Corporate Governance Policy

The Board of Directors (the Board) is responsible for overseeing the management of the business and is accountable for the long-term success of the Billington Group (the Group), by ensuring that the highest standards of corporate governance are maintained throughout the Group.

The Board fully endorses the following extract from the introduction to the Quoted Company Alliance (QCA) Corporate Governance Code, which has been adopted by the Group:

‘Good governance ensures sound decision making in the interests of long-term value creation while protecting minority interests. Good corporate governance is achieved through a series of decisions made by the board, which in itself needs to be kept dynamic and diverse of thought and to engender a consistent corporate culture throughout the organisation. The tone and signals from the top are vital in this regard.

Good corporate governance is about ensuring that the board is set up to make robust decisions and manage risk. To do so requires having the necessary breadth of expertise and perspectives around the board table and for each vote to be appropriately heard. It is increasingly about ensuring that a healthy culture is in place which combines a strong focus on performance and a shared sense of purpose. This should be cascaded throughout the workforce and guide what is acceptable and what is unacceptable in terms of behaviour.’

The Board recognises that corporate governance is not a static process and that there is a need for policies and practices to be kept under review to ensure that the Group meets the required standards, and that the Group’s governance develops in line with its growth and overall strategic plans.

The Board considers the Group’s current governance policies, procedures and related systems to be adequate for the Group at its current stage of development and to enable it to achieve its strategic objectives.

Purpose Statement

Our purpose statement is “Building today for tomorrow’s world.”

We will deliver our purpose by:

• ensuring that all of our staff are supported, encouraged, rewarded and most of all safe.
• ensuring that we protect and help develop our colleagues for their, and the Group’s benefit, for now and the future.
• providing value in yield and growth for shareholders and all stakeholders.

Business Model

The business model of the Group is to operate as a designer, manufacturer and installer of structural steelwork through its subsidiaries Billington Structures Limited, Peter Marshall Steel Stairs Limited and Specialist Protective Coatings Limited, and as a supplier of safety solutions and barrier systems to the construction industry, through its subsidiary Easi-Edge Limited as well as providing specialist site hoarding and branding systems through Hoard-it Limited. The parent company acts as a holding company providing management services to its subsidiaries.

Strategy

Billington strives for continuous improvement in all aspects of its operations to ensure we harness the energy of our people and deliver for our repeat clients in a safe, economic and sustainable manner, enabling the value for our shareholders to be maximised.

The Group has adopted five key pillars to its strategy which constitute the strategic objectives and focus of the business to drive shareholder value. The key pillars or ‘5P’s’ (People, Properties, Product, Position and Planet), are underpinned by the Company’s value system and are focused on developing, progressing and managing the areas that can add value and protect the business from unnecessary risk to secure its long-term future.

An update on Group Strategy is included in the Group Strategy Report in each year’s Annual Report.

The Board is authorised to manage the Billington business on behalf of the shareholders and in accordance with the Company’s Articles of Association. This is achieved through its own decision making and by delegating responsibilities to the Board Committees and by the delegation of authority to manage the business to the Executive Directors.

The Board is currently comprised of three Executive Directors and four Non-executive Directors, three of whom being, Ian Lawson (Independent Non-executive Chair), Stephen Wardell (Non-executive Director and Lead Independent Director) and Lyndsey Scott (Independent Non-executive Director) are deemed and considered to be independent. The Board are satisfied that there are no real or perceived impediments to independence for each of the Company’s three independent directors.

All the Directors meet on a regular and frequent basis. To enable the Board to discharge its duties, all Directors receive appropriate information and are allowed sufficient time to discharge their responsibilities effectively. Briefing papers are distributed by the Company Secretary to all Directors in advance of Board Meetings and the members of the Group Board regularly attend subsidiary company directors’ meetings.

