Board Composition & Operation

The Board is accountable to shareholders for the proper conduct of the business and its long-term success. It is ultimately responsible for the activities of the Group including its overall direction, strategy, risk management, governance and performance. In order to meet that responsibility it ensures that the necessary financial and human resources are in place, and that it is supported in its activities by its various Committees, Executive Management Board (‘EMB’) and senior managers. The authority delegated by the Board to the Audit, Remuneration and Nomination Committees, to carry out certain tasks, are defined in those Committees’ terms of reference.

The Board has a formal schedule of matters reserved for its decisions which includes

  • the Group’s business strategy;
  • Group-wide business and financial reviews;
  • major capital expenditure, acquisitions and disposals;
  • review of the internal financial control and risk management systems;
  • the approval of interim and annual financial statements; and
  • treasury management.

Board composition

The Board currently consists of eight members, the Chairman, the CEO, the CFO and five non-executive directors. During the year Andrew Heath joined the Board as a non-executive director. The Nomination Committee followed a rigorous procedure which evaluated the skills, experience and knowledge required of the new non-executive which led to the successful appointment of Andrew Heath.

Role of the Chairman

In accordance with the Code there is a clear division of responsibilities between the Chairman and CEO which have been set out in writing and agreed by the Board. The written roles are available to view on the Company’s website.

Peter Hill has led the Board as Non-Executive Chairman since 1st February 2017. The Chairman is responsible for the leadership of the Board and ensuring its effectiveness on all aspects of its role. He sets the agenda for the Board and ensures that the Board receives accurate, timely and clear information giving sufficient time to review all agenda items thoroughly including strategic issues. He promotes a culture of openness, debate and facilitates constructive relations between executive and non-executive directors. He is also responsible for ensuring that the views of shareholders are communicated to the Board as a whole. In order for him to effectively discharge his duties he works closely with the Company Secretary.

Role of the Chief Executive Officer

Chief Executive Officer, Andrew Heath, is the key driver for proposing, developing and implementing the Group’s strategy and commercial targets as agreed by the Board. He is responsible for the day-to-day management of the business. He carries out his duties in consultation with the Chairman, the Board and EMB which in turn are responsible for the commercial and operational activities of the Group. He holds weekly meetings with the CFO and EMB to ensure the Group are actively managing the overall strategy of the business. He is also responsible, with the EMB team, for implementing the decisions of the Board and its Committees.

Role of the Senior-Independent Director (‘SID’)

The SID acts as a sounding board for the Chairman and serves as an intermediary for the other directors when necessary. He also makes himself available to shareholders if they have concerns which contact through the normal channels of Chairman, CEO or CFO have failed to resolve or for which such contact is inappropriate. During the year no requests from shareholders were received. The SID meets with the non-executive directors annually without the Chairman present to appraise his performance. David Anderson took over this role from Ian Pearson during the financial year.

Role of the Company Secretary

The Company Secretary under the direction of the Chairman ensures good flow of information within the Board and its Committees and to senior management. She is also responsible for advising the Board on all governance matters and is on hand to offer advice and services should any director require it. The Company Secretary attends all Board and certain Committee meetings. The Board as a whole decides on the appointment or removal of the Company Secretary.

Role of a Non-Executive Director

The non-executive directors have a wealth of experience, business knowledge and are appointed to constructively challenge senior management and provide input to meet agreed goals, objectives and to ensure the integrity of financial information. The role is described in more detail within the FRC’s Code.

Induction and professional development

There is a formal induction procedure in place for all new appointments to the Board designed to enhance the directors’ knowledge of the industry in general and their understanding of the Group’s operations/performance, and importantly the Group culture.

The induction programme consists of the following

  • one-to-one meetings with the Chairman, CEO and CFO and meeting with the remaining Board members;
  • meetings with EMB and senior management to discuss Group operations; and
  • visiting regional and international offices.

In accordance with the Code the Chairman regularly reviews and discusses the development needs with each director though each director is fully aware that they should take responsibility for their own individual needs and take the necessary steps to ensure they are wholly informed.

Activities of the Board

The Board holds regular scheduled meetings throughout the year which are supplemented by unscheduled ad hoc meetings. Irregular meetings are held when urgent business decisions are needed, such as, acquisition activity.

At each meeting certain regular reports are presented which are, as follows

  • CEO delivers a full business update with focus on the semiconductor market, a business summary for each division, the Group’s relationships with current and potential partners, licensing updates, units shipped, potential acquisitions and key business issues and actions;
  • CFO gives the year to date financial results, latest financial projections, investor and analysts forecasts; and
  • Company Secretary provides updates covering governance, share price data and shareholder analysis.

In addition, the Board meets periodically with senior management in order to review the strategic direction of the business on an annual basis. The main objectives are to assess and decide upon the key technologies/ products/markets for the business to exploit by assessing the potential returns against the risks. The result is a common vision of the future aspirations of the business and an understanding of the function and goals that each division has within the strategy. Divisio nal business plans are built around executing the strategic plan. The CEO and CFO attend weekly and monthly meetings of the EMB, where each member provides an up to date operational report in which progress against plan is reviewed to ensure that this is in line with the Group’s strategic and business targets. They will then provide feedback to the Board at the next scheduled meeting on any areas of significant interest.

Relations with shareholders

The Group actively encourages open and constructive dialogue with shareholders.

This is primarily achieved through:

  • regular meetings between institutional investors and the CEO/CFO to discuss business performance; and
  • presentations to institutional investors/analysts by the CEO/CFO post release of the interim and full year financial results. The results are made available on the Company website on the day they are announced and shareholders can register through the Company website www.imgtec.com to automatically receive these.

The non-executive directors have access to independent feedback from shareholders after results presentations which, supported by periodic attendance at analyst and shareholder presentations, provides them with an understanding of the views of major shareholders. The Chairman is available to meet with major shareholders to discuss governance and strategy if required and the SID is also available to listen to their views to ensure a clear understanding of concerns or issues.

Another key tool used to communicate to both institutional investors and private investors is the Annual General Meeting (AGM). Shareholders are given a minimum of 21 days’ notice of the meeting and are provided with details of each substantially separate issue which will be raised for voting at the meeting, the results of which will be made available immediately after the meeting.

Conflicts of interest

All directors have a duty under the Companies Act 2006 to avoid a situation in which they have, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the Group. The Group has put in place procedures for the disclosure and review of any conflicts or potential conflicts of interest which the directors may have and for the authorisation of such conflict matters by the Board. In deciding whether to authorize a conflict, or potential conflict, the directors have regard to their general duties under the Companies Act 2006. The authorisation of any conflict matter, and the terms of authorisation, may be reviewed at any time and are reviewed formally by the Group on an annual basis. There have been no conflicts of interest in the year.