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Corporate Governance

In this document, unless the context otherwise requires, reference to Cambria or to the company is to Cambria Automobiles plc (and reference to our, us and we is to be construed accordingly). Reference to the group is to the group of companies of which Cambria Autos is the parent company. Reference to board is to the board of the company.

Introduction

The Board has elected to apply the QCA Corporate Governance Code (2018 edition) (the QCA Code). As a result  the corporate governance principles which now apply to us are those contained in the QCA Code. These are:

Corporate governance principles

  1. Establish a strategy and business model which promote long-term value for shareholders
  1. Seek to understand and meet shareholder needs and expectations
  1. Take into account wider stakeholder and social responsibilities and their implications for long-term success
  1. Embed effective risk management, considering both opportunities and threats, throughout  the  organisation
  1. Maintain the board as a well-functioning, balanced team led by the chair
  1. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
  1. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
  1. Promote a corporate culture that is based on ethical values and behaviours
  1. Maintain governance structures and processes that are fit for purpose and support good decision-making  by the board
  1. Communicate how the company is governed and is performing by maintaining a  dialogue with shareholders and other relevant stakeholders

Application of the QCA Code and required disclosures in our annual report or on our website

The correct application of the QCA Code requires us to apply the principles set out above and also to publish certain related disclosures; these can appear in our annual report, be included on our website or we can adopt a combination of the two approaches. Recommended locations for each disclosure are specified in the QCA Code; we have chosen to follow these. An index setting out where each required disclosure can be found appears at the end of this document.

Chairman's corporate governance statement

Cambria Automobiles is committed to high standards of corporate governance in all its activities. The Company recognises the value of the Corporate Governance Guidelines for Smaller Quoted Companies published by the Quoted Companies Alliance and complies with its requirements as far as is practicable and appropriate for a public company of its size and nature. The Board regularly reviews guidance from regulatory bodies, supported by its Nominated Advisor, and responds as appropriate.

Principle 1

Establish strategy and business model which promote long-term value for shareholders

Explanation

The board must be able to express a shared view of the company's purpose, business model and strategy. It should go beyond the simple description of products and corporate structures and set out how the company intends to deliver shareholder value in the medium to long-term. It should demonstrate that the delivery of long-term growth is underpinned by a clear set of values aimed at protecting the company from unnecessary risk and securing its long-term future.

Compliance

Cambria was established in 2006 with a strategy to build a balanced motor retail group to deliver the self-funded acquisition and turnaround of underperforming businesses. The strategy evolved in 2013 to encompass the acquisition of premium and high luxury businesses, located in geographically strategic locations, which would be immediately earning enhancing. See Directors report in the annual report.

Principle 2

Seek to understand and meet shareholder needs and expectations

Explanation

Explain the ways in which the company seeks to engage with shareholders and how successful this has been. This should include information on those responsible for shareholder liaison or specification of the point of contact for such matters.

Compliance

Copies of our annual report (which includes the notice of AGM) and the interim report are sent to all shareholders and copies can be downloaded from the investors section of http://www.cambriaautomobilesplc.com - alternatively, they are available on request by writing to the company secretary at Cambria Automobiles PLC, Swindon Motor Park, Dorcan Way, Swindon, SN3 3RA. Other information for shareholders (and other interested parties) is also provided on our website.

The Board enter into a scheduled set of investor relations roadshow meetings following release of both interim and preliminary annual results which are coordinated through the companies brokers and financial PR advisors.  The investor relations roadshow includes an analyst and media meeting and briefing.  The Board engage in ad-hoc meetings at the request of investors as required.  The Board holds an AGM, and all shareholders are sent notice of the AGM with their invitation to attend.

Principle 3

Take into account wider stakeholder and social responsibilities and their implications for long-term success.

Disclosure

Explain how the business model identifies the key resources and relationships on which the business relies.

Explain how the company obtains feedback from stakeholders and the actions that have been generated as a result of this feedback (e.g. changes to inputs or improvements in products).

Compliance

Our business model which explains how we create value, can be broadly summarised as follows:

Cambria was established in 2006 with a strategy to build a balanced motor retail group to deliver the self-funded acquisition and turnaround of underperforming businesses. The strategy evolved in 2013 to encompass the acquisition of premium and high luxury businesses, located in geographically strategic locations, which would be immediately earning enhancing.  The principle activities are that of a franchised motor retailer that sells new and used cars and provides aftersales services to customers.  The group represents a number of different new car manufacturers in its dealerships including High luxury, premium and volume brands.  A full list of the groups dealerships can be seen on the map of locations contained in the group's annual report

The group's stakeholders include shareholders, members of staff, customers, suppliers, regulators, industry bodies and creditors (including the group's lending banks). The principal ways in which their feedback on the group is gathered are via meetings and conversations.

