Quoted Companies Alliance Code for Small & Mid-sized Quoted Companies
The board of Bigblu Broadband Group plc (the “Company”) is responsible for the Group’s corporate governance policies and recognises the importance of high standards of corporate governance and integrity. The Group adopted the Quoted Companies Alliance Code for Small & Mid-sized Quoted Companies (the “QCA Code”) in September 2018. This statement sets out how the Group complies with the 10 principles of the QCA Code.
1. STRATEGY & BUSINESS MODEL
The Group is an alternative broadband provider who markets and delivers broadband services to homes and businesses mainly located in areas of poor or underserved telecoms infrastructure. The Group’s target customers are residential and businesses who are typically not served by fibre to the premise’s broadband. The Group is technology agnostic and uses a variety of technologies to deliver a super-fast broadband service to target customers including satellite broadband, 4G, 5G and licensed and unlicensed spectrum fixed wireless broadband (point to point and point to multi-point) and fibre.
The Group is now active and has customers in Australia and the Nordics, with approximately c58k customers as at 31 May 2021. The Group has grown strongly since listing on AIM in May 2015 both organically and by acquisition, acquiring and integrating 21 businesses in 9 countries in the last 4 years. The Group, although smaller in size following the disposals, is extremely focussed on growing the Continuing Group. The Group works closely with network partners to ensure we get the best customer offers in each jurisdiction.
Together with local bespoke systems the Group’s cloud-based global billing and customers service (ERP) platform, Pathfinder, enables it to support customers around the world in any language the customer chooses, with the system supporting multiple currencies and VAT jurisdictions. The Group uses satellite capacity from a number of different satellite owners to enable it to provide satellite broadband services and these include but are not limited to EBI and NBNCo. The Group makes its decisions on which satellite operator to use in each country based on a mixture of quality of their services, their product roadmap, business model, resultant price structure, and the amount of capacity available in a particular market.
Satellite design and processing efficiency continue to progress at a pace resulting in continually improving satellite economics with each new satellite launch allowing the Group to continue to improve its broadband offerings and keep pace with the growth in internet demand. Since the Group’s inception in 2008, headline consumer satellite broadband speeds in Australasia and the Nordics have increased from 4 Mbps to 50 Mbps and the Group, working with its satellite owner partners, believes that speeds and data allowances will continue to increase exponentially over the next 3 – 5 years.
Our Australian business SkyMesh, went from strength to strength with year on year overall customer growth of c21% and of equal importance, strong customer engagement with 40% of new customers coming from word of mouth and a net promoter score of 44, up from 36 year on year, and against an average competitor score of 25. During the year 2020 SkyMesh was also awarded the Whistleout 2020 Best Satellite NBN Co provider. We further reinforced our close working relationship with NBN Co as it pro-actively extended the use of satellite in regional and remote Australia.
After a period of Satellite investment and focus, following the Disposal, the Board continue to evaluate the opportunity to allocate part of the net proceeds from the Disposal to refining and enhancing the Group's service proposition in the Nordic market. Initiatives considered and acted upon included adding a Sales and Marketing director for the Nordics, now appointed, with a strategic objective to, among other things, expand the geographic focus of the operation into Sweden and Finland. In addition to the launch of new product satellite offerings across the region offering speeds of 50Mbps and unlimited capacity, the Group re - commenced investing in the upgrade of its fixed wireless network. The Directors consider that the Group's ability to offer FWA (Fixed Wireless) and satellite solutions in the Nordics means that there is potentially significant scope to expand its presence and reach in this region. The suite of competitive offerings and growing demand for working from home solutions means that the target market continues to increase in size. Market growth, alongside the operational investment outlined above, provide the Directors with confidence of stronger demand for its FWA solutions in Norway whilst, historically capital-light satellite solutions are expected to be successfully deployed across the wider Nordic region.
