Corporate Governance
The Board has adopted the Quoted Companies Alliance (QCA) Corporate Governance Code.
Our values are based on being smart thinking, dynamic and collegiate. We act with integrity and demonstrably care about our employees, customers and community. The Board believes this culture is key to creating a sustainable profitable business. This culture supports the Company’s fundamental purpose which is to provide specialised personal savings and working capital solutions to manufacturers and dealers operating across the supply chain. We have a clear business model and growth strategy to expand our business by offering more products and services to both existing and new customers.
The Board is responsible for ensuring the long-term success of DF Capital and that it is properly managed for the benefit of all our key internal and external stakeholders, including our customers, employees, shareholders, wider community and environment. This is achieved through robust decision making with the Board providing strategic direction and leadership of the Company within a framework of prudent and effective controls. We recognise that ensuring effective risk management and appropriate governance structures underpinned by a strong positive culture is a crucial part of this.
As Chair of the Board, I am responsible for leading the Board to ensure appropriate governance structures are implemented and maintained across the business. This is facilitated by promoting a culture of openness and debate both within and outside the boardroom, ensuring that the processes, structures and frameworks applied within the business are fit for purpose and are capable of evolving as the business grows. The Board is constituted of experienced and capable individual directors who provide support with this, lending their expertise and providing constructive challenge to Board discussions.
The QCA Code is constructed around ten broad principles and the Board has recommended that each of these principles is adopted and embedded into the corporate governance framework. The Board considers that it does not depart from the principles of the QCA Code.
Further details on our application of the 2023 Code will be available in the 2024 Annual Report and Financial Statements. Pending this publication, more details on our approach to corporate governance can be found in the 2023 Annual Report and in our AIM Admission Document.
Mark Stephens
Independent Chair
Establish a purpose, strategy and business model which promotes long-term value for shareholders
The Company’s business model, purpose and strategy are clearly defined and explained in the Annual Report.
Promote a corporate culture that is based on ethical values and behaviours
The Board sets the Company’s values and standards and seeks to maintain the highest level of integrity and probity in the conduct of its operations. These values are outlined in the written policies and working practices adopted by all employees. The Board regularly monitors the Company’s cultural environment and seeks to address any concerns that may arise. The Board and management are committed to creating an effective culture across the firm covering all staff and to assess the effectiveness of the Company’s culture on a regular basis.
Seek to understand and meet shareholder needs and expectations
The Board values the views of its shareholders and recognises their interest in our strategy and performance.
The Annual General Meeting (“AGM”) is the main method of communication with the shareholders. All directors are available to shareholders at the AGM. The Chairs of each Board committee, together with all other Directors, will be available to answer any relevant questions raised by the shareholders. The Chair will also be involved in material shareholder discussions from time to time.
Copies of our Annual Report and Accounts (and the notice of AGM) are sent to all shareholders and copies can be downloaded from the https://www.dfcapital-investors.com/, where other information for shareholders (and other interested parties) is also provided including all RNS announcements, preliminary and half-year results presentations and other matters relevant to shareholders.
The Chief Executive Officer makes formal presentations to the Company’s institutional shareholders and analysts each year following the release of the full-year and half-year results. The Board is kept informed of the views and concerns of shareholders by briefings from the Chief Executive Officer. Any significant Investment Reports from analysts are also circulated to the Board.
Existing and potential shareholders can get in touch with the Company at:
investor.relations@dfcapital-investors.com
Take into account wider stakeholder interests, including social and environmental responsibilities, and their implications for long-term success
The Company is aware of its corporate social responsibilities and the need to maintain effective working relationships across a range of stakeholder groups. In addition to the shareholders, these include the Company’s employees, directors, regulatory authorities, customers, creditors (including the DFC Group’s lending banks) and all those of its subsidiaries. The Company’s operations take account of the need to balance the needs of all of these stakeholder groups while maintaining focus on the Board’s primary responsibility, to promote the success of the Company. The Company endeavours to understand and act on the needs and requirements of each of these stakeholder groups where appropriate and in line with the Company’s long-term goals. The principal ways in which feedback on the DFC Group is gathered are via meetings, conversations and correspondence with stakeholders.
The Company has a direct regulatory relationship with the PRA and FCA operating in a manner to ensure effective compliance with its regulatory obligations and complying with the fundamental rule of cooperation with the regulatory authorities.
The Company’s approach to sustainability is detailed in the Annual Report.
Embed effective risk management, internal controls and assurance activities, considering both opportunities and threats, throughout the organisation
The Board has overall responsibility for ensuring that risk is appropriately managed within the DFC Group. As well as external reviews and audits from the DFC Group’s statutory auditors, the DFC Group has internal checks and policies. Responsibility rests with the Company’s management team for identifying and managing risks arising in the business.
The DFC Group manages such risks, among other things, with robust systems and processes, guidelines and policies which are forward-looking, clearly articulated, documented and communicated throughout the businesses and which enable the accurate identification and control of potential areas of risk.
