Corporate Governance

SysGroup's purpose is to future-proof the IT foundations of UK organisations, helping clients maintain resilience, flexibility and competitiveness through forward-looking technology planning. Key areas of focus include modernising legacy infrastructure, adopting artificial intelligence and machine learning, strengthening data security, and enabling cloud and distributed computing.

The Group is building an integrated technology platform that allows UK businesses to modernise with confidence, combining organic development with targeted acquisition of specialist capability. Core strengths span artificial intelligence and data analytics, modern data platforms, connectivity and data integration, infrastructure engineering and migration, and cybersecurity and business continuity. During the year, the Group anchored this strategy at the intersection of cybersecurity and artificial intelligence, growing cybersecurity to 45% of Group revenue (FY25: 40%).

These capabilities are delivered through four integrated solutions: SysAccess (managed IT services with AI-driven monitoring and support), SysGuard (continuous threat validation and incident response), SysProve (compliance assurance) and SysVault (data protection, backup and cyber recovery), supported by expert advice, implementation and ongoing management for each offering.

The Group continues to review acquisition opportunities that strengthen its capability in artificial intelligence, cloud, data security and sector expertise. Following the acquisition of Crossword Consulting Limited in November 2024, which added cybersecurity advisory capability and an expanded client base, the Group acquired Saxis Group Limited on 22 December 2025. Saxis is a UK specialist in enterprise storage, data protection and hybrid infrastructure, strengthening service continuity for its public sector and regulated-sector clients.

The Board upholds high standards of governance, with an emphasis on transparency and accountability. Leadership fosters a culture built on four cornerstones: Learning, Integrity, Kindness and Entrepreneurship, embedded across the business.

During the year, skills assessments were carried out to evaluate current capability and identify development needs. OKRs (Objectives and Key Results) continue to be used to ensure employees understand and engage with the Group's strategic priorities, with progress reported to the Board.

An employee engagement survey was conducted to gather feedback and better understand workforce needs, leading to improved communication through regular newsletters, Town Hall meetings and in-person briefings. A broader employee development programme supports ongoing learning, skills-building and career progression, including tailored training, support for professional qualifications and clear progression pathways, aimed at strengthening engagement and building a positive, forward-looking workplace.

The Executive Directors maintain dialogue with shareholders throughout the year on matters relevant to the Company. The Board recognises the value of shareholder engagement in understanding and appropriately addressing investor views.

The Annual General Meeting gives shareholders the opportunity to engage directly with the Board, including Committee Chairs, supplemented during the year by results roadshows and one-to-one meetings between management and institutional investors. Feedback gathered through brokers and advisers is reported to the Board.

Investor information, including the Annual Report (incorporating ESG reporting), Interim Announcement and RNS releases, is available on the Company's website, which is also used to share business updates and strategic progress via social media.

Stakeholders play a significant part in shaping the Group's direction and are essential to its success. Understanding their needs and views allows the Board to meet its duty under section 172 of the Companies Act 2006, weighing the interests, concerns and likely consequences for each stakeholder group. This understanding is built through Board engagement, customer feedback and regular consultation.

A strong customer focus underpins the business, with an emphasis on service quality and exceeding customer expectations through innovation and clear performance goals. Understanding and responding to customer circumstances keeps the Group responsive and competitive; the Group's Net Promoter Score increased four-fold over two years, from 8 to 32.

Suppliers are selected on quality, value and service, with the Group valuing long-term supplier relationships that support mutual growth. New suppliers go through a thorough onboarding process, and the Group operates monthly payment runs to ensure suppliers are paid reliably and on time.

Employees are a key stakeholder group, and their success is central to the Group's own. Attracting and retaining skilled people is a priority, supported by investment in training and development, and market-competitive pay and benefits.

The Group recognises that responsible operation requires progress that benefits its stakeholders, workplaces and the environment, with further detail set out in the ESG Report within the Annual Report. The Board also weighed stakeholder interests in its decision to acquire Saxis Group Limited during the year, balancing shareholder capital discipline in funding the deal from existing cash against enhanced service continuity for customers and the interests of employees across both businesses.

The Group's principal risks and uncertainties are set out in the Annual Report. The Board receives regular updates at its meetings on material developments, including mitigating action taken by management.

The Board is responsible for the effectiveness of the Group's governance arrangements, designed to safeguard assets and ensure the reliability of financial reporting for both internal decision-making and external reporting. This includes robust financial reporting and careful oversight.

When setting business direction, the Board assesses exposure to opportunities and threats, including climate-related risk, and sets an appropriate risk appetite, considering both immediate and longer-term implications for stakeholders. The Audit Committee has delegated authority to a dedicated Internal Risk Subcommittee, which meets quarterly to review, analyse and assess key risks and reports its findings to both the Audit Committee and the Board.

The Board comprises six members: two Executive Directors, including the Executive Chairman, and four independent Non-Executive Directors. The Board's diversity of expertise, skills and experience strengthens the Group's ability to deliver its objectives. Heejae Chae serves as Executive Chairman, alongside Non-Executive Directors Paul Edwards, Mark Reilly, Mike Fletcher and Davin Cushman, who the Board considers to be independent in character and judgement. The Board recognises that combining the Chairman and Chief Executive responsibilities in one role is a departure from best practice, and considers this appropriate at the Group's current stage, intending to separate the roles in due course. In December 2025, the Board also appointed Dr David K. Park as an Advisor to the Board on artificial intelligence.