As part of the corporate governance structure the Group Board has established Audit and Risk, Remuneration and Nomination Committees, the activities of which are summarised below:

Audit and Risk Committee

The Audit and Risk Committee (the Committee) is made up of the three Independent Non-Executive Directors and meets at least three times each year. It is chaired by Stephen Wardell, the Lead Independent Director. Mr Wardell is a member of the Institute of Chartered Accountants in England and Wales, having qualified in 1988. He was a partner at a leading accounting firm for over 20 years and has specialised in the construction and contracting sectors.

The Executive Directors, namely the Chief Executive Officer, the Chief Operating Officer and Chief Financial Officer as well as any Non-Executive Director who is not a member of the committee, are invited to attend meetings, when considered appropriate.

The primary role of the Committee is to assist the Board in fulfilling its responsibilities regarding the integrity of financial reporting, audit, risk management frameworks and internal controls and to provide non-executive oversight and reporting on internal checks and balances. It fulfils its role and oversight responsibilities by:

• Reviewing, monitoring, assessing and advising the Board on the internal financial, operational and compliance controls.
• Monitoring and reviewing the Group’s accounting policies and significant accounting judgements.
  • Reviewing the integrity of the annual and interim financial statements and any public financial announcements and advising the Board on whether the annual report and accounts are fair, balanced and understandable.
  • Monitoring and reviewing the adequacy and effectiveness of the risk management systems and processes.
  • Assessing the internal and external audit processes and the auditors.
  • Providing oversight for the Group’s policies and procedures for compliance with all relevant and applicable laws, accounting standards and the principles of the QCA Corporate Governance Code (the QCA Code), in so far as they relate to audit and risk matters and includes oversight of the Group’s Whistleblowing Policy.

The Committee reports to the Board on the Group’s full and half year results, having examined the accounting policies on which they are based and compliance with relevant accounting standards. In addition, it reviews the scope of the external audit, the effectiveness, independence and objectivity of the auditors taking into account relevant regulatory and professional requirements.

An Audit and Risk Committee Report is included in each year’s Annual Report.

Remuneration Committee

The Remuneration Committee (Remco) is made up of three independent non-executive members of the Board and meets at least twice each year and at other times as necessary. Mr A. Ospelt (Non-Executive Director) is invited to attend the meetings to present shareholder views. The Remco Chair is an Independent Non-Executive Director who has considerable human resources, people management and remuneration committee experience.

Remco’s primary responsibility is to determine and review salary levels, discretionary variable remuneration and the terms and conditions of service of the Executive Directors. Remco also provides oversight of the Group Senior Management final reward packages and reviews the compensation decisions made in respect of all other senior executives and the wider workforce.

Remco is also responsible for reviewing and determining, along with the Executive Directors, the overall Remuneration Policy applied to the Group. This includes the quantum of variable remuneration and the method of delivery, taking into account relevant regulatory and corporate governance developments.

Remco is authorised to seek any information it requires in order to perform its duties and obtain external legal or other professional advice that it considers necessary from time to time.

A Remuneration Committee Report, which includes the details of the Remuneration Policy in force for each financial year, is contained in the Group’s Annual Report.

Nomination Committee

The Nomination Committee (Nomco) is made up of all of the Independent Non-Executive Directors and meets twice each year and at other times as necessary. Nomco is chaired by the Company’s Independent Non-Executive Chair. Its primary responsibility is to ensure that the Board continues to contain the necessary mix of experience, skills, and capabilities to exercise effective leadership and control of the Group and to adequately inform and oversee the execution of the company’s strategy for the benefit of the shareholders over the medium to long-term.

Nomco is responsible for considering the periodic refreshing of the Board’s membership and conducting appropriate recruitment of new Executive and Non-Executive members of the Board, as and when required.

Nomco has the responsibility for succession planning for the Executive and Non-Executive Directors.

