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Chair’s Introduction
Dear Shareholder,
As Chair of the Board, it is my responsibility to ensure that the Group has both sound corporate governance and an effective Board, including leading the Board effectively, overseeing the Group’s corporate governance model, communicating with shareholders and to ensure that the highest levels of corporate governance are maintained throughout the Group and also at Board level.
As an AIM-quoted company, the Board, has decided to adopt the Quoted Companies Alliance Corporate Governance (the “QCA Code”), which requires AIM-quoted companies to adopt a ‘comply or explain’ approach in respect of the application of guidance contained within. The following report sets out how we have applied the 10 principles of the QCA Code. It also covers how the Board and its committees operated in 2023 and how we have continued to comply with the principles of the QCA Code.
In addition to our adherence to the current QCA Code, it is important to note that a new iteration of the QCA Corporate Governance Code is set to come into effect. This updated code reflects evolving best practices and aims to further enhance corporate governance standards for AIM-quoted companies like Boku. We are actively preparing to align with these revised guidelines, ensuring our governance practices remain at the forefront of industry standards, fostering transparency, accountability, and trust among our stakeholders. The Board of Directors is fully committed to achieving high standards of governance expected for the size and stage of development of the Group.
Dr. Richard Hargreaves
Non-executive Chairman
19 March 2024
Statement of Compliance
Application of the QCA Corporate Governance Code
Deliver Growth
| Principle | Application | |
|---|---|---|
| 1 | Establish a strategy and business model which promote long-term value for shareholders | At Boku we seek to develop an entrepreneurial and supportive culture across our business so that these values are integral to everything else we do. An explanation of the Company’s business model and strategy, including key challenges in their execution (and how those will be addressed) is included on pages 4 to 6 of our Annual Report. The Chief Executive Officer is responsible for the leadership and day-to-day management of the Group, including formulating and recommending the Group’s strategy to the Board and executing the approved strategy. |
| 2 | Seek to understand and meet shareholder needs and expectations | The Board is committed to regular, open and effective communication with shareholders to ensure that the Company’s strategy and performance are clearly understood. The Board engages with shareholders via a variety of channels and activities including the annual general meeting, updates to shareholders via its reporting and the regulatory news services, institutional and retail investor presentations and investor roadshows, all of which provide an opportunity for shareholders to engage directly with senior management and the Board. The main day-to-day engagement with shareholders and prospective investors is carried out by the Chief Executive Officer and Chief Financial Officer and from time to time by our Chair. During the year, meetings with analysts and institutional shareholders take place immediately after the results announcements, supplemented by ad hoc meetings and calls at other times. The Board encourages participation by shareholders at the Annual General Meeting where all Board members are present and are available to answer questions from shareholders. Regular market reports are prepared by Company’s Nominated Advisor and which are provided to the Board for consideration and discussion to ensure that the Directors have a clear understanding of shareholders’ views and expectations. The Board believes that they have successfully engaged with the Company’s shareholders in the past and will continue to do so going forward. |
| 3 | Take into account wider stakeholder and social responsibilities and their implications for long-term success | The Board regularly considers resourcing requirements of the business including the key stakeholder relationships which give Boku its competitive advantage and thereby contribute to its long-term success. The key stakeholders are the skilled people employed by Boku, its merchant and carrier relationships, together with other service providers. These relationships are regularly monitored and discussed at senior Executive and Board meetings. Boku regularly approaches its key stakeholders for feedback through regular employee surveys, company wide all-hands meetings and progress workshops with merchants and carriers. Initiatives that have been developed following feedback include employee social events, updates to Company policies and improvements to the Company’s product offering. Our approach to the Group’s environmental and social responsibilities are described in the ESG Report on pages 50 to 57 of our Annual Report. |
| 4 | Embed effective risk management, considering both opportunities and threats, throughout the organisation | The Board retains overall responsibility for identifying the major business risks faced by the Group by setting both the framework and risk appetite of the Group, in line with best practice. Our risk management framework and approach to risk is summarised on pages 16 to 20 of our Annual Report. |
Maintain a Dynamic Management Framework
| Principle | Application | |
|---|---|---|