Establish and maintain the board as a well-functioning, balanced team led by the chair
Mark Stephens is the Independent Chair and is responsible for the leadership of the Board and ensuring the effective running and management of the Board. The Chair regularly assesses the effectiveness of the Board. The structure of the Board of Directors and committees is set out in our Annual Report. The Board is satisfied that it has an appropriate balance between executive and non-executive directors together with suitable levels of independence. Biographies of each Director can be found on the Company’s website.
Maintain appropriate governance structures and ensure that individually and collectively the directors have the necessary up-to-date experience, skills and capabilities
The Company has in place a detailed corporate governance framework which sets out the principles of governance and how this is implemented and embedded through the business. Further information is contained in the corporate governance section of the Annual Report. The appropriateness and effectiveness of the governance framework, Board structures and processes are regularly reviewed and assessed through a formal Board evaluation process.
The Board is satisfied that, between the Directors, the Board has an appropriate balance of skills and experience to perform its oversight function effectively. Each Director takes responsibility for maintaining their skill set, which includes roles and experience with other boards as well as formal training and seminars.
Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
An evaluation of the Board’s own performance, that of its committees and individual Directors is undertaken by the Board on an annual basis. This review assesses the effectiveness of all aspects of the Board, its committees and individual Directors and includes composition, experience, dynamics, contribution, commitment, independence, the Chair’s leadership and the Board’s role and responsibilities in connection with the strategy, oversight of risk and succession planning.
Establish a remuneration policy which is supportive of long-term value creation and the company’s purpose, strategy and culture
The Board considers appropriate remuneration to be an important part of attracting, retaining talent and incentivising performance to promote the long-term success of the Group. Under delegated authority from the Board, the Remuneration Committee reviews and recommends remuneration proposals for employees across the Group, including the executive directors and senior leadership team. The Annual Report outlines the approach of the Remuneration Committee and policies.
Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
The Company communicates with its shareholders through its Annual and Interim Reports and Accounts, at the AGM and formal meetings with existing or potential new shareholders. Results of shareholder votes are made public. The Company communicates progress throughout the year through Regulatory News Service Announcements.
The Chair ensures that the views of shareholders are communicated to the Board.
(a) The Board Audit Committee
The Board Audit Committee is chaired by Nicole Coll and its other members are Thomas Grathwohl, Sheryl Lawrence and Mark Stephens
The Board Audit Committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Company is properly measured and reported on.
It will receive and review reports from the Company’s management and auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Company.
The Board Audit Committee meets at least quarterly and will have unrestricted access to the Company’s auditors.
(b) The Board Risk Committee
The Board Risk Committee is chaired by Sheryl Lawrence and its other members are Thomas Grathwohl, Nicole Coll and Mark Stephens.
The Risk Committee oversees the development, implementation and maintenance of its risk management framework, ensuring that its strategy, principles, policies and resources are aligned to its risk appetite, as well as to regulatory and industry best practices.
The Risk Committee also monitors and reviews the formal arrangements in place in respect of internal controls and risk management framework and reviews the effectiveness of its systems for risk management and compliance with financial services legislation and other regulations.
*subject to regulatory approval
(c) The Remuneration Committee
The Remuneration Committee is chaired by Mark Stephens and its other members are Nicole Coll, Thomas Grathwohl and Sheryl Lawrence.
The Remuneration Committee will review the performance of the Company’s Executive Directors and make recommendations to the Board on matters relating to their remuneration and terms of employment.
The Remuneration Committee also makes recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any share option scheme or equity incentive scheme in operation from time to time by the Company.
The remuneration and terms and conditions of appointment of the Non-Executive Directors will be set by the Board. The Remuneration Committee meets formally at least once a year and otherwise as required.
The Group’s remuneration objective is to promote the long-term success of the Group and delivery of its strategic plan by attracting, motivating, and retaining high calibre and talented employees, through a market competitive set of benefits, which in turn encourage the delivery of sustainable performance, appropriate and effective management of the Group’s risk profile, strong customer outcomes and the creation of an inclusive and engaging environment for our employees. We believe that through having an engaged and motivated workforce we will deliver the Group’s strategic ambitions. The Group’s approach to remuneration aligns to the relevant remuneration codes and policy statements of the PRA and FCA. Our remuneration approach is set out in the Annual Pillar 3 Reports and full details of the Group Executive Directors’ remuneration can be found in the Annual Report and Financial Statements (both available here).
(d) The Nomination Committee
The Nomination Committee is chaired by Mark Stephens and its other members are Nicole Coll, Thomas Grathwohl and Sheryl Lawrence.
The Nomination Committee assists the Board in discharging its responsibilities relating to the composition of the Board, performance of Board members, induction of new directors, appointment of committee members and succession planning for senior management of the Company.
The Nomination Committee is responsible for evaluating the balance of skills, knowledge, diversity and experience of the Board, the size, structure and composition of the Board, retirements and appointments of additional and replacement directors and makes appropriate recommendations to the Board on such matters.
The Nomination Committee prepares a description of the role and capabilities required for a particular appointment. The Nomination Committee will meet formally at least once a year and otherwise as required.
Last updated 31 July 2024