The Group’s Senior Management is comprised of the Group Executive Directors as well as the Managing Directors of each of the Group’s operating subsidiary companies namely:

• Billington Structures Limited
• Peter Marshall Steel Stairs Limited
• Easi-Edge Limited
• Hoard-It Limited
• Specialist Protective Coatings Limited

The Group has implemented systems of control for the governance of its subsidiary companies and operating entities, including:

• The Executive Directors are appointed as directors of all Group operating companies and meet with and are in continual discussion with operational management to ensure that the business objectives of the Group are achieved. Organisational structures have been established across the Group with clearly defined lines of responsibility.
• Financial reporting procedures and levels of authority for the commitment to contracts and expenditure have been implemented for all operational management.
• Group Senior Management are charged with the ongoing responsibility for identifying risks facing each of the businesses and for putting in place procedures to mitigate and monitor risks. Subsidiary company risk registers are reviewed by the Audit and Risk Committee on a biannual basis.
• An annual budget for each operating company is prepared in detail, reviewed by the Executive Directors and formally adopted by the Board. The Board also formally adopts the Group’s overall budget and plans.
• Monthly actual results of sales, profitability and cash are reported against budget and prior year, to the Group Board. Significant variances are investigated and explained.
• Daily cash monitoring and monthly cash forecasting and treasury reporting to the Group finance function and monthly reporting to the Group Board.
• Internal financial control is exercised within clearly defined organisational structure which operates a system of financial management controls.

Board Performance Reviews are performed on an annual basis and include opportunities for improvement with respect to the performance of the Chair and the operation of the Board and its committees. A key focus of reviews is identifying development or mentoring needs of individual directors and/or the wider senior management team, including in areas such as emerging technologies and climate change.

The annual review is carried out internally but is periodically supplemented by an external independent third-party review.

Appropriate training and briefing is provided to all Directors on appointment to the Board, taking into account their individual qualifications, skillsets and experience. This is supplemented with visits to the Group’s operations and meetings with senior business unit management to develop each Director’s understanding of the business.

Training and updating in relation to the business of the Group and the legal and regulatory responsibilities of Directors is provided to Board members throughout the year by a variety of means, including presentations by executives, visits to business operations and the circulation of briefing materials. The Group’s Nominated Adviser (NOMAD) provides regular updates and information on the UK Market Abuse Regulation and LSE Listings Requirements, ensuring all Directors are aware of their implications and their duties.

Individual Directors are expected to take responsibility for identifying their training needs and to ensure they are adequately informed about the Group and their responsibilities as a director.

Non-Executive members of the Board are continually updated on the Group’s business, its markets, social responsibility matters, changes to the legal and governance environment and other changes impacting the Group. During the year, the Directors receive updates on industry best practice, regulatory and legislative developments.

Any Director who considers it necessary or appropriate, may take independent professional advice in furtherance of their duties, at the Company’s expense.

The Board is confident that all its members have the knowledge, ability and experience to perform the functions required of a Director of an AIM listed company and to fulfil their governance responsibilities.

The senior executive team have a responsibility for succession planning at an operational level particularly regarding the management of the subsidiary companies, which is carried out by working with and having a regular dialogue with those management teams.

The Company encourages two-way communication with both its institutional and private investors and attempts to respond quickly to all queries received verbally or in writing.

The Executive Directors undertake a regular communication programme with institutional shareholders and with analysts covering the Group’s activities, its performance and strategy. They meet with institutional shareholders at least twice a year, after the half year and full year’s results are released.

The Board has sought to use the AGM to communicate with private investors and encourages their participation. The notice of the AGM, detailing all proposed resolutions is notified to shareholders at least 21 days before the meeting.

Please contact our Company Secretary for any general shareholder queries via e mail at  gzacharias@billington-holdings.plc.uk .

The Board is ultimately responsible for the Group’s systems of internal control for safeguarding shareholders’ investments and the Group’s assets, as well as financial, operational and compliance controls. Such systems are designed to manage, rather than eliminate, the risks of failing to achieve business objectives. The Board, via the Audit and Risk Committee, regularly reviews the effectiveness of systems of internal control and considers major risks and the overall control environment.

