CORPORATE GOVERNANCE
Corporate Governance and Compliance with QCA code
The Directors acknowledge the importance of high standards of corporate governance and have chosen to comply with the principles set out in the Corporate Governance Code for Small and Mid-Size Quoted Companies, as issued by the QCA (the QCA Code). A summary of how the Company currently complies with the QCA Code is set out below and annual updates on the Company’s compliance will also be provided in the manner recommended by the QCA Code.
As Chair, my role is to lead the Board of Directors and to be responsible for ensuring that the Company adheres to and applies the standards of corporate governance.
The Board meets regularly to review, formulate and approve the Group’s strategy, performance and corporate actions. The Company has established an Audit Committee, Nomination Committee and a Remuneration Committee with formally delegated duties and responsibilities and with written terms of reference. Each of these committees meets regularly as set out below. From time to time, separate committees may be set up by the Board to consider specific issues when the need arises.
Frank Sagnier
Chair
Click here for our Whistleblowing Policy
Click here for our Anti-Corruption & Bribery Policy
Click here for our Anti-Modern Slavery Statement
Compliance with the QCA Code
Principle 1 – Establish a strategy and business model which promote long-term value for shareholders
The Company develops and publishes games across multiple platforms and through its games label, which focuses on the premium high-quality independent gaming market, it partners with independent developers across the world, from lone developers to large creative studios, to provide a full partnership offering which spans development, publishing and lifecycle management. The Company has a stringent greenlight process which works to identify the best creative ideas and global talent.
The Company seeks to maximise long-term revenues through building gaming franchises with longevity, and has a significant back catalogue that contributes a large majority of its revenues.
Examples of the principal risks that the Company faces are set out in the AIM Admission Document available on the “Reports and Circulars” section of the website. The Board monitors the risks facing the Company on a regular basis and takes appropriate action to ensure that it is able to manage and limit any adverse effects.
Further information regarding the strategy and business model will be provided in each Annual Report and Accounts and Interim Reports.
Principle 2 – Seek to understand and meet shareholder needs and expectations
The Board is committed to an open and ongoing engagement with its shareholders, which has been the case since its AIM admission in May 2018 and it also reviews and discusses the make-up of the Company’s shareholder base at Board meetings. The main methods of communication with shareholders will be the Annual Report & Accounts, the interim and full-year results announcements, the Annual General Meeting and the Company’s website.
In addition, the Chief Executive Officer and the Chief Financial Officer meet regularly with institutional investors and analysts to ensure that its objectives and any business developments are clearly communicated and they are available to respond to any enquiries following Company announcements, together with other Company advisers. The Non-Executive Directors are also available to discuss any matters that shareholders wish to raise and discuss. The Company has a dedicated Investor Relations Director and engages with an external investor relations adviser to act as another point of contact for shareholders, details of which are on the Company’s website.
The Company hosted its first Annual General Meeting post AIM admission in May 2019 has held AGMs annually thereafter. The Company continues to proactively engage with shareholders throughout the year.
Principle 3 – Take into account wider stakeholder and social responsibilities and their implications for long term success
The Board recognises that its long-term success will necessitate the maintenance of effective working relationships across a wide range of stakeholders as well as its shareholders; being primarily its employees, customers and the gaming platforms and developers that it partners with as part of the business strategy. The Executive Directors, in particular, maintain an ongoing and collaborative dialogue with such stakeholders and take all feedback into consideration as part of the decision- making process and day-to-day running of the business.
The Company takes corporate social responsibility very seriously. Team17 is working to update working practices in order to make Team17 as sustainable as possible. Concurrently, we have established Green17 internally, an employee-led group that is passionate about finding ways that our Company and the wider gaming community can become more climate aware and reduce the impact on the planet. We recognise the growing importance of ESG matters for all our stakeholders and to that end, the Board recently established a Board level ESG Committee, led by our Independent Non-Executive Director, Penny Judd. Furthermore, the Company recognises the need to give back to the communities where we do business. Team17 has long been a proud supporter of both local and international charity projects and has hosted a number of fundraising activities across 2022. Team17’s Games Label’s Charity Committee hosted multiple events in 2022 in support of numerous charities, including the British Heart Foundation, Mind, the Samaritans and The Trussell Trust, as well as smaller local charity projects such as Child’s Play and The Mustard Tree.
In 2022, astragon made a donation to support Ukrainian refugees, while StoryToys subsidised the cost of its educational apps for Ukrainian families, helping to provide some minor relief and vital early-years development tools for families caught up in the conflict.
As a video game developer and publisher, a significant portion of sales are generated from our digital channel, resulting in an inherently low carbon footprint.