The Group embraces new technologies like 5G and indeed is itself helping to develop and design new hardware to bring technologies like fixed broadband via 5G to the mainstream market. Many of the Group’s existing fixed wireless customers are already being connected to fixed 5G services.
The Directors believe there is a significant opportunity to continue to grow the Group’s subscriber base organically and also through bolt on acquisitions in the markets we operate in. The Group continues to be well placed to drive value form its continuing operations. Skymesh has maintained its position as Australia’s number one satellite broadband provider and is now geared up to broaden its reach – with the near-term focus on New Zealand. The development plans in the Nordics continue to progress with the Company well placed to accelerate growth &and we fundamentally believe that the region is one that we can make significant returns from.
2. UNDERSTANDING AND MEETING SHAREHOLDER NEEDS AND EXPECTATIONS
The AGM is the main forum for dialogue with shareholders and the Board. The Notice of Meeting is sent to shareholders at least 21 clear days before the meeting. The chairs of the Board and all committees, together with all other Directors, routinely attend the AGM and are available to answer questions raised by shareholders. Feedback from investors is also obtained through direct interaction between the CEO and CFO at meetings following the publication of its full-year and half-year results. The Group also holds an open retail investor meeting shortly after results have been published. There is also regular dialogue with investors through the medium of the Group’s corporate broker (finnCap), and through the Group’s Investor Relations and Financial PR agency Walbrook PR.
The Company has a dedicated investor relations website at www.bbb-plc.com which aims to keep all types of investor fully informed and up to date on the Group’s activities, share price and future meetings as well as supplying documents and information which may be of general interest.
Details of specific contacts at finnCap and Walbrook PR are published on all the Group’s RNS releases and on the Group’s investor website.
3. TAKING INTO ACCOUNT WIDER STAKEHOLDER & SOCIAL RESPONSIBILITIES AND THEIR IMPLICATIONS FOR LONG-TERM SUCCESS
The long-term success of a business and good Corporate Governance includes the Board considering the Group's impact on the communities it operates in, the environment and society as a whole. The group’s stakeholders include shareholders, customers, members of staff, suppliers, regulators, industry bodies and creditors including lenders. The Board works hard to identify the Group’s stakeholders and understand their needs, interests and expectations.
The principal ways in which their feedback on the Group is gathered are via meetings, conversations, surveys and online reviews. Following this feedback, the Group has continued and evolved its clearly defined customer-focused and people-led strategy.
Every company should consider its corporate social responsibilities (CSR). Any CSR policy should include a narrative on social and environmental issues and should show how these are integrated into the Group's strategy. Integrating CSR into strategy will help create long-term value and reduce risk to shareholders and other stakeholders. The Group see CSR as a very important area for consideration and are currently in the process of finalising a CSR Policy. This year we have reported on carbon output for the first time in Chief Executive Report section. In the coming year we will be looking at setting carbon reduction targets following the TCFD recommendations (The Task Force on Climate-related Financial Disclosures).
The Directors are aware of the impact the business activities have on the communities in which it operates and has in place an environmental policy. The Group's responsibilities to stakeholders including staff, suppliers and customers and wider society are also recognised and this is evidenced and underpinned by our values:
- Customers – Grow profitable elements of the business whilst putting the customer first
- Innovation – Industry leading product design always exceeding customers expecatations
- Quality – Excellence in operations, processes and systems
- Environment – Engaging with and supporting the communities in which we work
- Team Work – Support and engage with our people
4. EMBEDDING EFFECTIVE RISK MANAGEMENT
The board of the Group ensures that its risk management framework identifies and addresses all the relevant risks and threats that the business may be subject to in the execution of its business plan. These include extended business activities including key customers and its supply chain.
The section “Principal Risks and Uncertainties” on pages 27 to 31 the Company’s 2020 Annual Report identifies these risks and how the Board and the business mitigate these risks. The board of the Group meets regularly during the year and continually reappraises and discusses the tactics and strategy employed to mitigate these risks.
