Eleco plc adheres to the Quoted Companies Alliance Corporate Governance Code for AIM listed companies.

The Board of Directors, which consists of the Non-Executive Chairman, Chief Executive Officer and independent Non-Executive Directors, meets at least ten times throughout the year.

The Directors have access to independent professional advice in executing their duties on behalf of the Company.

Our corporate governance is broken down into 10 main principles.

Principle 1: Establish a strategy and business model which promote long-term value for shareholders.

Growth
Expanding Eleco’s sales and marketing capabilities, channel capacity and operational territories. Transitioning the business to a subscription pricing model.


Stability
Continuing to strengthen Eleco’s financial position, whilst consolidating and simplifying its operations.

Eleco’s customers range significantly from main contracting companies, house builders, retailers, product manufacturers, staircase producers, architects and trades. Within these organisations, software users include project planners, estimators, property managers, designers, architects, engineers and maintenance managers. The UK government BIM mandate is gaining adoption internationally and Elecosoft is delivering key elements to the BIM process including project scheduling, cost estimating, building and specification management and asset maintenance. The construction sector is seeing changes as it digitises; companies seek to invest in technologies for the long‐term to deliver time and cost certainty, accuracy of information and de‐risk their projects.

The engineering and manufacturing industry, where Eleco also delivers specialist software solutions, is continuously seeking efficiencies in production. The industry commits to long‐term suppliers that deliver innovative and value-added applications.


Technology strategy
Eleco holds a broad technology portfolio which consists of desktop, web and mobile applications, 2D and 3D visualisation technology and sophisticated database systems. The skills are drawn from in‐house development teams based in the UK, Sweden and Germany.

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Principle 2: Seek to understand and meet shareholder needs and expectations.

The Group seeks to maintain and enhance good relations with its shareholders through a number of scheduled activities throughout the financial year including:

  • Interim and annual reports
  • Public announcements
  • Annual General Meeting

The Company’s interim and annual reports are supplemented by capital market presentations and through public announcements to the market on technological, commercial, and financial progress.

The Non-Executive Chairman, the CEO and CFO are primarily responsible for maintaining dialogue with shareholders, supported by the Company’s Nomad and broker (finnCap) and financial PR advisers (SEC Newgate). Communication with shareholders is given high priority by the Board. The CEO and CFO have meetings with representatives of institutional shareholders and hold analyst briefings at least twice a year, following the announcements of the interim and full year results, but also on request at other times during the year as necessary. Following these meetings, the Company’s Nomad provide independent and anonymised feedback to the Board. The Company’s financial PR advisers also provide anonymised feedback to the Board on views of journalists and analysts.

The AGM is the principal forum for dialogue with private shareholders, and we encourage all shareholders to attend and participate. The Non-Executive Chairman together with all Executive and Non-Executive Directors as well as staff members, attend the AGM and are available to answer questions raised by shareholders. Where feedback is received directly from shareholders, this is brought to the attention of the Board.

The Board Directors also attend private investor events to provide a forum to meet the management team.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long term success.

The Board established a new ESG Committee in 2021 to specifically consider the impact of its decision making on the community.

Employees
The Board recognises that an essential part of its continued success is the support and involvement of its employees.

The Company supports communication through internal social media, internal video, audio and messaging, shared calendars, and team collaboration tools. Any employee can contact anyone within the Company through these tools.

Senior management meet regularly throughout the year to discuss business progress against Company and business objectives. Training is provided where necessary to enhance job performance and aid development. The Company reviews the benefits offered to employees annually.


Environment
The nature of Eleco’s software development business does not have a substantial impact on the environment compared with its former manufacturing businesses. However, the Company continues to recognise its activities that have an impact on the environment and acknowledges its responsibility to ensure it is minimised. The new ESG Committee has a particular focus on this and is reviewing Eleco’s activities and impact on the environment.


Ethics and values
Eleco aims for job satisfaction for all its employees, a safe and secure working environment and the feeling that their efforts are recognised with opportunity to develop their full potential. The Company recognises its customers’ needs for accuracy, customer service and quality of support at an affordable price.

Further details of how the Company engages with its stakeholders and the influence that such engagements have on its decision making as a Board can be found in the section 172 Statement within each year’s Annual Report and Accounts.

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation.

Internal control and risk management
The Board has overall responsibility for the Group’s system of internal control and for monitoring its effectiveness. However, such a system is designed to manage rather than eliminate the risk of failure and by its very nature can only provide reasonable and not absolute assurance against material misstatement or loss.

The Board has identified significant risks that the Group faces, key elements of the system of internal controls.

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Principle 5: Maintain the board as a well-functioning, balanced team led by the chair.

Composition of the Board

The Board now comprises the Non-Executive Chairman, three Independent Non‐Executive Directors (including the Senior Independent Director) and one Executive Director, being the CEO (the CFO having stepped down on 7 February 2022). As of the date of writing this, an interim CFO is covering all the usual duties of the CFO and a recruitment process for a permanent CFO is ongoing. The gender balance of the Board is 60% Male and 40% Female.

