Corporate Governance

STATEMENT OF COMPLIANCE WITH THE 2023 CORPORATE GOVERNANCE CODE

THIS INFORMATION WAS LAST REVIEWED AND UPDATED on 25 FEBRUARY 2025

The Board recognise that high standards of corporate governance underpin our continuing success and as a Board we acknowledge our responsibility in leading this process.  To this end, the Board has adopted the Quoted Companies Alliance Corporate Governance Code 2023 (the “QCA Code”) as the basis of the Group’s governance framework.  We have reviewed our policies and processes to ensure that they reflect the complexities of our business and, whilst acknowledging our size, are also capable of adding value as the business grows.

Whilst the Company is guided by the provisions of the QCA Code, in respect of my independence as Chairman, the Board gives regard to the overall effectiveness and independence of the contribution made by Directors to the Board and does not consider a Director’s tenure and participation in the Company’s share option Schemes in isolation to determine this independence.

Within Image Scan, we promote a culture of good governance in dealing with all key stakeholders: our employees, our customers, our suppliers and our shareholders. These disclosures describes our corporate governance structures and processes and how they have been applied throughout the Year.

Tim Jackson
Chairman, Image Scan Holdings plc

CORPORATE GOVERNANCE STATEMENT

The Board ensures that the Company maintains proper standards of corporate governance and that the principles of best practice, as set out in the QCA Code 2023, are followed so far as is practicable and appropriate to the size and nature of the Group and the constitution of the Board. Set out below is a summary of how the Group is applying the key requirements of the Code and an explanation of where it has chosen not to fully comply.

Principle 1 – Establish a purpose, strategy and business model which promote long-term value for shareholders

The purpose, strategy and business model of the Group are set out in the Strategic Report on pages 5 to 6 of the Annual Report. These are reviewed and approved by the Board on a periodic basis.

The Executive Directors are responsible for implementing the strategy and managing the business at an operational level and report to the Board on a monthly basis.

Principle 2 -Promote a corporate culture that is based on ethical values and behaviours

The Board established the culture of the business by the setting of values and seeks to set an example which is consistent with the vision and objectives of the Group.  Our key values are

• Driven by customer needs – focussing on the needs of our customers and being a valued, long-term, trusted partner
• Innovative – in everything that we do, with a focus on commercial success and raising the bar

These values flow down though a set of specific initiatives, designed to deliver strategic objectives. These initiatives are driven personally by the Chief Executive Officer and progress is reported to the Board and discussed with employees at periodic briefings.

The Board reserves for itself a range of key decisions such as strategy, acquisitions, significant contracts and internal controls, to ensure it retains proper direction and control of the Group, whilst delegating authority to individual Directors who are responsible for the executive management of the business.

Principle 3 – Seek to understand and meet shareholder needs and expectations

The Board recognises that Image Scan communicates with its shareholders principally through its website and the Annual Report. The Chief Executive Officer and Chairman makes themselves available to major shareholders on request and periodically attends meetings with shareholders. 

The main areas of discussion in the year are share price and trading and how the strategic direction will deliver improvements.  While environmental considerations are recognised as part of the long-term delivery of strong performance, given the Group’s low carbon impact, this is not an area of focus for our investors.

Principle 4 – Take into account wider stakeholder interests including social and environmental responsibilities, and their implications for long-term success

Key stakeholders identified by the Board are set out on page 20 in the s172 Stakeholder Engagement Impact Statement of the Director’s Report and the social and environmental responsibilities on page 12 of the ESG Report in the Annual Report.

The Group considers feedback received from key stakeholders, when making decision making or making amendments to working arrangements and operational plans of the Group and where such amendments are consistent with the Group’s longer-term strategy.  The Chief Executive takes responsibility for driving this work.

Through the various procedures and systems it operates, the Group ensures full compliance with health and safety and environmental legislation relevant to its activities as well as maintain quality certification ISO9001:2015.  Recognising the impact of cybercrime, the Group is also certified for Cyber Essentials.

Principle 5 – Embed effective risk management, internal controls and assurance activities, considering both opportunities and threats, throughout the organisation

Details of the principal risks and how they are mitigated, are set out in the Directors report on page 10 of the Annual Report.

As set out in the Risk Management process on page 10 of the Director’s report in the Annual Report, the Board has a systematic approach to risk management, setting out both the appetite and tolerance to risk as well as identifying key areas of risk, designing suitable controls to manage the risk and identifying where assurance can be obtained about the effectiveness of those controls. 

Given the size of the Group, these controls rely to a high degree on the professional competence of the team, including the Executive Directors and the Board receives periodic reports from and meets with management to review these controls.  The review of the effectiveness of the controls is delegated to the Audit Committee as set on pages 21 to 22 of the Annual Report.  The Audit Committee also considers the independence of external auditors approving any work carried out by Dains Audit Ltd outside of the statutory audit.

Principle 6 – Maintain the Board as a well-functioning, balanced team led by the Chair

The Board of Image Scan is comprised of the Chairman, one further Non-Executive Director and two Executive Directors.  The skills and experience of the Board are set out in their biographical details on the Investor Relations website https://www.ish.co.uk/investor-relations/board-of-directors. The combined experience and knowledge of each of the Directors gives them the ability to constructively challenge the strategy and to scrutinise performance.