5. MAINTAINING A BALANCED AND WELL-FUNCTIONING BOARD
The Company ensures a balanced board membership to reflect the skills and attributes needed. The board consists of two executive directors and four non-executive directors (one of which is deemed non-independent).
Regular board meetings are held and ad hoc meetings are scheduled as and when required. Attendance at board meetings is reported each year within the Company’s annual report.
The Board and its committees
The Board is responsible for the effective oversight of the Group. It also agrees the strategic direction and governance structure that will help achieve the long-term success of the Group and deliver shareholder value. The Board takes the lead in areas such as strategy, financial policy and making sure a sound system of internal control is maintained. The Board’s full responsibilities are set out in the schedule of matters reserved for the Board described below. The Board delegates authority to its Committees to carry out certain tasks on its behalf, so that it can operate efficiently and give the right level of attention and consideration to relevant matters.
Role of the Board and management
Role of Chairman and Chief Executive Officer
There is a clear division of responsibilities between the running of the Board and the executive responsible for the Group’s business.
The Chairman is responsible for leadership of the Board, ensuring its effectiveness and setting the agenda for Board meetings. Once strategic objectives have been agreed by the Board, it is the Chief Executive Officer’s responsibility to ensure they are delivered upon and consistently to be accountable to the Board. The day to day operations of the Group are managed by the Chief Executive Officer and his management team.
The full Group Board met eleven times in the 2020 financial year under report and is scheduled to meet at least eight times in the current financial year and at any other time as may be necessary to address any specific significant matters that may arise.
The agenda for Board meetings is prepared in conjunction with the Chairman and the Company Secretary. Submissions are circulated in advance of meetings and for regular Board meetings will include operational and financial updates together with papers relating to specific agenda items.
Management prepares monthly finance reports which allow the Board to assess the Group's activities and review its performance. Members of management are regularly involved in Board discussions and Directors have other opportunities for contact with a wider group of employees.
To assist in the execution of its responsibilities, the Board has established an Audit and Risk Committee, a Remuneration Committee and a Nominations Committee together with a framework for the management of the consolidated Group including a system of internal control.
The Board is ultimately responsible for the Group's system of internal control and for reviewing its effectiveness. This includes financial, operational and compliance controls and risk-management systems. The Board has reviewed the effectiveness of the system of internal control during the year in conjunction with the External Auditors.
Internal control systems are designed to meet the Group's particular needs and the risks to which it is exposed. Accordingly, the internal control systems are designed to manage rather than eliminate the risk of failure to achieve business objectives and by their nature can only provide reasonable and not absolute assurance against misstatement and loss.
Role and Responsibilities of the Board
The Board's primary role is the protection and enhancement of long-term shareholder value. To fulfil this role, the Board is responsible for the overall management and corporate governance of the consolidated Group including its strategic direction, establishing goals for management and monitoring the achievement of these goals.
From time to time the Board may delegate or entrust to any Director holding executive office (including the CEO) such of its powers, authorities and discretions for such time and on such terms as it thinks fit. During 2018, the Board reviewed and updated the "Delegation of Board authority" which establishes those matters which it is considered appropriate remain within the overall control of the Board (or its committees) and those which are delegated to the CEO (or onwards as appropriate). In addition to overall Group strategy, the Board approves the annual budget and retains control over corporate activity (mergers, acquisitions, partnerships, material disposals and investments) and material contract and financing decisions (over and above set value/credit-risk limits). The Board considers that the current authority remains appropriate for the Board.
Management's role is to implement the strategic plan established by the Board and to work within the corporate governance and internal control parameters established by the Board.