The environmental impact of the group's activities is carefully considered, and the maintenance of high environmental standards is a priority. The group is committed to reducing that impact as far as reasonably possible through full regulatory compliance, recycling programmes and other initiatives.

The board welcomes shareholder contact at any time and communications should be sent in the first instance to the company secretary at: Cambria Automobiles plc, Dorcan Way, Swindon, SN3 3RA or james.mullins@cambriaautos.co.uk

Principle 4

Embed effective risk management, considering both opportunities and threats, throughout the organisation

Explanation

Describe how the board has embedded effective risk management in order to execute and deliver strategy. This should include a description of what the board does to identify, assess and manage risk and how it gets assurance that the risk management and related control systems in place are effective.

Compliance

The Board has overall responsibility for the Company's internal controls and managing their effectiveness. The Board is also responsible for the identification and evaluation of key risks applicable to the Company and individual business areas. The principal risks and uncertainties are available in the 2018 annual report.

The Board has established Audit, Remuneration and Nomination Committees:

The Audit Committee comprises Philip Swatman (as chairman), Michael Burt and Paul McGill. The Audit Committee will receive and review reports from management and the company's auditors relating to the annual and interim accounts and the accounting and internal control systems in use by the company.

The Remuneration Committee comprises William Charnley (as chairman), Philip Swatman and Michael Burt. It is responsible for determining and agreeing with the Board the framework for the remuneration of the Executive Directors, the company secretary and such other members of the management as it is designated to consider. It is furthermore responsible for determining the total individual remuneration packages of each Director including, where appropriate, bonuses, incentive payments and share options. The Remuneration Committee will also liaise with the Nomination Committee to ensure that the remuneration of newly appointed executives is within the company's overall policy.

The Nomination Committee comprises Philip Swatman (as chairman), Paul McGill and William Charnley. It is responsible for reviewing the structure, size and composition of the Board, preparing a description of the role and capabilities required for a particular appointment and identifying and nominating candidates to fill Board positions as and when they arise

The Audit committee receives annual reports from the group's auditors on the internal financial controls of the business and any recommendations are adopted by the group.  The finance director provides a monthly report to the Board including details relating to compliance matters for the group's regulatory activities.  The group has a number of internal audit functions carried out in a structured manner by members of staff that are competent in the specific fields of expertise.

Principle 5

Maintain the board as a well-functioning, balanced team led by the chair

Explanation

Identify those directors who are considered to be independent; where there are grounds to question the independence of a director, through length of service or otherwise, this must be explained.

Describe the time commitment required from directors (including non-executive directors as well as part-time executive directors).

Include the number of meetings of the board (and any committees) during the year, together with the  attendance record of each director.

Compliance

Full details of the board can be found here: http://www.cambriaautomobilesplc.com/the_board

The annual report and accounts (available on the website) also explains the governance framework and provides data on the number of Board and Committee meetings for that year. (Director attendance at the same was not included in the annual report to 31 August 2018 but will be included in the annual report from 31 August 2019 onwards).

Executive directors are full time employees of the Company. Non-executive directors are expected to devote as much time as is necessary for the proper performance of their duties and a minimum of 10 days per year. All non-executive Directors are considered independent.

Principle 6

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

Explanation

The board must have an appropriate balance of sector, financial and public markets skills and experience, as well as an appropriate balance of personal qualities and capabilities. The board should understand and challenge its own diversity, including gender balance, as part of its composition.

The board should not be dominated by one person or a group of people. Strong personal bonds can be important but can also divide a board.

As companies evolve, the mix of skills and experience required on the board will change, and board composition will need to evolve to reflect this change.

Compliance

Directors who have been appointed to the group have been chosen because of the skills and experience they offer.

Full biographical details of the directors are included on the website under Board of Directors.

As noted above, the group has put in place an Audit Committee, Remuneration Committee and a Nomination Committee. The responsibilities of each of these are set out above.

Principle 7

Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

Explanation

Include a more detailed description of the board performance evaluation process/cycle adopted by the company.  This should include a summary of:

  • The criteria against which board, committee, and individual effectiveness is considered;
  • How evaluation procedures have evolved from previous years, the results of the evaluation process and action taken or planned as a result; and
  • How often board evaluations take place.

Explain how the company approaches succession planning and the processes by which it determines board and other senior management appointments, including any links to the board evaluation process.