| 5 | Maintain the board as a well-functioning, balanced team led by the chair. | The QCA Code requires that Boards have an appropriate balance between executive and Non-Executive Directors and that each Board should have at least two Independent Directors. The Board is currently made up of an Independent Non-Executive Chair (Richard Hargreaves), one Executive Director: the Chief Executive Officer (Stuart Neal), three Independent Non-executive Directors (Charlotta Ginman, Meriel Lenfestey and Loren I. Shuster) and two Non-Executive Directors (Mark Britto and Jon Prideaux). The Board has sufficient members to contain the appropriate balance of skills and experience to effectively operate and control the business. The roles of the Chair and the Chief Executive Officer are separate, with their roles and responsibilities clearly defined. The Chair’s main responsibility is the leadership and management of the Board and its governance. He meets regularly and separately with the Executive and Non-Executive Directors to discuss matters for the Board. The Chief Executive Officer is responsible for the leadership and day-to-day management of the Group and executing the strategy of the Group as approved by the Board. The roles and responsibilities of the Chair, Chief Executive and any other Directors who have specific individual responsibilities or remits (e.g. for engagement with shareholders or other stakeholder groups) are set out on page 28 of our Annual Report. The Board holds at least six regular meetings per year and has also created separate Audit and Remuneration Committees comprising of Directors with the necessary skills and knowledge to discharge their duties and responsibilities effectively. Both Executive Directors are full time employees. Non-Executive Directors are required to devote sufficient time to prepare for and attend regular Board meetings, any ad hoc Board sessions, their Committee duties and other stakeholder engagement. Further details of the current Directors and a note of those who are considered to be independent are set out page 21 of our Annual Report. |
| 6 | Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities. | The Board is satisfied that its Directors have an effective and appropriate balance of skills and experience, and that there is a suitable balance between independence of character and judgement, and knowledge of the Company, to enable it to discharge its duties and responsibilities effectively. All directors are encouraged to use their independent judgement and to constructively challenge all matters, whether strategic or operational. The current Directors, their background and experience are described on pages 21 to 25 of our Annual Report. Collectively, our team has all the necessary skills and experience, to carry out the Group’s strategy and business model effectively. The Directors keep their skills up to date through appropriate training, including an annual refresher training on the AIM rules provided by the Nominated Advisor as well as receiving periodic updates on corporate governance matters. The Senior Independent Director is available to speak with shareholders concerning the corporate governance of the Company. The Company Secretary, Deepa Kalikiri is responsible for advising the Board on governance matters and ensuring that decisions of the Board in relation to governance matters are implemented. Charlotta Ginman assumed the role of Senior Independent Director on February 1, 2024. The Remuneration Committee engaged an external remuneration consultant to provide advice on the structure and presentation of Executive and Non-executive compensation. The latest review of Board effectiveness did not highlight any areas of concern. Additionally, neither the Chair nor Chief Executive have received any representations to this effect. |
| 7 | Evaluate board performance based on clear and relevant objectives, seeking continuous improvement. | In line with its standard practice, during the financial year, the Board undertook a formal annual evaluation survey of the Board’s performance and effectiveness, including that of Boku’s committees. The evaluation which was discussed by the Board demonstrated an overall positive performance by the Board and the committees, recognising both current areas of strengths as well as areas suggesting improvements where appropriate, such as increased focus on strategic matters at Board meetings. The Board evaluation process reviews performance against a set of criteria which includes Group strategy, board skillset, composition and succession planning, stakeholder engagement and the effectiveness of the Board committees. The criteria is reviewed to ensure that the evaluation survey remains relevant. Following a review of the survey by the Board, an ESG criteria was also added to the evaluation survey. Following completion of the Board evaluation survey, the Board reviews the composition of the Board and the committees and considers matters pertaining to its succession planning. Appropriate training is available to all Directors to develop their knowledge and skills to ensure they stay up to date on specific matters for which they have responsibility. The Board will engage an external consultant to conduct the next Board annual evaluation survey in Q2 2024. |
| 8 | Promote a corporate culture that is based on ethical values and behaviours | Boku’s culture is one of acting ethically and with integrity, not only in our business relationships but also in our relationships with our employees. We strongly believe that our people are what makes Boku great. Fostering a diverse, equitable, and inclusive workplace is crucial for our success. The Boku’s culture is guided by many different activities, which include regular senior management meetings and feedback following employee surveys. Such surveys provide an insight to the views of the workforce on Boku. The Boku’s policies set out its zero-tolerance approach towards any form of discrimination or unethical behaviour relating to bribery, corruption or business conduct in all jurisdictions in which it operates. In order to embed a culture of ethics and inclusiveness at Boku, we have implemented certain policies and training in the areas of recruitment diversity, equity and inclusion, whistleblowing and anti-bribery. An outline of the corporate culture promoted by the Board is set out in Boku’s website in the section headed “Our Values” (which can be viewed at: https://www.boku.com/careers The Chair and other Non-Executive Directors regularly meet with employees without Executive Directors present so as to gauge the health of Boku’s culture and allow opportunities for more open discussions by employees. More information in relation to diversity, equity and inclusion at Boku are described in the ESG Report on pages 50 to 57 of our Annual Report. |