The Board has approved a schedule of matters reserved for its decision; specifically, the Board is responsible for:
- Guiding the Group’s long-term strategic aims, leading to its approval of the Group’s strategy and its budgetary and business plans
- Approval of significant investments, M&A and capital expenditure
- Approval of annual and half-year results
- Ensuring maintenance of a sound system of internal control and risk management (taking into consideration recommendations of the Audit and Risk Committee)
- Ensuring adequate succession planning for the Board and Executive management (taking into consideration the recommendations of the Nomination Committee)
- Determining the remuneration policy for the Directors and the senior management team (taking into consideration the recommendations of the Remuneration Committee)
Board focus during the year
- Strategy and Funding:
The Board work with management to identify and anticipate industry trends to ensure that the Group’s strategy is designed to address these trends as well as other industry dynamics, such as the competitive landscape.
The Board also reviewed relationships with the Group’s main partners and suppliers. Together with our Partners over the past five years, the Group successfully executed its strategy of becoming a leading provider of last mile rural broadband solutions through a combined offering of both satellite and fixed wireless products.
During FY20, the Board reviewed the Group's operating results and financial statements with management and the Group's external auditors. The Board also reviewed and approved the budget and operating plan for the financial year. This was given even more attention including multiple scenarios run and sensitivity analysis performed as we navigate through the COVID-19 Pandemic.
The Board continues to review its governance structure following the adoption of the QCA Code to ensure, where possible, the Company is compliant with the requirements applicable to a publicly listed Group and the QCA Code. In addition, the control environment was improved with the recruitment of additional Financial and systems resources.
- Business performance:
In FY20, the Board received and reviewed reports from management on the performance of the Group’s business. The Board engaged in discussions with management on various aspects of business performance, Key Performance Indicators, including business drivers, industry trends, risks, opportunities and the competitive landscape.
The Board has established Committees as follows:
- Audit and Risk Committee (chaired by Phil Moses) to oversee financial reporting, internal control and the management of the risks the Group faces. The Audit and Risk Committee will, inter alia, determine and examine matters relating to the financial affairs of the Company including the terms of engagement of the Company’s auditors and, in consultation with the auditors, the scope of the annual audit. It receives and reviews reports from management and the Company’s auditors relating to the half-yearly and annual accounts and the accounting and internal control systems in use throughout the Group. The Audit Committee intends to meet at least twice per year.
- Nomination Committee (chaired by Michael Tobin OBE) to lead the process for appointments to the Board. The nominations committee will meet at least once each year and is responsible for reviewing the structure, size and composition of the Board, succession planning and nominating candidates to fill board vacancies and evaluating the performance of the Board.
- Remuneration Committee (chaired by Michael Tobin OBE) which has the responsibility of helping to develop and manage the Group’s Remuneration Policy. The committee will meet at least twice each year and is responsible for reviewing the performance of the executive directors, setting their remuneration levels, determining the payment of bonuses and considering the grant of options under the share option schemes.
The committee reports can be found on pages 59 to 71 of the Company’s 2020 Annual Report, and each committee’s full terms of reference are available on our website.
6. HAVING APPROPRIATE EXPERIENCE, SKILLS AND CAPABILITIES ON THE BOARD
Board Composition, Qualification and Experience
The Board currently comprises six Directors. The number and/or composition may be changed where it is felt that additional expertise is required in specific areas, or when an outstanding candidate is identified.
The composition, experience and balance of skills on the Board are periodically reviewed to ensure that there is the right mix on the Board and its Committees, and they are working effectively. The Board comprises a Non-Executive Chairman (who, for the purposes of the QCA Code was independent on appointment), three Non-Executive Directors, two of whom are considered by the Board to be independent for the purpose of the QCA Code. There are two Executive Directors who are considered by the Board to be non-independent for the purpose of the QCA Code.
The current members of the Board have a wide range of skills and experience. The Board believes that a membership that combines detailed knowledge of the Group’s operations, the technology industry and leading a Group listed on the London Stock Exchange are crucial to the Board's ability to lead the Group successfully.
The composition of the Board is determined using the following principles:
- a majority of the Board should be non-executive Directors. Currently there are 4 non-executive Directors and 2 executive Directors.