In 2022, Team17 successfully achieved carbon neutrality status for Team 17 Digital’s FY21 emissions, independently verified against the PAS 2060 standard. As a result of the PAS 2060 audit, we concluded we will not be able to make further significant saving in our total Scope 1 emissions at this stage. Accordingly, to show our understanding and continue our journey towards net zero, we have purchased carbon removal credits to cover the whole of the Group’s 17 tonnes Scope 1 emissions in 2022. Given that global efforts are currently aiming at achieving net zero by 2050, we are developing our plans to achieve this goal across Scope 1-3 emissions, but we continue to work on ways that we can improve on this target.
Principle 4 – Embed effective risk management, considering both opportunities and threats, throughout the organisation
Examples of the material risks relating to the business and the industry in which the Company operates are set out in the AIM Admission Document, available on the “Reports and Circulars” section of the website and are reviewed annually. The Principle Risks and Uncertainties can be viewed on pages 24 & 25 of the 2022 Annual Report and Accounts, also available on the “Reports and Circulars” section of the website.
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and also has an Audit Committee, further details of which are set out below.
Principle 5 – Maintain the board as a well-functioning, balanced team led by the chair
The Board currently comprises six Directors: the Non-Executive Chair, three Non-Executive Directors and two Executive Directors. Three of the Non-Executive Directors, Frank Sagnier, Penny Judd, and Peter Whiting are considered by the Board to be independent.
The Board comprises individuals with a range of skills to support the business, including significant gaming, financial, corporate and audit experience.
The Board meets regularly and there are processes in place to ensure that each Director is at all times provided with such information as is necessary for him or her to discharge their duties.
The Board is also supported by the Committees, details of which are set out below.
The Non-Executive Directors were selected with the objective of increasing the breadth of skills and experience of the Board, and bringing independent judgment to the Board. The Company believes that the make-up of the Board as a whole represents a suitable balance of independence and detailed knowledge of the business so as to ensure that it is able to fulfil its role and responsibilities as effectively as possible.
All Directors are subject to re-election by shareholders at the Annual General Meeting and any Directors appointed during a financial year must be formally elected at the Annual General Meeting following their appointment.
Principle 6 – Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
Biographies of the Directors are set out in the “Board of Directors” section of the website and on page 33 of the 2022 Annual Report and Accounts which is available in the “Reports and Circulars” section of the website.
The Directors believe that the Board has the appropriate balance of diverse skills and experience in order to deliver on its core objectives.
Principle 7 – Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
The Board considers it important to evaluate its performance and each meeting of the Board reviews performance and contributions made during the year.
The Board will continue to evaluate its performance under the leadership of the Chair, and will also look at more formal systems of evaluation in the near future.
Principle 8 – Promote a corporate culture that is based on ethical values and behaviours
The Board places significant importance on the promotion of ethical values and good behaviour within the Company and takes ultimate responsibility for ensuring that these are promoted and maintained throughout the organisation and that they guide the Company’s business objectives and strategy.
The central role that sound ethical values and behaviour plays within the Company is enshrined in the Employee Handbook, which promotes this culture through all aspects of the business, from initial recruitment and hiring to career advancement. The Employee Handbook also sets out the Company’s requirements and policies on such matters as whistleblowing, communication and general conduct of employees.
Principle 9 – Maintain governance structures and processes that are fit for purpose and support good decision-making by the board
The Chair leads the Board and is responsible for its governance structures, performance and effectiveness. The Chair is also responsible for ensuring that the links between the Board and the shareholders, are strong and efficient. Meanwhile, the Chief Executive Officer and the Chief Financial Officer are responsible for the day-to-day management of the business and for implementing the strategic goals agreed by the Board.
The Board is responsible for the good management of the Company and its principal aim is to enhance the Company’s long-term value for the benefit of shareholders. The Board has adopted a Board Charter and Terms of Reference which set out those matters that are reserved for the Board and which include corporate governance, strategy and management, financial reporting and internal controls.
The Board has also established an Audit Committee, a Remuneration Committee and a Nomination Committee, the responsibilities of which are set out below. We have also recently set up an ESG Committee, recognising the growing importance of ESG matters for all stakeholders. From time to time, separate committees may be set up by the Board in order to consider and address specific issues, when and if the need arises.
It is envisaged that the governance framework described above will be reviewed on an annual basis to ensure that it remains effective and appropriate for the business going forwards.
Principle 10 – Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
The Group places a strong emphasis on the standards of good corporate governance and maintaining an effective engagement with its shareholders and key stakeholders, which it considers to be integral to longer term growth and success.
The principal methods of communication with shareholders are the Annual Report & Accounts, the interim and full-year results announcements, the Annual General Meeting and the website. The website is updated regularly with information regarding the Group’s activities and performance, and users can register to be alerted of new announcements, reports and events, including Annual General Meetings.
The Company’s reports and presentations and notices of Annual General Meetings will be made available on the website when available, as will the results of voting at shareholder meetings.
