|QCA Principle||How RM2 Applies Each Principle of the QCA Code|
|1. Establish a strategy and business model which promote long-term value for shareholders||The Company’s business model, strategy and key challenges are set out in the Consolidated Management Report found on pages 1 to 6 of the Company’s 2017 audited consolidated financial statements, available here.|
|2. Seek to understand and meet shareholder needs and expectations||RM2 has a proactive shareholder engagement strategy designed to foster relationships, enhance transparency and interact with its principal shareholders firsthand. RM2 recognizes that while the majority of its shares are held by a small number of significant shareholders with a long-term perspective, relatively small volumes of trades can lead to substantial volatility in its share price. To that end, RM2 aims to reach out throughout the year at appropriate moments to inform all shareholders of its strategy and performance and to hear their reflections on the Company. Periodic one-on-one meetings are held between the CFO and/or CEO and principal shareholders and analysts throughout the year. Queries from individual shareholders sent to the Company’s firstname.lastname@example.org email address are given prompt attention. Given the composition of the Company’s shareholders’ base, road shows and investor days are currently not deemed cost-effective methods of communicating, but may be part of RM2’s shareholder outreach in the future should circumstances warrant.
|3. Take into account wider stakeholder and social responsibilities and their implications for long-term success||To drive the business, the Company takes a long-term view. Listening and responding to stakeholder issues or concerns is critical to achieving this. The Company strives to maintain open and constructive relationships with a wide range of stakeholders, including its employees, suppliers and customers, to help it operate as a responsible and sustainable business. The Company engages in regular dialogue with stakeholders, and tracks and evaluates long- and short-term issues based on their impact on the business. This helps inform the Company’s business strategy and build sound relationships.
The Company is committed to sustainability progress in all aspects of its business and is proud that its products are a key element in helping its customers attain their own sustainability targets. The Company commissioned a third-party life cycle analysis which demonstrates the tangible benefits of the use of RM2 BLOCKPal pallets. The summary conclusions of the life cycle analysis report can be found here and here and the executive summary of the report is posted on the website here.
The Company encourages feedback from its customers through account managers and customer service teams. It also seeks engagement with individual customers through social media such as Twitter.
Customer feedback has led to a number of design improvements in the RM2 BLOCKPal pallets, such as increasing the coefficient of friction through modifications to the upper decking to deter the slippage of loaded products. In fact, the RM2 ELIoT BLOCKPal itself is the fruit of feedback from pallet users looking for a robust, sustainable, trackable, lighter weight alternative to wood pallets which was not permeated with chemicals to combat mold and pests and which also had high flame retardant properties.
|4. Embed effective risk management, considering both opportunities and threats, throughout the organisation||Due to the size of the Company and the close involvement of the Executive Directors and senior management on a day-to-day basis, the Group believes that the annual review of business risks performed by the Company’s external auditors is sufficient at present. The need for a dedicated internal audit function is regularly reviewed by the Audit Committee.
The Group has policies for internal control of key matters. In particular, internal controls and processes within its finance and accounting departments, are regularly updated and are evaluated annually.
|5. Maintain the board as a well-functioning, balanced team led by the chair||The roles of Chairman and CEO are clearly separated to ensure a balance of power and responsibilities.
The Board comprises two Executive Directors and five Non-Executive Directors. The Board notes that the Luxembourg law firm, Duro & Goebel, of which Charles Duro is a founding partner, regularly provides advice and renders invoices to the Company with respect to matters of local Luxembourg law. The Board considers that all Non-Executive Directors bring an independent judgment to bear notwithstanding their varying lengths of service, and in the case of Charles Duro, notwithstanding the rendering of services by Duro & Goebel to the Company.
Since 2016 taking into account the cash resources of the Company, Non-Executive Director’s fees have been paid in the form of shares rather than cash.
The Non-Executive Directors receive regular and timely information prepared by the Executive Directors and the management team relating to the Group’s operational and financial performance. The Non-Executive Directors demonstrated their commitment and availability to the Company over the past year where a large number of interim meetings were called, often on short notice, to discuss critical strategic matters as the Company traversed a period of high financial stress.
|6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities||The Company’s directors have been appointed with due regard to the business experience and expertise they can contribute to the business. They compose an international group, representing six different nationalities and the full spectrum of corporate experience, including retail, manufacturing, logistics, information technology, finance, tax and legal. The biographies of the Company’s directors are found here.
With the increasing importance of track and trace technology and the Internet of Things to the success of the Company’s business plan, the Company anticipates recruiting additional expertise from this sector in the near term.
|7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement||The Board is undertaking to perform an assessment of its performance. The assessment criteria against which the evaluation is conducted will be set forth in the 2018 annual report, and will focus in contribution to strategic thinking leadership, participation, communication and inter-personal skills and will determine a series of actions designed to improve governance in the service of the interests of the Company and its shareholders.
All continuing directors are re-elected on an annual basis and prior to nominating directors for re-election their continuing suitability is assessed. The performance of executive directors is reviewed at least annually.
Senior management appointments historically have been conducted with the assistance of highly qualified executive recruiters to assist in the identification and assessment of candidates. Board candidates historically have been identified through the network of existing board members and significant shareholders. Recognizing the benefit diversity brings to decision-making, as the composition of its membership evolves over time, the Board is committed to promoting its diversity.
|8. Promote a corporate culture that is based on ethical values and behaviours||The Corporate Responsibility section of the Company’s website details the values and policies of the Company including environmental, social and community and relationships.
|9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board||The Company’s corporate governance structures are set out here: http://rm2.com/aim-rule-26/|
|10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders||Reports of the Audit Committee and the Remuneration Committee are expected to be included in the 2018 Audited Annual Financial Statements.
The results of the voting at the Company’s last general meeting is posted at: http://rm2.com/agm-information/
The last five year audited financial statements are posted at: http://rm2.com/financial-statements/
Agendas for the annual and extraordinary general meetings of shareholders for the past five years are posted at: http://rm2.com/agm-information/