. Biographical details of each of the Directors can be found in the Annual Report as well as on the Company’s website.

All members of the Board receive training as required and can take independent professional advice if necessary. Zeus Capital LLP, the Company’s Nomad, provided training on the AIM rules and the Market Abuse Regulation when it assumed the role as Nomad and it continues to provide training as part of the on-boarding for newly appointed directors. Additionally, all members of the Board have access to the Company Secretary and are able to receive additional training if required.

At the forthcoming Annual General Meeting, all Directors will seek election/re-election and it is proposed that this approach will be adopted at future annual general meetings.

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

The Executive Chairman is responsible for assessing the individual contributions of the Directors on an ongoing basis. Following the appointments to the Board during the year, the Executive Chairman is satisfied that all the Directors are making valued contributions, and the Board is working effectively together. Whilst the Company does not currently have a formal appraisal process for Directors, we intend to review our processes for Board performance evaluation over the next twelve months and to establish a more formalised framework for assessment and review.

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

The Directors recognise the importance of, and are committed to, high standards of corporate governance, aligned with the needs of the Company and the interests of all stakeholders. The Board believes it upholds its responsibility for maintaining high standards of corporate governance which necessitates managing the business in a transparent and accountable way. This ethical leadership is cascaded throughout the business creating a culture of Learning, Integrity, Kindness and Entrepreneurship, the cornerstones of our culture.

We have recently recruited a Chief People and Culture Officer who will be reviewing the Group’s approach to employee communication and engagement and ensuring that corporate culture is embedded throughout the business. We have also launched ‘SysHub’, an online platform for our employees that provides access to our employee benefits offering and the latest Company news and serves as a ‘go-to’ source for all the Group’s internal policies including the Health & Safety Policy, Anti-Corruption and Bribery Policy, Whistleblowing Policy, and Data Protection Policy.

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

The Directors recognise the importance of a robust system of governance to ensure appropriate levels of internal control, financial reporting, risk management, compliance and corporate responsibility.

Board Meetings

Six Board meetings per year are scheduled with Board update calls in the intervening periods. Attendance is usually in person but may be by video conference facilities. Board papers are circulated in advance of the meeting to allow the Directors sufficient time to review. The Executive Chairman will ordinarily chair the meetings and all Directors are given the opportunity to ask questions, deliberate on issues and challenge the Executives.

Matters Reserved for the Board is a schedule of key issues that must be considered and addressed by the Board. This is reviewed annually. An outline of the contents of the current schedule are referred to under Principle 1 above.

Audit Committee

The Company has established an Audit Committee that comprises Paul Edwards (Chairman), Mike Fletcher, Mark Reilly and Davin Cushman. The Audit Committee meets at least twice a year and is responsible for reviewing the integrity of the Group’s financial statements, compliance with legal and regulatory requirements, and the adequacy and effectiveness of the Group’s internal financial controls and risk management processes including the need for an internal audit review. It also reviews the external auditors’ performance and independence and makes recommendations to the Board on their appointment.

The Group’s auditors, BDO, attend the Audit Committee Meetings.

During the year to 31 March 2024, there were three Audit Committee meetings and the principal items discussed were:

• Review of the BDO Planning, Interim and Full Year Audit Reports
• BDO auditor independence, audit fee and engagement letters
• Review of Going Concern
• Review of IFRS15 Revenue Recognition for the new acquisitions
• Review and approval of the Interim Results, Preliminary Announcement
• Review and approval of the Annual Report and Accounts
• Review and approval of the Management Letters of Representation
• Reviewed its Terms of Reference which were then adopted by the Board

The Group has not included a separate Audit Committee report in its financial statements, the contents of such a report including the principal risks and uncertainties, the role and structure of the Audit Committee and the corporate governance disclosure are separately included throughout the report and have been reviewed by the Audit Committee.  The terms of reference of the Audit Committee can be found here.

Remuneration Committee

The Company has established a Remuneration Committee that comprises Mike Fletcher (Chairman), Paul Edwards and Davin Cushman. The Committee meets at least twice a year and is responsible for determining the remuneration of the Executive Directors. The Remuneration Committee also approves the design of, and determines targets for, any performance related pay schemes, reviews the design of any share incentive plans, and determines the awards to the Executive Directors and other senior members of management.

There were two Remuneration Committee meetings during the year. On 13 April 2023, the Committee approved the FY24 Executive Directors’ cash bonus and the early vesting of the share options. In addition the Committee approved to extend the notice period of both Adam Binks and Martin Audcent from six months to 12 months. In January 2024, the Committee met and recommended to the Board, for their approval, the terms and conditions for the new Chief Financial Officer. The terms of reference of the Remuneration Committee can be found here.

Nomination Committee

The Company has established a Nomination Committee that comprises Heejae Chae (Chairman), Mike Fletcher, Paul Edwards, Mark Reilly and Davin Cushman. The Nomination Committee meets at least twice a year and is responsible for reviewing the structure, size and composition of the Board, leading the process for appointments, ensuring plans are in place for orderly succession to both the Board and senior management positions, and overseeing the development of a diverse pipeline for succession.

There were two Nomination Committee meetings during the year and the principal items were to review the Board composition and discuss and approve appointments to the Board. The Committee also reviewed its Terms of Reference which were then adopted by the Board. The terms of reference of the Nomination Committee can be found here.

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

The Annual Report is a key deliverable to our shareholders to explain how our business is performing and our approach to governance and risk management. In the Annual Report we aim to provide all relevant information that allows shareholders to gain a clear understanding of how we manage the business, and we shall continue to identify areas of disclosure that can be enhanced.

Regular meetings are held with our principal shareholders and the Executive Directors maintain that dialogue. The Company communicates with institutional investors through briefings with management and analyst notes are reviewed to understand the external view of the Company.

Regular communications to shareholders comprise:

• Full Year Announcement
• Annual Report and Accounts
• Interim Announcement
• Annual General Meeting
• Institutional shareholder meetings following Results Announcements
• Regulatory RNS Announcements and other press releases

Shareholders can find information on the Board of Directors, Shareholder Circulars, Articles of Association, Admission Document, Financial Reports and Regulatory Announcements on our sysgroup.com website.

This page was last updated on 27 November 2024