The Role of the Main Board and reserved matters 

Introduction

 The Headlam board operates under the principles of openness, integrity and accountability. Its primary aim is to increase shareholder value. The Headlam board operates as a team to achieve this goal and the directors are collectively responsible for the board's decisions and actions.

 It is vital to Headlam’s success that investor confidence is maintained and that specific controls and procedures are in place to ensure that:

 1.         Investors are informed and spared any surprises

 2.         Material errors do not occur in the accounts

 3.         Undefined or non essential financial risks are avoided

 Schedule of matters reserved for the board

 The UK Corporate Governance Code (“Code”) states that “There should be a formal schedule of matters specifically reserved for the board’s decision. The annual report should include a statement of how the board operates, including a high level statement of which types of decisions are to be taken by the board and which are to be delegated to management.”

 The Code also states that “The board’s role is to provide entrepreneurial leadership of the company within a framework of prudent and effective controls which enables risk to be assessed and managed. The board should set the company’s strategic aims, ensure that the necessary financial and human resources are in place for the company to meet its objectives and review management performance. The board should set the company’s values and standards and ensure that its obligations to its shareholders and others are understood and met.”

 In connection with this recommendation and the aims of the Headlam board, the following matters are reserved exclusively for consideration and decision by the board:

 1          Strategy and management

1.1       responsibility for the leadership and long term success of the group and setting of values and standards

1.2       Approval and review of the group's strategy, corporate objectives and the annual operating plan.

1.3       Approval of the annual plan and capital expenditure budget and any material changes

1.4       Oversight of the group’s operations ensuring competent and prudent management, sound planning, an adequate system of internal control, adequate accounting and other records and compliance with statutory and regulatory obligations.

1.5       Entering into any binding commitments to strategic alliances or joint ventures.

 2          Structure and capital

2.1       Changes relating to group capital structure

2.2       Major changes in group corporate structure

2.3       Changes to the groups’ management and control structure

2.4       Changes to the company’s listing or status as a plc

 3          Financial reporting and controls

3.1       Approval of the annual report and accounts, including interim accounts, dividend policy declaration of dividend and treasury policies

3.2       Approval of the Remuneration Report

3.3       Approval of any significant change in accounting policies or practices

3.4       Approval of treasury policy

3.5       Acquisition of assets and approve unbudgeted expenditure in excess of £500,000

3.6       Approval of financial statements, interim dividends and recommendation of the final dividend

3.7       Major health and safety issues that have a potential financial risk to the group in excess of £150,000    

 4          Internal controls

4.1       Ensuring maintenance of a sound system of internal control and risk management including:

4.1.1    Receiving reports on, and reviewing the effectiveness of, the group’s risk and control processes to support its strategy and objectives

4.1.2    Undertaking an annual assessment of these processes

4.1.3    Approving an appropriate statement for inclusion in the annual report

 5          Contracts

5.1       Acquisition of assets and approve unbudgeted expenditure in excess of £500,000

5.2       Any disposal of assets of the group with a consideration in excess of £500,000 or a loss on disposal in excess of £150,000

5.3       Making any takeover bids

5.4       All contracts not in the ordinary course of business

5.5       All foreign currency transactions in excess of £2,500,000

5.6       Any investment in more than 20% of the share capital of another company

5.7       Investments (in excess of £50,000) including the acquisition or disposal of interests of more than 5% in the share capital of any company

5.8       Changes to the group's tax status or corporate or capital structure

5.9       All contracts in excess of 12 months duration and over £150,000 in value

6          Communication

6.1       Approval of resolutions and corresponding documentation to be put forward to shareholders at a general meeting and ensuring a satisfactory dialogue with shareholders

6.2       Approval of all circulars, listing particulars and press releases

 7          Board membership and other appointments

7.1       Appointment and removal of members of the board (including terms and conditions of employment) following recommendations by the nomination committee

7.2       Continuation in office of directors at the end of their term of office, when they are due to be re-elected by shareholders at the AGM and otherwise as appropriate

7.3       Continuation in office of any director at any time, including the suspension or termination of service of an executive director as an employee of the company, subject to the law and their service contract

7.4       Appointment of the Senior Independent director, assisted by the Nominations Committee and ensure adequate succession planning

7.5       Appointment or removal of the Company Secretary

7.6       Remuneration of auditors and recommendations for appointment or removal of auditors

7.7       Appointments to boards of subsidiaries and receiving reports from committees

8          Remuneration

8.1       Determine remuneration of directors, company secretary and non-executive directors

8.2       Approval of new share incentive plans or major changes to existing plans

8.3       Changes to employee share and other incentive schemes and the allocation of executive share options

9          Delegation of authority

9.1       Division of responsibilities between the chairman, the chief executive and other directors

9.2       Appointments to boards of subsidiaries and receiving reports from committees

9.3       Terms of reference and membership of board committees including the receiving of reports from board committees on their activities

9.4       Approval of the delegated authority vested in the Chief Executive

9.5       Matters which the board considers suitable for delegation are contained in the terms of reference of its committees

 10        Corporate governance matters

10.1     Undertaking a formal and rigorous review annually of its own performance, that of its committees and individual directors

10.2     Determining the independence of non-executive directors

10.3     Considering the balance of interests between shareholders, employees, customers and the community

10.4     Review of the group’s overall corporate governance arrangements

10.5     Receiving reports on the views of the company’s shareholders

10.6     Authorising conflicts of interest where permitted by the Articles of Association

 11        Policies

11.1     Approval of policies, including:

•          code of conduct

•          share dealing code

•          bribery prevention policy

•          whistleblowing policy

•          health and safety policy

•          environmental and sustainability policy

•          communications policy including procedures for the release of price sensitive information

•          corporate social responsibility policy and charitable donations policy

12        Other

12.1     The making of political donations

12.2     Approval of the appointment of the group’s principal professional advisers

12.3     Prosecution, defence or settlement of litigation involving above £250,000 or being otherwise material to the interests of the group

12.4     Major changes in policy with respect to risks covered by insurance. Approval of the overall levels of insurance for the group including Directors’& Officers’ liability insurance and indemnification of directors

12.5     Major changes in the rules of the company pension schemes, or changes of trustees or fund management arrangements

12.6     development and protection of the group’s reputation, its values and business principles

12.7     In addition, the board will receive reports and recommendations from time to time on any matter which it considers significant to the group

 

End