- the role of Chairman is to be filled by a non-executive Director,
- the Board should have enough Directors to serve on various committees of the Board without overburdening the Directors or making it difficult for them to fully discharge their responsibilities,
- Directors appointed by the Board are subject to election by shareholders at the following annual general meeting and thereafter one third of Directors are subject to retire by rotation each year.
The Company Secretarial service is provided by a professional services company in order to conform to requirements.
Key Board Roles
Chief Executive Officer
Leads the Board
Leads the management team
Promotes highest standard of corporate governance
Supports the Chairman to ensure appropriate governance standards spread through the Group
Acts as intermediary between Directors when required
Challenges strategic matters
Raises strategic initiatives aimed at improving shareholder returns in line with the strategic direction of the Group
Challenges strategic initiatives presented by Executive Directors as well as assists in the development of Group Strategies
Promotes a culture of openness and debate
Oversees implementation of all Board-approved actions
Available to stakeholders to address any concerns or issues that they feel have not adequately been addressed through usual channels of communication.
Encourages constructive relations between Executive and Non-Executive Directors
Ensures that the Board is made aware of the employees' views on relevant issues
Integral role in succession planning
Facilitates effective contributions by the Non-Executive Directors
Develops proposals for the Board to consider in conjunction with fellow Executive Directors
Non-Executive Director Independence
The Board considers and reviews the independence of Non-Executive Directors on an annual basis as part of the Directors’ performance evaluation. In carrying out the review, consideration is given to factors such as their character, judgement, commitment and performance on the Board and relevant committees and their ability to provide objective challenge to management.
The Board considers its Independent Non-Executive Directors bring strong judgement and considerable knowledge and experience to the Board’s deliberations.
As noted in the 2020 Annual Report on Remuneration on page 61, Michael Tobin OBE, and Paul Howard all participate in the Group’s share option plan. Notwithstanding this, both Michael Tobin and Paul Howard are considered independent in character and judgement, this is evidenced by the valuable contributions they make at Board and Committee meetings, and in particular, the knowledge and experience they bring to the roles as Chairman, Non-Executive Directors and Committee members. In addition, whilst Christopher Mills is considered Non-Independent Christopher provides enormous contribution guidance and support to the business and is however considered to be independent in character and judgement.
Appointment and Tenure
All Non-Executive Directors serve on the basis of letters of appointment which are available for inspection upon request. The letters of appointment set out the expected time commitment of Non-Executive Directors who, on appointment, undertake that they will have sufficient time to meet what is expected of them. Non-Executive Directors are appointed for an initial three-year term and the continuation of their appointment is conditional on satisfactory performance and subject to annual re-election at the Group’s Annual General Meetings.
Executive Directors serve on the basis of service agreements which are also available for inspection upon request. Further details on the Executive Directors’ service agreements are included in the 2020 Annual Report on Remuneration, on page 61.
The Chairman is responsible for the induction of new Directors and ongoing development of all Directors. The Board received tailored training as appropriate for service on a listed Company Board. New Directors receive a full, formal and tailored induction on joining the Board designed to provide an understanding of the Group’s business, governance and key stakeholders. The induction process typically includes an induction pack, operational site visits, meetings with key individuals and the Group’s advisors, and briefings on key business, legal and regulatory issues facing the Group.
As the business environment changes, it is important to ensure the Directors’ skills and knowledge are refreshed and updated regularly. Accordingly, the Nomad ensures that updates on corporate governance, regulatory and technical matters are provided to Directors at special sessions in between formal Board meetings. In this way, Directors keep their skills and knowledge relevant so as to enable them to continue to fulfil their duties effectively.
Information and Support Available to Directors
All Board Directors have access to the Company Secretary, who advises them on Board and governance matters. The Chief Executive Officer, Chief Financial Officer and the Company Secretary work together to ensure that Board papers are clear, accurate, delivered in a timely manner to Directors, and of sufficient quality to enable the Board to discharge its duties. As well as the support of the Company Secretary, there is a procedure in place for any Director to take independent professional advice at the Group’s expense in the furtherance of their duties, where considered necessary or advisable.