The Board meets no less than six times a year, supplemented by update calls between scheduled meetings and ad-hoc meetings as circumstances require. The Board maintains contact with its advisers and seeks to understand the views of major shareholders.

Specific responsibilities are delegated to the Audit, Remuneration and Nomination Committees, each operating under written Terms of Reference reviewed annually. Other than the Nomination Committee, chaired by Heejae Chae, Committee membership is drawn from the independent Non-Executive Directors.

The Board keeps its balance of Executive and Non-Executive Directors, and the collective skills available to it, under review, and has procedures in place to identify and manage any conflicts of interest among Board members.

Board papers are circulated in advance to allow adequate time for review. The Executive Chairman typically leads meetings, ensuring all Directors can contribute, address key matters and challenge the Board where appropriate. A schedule of Matters Reserved for the Board sets out the key decisions and discussions requiring Board consideration, reviewed annually.

The Audit Committee is chaired by Paul Edwards, with Mike Fletcher, Mark Reilly and Davin Cushman as members, meeting no less than three times a year. Its responsibilities include the completeness of financial statements, legal compliance, the adequacy of internal financial controls and risk management, and the need for internal audit, and it assesses the independence and effectiveness of the external auditor and advises on their appointment. BDO acts as external auditor and attends Committee meetings by invitation.

The Remuneration Committee is chaired by Mike Fletcher, with Paul Edwards and Davin Cushman as members, meeting no less than twice a year. Its responsibilities include Executive remuneration policy, the design of performance incentives and targets, review of benefits, and decisions on Executive and senior employee awards. During the year, the Committee oversaw the Group's employee share schemes, summarised at Principle 9 below.

The Nomination Committee is chaired by Heejae Chae, with Mike Fletcher, Paul Edwards, Mark Reilly and Davin Cushman as members, meeting no less than once a year. Its responsibilities include reviewing the structure, size and composition of the Board, overseeing the appointments process, and succession planning. During the year, the Committee reviewed Board composition and its Terms of Reference.

The Board's composition reflects a deliberate mix of executive and non-executive experience, with Directors appointed for the specific skills, sector knowledge and independent judgement they bring to the Group's strategy and oversight.

The Audit and Remuneration Committees give Non-Executive Directors the opportunity for private discussion of important matters, allowing independent judgement on significant decisions.

All Board members receive training as needed, on appointment and afterwards, and may seek independent professional advice. Zeus Capital LLP, the Company's Nominated Adviser, provides an annual briefing on AIM Rules and Market Abuse Regulation requirements; refresher training was most recently provided at the January Board meeting to confirm all Directors' understanding of these requirements. Directors also have access to the Company Secretary for further support and are encouraged to request further training as necessary.

All Directors will stand for election or re-election at the forthcoming Annual General Meeting, in line with the Company's governance practices.

The Executive Chairman carries out an ongoing assessment of Board and Director performance and considers that all Directors contribute effectively and that the Board functions well as a whole. The Board does not currently operate a formal Director evaluation process; in its place, the Nomination Committee reviews Board composition, the balance of skills and experience, and succession needs at least annually.

The Group's remuneration policy is designed to attract, motivate and retain individuals of the highest calibre who are committed to growing the business and maximising shareholder value. During the year, the Committee administered three employee share schemes: the Value Creation Plan, an equity-settled scheme for Executive Directors and senior management running to June 2029 and subject to performance hurdles; the Performance Share Plan, linking option vesting to continued employment and three-year earnings-per-share targets; and the Save As You Earn scheme, enabling employees to save monthly towards share purchases at a discount to market price. Further detail is set out in the Remuneration Report within the Annual Report.

The Board considers strong governance central to the Group's performance. The Board's composition, supported by its Committees, enables thorough discussion, debate and delivery of strategy. Working practices reflect clarity and accountability, with a focus on effectiveness, and ongoing engagement with shareholders and other key external groups underpins the Group's governance approach.

The Group's ESG Report and Remuneration Report, both within the Annual Report, demonstrate governance transparency, showing how the Board oversees key areas including financial reliability, environmental and social responsibility, and Director remuneration. Financial reliability and governance matters are managed through regular review, with oversight from the Audit Committee.

Regular meetings with investors support open dialogue. The Executive Directors maintain ongoing engagement, and Committee Chairs are available to engage with investors on governance and strategic matters. The Board engages directly with shareholders through results presentations, supported by published analyst research. Investor communication takes place through full-year and half-year results, financial reporting, the Annual General Meeting, RNS announcements and press releases. Investor materials, including Board information, shareholder communications, governance documents and financial reporting, are available in the investor relations section of the Company's website.

The Group complies with Rule 21 of the AIM Rules, which governs dealings in securities during close periods. A robust share dealing policy is in place to support this compliance. All employees are formally notified when the Company enters and exits a close period. Regardless of timing, the Group's dealing code requires employees to seek prior approval from designated individuals before undertaking any transactions in the Company's shares, ensuring a controlled and transparent approach to share dealing at all times.