Compliance

The board hold monthly meetings and the executive directors produce monthly reports that are submitted to the board in advance of these meetings covering specific financial and non-financial criteria updates.  The board measures progress against the financial objectives set in each reporting period and against strategic initiatives agreed at each board meeting. Performance of individual Directors is reviewed by the Chairman annually.

Succession plans for all members of the Company's executive board are in place and regularly reviewed.

Principle 8

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

Explanation

Explain how the board ensures that the company has the means to determine that ethical values and behaviours are recognised and respected.

Compliance

The Board is committed to embodying and promoting a sound corporate culture and has endorsed various policies which require ethical behaviour of staff and relevant counterparties (such as those mandating anti-corruption, anti-counterfeiting, anti-modern day slavery, fair treatment and equality of opportunity).

The board and management conduct themselves ethically at all times and promote a culture in line with the standards set out on the website. The group values its reputation for ethical behaviour and has a set of values that are at the core of its business philosophy.

Principle 9

Maintain governance structures and processes that are fit for purpose and support good decision-making by the board

Explanation

In addition to the high level explanation of the application of the QCA Code set out in the chair's corporate governance statement:

•           Describe 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).

•           Describe the roles of any committees (e.g. audit, remuneration and nomination committees) setting out any terms of reference and matters reserved by the board for its consideration.

•           Describe which matters are reserved for the  board.

•           Describe any plans for evolution of the governance framework in line with the company's plans for growth.

Compliance

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)

The Chairman is responsible for ensuring that the board is effective in its task of setting and implementing the company's direction and strategy. The Chairman takes a leading role in determining the composition and structure of the board. This will involve regular reviews of the overall size of the board, the balance between executive and non-executive directors and the balance of age, experience and personality of the directors.  The Chairman will also ensure effective communication with shareholders and, where appropriate, the stakeholders.

The Chief Executive Officer ("CEO") is responsible for leading the development. and execution of the Company's long term strategy with a view to creating. shareholder value. The CEO's leadership role also entails being ultimately. responsible for all day-to-day management decisions and for implementing the. Company's long and short term plans.  The CEO along with the Finance Director are the primary contact for shareholders and key stakeholders and hold regular meetings with them.

Roles of any committees (e.g. audit, remuneration and nomination committees)

The roles of the committees are set out above.

Matters reserved for the board

The board has a formal written schedule of matters reserved for its review as follows:

  • The approval of financial statements, dividends and significant changes in accounting practices;
  • Board membership and powers including the appointment and removal of Board members, determining the terms of reference of the Board and establishing the overall control framework;
  • Stock exchange related issues including the approval of the Company's announcements and communications with both shareholders and the Stock exchange;
  • Senior management and subsidiary Board appointments and remuneration, contracts and the grant of share options;
  • Key commercial matters;
  • Risk assessment and regulatory compliance;
  • Financial matters including the approval of the budget and financial plans, changes to the Group's capital structure, the group's business strategy, acquisitions and disposals of businesses and significant capital expenditure.

Principle 10

Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

Explanation

Disclose the outcomes of all votes in a clear and transparent manner.

Where a significant proportion of votes (e.g. 20% of independent votes) have been cast against a resolution at any general meeting, the company should include, on a timely basis, an explanation of what actions it intends to take to understand the reasons behind that vote result, and, where appropriate, any different action it has taken, or will take, as a result of the vote.

Include historical annual reports and other governance-related material, including notices of all general meetings over the last five years.

Clear and transparent disclosure of voting outcomes

As soon as practicable after any general meeting has concluded, the results of the meeting are released through a regulatory news service and a copy of the announcement is posted here: http://www.cambriaautomobilesplc.com/announcements. The announcement also provides, for information, details of the total number of voting shares in issue and the number of shares in respect of which valid proxy appointments were received; a table is included showing the number of votes for and against each resolution and also the number within the chairman's discretion - excluded from the table are abstentions / votes withheld and proxy appointments received from holders who appointed someone other than the chairman of the meeting as their proxy.

Explanation of actions where a significant proportion of votes (e.g. 20% of independent votes) is cast against a resolution at any general meeting

There has been no resolutions at a general meeting that have resulted in less than 80% of votes in favour. The company would explain what actions it would take if it became relevant.

Inclusion of historical annual reports and other governance-related material, including notices of all general meetings over the last five years.

The investors section of http://www.cambriaautomobilesplc.com/investor_relations includes all annual reports and notices of general meetings for the past 5 years.

This page was last reviewed 11th December 2018