As the Company’s shares are traded on AIM, MirLand is not required to comply with the UK Corporate Governance Code (formerly the Combined Code), nor to comply with the equivalent Corporate Governance regime of its country of incorporation, Cyprus. As stated in the Company’s Admission Document, however, the Board of MirLand believes that it is essential to maintain the highest standards of Corporate Governance appropriate for a company of MirLand’s size. Accordingly, a statement of how the principles of the UK Corporate Governance Code have been applied in the period since admission to AIM, and how it is intended they continue to be applied, is given below.
Board Composition, Roles and Independence
During the financial year, MirLand’s Board comprised nine Directors until 30 June 2011, and eight Directors following Moshe Morag stepping down from his position as a Non-executive Director. Caroline Brown is the Senior Independent Non-executive Director.
The roles of Chairman and Chief Executive Officer are distinct. The principal differentiating factors in their respective responsibilities are:
Reports to the Board
Only the Chief Executive Officer reports to him
Responsible for running the Board
Chief Executive Officer
Reports to the Chairman
All executive management report to him, directly or indirectly
Responsible for running the business
Responsible for implementing the Board’s decisions
Committee membership will be continually reviewed to ensure the most appropriate composition for each committee based on the skills and experience of the Directors.
The UK Corporate Governance Code recommends that the Board of Directors of a listed company should include a balance of executive and Non-executive Directors (and, in particular, independent Non-executive Directors) such that no individual or small group of individuals can dominate the Board’s decision taking. The UK Corporate Governance Code states that the Board should determine whether a Director is independent in character and judgment and whether there are relationships or circumstances which are likely to affect, or could appear to affect, the Director’s judgment.
Of MirLand’s five Non-executive Directors (excluding the Chairman), three of the Non-executive Directors are considered by the Board to be independent.
The Board meets at least four times each year, for the consideration of strategy and to monitor and evaluate the Group’s performance and prospects.
Further to the regular “ordinary” Board meetings, the Board will also meet (if necessary, by teleconference) to consider substantial transactions or issues as they arise. If any Director is unable to attend such meetings, the Chairman will seek to speak to any such Director in advance.
At each Board meeting, there is a formal schedule of matters reserved for the Board’s attention which includes:
- setting the overall strategy;
- approving major transactions;
- establishing debt funding strategies, including gearing ratios and other financial risk strategies, such as hedging policies;
- accounting policies; and
- operational review.
An annual budget is produced, together with longer-term projections, which are presented to the Board for approval. At each meeting the Board discusses progress against the budget and monitors any variances. Where applicable, revisions are made to expected out-turn against which further progress can be monitored.
The Board also discusses in detail the projected financial impact of major proposed acquisitions and disposals, including their financing. All such proposed substantial investments are considered by all Directors.
The above will be subject to continual review and will be updated as appropriate to ensure that the most important matters affecting the business are dealt with by the main Board.
Board packs containing relevant financial and non-financial information are supplied to Directors in advance of each Board/committee meeting. Additional requests for information from Directors are met and Directors are entitled to table agenda items at Board meetings.
The appointment and removal of the Company Secretary is a matter for the Board as a whole.
The Non-executive Directors’ terms of appointment entitle them to take independent professional advice as required, at the Company’s expense.
Retirement by Rotation and Re-election
Directors are, under the Company’s Articles of Association, required to stand for re-election at intervals of no more than three years.
Under the provisions of the Company’s Articles of Association, one-third of the Directors are required to retire by rotation each year and, accordingly, Nigel Wright, Caroline Brown and Steven Holm will retire by rotation and their re-appointment to the Board is subject to the approval of shareholders. The Board considers that the performance of these Directors has, since their appointment, been effective and that they have demonstrated commitment to their roles. Accordingly, it recommends the re-election of each of them.
Relations with Shareholders
The Chief Executive Officer and the Chief Financial Officer meet regularly with institutional shareholders and analysts. Additional meetings are arranged to ensure open dialogue throughout the year. It is proposed that Non-executive Directors should also be available for such meetings, subject to institutional shareholder requests.
Press releases are issued throughout the year and the Company maintains a website (www.mirland-development.com) on which all press releases are posted and which also contains major corporate information. Additionally, this annual report, which is sent to all registered shareholders, contains extensive information about the Group’s activities. Enquiries from individual shareholders on matters relating to their shareholdings and the business of the Group are welcomed.
The AGM is a key forum for communication with shareholders. All Directors will attend the AGM, and the chairmen of all committees will be available to answer questions. The notice of meeting and annual report and accounts will be sent out at least 20 working days before the meeting. Shareholders are encouraged to attend the AGM to discuss the progress of the Group.
Separate votes will be held for each proposed resolution, including the approval of the Remuneration Committee report, and a proxy count is given in each case.