Governance
The directors acknowledge the significance of sound corporate governance. As a company whose shares are traded on the London Stock Exchange (Alternative Investment Market) (AIM), the Company is not obliged to comply with the corporate governance regime as set out in the Combined Code on Corporate Governance, but it does support the principles of the Code. It intends to comply with the Quoted Companies Alliance's Corporate Governance Guidelines for AIM Companies insofar as it is reasonably practicable for a public company of its size and nature. The directors have adopted a code of conduct for dealings by directors and employees which complies with the FSA and AIM Rules and are committed to maintaining the highest standards of corporate governance.
The Board
The Board directs the Company's activities in an effective manner through regular board meetings and monitors performance through relevant reporting procedures.
The Board has established an Audit Committee, a Remuneration Committee and a Nominations Committee each comprising the non-executive directors (including the chairman of the Company). Each committee will invite other members of the Board and advisers to join meetings where appropriate.
Committees
The Audit Committee
The Audit Committee meets not less than twice each year and is responsible, inter alia, for ensuring that proper financial reporting procedures are maintained, the financial performance of Westhouse is properly measured and reported on and meeting with the auditors and reviewing reports from the auditors relating to accounting and internal controls.
The Remuneration Committee
The Remuneration Committee is responsible for reviewing the performance of the executive directors, setting the scale and structure of their remuneration, determining the payment of bonuses and reviewing their service agreements with due regard to the best interests of the Company. The Remuneration Committee determines the allocation of share options to directors and employees of Westhouse. No director is permitted to participate in discussions or decisions concerning his or her own remuneration.
The Nominations Committee
The Nominations Committee meets not less than once a year and is responsible, inter alia, for reviewing the size and composition of the Board and the boards of its subsidiaries, and assessing the suitability of candidates proposed for appointment to any Westhouse board.
Share Options
A share option scheme for the Directors has been put in place but no grants have been made to directors who served in the period. Further information is detailed in note 12 to the accounts contained in the 2010 Annual Report.
Relations with Shareholders
The Company recognises that its shareholders are the ultimate owners of the business and that it is the steward of their investment. The Board seeks to maximise shareholder value, to communicate in a coherent and appropriate manner Westhouse's condition and prospects and to develop and maintain a robust system for corporate governance.
The AGM is used as one way to communicate with all shareholders.
Risk management
Executive risk management is the responsibility of the boards of Westhouse Securities Ltd and Smith's Corporate Advisory Ltd. They are responsible to the Company for ensuring that procedures are in place, and are being effectively implemented to identify, evaluate and manage the significant risks faced by Westhouse. A risk assessment matrix sets out those risks, and identifies their ownership and the controls that are in place. This matrix is reviewed regularly and updated as changes arise in the nature of risks or the controls that are implemented to mitigate them. The risk matrix is tested for effectiveness with scenario testing or stress testing on a regular basis. The risk matrices form part of Westhouse Securities' and Smith's' Internal Capital Adequacy Assessment Process ("ICAAP") documents for the FSA.
Accountability and Audit
The Board considers that the Annual Report presents a balanced and understandable assessment of Westhouse's performance and prospects.
The Audit Committee reviews the independence and objectivity of the external auditors. The committee reviews the nature and amount of non-audit work undertaken by the auditors to satisfy itself that there is no effect on their independence. The committee is satisfied that Grant Thornton UK LLP is independent.