Corporate Governance
The Board has adopted the Quoted Companies Alliance (QCA) Corporate Governance Code in line with the AIM Rules requiring all AIM-listed companies to adopt and comply with a recognised corporate governance code.
Our values are based on being smart thinking, dynamic and collegiate. We act with integrity and demonstrably care about our clients and our staff. The Board believes this culture is key to creating a sustainable, growing business. This culture supports the Company’s core mission to provide the right financing options to manufacturers and their customers operating across the supply chain to grow their business. We have a clear business model and growth strategy to expand our business by offering more services to our existing and new clients.
It is the Board’s job to ensure that DF Capital is managed for the long-term benefit of all our clients, staff, shareholders, and our other key stakeholders, with effective and efficient decision making, including the maximising of revenue opportunities across DF Capital. Sensible corporate governance is an important part of that job, reducing risk and adding value to our business.
The Chair leads the Board and is responsible for directing the Company. He manages the Board agenda and ensures that all Directors have the capability, structure and support to effectively contribute their various talents and experience in the development and implementation of the Company’s strategy. The Chair is responsible for ensuring that the Board implements, maintains and communicates effective corporate governance processes and for promoting a culture of openness and debate designed to foster a positive governance culture throughout the Company.
As Chair of DF Capital, I take overall responsibility for ensuring that our corporate governance processes are implemented at all levels of the business and welcome the opportunity to review our internal processes and define our objectives to all stakeholders.
DF Capital’s application of the QCA Guidelines is detailed below through each objective. Further information is available in the Annual Report and Financial Statements and in the Admission Document.
The Board considers that it does not depart from any of the principles of the QCA Code.
Mark Stephens
Independent Chair
Establish a strategy and business model which promotes long-term value for shareholders
The Company’s strategy is to operate as a specialist commercial lending and personal savings bank. Providing lending solutions to businesses across the UK through supply-chain finance products, supported by deposits from it’s online personal savings products. The Company combines the benefits of both the traditional relationship banking model and developments in the fintech sector.
The Company’s key objective is to deliver a roadmap of ambition and a demonstrable record of execution to its shareholders. The Company’s focus is ensuring that the business plan is delivered.
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. At the AGM, the Chief Executive Officer will present on the DFC Group’s progress. The Chairs of each Board committee, together with all other Directors, will be available to answer any relevant questions raised by the shareholders.
For each vote, the number of proxy votes received for, against and withheld will be announced at the meeting. The results of the AGM will be announced through the Regulatory News Service (“RNS”) and subsequently published on the Company’s website.
Copies of our Annual Report and Accounts (and the notice of AGM) and the interim report 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:
investorrelations@dfcapital.co.uk
Take into account wider stakeholder and social 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 subsidiary (DF Capital Bank Limited). 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.
With regards to corporate social responsibility, the Company takes due account of any impact that its activities may have on the environment and seeks to minimise this impact wherever possible. The Company ensures full compliance with health and safety legislation relevant to its activities.
In operating its lending business, the Company is aware of the need to engage in responsible lending and the Board’s approach to risk mitigation helps ensure that this standard is met.
DFC Group internal policies include those relating to The Bribery Act 2018 and The Data Protection Act 2018 and there are internal policies on dealing in shares of the Company to ensure compliance with Market Abuse Rules of the AIM market.
Embed effective risk management, 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.
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. He is also responsible for the Board’s oversight of the Group’s affairs, which includes ensuring that the directors receive accurate, timely and clear information, and the effective contribution of the non-executive directors. He has overall responsibility for leading the development of the Group’s culture by the governing body as a whole.
Carl D’Ammassa is the Chief Executive Officer and is responsible for the day-to-day management and executive leadership of the business. His other responsibilities include the progress and development of objectives for the Group, managing the Group’s risk exposure, implementing the decisions of the Board and ensuring effective communication with all stakeholders and regulatory bodies. He has overall responsibility for the Group’s performance of its obligations under the Senior Managers and Certification Regime.
Balance
The Board is satisfied that it has an appropriate balance of personal and professional qualities, particularly given the breadth of previous finance experience. Biographies of each Director can be found on the Company’s website www.dfcapital-investors.com/who-we-are/board-management.
Independence
The Board currently consists of five Non-Executive Directors (four of whom are independent) and two Executive Directors.
The contracts of the Non-Executive Directors are available for inspection at all AGMs. The tenure of each of the Non-Executive Directors is less than nine years, which is in accordance with the QCA Code.
Commitment
The Board is satisfied that each of the Directors are able to allocate sufficient time to the Company to discharge their responsibilities effectively.
Attendance
Each calendar year, at least six Board meetings are scheduled with the expectation of each Director being present, in person or by telephone. The Board’s primary responsibilities are to provide leadership, set strategic objectives and develop robust corporate governance and risk management practices.
The Board Risk Committee meets at least six times a year to discuss the various risks the bank is facing in line with the wider environment. The Board Audit Committee and Remuneration Committee meet at least on a quarterly basis and at least two Nomination Committee meetings are scheduled each year. Full attendance is expected from each of the committee’s members, in person, virtually or by telephone.
Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
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.
Biographies of each Director can be found on the Company’s website www.dfcapital-investors.com/who-we-are/board-management.
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.
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.
Maintain governance structures and processes that are fit for purpose and support good decision-making by the board
The Board
The Board considers the most important management and policy matters, approves business strategy and is responsible for the long-term success of the Company. The Company maintains a formal schedule of matters reserved for the Board in line with the respective Terms Of Reference for each board and committee.
The Company ensures that the Board has a clear line of sight to the business where appropriate. All Directors receive regular and timely information on the Company’s operational and financial performance and all relevant information is circulated in advance of meetings.
Board Committees
The Board is supported by a number of committees including Audit, Remuneration, Risk and Nomination Committees. Each committee has access to resources, information and advice as it deems necessary, at the cost of the Company, to enable the committee to discharge its duties effectively.
The terms of reference for these committees is available on the Company’s website.
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. At the AGM in particular, shareholders are invited to ask questions of any of the Board members. A range of corporate information, including all the Company’s market announcements, is also available to shareholders and the public on its website.
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 9 March 2023
