MM&K partners with The London Stock Exchange, First Flight and Board Excellence in a seminar for AIM companies on directors’ pay, governance and board effectiveness
On 20 June, MM&K Chief Executive, Paul Norris made a presentation at The London Stock Exchange (LSE) to an audience of AIM companies and advisers on designing fit-for-purpose remuneration policies. He was joined by Naomi Scott-Mackie a consultant in First Flight (non-executive search) and Kieran Moynihan (Managing Partner in Board Excellence) to reinforce the message that developing and maintaining a successful remuneration policy requires an independent, robust and well-functioning Board, operating within a sound governance framework.
An effective Board and a sound governance framework are essential to the overall success of any business, but independent non-executive directors (NEDs) and good governance are particularly important in the context of executive remuneration. AIM companies are not “quoted companies” and so are not bound by the Companies Act strict remuneration disclosure requirements. As AIM companies are not listed on the main board of the LSE, the UK Corporate Governance Code does not bind them. However, AIM companies are required to adopt a corporate governance code (many adopt the QCA code) identify it on their web-site and explain how they have complied with its principles. Instances of non-compliance and the reasons for it, must also be identified.
Corporate governance is catching up with AIM but with a lighter touch than for quoted companies listed on the main board. In an environment of lighter regulation (in which AIM operates) it becomes even more important to demonstrate to investors and other stakeholders how the Board takes account of their interests and that the company is being run sustainably for the benefit of all its stakeholders. This includes developing a remuneration policy that is demonstrably fit-for-purpose because it is competitive, supports the business strategy and is affordable (taking account of the economics of the business and stakeholder requirements).
There are more than 1,400 AIM companies. Some of them are large corporations, which could (there are those who might say should) be listed on the main board. Many are early-stage, growing companies with large appetites for cash to fund their growth but few of the resources available to their larger peers. They all need good relations with their stakeholders. What amounts to fit-for-purpose remuneration for one AIM company will not necessarily be fit-for-purpose for another. Fortunately, flexibility exists to tailor a good result.
The seminar was well-attended and there was a lively discussion after the three presentations concluded. It is clear that this combination of complementary presentations struck a number of chords with the audience. MM&K is pleased to have participated in this event in partnership with the LSE, First Flight and Board Excellence and looks forward to repeating the experience. The seminar slides are available here.
MM & K Limited advises extensively among AIM companies. For more information about executive remuneration, please contact: Paul Norris