The Non-Executive Chairman is responsible for the effective leadership, operation and governance of the Board and its Committees. She ensures that all Directors contribute effectively in the development and implementation of the Company’s strategy whilst ensuring that the nature and extent of the significant risks the Company is willing to embrace in the implementation of its strategy are determined and challenged. The Chief Executive Officer is responsible for the management of the Group’s business and for implementing the Group’s strategy.

Each of the Non‐Executive Directors is considered independent of management and free of any relationship that could materially interfere with the exercise of their independent judgement. At the date of appointment the Independent Non‐Executive Directors were assessed for independence against the main Corporate Governance code issued by the FRC in April 2016:

  • Has not been an employee of the Group in the last five years;
  • Has not had a material business relationship with the Group in the last three years;
  • Does not receive any remuneration other than directors’ fees and does not participate in the option scheme or is a member of the Group pension scheme;
  • Does not have any family ties with the company’s advisors, directors or senior employees of the Group;
  • Does not hold cross directorships or has significant links with the directors through the involvement with other companies or bodies;
  • Does not represent a significant shareholder;
  • Has not served on the Board for more than nine years.

The Board has established Audit, Remuneration and Nomination committees, as well as a new ESG Committee for 2022. The number of Board and Committee meetings and attendance records of Directors are set out in the Annual Report and Accounts.

In line with corporate governance best practice, the Company has chosen for all Non-Executive Directors along with the Executive Directors to stand for re-election at each Annual General Meeting.

Principle 6: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities.

The Board has ensured that both its Executive and Non‐Executive Directors have a wide range of skills in management, finance and technical expertise.

Serena Lang MBA34
Non-Executive Chairman

Serena was appointed to the Board as a Non-Executive Director in 2014 and became Non-Executive Deputy Chairman in May 2017.  In September 2020, she was appointed Executive Chairman and after a period of twelve months is now Non-Executive Chairman. Serena’s distinguished and multifaceted career includes working as an Executive Consultant at E&Y, where she was heavily involved in client M&A and integration activities, then onto BP’s group leadership team where she was VP Transformation in the downstream and latterly onto Invensys Plc (now part of Schneider Electric) running the highly profitable £130m North Europe and Africa Division of their international software and process businesses as well as being the VP in charge of the BP account globally.

Serena brings a depth of experience to bear on the long term strategy of the business, international growth, merger, and acquisitions as well as software development.

Time commitment: 4-6 days per month


Jonathan Hunter BBus. BMm.4
Chief Executive Officer

Appointed to the Board in June 2016 and with a bachelor’s degree in Business Management and Multimedia, Jonathan is responsible for implementing the Group’s strategy and has played a major part in the Group’s M&A activity since the commencement of his directorship. Having held a number of senior management positions within Eleco plc since joining in 2010, he played a fundamental role in the transition to a software group during and post divestment of the Building Systems division. His appointment as interim Chief Executive Officer in September 2020, which was made permanent in February 2021, follows three years as Chief Operating Officer with the Group.

Jonathan is a member of the Institute of Directors and has continued to attend relevant professional training and coaching throughout the year.

Time commitment: Full time.


Dr. Annette Nabavi MA (Oxon), Doc. de 3ieme cycle (Dijon) 1234*
Senior Independent Non‐Executive Director

Dr. Nabavi has held several Non-Executive Director roles, including a seven-year tenure at AIM-listed Maintel Holdings Plc, a cloud and managed services company, where she also chaired the Remuneration Committee. She has substantial experience in this area through her involvement with the Quoted Companies Alliance (QCA), where she supported the update to the Remuneration Committee Guide. In 2018, she was shortlisted for The Sunday Times’ Non-Executive Director Awards as AIM Director of the Year.

Time commitment: 2-4 days per month


Paul Boughton FCA BSc 1234*
Non‐Executive Director

Appointed as a Non-Executive Director in March 2021, Paul is Chair of Quartix Technologies plc, the telematics and vehicle analytics company. He has 30 years of executive experience in identifying, negotiating and completing acquisitions in the USA and Europe. Paul spent 13 years as Business Development Director for Spectris plc, and subsequently held similar positions at IMI plc, Consort Medical plc and Brammer plc. He was a Non-Executive Director of London Bridge Software plc and Raymarine plc earlier in his career. Paul has a BSc in Business and Managerial Economics from the University of Hull and is a Fellow of the Institute of Chartered Accountants.

Time commitment: 2-4 days per month


Mark Castle FRICS 1234*
Non‐Executive Director

Mark Castle is currently a Non-Executive Director of Mace Group, a global construction, property investment, consultancy, and facilities management business, which he joined in 2005. Working as Chief Operating Officer until earlier this year Mark oversaw Mace Group’s construction growth from start-up to becoming a £1.6 billion revenue company within the group which operates in over 80 countries with 6,500 employees.

Time commitment: 2-4 days per month


*Independent NonExecutive Director, 1Member of the Audit Committee. 2Member of the Remuneration Committee. 3Member of the Nominations Committee 4Member of the ESG Committee

Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement.