| 9 | Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board | Formal Board meetings are held every two months to review strategy, management and performance of the group. Additional meetings between those dates are convened as necessary. We have two Board committees: the Audit Committee and the Remuneration Committee. The terms of reference of both these committees have been revised to reflect the principles of the QCA Code. The terms of reference can be viewed at https://investors.boku.com/reports-documents/ Due to the current size of the Group, the Board still considers a nominations committee is not required , any decisions relating to appointments to the Board will be a matter for the consideration of the whole Board. From time to time, ad hoc committees are set up by the Board to consider specific issues when the need arises. The roles and responsibilities of the Chair, Chief Executive and any other Directors who have specific individual responsibilities or remits (e.g. for engagement with shareholders or other stakeholder groups) are set out on page 35 of our Annual Report. The principal responsibilities of Board members are as set out below: Amongst other things the Chair is responsible for: • Promoting the highest standards of corporate governance and ethical leadership • Developing effective working relationships with the Executive Directors • Promoting effective relationships between all Board members • Setting the agenda for Board meetings and ensuring that sufficient time is devoted to the consideration of agenda items and that each Director can express their views on matters • Ensuring that the Board monitors and determines the nature of the significant risks the Company embraces in the implementation of its strategy • Ensuring the Company maintains effective communications with shareholders and other stakeholders and that the Board as a whole is made aware of shareholder and stakeholder issues and concerns. The Chief Executive is responsible for the following matters amongst others: • Developing and implementing strategy following approval by the Board • Reporting on a regular basis to the Board of progress in respect of strategy, Group performance and business matters • Developing the senior management teams and creating the appropriate organisational environment to deliver the strategy • Acting as the principal spokesman for the Company The Chief Financial Officer is primarily responsible for the delivery of high-quality information to the Board on the financial position of the Group. The Non-Executive Directors are responsible for providing a challenge to the Executives where required and to make the Board aware of their views on matters before Board decisions are made. They must be able to devote sufficient time to develop their knowledge and skills to be able to make a positive contribution to the Board. The Board has a schedule of matters reserved for the Board which requires the following key matters to considered and approved by the Board: • Strategy and overall management of the Group • Financial reporting and controls • Ensuring a sound system of internal controls • Approval of major capital projects and contractors • Communication with shareholders • Board membership and appointments • The Remuneration Policy • Delegated authorities • Corporate governance matters • Approval of key policies The Board and its committees receive appropriate and timely information before each meeting, a formal agenda is produced for each meeting, and Board and committee papers are distributed several days before meetings take place allowing all Board members to prepare effectively. Any Director can challenge proposals, and decisions are taken democratically after discussion. Any Director who feels that any concern remains unresolved after discussion may ask for that concern to be noted in the minutes of the meeting, which are then circulated to all Directors. Specific actions arising from such meetings are agreed by the Board or relevant committee and then followed up by management. The Board continues to receive departmental ‘deep dives’ during the Board meetings, which has strengthened the Board’s exposure to the executive committee and other senior management. The Board is satisfied that the governance arrangements for the business remain appropriate and that the delegations in place are effective and with strong oversight and controls. This is, of course, subject to regular Board and managerial oversight and review. |
Build Trust
| Principle | Application | |
|---|---|---|
| 10 | Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders | Reports on the work of the Board and its committees are set out in the Board and Committees page of the Company’s website here. Information about shareholder voting at the 2023 Annual General Meeting of the Company is set out on Boku’s website. The Group’s approach to investor and shareholder engagement is described under Principle 2 above. Annual Reports, Annual General Meeting notices, regulatory announcements, trading updates and other governance related materials for 2023 and previous years are available from the Company’s website. |