Following recommendations from the Nomination Committee, taking into account the results of the Board's performance evaluation process, the Board considers that all Directors continue to be effective, committed to their roles and have sufficient time available to perform their duties. In accordance with the Company’s Articles of Association one third of Directors are to retire by rotation excluding those appointed during the year and those re-elected at the Group’s AGM.
Directors’ Conflicts of Interest
Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Company. Where the Board believes that a significant conflict exists, the Director concerned is either not present or does not take part in discussions and voting at the meeting whilst the item is considered.
Directors have a statutory duty to avoid situations in which they have, or may have, interests that conflict with those of the Company, unless that conflict is first authorised by the Directors. This includes potential conflicts that may arise when a Director takes up a position with another Company. The Company’s Articles of Association allow the Board to authorise such potential conflicts, and there is in place a procedure to deal with any actual or potential conflict of interest. The Board deals with each appointment on its individual merit and takes into consideration all the circumstances.
All other appointments have been authorised by the Board and have been included in the conflicts register.
Independent professional advice and access to Company information
Each Director has the right of access to all relevant Group information and to the Group’s management and, subject to prior consultation with the Chairman, may seek independent professional advice at the Group's expense. A copy of any advice received by the Director is to be made available to all other members of the Board.
7. EVALUATING BOARD PERFORMANCE
Board Evaluation and Effectiveness
The Board and its Committees were formed upon listing in May 2015 and are reviewed from time to time. A Board Effectiveness Review was carried out at the beginning of 2020 with the results being analysed and reported to the Board. A small number of proposed recommendations were made and are being implemented by the Board.
8. ETHICAL VALUES & BEHAVIOURS
The Company operates a corporate culture that is based on ethical values and behaviours. The Executive Directors (comprising Andrew Walwyn and Frank Waters) communicate regularly with staff through meetings and messages to ensure best-in-class ethical standards and to provide clear guidance on how the members of staff are expected to behave towards their colleagues, suppliers, customers, shareholders and on their wider responsibilities to the communities within which they operate.
9. MAINTAINING GOVERNANCE STRUCTURES AND PROCESSES
The Chairman is responsible for leadership of the Board, ensuring its effectiveness and setting the agenda for Board meetings. Once strategic objectives have been agreed by the Board, it is the Chief Executive Officer’s responsibility to ensure they are delivered upon. The day-to-day operations of the Group are managed by the Chief Executive Officer and the Chief Financial Officer.
The division of responsibilities between the Chairman, Chief Executive Officer and Non-Executive Directors is set out in writing in their contracts and agreed by the Board. The roles of the Chairman and the Chief Executive Officer are separate with a distinct division of responsibilities. The partnership between Michael Tobin OBE and Andrew Walwyn is based on mutual trust and facilitated by regular dialogue between the two. The separation of authority enhances independent oversight of the executive management by the Board and helps to ensure that no one individual on the Board has unfettered authority.
For the roles and responsibilities of the Board please see section 6 on page 50 of the Company’s 2020 Annual Report.
10. COMMUNICATING WITH SHAREHOLDERS AND OTHER RELEVANT STAKEHOLDERS
Responsibility for shareholder relations rests with Andrew Walwyn, the Group's Chief Executive Officer. He ensures that there is effective communication with shareholders and is responsible for ensuring that the Board understands the views of shareholders. Andrew is supported by the Group's corporate brokers with whom he is in regular dialogue. As a part of a comprehensive investor relations programme, formal meetings with investors are scheduled to discuss the Group’s interim and final results. In the intervening periods, the Group continues its dialogue with the investor community by meeting key investor representatives and holding investor roadshows as appropriate.
Under AIM rule 26 the Company publishes a comprehensive suite of information on the Company’s website.
The company regularly meets with its key stakeholder, Santander, quarterly and with core suppliers bi-monthly.
This information was last updated on 7 July 2021