The Audit and Risk Committee has primary responsibility for:

• monitoring the quality of internal financial controls ensuring that the Group’s financial performance is correctly measured and reported upon; and
• monitoring and reviewing the adequacy and effectiveness of the risk management systems and processes.

The Group is committed to conducting its business responsibly and in accordance with all applicable laws and regulations. Employees are encouraged to raise concerns about fraud, bribery and other related matters through a whistleblowing procedure.

The Audit and Risk Committee Report as contained in each year’s Annual Report provides details of the Committee’s monitoring of internal financial controls as well as its review of the adequacy and effectiveness of the Group’s management systems and processes.

Safety and health issues and risks are continually monitored at all sites and are reviewed monthly by Group Senior Management and the Board.

The Group has a well-developed health and safety management system for the internal and external control of health and safety which is managed by the Group SHEQ Manager. This includes the use of SHEQ risk management systems for the identification, mitigation and reporting of health and safety management information.

The Group values its reputation for ethical behaviour and has a set of values that are at the core of its business philosophy. The Board embodies and promotes a corporate culture amongst senior management and all employees that is based on sound ethical values and behaviours, and which is supportive of the delivery of the company’s strategy and business model. Core Values are:

To conduct business ethically, maintaining the Group’s integrity:

The Group will communicate fully and openly in its dealings with employees, clients, suppliers and the communities in which it operates, ensuring Billington meets its obligations to the best of its ability.

The Group will conduct its business operations in an honest, fair and transparent manner.

The Company will strive to meet the highest industry standards across all Group companies and ensure all employees are in the position to successfully deliver these requirements.

To value the welfare of its employees and ensure they have a safe, healthy and productive working environment:

Billington values its employees and understands they are key to delivering the sustained growth and development of the Company. The Group ensures every employee has the opportunity to fulfil their potential in a supportive and inclusive environment.

To be regarded as a good neighbour and operate in a sustainable manner:

The Group is highly regarded in the industry and aims to maintain this positive reputation. It engages openly and effectively with stakeholders and adopts the highest standards of environmental and sustainability guidelines to minimise its impact within the communities and areas in which it operates.

Billington’s stakeholders are an integral part of the business; they consist of customers, suppliers, employees, shareholders, advisors and the local communities within which the Group operates.

Employees

Employee engagement, development and satisfaction is key to building a successful business. The Group invests in the development of its staff, adopting a number of policies aimed at recruiting and rewarding employees, including operating effective training and award-winning apprenticeship schemes.

The Group treats staff fairly in all aspects of their employment, valuing their contribution to the achievement of Company objectives and providing them with opportunities for training and development.

Billington is an equal opportunity employer; the Group adheres to the Equality Act 2010 and believes that all individuals should be treated fairly and equally. The Group strives to create a supportive and welcoming environment where diversity is valued, and employees have the ability to progress and prosper without prejudice or discrimination.

The Group is committed to the highest standards of openness, honesty and accountability, and has a whistleblowing policy in place that allows employees to raise concerns, without fear of reprisal.

Modern Slavery

Billington considers its responsibilities regarding the prevention of modern slavery with the upmost importance. It complies with the Modern Slavery Act 2015 and recognises its duties in relation to the Company’s employees and supply chain. The Group implements a number of processes and procedures within the business to ensure the prevention of modern slavery including risk assessments, due diligence investigations and training.

Customers and Suppliers – Ethical Trading

The Company recognises the need to maintain a supply chain that adheres to and is aligned with its environmental, social and commercial objectives and policies.

Billington is committed to carrying out all dealings with clients, suppliers, sub-contractors and its own staff in a fair, open and honest manner. The Group is also committed to complying with all legislative and regulatory requirements that are relevant and applicable to its business activities, including the Competition Act 1998, which prohibits anti-competitive practices and agreements.