Whilst the Company is guided by the provisions of the Code in respect of the independence of directors, it gives regard to the overall effectiveness and independence of the contribution made by directors to the Board in considering their independence and does not consider a director’s period of service in isolation to determine this independence. The Board acknowledge that Mr Jackson, who joined the Board on 22 September 2014, has served for longer than the recommended nine year period and participates in the Company’s share option scheme.  This is the only performance related pay that a non-executive director receives.

The Board’s role is to establish the strategic objectives and policies; oversee all aspects of the Group’s finances and operations; continuously review performance and controls; manage risk; decide on key business transactions and manage the interests of stakeholder groups.  The internal formal Board evaluation process considers whether the board contains the right mixture of experience, skills and capabilities to deliver its strategic objectives.

All Board members are fully aware of their fiduciary duty under company law and seek at all times to act in the best interests of the Group as a whole. Each director has signed up to a code of Conduct which commits to them to the highest standards of behaviour.

At every AGM, one-third of the Directors must retire by rotation.   While the Code recommends that all directors stand for re-election each year, the size of the Board means that directors typically stand for re-election every other year.

The Company does not have a director designated as the Senior Independent Director. In light of the size of the Board, the Board does not consider it necessary to appoint a Senior Independent Director at this stage but will nevertheless keep this under review as part of the Board’s evaluation of Board effectiveness.

Attendance at Board and its Committee meetings

The following meetings were held during the Year.

*Indicates the Chair of the committee

In the Year, the terms of reference of each committee were updated so that the membership of the committees is restricted to Non-Executive Directors but that at least one Executive Director will be in attendance at each committee meeting.

The terms of reference of the Audit Committee stipulate that three meetings per year should be held, however, given the size of the board, some of the Audit Committee business was conducted at the full Board, including review of the Risk Management system and Internal Controls.

Principle 7 – Maintain appropriate governance structures and ensure that individually and collectively the directors have the necessary up-to-date experience, skills and capabilities

The skills and experience of the Board are set out in their biographical details on the Investor Relations website https://www.ish.co.uk/investor-relations/board-of-directors. The Board also has access to external advisors where necessary although none was sought in the year.

The structure of the Board is subject to regular review to ensure that it is appropriate for the Group. The Directors’ varied backgrounds and experience give Image Scan a good mix of the knowledge and expertise necessary to manage the business effectively.

The Board has twelve scheduled meetings a year, but meets more frequently if required, and, together with the Audit, Remuneration and Nominations Committees, deals with all important aspects of the Group’s affairs. The Board receives timely information in a form and of a quality appropriate to enable it to discharge its duties.  All Board Committees have their own terms of reference, which are available from the Company Secretary. 

Audit Committee

The Audit Committee comprises Tim Jackson, who acts as the Chairman, and Sunil Vadgama. Tim Jackson is considered to have recent and relevant financial and legal knowledge and experience. 

The Audit Committee has three scheduled meetings per year.

The Audit Committee report can be found on pages 21 and 22 of the Annual Report.

Remuneration Committee

The Remuneration Committee comprises Sunil Vadgama who acts as Chairman and Tim Jackson.

The Remuneration Committee normally meets at least once a year.

The Remuneration Committee report can be found on page 24 of the Annual Report.

Nominations Committee

The Nominations Committee compromises of Tim Jackson, who acts as the Chairman and Sunil Vadgama.

The Nominations Committee normally meets at least once a year.

The Nomination Committee report can be found on page 23 of the Annual Report.

Principle 8 – Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

The Board undertakes an annual evaluation under a formal, self-evaluation process. This process has led to a number of actions, including alternative sources of information that the Board receives, and the Board defined initiatives which are reviewed regularly at Board meetings. The process focuses closely on objectives and targets for improving performance. As part of the review of the governance arrangements, this self-evaluation review was considered and updated.

No externally facilitated review has been undertaken nor do the Board consider that the costs of such a review would be a cost effective way to evaluate Board performance.

Principle 9 – Establish a remuneration policy which is supportive of long-term value creation and the Group’s purpose, strategy and culture.

The Directors remuneration policy is set out in the Remuneration Report on page 25 of the Annual Report.

Principle 10 – Communicate how the Group is governed and is performing by maintaining a dialogue with shareholders and other key stakeholders

As well as the Annual General Meeting of the Company which gives the directors the opportunity to report to shareholders on current and proposed operations and enables the shareholders to express their views of the Group’s business activities, the Board makes itself available on request to shareholders and potential investors, and any such discussion is considered at the following Board meeting. 

Communication policy

The Group formally communicates with its staff in a number of ways including annual appraisals and periodic staff briefings but given the given the size of the organisation most feedback from the team is received in an informal manner.  Business partners and customers have a dedicated member of the sales team who periodically report to the Board about the requirements of our customers.  Key suppliers relationships are managed by members of the management team and where possible site visits are organised.

Share Dealing Code

The Company has adopted a share dealing code for the Directors and certain employees, which is appropriate for a company whose shares are admitted to trading on AIM (including relating to the restrictions on dealings during close periods in accordance with MAR and with Rule 21 of the AIM Rules for Companies) and the Company takes all reasonable steps to ensure compliance with the share dealing code by the Directors and any relevant employees.

Anti-Bribery Policy

The Group believes that it has robust policies and procedures for combating bribery and corruption which are periodically reviewed.

Company Directors