Compensation & Total Rewards
Stock Ownership
All employees have the opportunity to receive £1,000 of shares on joining to enable them to share financially in the success of the business. It also helps create a connection to the group as a whole. This is in addition to other incentive programmes that exist across the business.
Additionally, the Company has implemented specific stock ownership guidelines for executives, as noted in the Directors Remuneration Report.
Clawback & Malus
As detailed in our Remuneration Committee Report, malus and clawback provisions apply for up to two years for the Long-Term Incentive Plan, and a recovery and withholding mechanism applies in the event of a material mis-statement of the Group’s accounts and also for other defined reasons.
The Board Committees
The Board has established an Audit Committee, a Remuneration Committee and a Nomination Committee, the responsibilities of which are set out below. We have also recently set up an ESG Committee, recognising the growing importance of ESG matters for all stakeholders. From time to time, separate committees may be set up by the Board in order to consider and address specific issues, when and if the need arises.
Audit Committee
The Audit Committee will have the primary responsibility of monitoring the quality of internal controls to ensure that the financial performance of the Group is properly measured and reported on. It will receive and review reports from the Group’s management and external auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Group. The Audit Committee will meet not less than two times in each financial year and will have unrestricted access to the Group’s external auditors. The Audit Committee is chaired by Penny Judd.
Remuneration Committee
The Remuneration Committee will review the performance of the Executive Directors and make recommendations to the Board on matters relating to their remuneration and terms of service. The Remuneration Committee will meet as and when necessary, but at least once each year. In exercising this role, the Directors shall have regard to the recommendations put forward in the QCA Code and, where appropriate, the Remuneration Committee Guide for Small and Mid-Size Quoted Companies published by the QCA and associated guidance. The Remuneration Committee is chaired by Peter Whiting.
Nomination Committee
The Nomination Committee will lead the process for board appointments and make recommendations to the Board. The Nomination Committee shall evaluate the balance of skills, experience, independence and knowledge on the board and, in the light of this evaluation, prepare a description of the role and capabilities required for a particular appointment. The Nomination Committee will meet as and when necessary, but at least once a year. The Nomination Committee is chaired by Frank Sagnier.
ESG Committee
In 2022, we established a new ESG Board Committee to increase the visibility and focus on these important matters going forward. The ESG Committee is chaired by Penny Judd.
Corporate Policies
Whistleblowing Policy
Our Whistleblowing policy covers all employees, officers, consultants, contractors, casual workers and agency workers. If a person covered by our policy witnesses or experiences dishonest or unethical behaviour, their first port of call should ordinarily be to report their concerns to a line manager or a member of the HR team who will arrange a meeting to discuss the concerns.
However, in the event that someone does not feel able to raise their concern with a line manager or a member of the HR team, we have a service provided by Safecall which offers a professional, independent, external and confidential means for reporting serious concerns.
Safecall can be called at any time on 0800 915 1571, or alternatively via the web www.safecall.co.uk/report. All calls and reports are treated with utmost confidentiality by independent advisors who will, should you wish for whatever reason, not disclose your name to anyone at Team17. Please note that Safecall is an additional service and does not replace other company policies and procedures already in place.
Anti-Corruption & Bribery Policy
It is our policy to conduct all of our business in an honest and ethical manner. We take a zero-tolerance approach to bribery and corruption and are committed to acting professionally, fairly and with integrity in all our business dealings and relationships.
Our Anti-Corruption & Bribery policy applies to all persons working for us or on our behalf in any capacity, including employees at all levels, directors, officers, agency workers, seconded workers, volunteers, interns, agents, contractors, external consultants, third-party representatives and business partners.
Anti Modern Slavery Policy
We do not tolerate any form of modern slavery or human trafficking in any part of our business. As a UK-centred games developer and publisher business, the Group has a relatively low risk of modern slavery within its employee base and relatively small supply chain.
Should anyone within our Group have any concerns or suspicions, our Whistleblowing, Anti-Bribery, and Grievance Policies provide processes for employees to report any concerning incidences, which can be raised through either HR, or by contacting Safecall (the Group’s external third-party hotline provider).
Our Anti Modern Slavery Policy applies to all persons working for or on behalf of us in any capacity, including employees at all levels, directors, officers, agency workers, seconded workers, volunteers, interns, agents, contractors, external consultants, third-party representatives, and business partners.
Grievance Policy
Our Whistleblowing, Anti-Bribery, and individual group company Grievance Policies provide details of both internal and external reporting systems, whereby employees can confidentially report any concerns or suspicions. Employees can either contact HR directly, or refer to our Safecall (the Group’s external third-party hotline provider).
Our commitment to a robust corporate governance framework extends to ensuring that all our employees have access to effective channels for addressing concerns and grievances. Our internal grievance policies are designed to provide a confidential and accessible avenue for employees, partners, and other stakeholders to voice their concerns. We believe that a culture of open communication and responsive resolution is essential for the well-being of our collective and to uphold the principles of fairness and equity.