The Company is proud of its long standing and committed partner relationships with its supply chain and in turn seeks to treat members of its supply chain fairly with timely payment for works and the implementation of a ‘no retention’ policy.

Bribery and Corruption Policy and the Prevention of Fraud

Billington has a strict, zero tolerance Bribery and Corruption Policy, which complies with the Bribery Act 2010, to ensure that the integrity and transparency of the Group is maintained. All employees are informed of the Company’s Bribery and Corruption Policy, and the Board oversees the implementation of this policy ensuring that all sectors of the business comply with their obligations in regard to anti-bribery and corruption.

The Economic Crime and Corporate Transparency Act 2023 (the ECCTA) has introduced the offence of failure to prevent fraud. Under the offence an organisation may be criminally liable where an employee, agent, or subsidiary commits a fraud intending to benefit an organisation. The Group has implemented a fraud prevention framework which identifies high risk areas within the organisation and measures to mitigation identified risks. The framework also includes procedures aimed at the prevention of fraud.

Appropriate internal and external training is given to employees who may be exposed to situations whereby bribery, corruption, collusion and fraud could occur to ensure that they are able to identify, act and report instances as they arise.

Communities – Billington Holdings Charity Foundation

The Group is actively engaged in supporting local and national charities and has established the Billington Holdings Charity Foundation through which it directs all charitable donations. It hosts charitable events for employees and denotes funds to its local communities, sports teams and other worthwhile causes.

The Sustainability and Responsible Business Report, which is included in the Group’s Annual Report, provides further details of the Group’s sustainability and responsible business principles.

Billington believes that operating in a sustainable and responsible manner is key to the success of the Group. Several policies are in place that underpin the day-to-day operations, ensuring the safeguarding of both the environment and all stakeholders. Environmental and Social issues which have been identified as being material to the business model and strategy are monitored and updated on a regular basis. This highlights Billington’s fundamental commitment to delivering responsible business growth and development.

Group sustainability is governed via a three-tier governance structure, namely:

• The Board retains overall responsibility for Group Sustainability, with the Audit and Risk Committee providing regular reports to the Board.
• Executive Sustainability Committee (ESC) which reports to the Audit and Risk Committee.
• Group Sustainability Committee (GSC), a steering committee which reports to the ESC.

The primary roles of the GSC and ESC Committees, are:

• Continually review and update the Group Sustainability Plan and Strategy.
• Confirm and revise annual and long-term internal and external sustainability targets including all climate related reporting targets.
• Approve sustainability risks, opportunity and mitigation measures including climate related risks for inclusion in Group Risk Register.
• Review annual and longer-term targets Social and Charitable Initiatives, objectives and priorities.
• Non-financial and Sustainability Reporting including climate-related reporting utilising the Taskforce for Climate-related Financial Disclosures (TCFD) reporting framework.

This structure provides strategic oversight, coordination, and advocacy for the Sustainability Strategy across the Group and fosters a Group culture of sustainability through education, engagement and communication.

Section 172 of the Companies Act 2006 requires each Director to act in a way they consider, in good faith, would most likely promote the success of the Company for the benefit of its shareholders. In doing so, the Directors must have regard, amongst other matters, to:

• the likely consequences of any decision in the long term.
• the interests of the Group’s employees.
• the need to foster the Group’s business relationships with suppliers, customers and others.
• the impact of the Group’s operations on the community and the environment.
• the Group’s reputation for high standards of business conduct.
• the need to act fairly as between members of the Group.

Details of how the Board has met these requirements is reported annually in the Section 172 Statement and in the Strategic and Governance Reports, in each year’s Annual Report.

Details of Billington’s compliance with and application of the QCA Code’s ten Principles and associated disclosures, is contained in the QCA Principles Application and Compliance Report, which may be accessed here.

For further information please contact the Company Secretary:

Email: gzacharias@billington-holdings.plc.uk

Phone: 01226 340666