Governance

Board Committees

The Board is responsible for the determination of the Company’s Investment Objective and Policy and has overall responsibility for maximising the Company’s success by directing and supervising the affairs of the business, meeting the appropriate interests of Shareholders and relevant stakeholders, and also ensuring the protection of investors. As part of the governance framework, the Board has delegated some of its responsibilities to five committees: the Audit and Risk Management Committee, the Nomination Committee, the Management Engagement Committee, Remuneration Committee and the Portfolio Committee. Each committee has written terms of reference, approved by the Board, summarising its objectives, remit and powers. Their terms of reference are reviewed and approved annually by the Board and the respective committee Chairs report on their activities to the Board.

Audit and Risk Management Committee

The primary functions of the Audit and Risk Management Committee are:

  • reviewing and monitoring the integrity of the Financial Statements of the Group and any formal announcements relating to the Group’s financial performance, reviewing significant financial reporting judgments contained in them;
  • reporting to the Board on the appropriateness of the Group’s accounting policies and practices including critical judgment areas;
  • reviewing the valuations of the Group’s investments as prepared and presented in report format by the independent valuer, and making a recommendation to the Board on value of the Group’s investments;
  • meeting regularly with the external auditor to review their proposed audit plan and the subsequent audit report and assessing the effectiveness of the audit process and the levels of fees paid in respect of both audit and non-audit work;
  • making recommendations to the Board in relation to the appointment, re-appointment or removal of the external auditor and approving their remuneration and the terms of their engagement;
  • monitoring and reviewing annually the auditor’s independence, objectivity, expertise, resources, qualification and non-audit work;
  • considering annually whether there is a need for the Group to have its own internal audit function;
  • monitoring the internal financial control and risk management systems on which the Group is reliant;
  • reviewing and considering the UK Code, the AIC Code, the FRC Guidance on audit committees; and
  • reviewing the risks facing the Group and monitoring the risk matrix.

The Audit and Risk Management Committee formally reports its findings to the Board, identifying any matters on which it considers that action or improvement is needed, and makes recommendations on the steps to be taken.

Committee Members

Mr Andrew Wilkinson (Chair of the Committee), Mr Paul Burger, Ms Sylvia Coleman, Mr Simon Holden, Mr Andrew Sutch

Nomination Committee

The principal responsibility of the Nomination Committee is to ensure that, collectively and at any given time, the members of the Board possess the necessary balance of knowledge, skills and experience to support and develop the strategy of the Company. In seeking to achieve this, the Nomination Committee recommends new Board appointments as and when considered appropriate and ensures that appropriate succession planning procedures are in place. In accordance with our Terms of Reference, the Chair of the Nomination Committee reports its conclusions to the Board and it is the Board as a whole which is responsible for making new appointments upon its recommendation. The committee keeps under review and evaluates the composition of the Board and its committees to maintain the appropriate balance of skills, knowledge, experience and independence to ensure their continued effectiveness. Appropriate succession plans are also kept under review.

Committee Members

Mr Paul Burger (Chair of the Committee), Ms Sylvia Coleman, Mr Simon Holden, Mr Andrew Sutch, Mr Andrew Wilkinson

Management Engagement Committee

The Management Engagement Committee provides a formal mechanism for the review of the performance of the Investment Adviser and the Company’s other advisers and service providers. It carries out this review through consideration of a number of objective and subjective criteria and through a review of the terms and conditions of the advisers’ appointments with the aim of evaluating performance, identifying any weaknesses and ensuring that their terms are competitive, fair and reasonable for Shareholders.

Committee Members

Mr Andrew Sutch (Chair of the Committee), Mr Paul Burger, Ms Sylvia Coleman, Mr Simon, Holden

Remuneration Committee

The Remuneration Committee is responsible for recommending and monitoring the level and structure of remuneration for all the Directors, taking into account the time commitments and responsibilities of Directors and any other factors which it deems necessary, including the recommendations of the AIC Code. The Remuneration Committee is also responsible for the review of any workforce remuneration and related policies, and the alignment of incentives and rewards with culture and taking these into account when setting the policy for any executive director remuneration. At the moment this involves oversight of the arrangements for the employees of Hipgnosis Songs Group, managed by The Family (Music) Limited.

Committee Members

Mr Simon Holden (Chair of the Committee), Mr Paul Burger, Ms Sylvia Coleman, Mr Andrew Sutch, Mr Andrew Wilkinson

Portfolio Committee

The Portfolio Committee provides a formal mechanism for the following functions:

  • making the final decision as to the acquisition of Catalogues of Songs based on a comprehensive investment paper, financial model, and legal due diligence report as presented by the Investment Adviser along with an Independent Valuation Report;
  • determining, in collaboration with the Company’s legal, tax or corporate finance advisers, the most appropriate means for acquiring the Catalogues of Songs in the event that such Catalogues of Songs are not directly transferable, but are available in an intermediated form (such as a special purpose company, or similar) including determining any adjustments to the price if necessary or appropriate;
  • making enquiries, at any stage, of the Investment Adviser with regards to the pipeline opportunities identified by the Investment Adviser from time to time;
  • making the final decision as to the disposal of any Catalogues of Songs; and
  • determining, in collaboration with its legal, tax or corporate finance advisers, the most appropriate means for disposal of the Catalogues of Songs in the event that such Catalogues of Songs are not directly transferable but are held in an intermediated form (such as a special purpose company, or similar).

Committee Members

Mr Paul Burger (Chair of the Committee), Ms Sylvia Coleman, Mr Simon Holden, Mr Andrew Sutch, Mr Andrew Wilkinson