The Board evaluation process

The performance of Executive Directors is reviewed on an annual basis by the Remuneration Committee. The review looks at the individual and the Group’s performance as well as any feedback from the other Board members including the Chairman. This review is discussed with each individual Director and forms the basis for any additional training or development that may be required.

The Board considers board evaluation as critical to sound corporate governance and sustainability and considers that a robust evaluation process will create transparency, better decision making, stronger culture and more effective meetings. To this end the Board is now using an external board evaluation platform to facilitate this process, which is QCA and Wates Principals compliant. This will provide a 360˚ evaluation and will foster top team alignment and will influence our development as a board in future years.

Training of Directors
Directors are required to keep their skills up to date in accordance with their professional qualifications. Non‐Executive Directors and Executive Directors are encouraged annually to undertake relevant training, courses are circulated to the Board by the Company Secretary or the Board members can identify courses themselves.

Succession planning

During 2021, the Board has been refreshed and updated following a process of identifying the preferred skills and capabilities needed to deliver the growth strategy. Also during 2021 and into 2022 a diverse Executive Leadership Team has been formed to provide a pool of skilled talent for Executive succession opportunities. During 2021 the members of the Executive team received leadership training and were given personal development opportunities. The Company considers succession planning as very important and continues to monitor the succession requirements of both executive and non-executive directors of the Board, in light of the Company’s overall needs.

Principle 8: Promote a corporate culture that is based on ethical values and behaviours.

The Group’s medium and long‐term success is underpinned by the Group’s employees and its corporate culture. Company culture is based on agile methodology supported by structured business targets and an enduring commitment to delivering customer satisfaction which drives the Group’s recurring revenues. Reputation is key to driving success and the Company promotes ethical behaviours to maintain its reputation within the industry. Teamwork and working as one is supported by investment in Group-wide software communication systems that allow group collaboration.

The Company operates a flat structure with all staff having access to discuss matters with the Executive Management Team. Management teams meet monthly to promote communication, teamwork, and agility.

The Company has a long‐term incentive plan for Directors and senior management to reward performance.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board.

The Chairman, along with the Senior Independent Director, the Executive Directors and the Company Secretary, ensure that the Board functions effectively and has established Board processes designed for this purpose. Key aspects of these processes are:

  • The Board meets at last ten times during the year. These meetings, together with any Committee meetings, are generally held at the Group’s Head Office in London.
  • Each regular, scheduled Board meeting has an overarching theme. These include the annual budget, Group business strategy, interim and final results.
  • Executive Directors and members of the senior management team make presentations covering progress against current strategy, key objectives and ideas for future investment.
  • In addition, the Board maintains regular electronic communications and makes further decisions by way of written resolutions to address largely procedural issues  between scheduled Board meetings. An example of this would be the grant of clearance to deal for PDMRs.
  • To enable the Board to discharge its duties, all Directors receive appropriate and timely information. Briefing papers are distributed by the Company Secretary and made available via a Board portal to all Directors usually four working days in advance of Board and committee meetings.
  • A monthly reporting pack containing management accounts with commentary and reports from each Executive is distributed to the Board on a monthly basis.
  • Meetings are held between the Non-Executive Chairman and the Non‐Executive Directors throughout the year, without the Executive Directors being present, to discuss appropriate matters, as necessary.
  • Both Executive and Non-Executive Directors are encouraged to undertake annual training in furtherance of their specific roles and general duties as a Director and to keep their skills up to date and relevant to the Group. This includes but is not limited to attending meetings and workshops run by the London Stock Exchange and the Quoted Companies Alliance.
  • The Chairman ensures that the Directors take independent professional advice where they judge it necessary to discharge their responsibilities as Directors at the Group’s expense. All members of the Board have access to the advice of the Company Secretary.

Matters reserved for the Board

The Board is responsible to shareholders for the proper management of the Group. There is a formal schedule of matters specifically reserved for the Board’s decision that covers key areas of the Group’s affairs, which include:

  • Overall responsibility for the strategy of the Group;
  • Corporate governance;
  • Review of trading performance and forecasts;
  • Risk management;
  • Board membership;
  • Communications with shareholders;
  • Approval of major transactions, including mergers and acquisitions; and approval of the financial statements and annual operating and capital expenditure budgets.

A table on the Directors’ attendance at meetings during the year is included in each year’s Annual Report and Accounts.

The Board operates a number of subcommittees, Audit, Remuneration, Nomination and ESG. Terms of reference for each committee can be found by using this link or by referring to Principle 4 above.

Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.

Having regard for Principle 2 above, the Company holds investor roadshows following the release of its year end and interim results. The Company also hosts analyst meetings to promote the business and releases regular announcements to keep investors informed on the Company’s latest progress and performance.

All shareholders are invited to make use of the Group’s Annual General Meeting to raise any questions regarding the management or performance of the Company. In 2021, the Company held its AGM on 6 May. Due to restrictions relating to the Covid-19 pandemic, all shareholders were invited to attend the AGM virtually by a written request and the company encouraged the use of proxy voting. In 2022, the Company will hold its AGM on 25 May and will be welcoming shareholders back to an in-person format.