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Corporate Governance
As a company that will be admitted to trading on AIM, the Company is not required to adopt a specific corporate governance code. However, it is required to provide details of the corporate governance code it has decided to adopt, state how it complies with that code and provide an explanation where it departs from compliance with that code.
The Directors support a high standard of corporate governance and have decided to adopt the QCA Code. The Directors believe that the QCA Code provides the Company and the Group with the framework to help ensure that a strong level of governance is maintained, enabling the Group to embed the governance culture that exists within the organisation as part of building a successful and sustainable business for all of its stakeholders. The Company will comply with the ten principles of the QCA Code, with effect from Admission as detailed below.
The Company communicated its purpose, strategy and business model in the Company’s Admission Document created and published in connection with the Company’s IPO and related admission to AIM in April 2023. This strategy and business model has been further reiterated within this the Annual Report on pages 14 and 15. The Board believes that the current strategy of the Company will lead to an increase in shareholder value through the focus on:
- investment in sales;
- effective marketing; and
- continuing R&D expenditure on current and new products.
Following Admission to AIM and the associated fundraising, the Group has invested in the above-mentioned items. These continuing investments will mean the Group remains loss making in the short-term but are expected to yield long-term benefits such as an increased market share in a competitive marketplace, making its product offering more attractive to potential customers and building a business that is resilient to macro-economic shifts. Principal risks facing the Group were also set out in the Admission Document and detailed further on pages 29 and 30 of the Annual Report. The Board periodically discusses and reviews these risks and identifies and deploys mitigation steps to manage these risks of the business.
The Board are committed to open and continuing engagement with the Company’s shareholders. There are four main ways in which the Company communicates with its shareholders:
- The Company’s Investors website;
- The Annual General Meetings (“AGM”);
- The Annual Report; and
- The half-year and full-year results announcements, and other trading updates (where
required and appropriate).
The Company’s Chief Executive Officer and Chief Financial Officer oversee investor relations with shareholders, prospective investors, analysts and the various regulators. We do this via investor roadshows and retail forums, attending and presenting at investor conferences, meeting with independent investment analysts, regular reporting processes and at our Annual General Meeting.
The Board is kept informed of the views and concerns of major shareholders by briefings from the CEO and CFO. Any internal communications, with internal shareholders and option holders, are handled with input from HR and the senior management team.
We are committed to listening and communicating with shareholders to ensure that our purpose, strategy, business model and performance are clearly understood. We maintain an active corporate website (https://fadel.com/) and post regular updates on various social media platforms (LinkedIn, Twitter, Facebook) to inform stakeholders of business updates and key events. These updates also include the required financial reporting and market updates for significant events. The Company’s senior management team speak on a weekly basis, with the Chief Executive Officer and Chief Financial Officer speaking with the NOMAD on at least a bi-weekly basis to share internal developments, ideas and other matters should they arise.
As mentioned above, the AGM is one forum for dialogue with shareholders and the Board. The Notice of Meeting will be sent to shareholders at least 14 days before the AGM. The results of the AGM will subsequently be published on the Company’s website.
The Board recognises that its long-term success comes from the continuing efforts of employees, customers, contractors, suppliers, partners, vendors and other stakeholders. Engaging effectively with them all strengthens those relationships and helps us meet our commitments. The Directors and the Group maintain an ongoing dialogue with these various stakeholders through the channels highlighted in principle 2 above. The Board is regularly updated on broader stakeholder engagement to stay up- to-date with stakeholder insights into the issues that matter most to them and our business, thus enabling the Board to understand and consider these issues in decision-making.
FADEL is a socially responsible business and has a positive impact on the communities in which it operates. Our geographic working location spread, and business model, facilitates the identification of shared challenges, and opportunities and ideas, whilst also identifying the key resources and relationships to drive the business forward and achieve its goals.
We welcome, and listen to, feedback from employees and all employees have the opportunity to progress and develop their capabilities and careers. We have a diverse workforce of colleagues of many nationalities, thus making communication and feedback crucial development tools within the Group.
The principal risks facing the Group are set out in Part II of the Admission Document.
Financial Controls
The Company’s Audit, Risk and Sustainability Committee comprises Sally Tilleray (Chair), Ken West, and more recently appointed member Joe Gruttadauria. The Audit, Risk and Sustainability Committee meets as often as required and at least three times a year. The Audit, Risk and Sustainability Committee main functions are:
- Internal control and risk assessment;
- Review and appointment of third-party services providers;
- Monitoring the integrity of the financial statements of the Group, both the annual and
interim accounts, and any other formal announcements in relation to financial
performance; and - Review of the policies in place regarding sustainability and ESG.
The Audit, Risk and Sustainability Committee considers the nature, scope and results of the external auditor’s work, whilst also reviewing any non-audit services provided by the external auditors where appropriate. The ultimate responsibility for reviewing and approving the annual report and accounts remain with the Board.
The Chair of the Audit, Risk and Sustainability Committee is reviewed on an annual basis, and the membership of the Audit, Risk and Sustainability Committee and its terms of reference are kept under review.
Standards and policies
Principal risks facing the Group and the industry in which it operates were set out in the Admission Document. These risks are reviewed at least once a year and are detailed on pages 29 and 30 of the Annual Report. The Company operates a risk register that is managed by the Chief Financial Officer which is reviewed by the Board at least once a year but on a more regular basis by the Audit, Risk and Sustainability Committee, and the Chief Financial Officer.
Our Audit, Risk and Sustainability Committee meets at least three times a year and its duties and responsibilities are detailed on page 43 of the Annual Report. The Audit, Risk and Sustainability Committee reports to the Board who define and set out the policies in communicated procedures, and these are reviewed and revised each year to ensure consistency in application throughout the
business.
As a result of the application of these policies, alongside the identification of any risks in connection with the annual audit, there have been no material issues raised during the year under review, other than ordinary operational matters.
On Admission, the Company formally adopted a social media policy which sets out to minimise the risks to the Company through the use of social media by all Directors, employees and vendors. This policy covers both the use of social media for business use and personal use, and a wide variety of social media sites, from social networking sites such as Twitter, to the Company website. Other key policies implemented include but are not limited to: anti-bribery, share dealing code, material contract reviews.
The Board has been constructed to ensure that there is the correct balance of knowledge of the business, independence and experience. As at 29 April 2024, the Board is currently made up of the Non-Executive Chairperson, two Non-Executive Directors and two Executive Directors, as detailed on the Board of Directors page on our website.
The Board meets at least six times each year with eight meetings occurring in the eight months since admission to AIM. Processes are in place to ensure that each Director, always, is provided with such information as is necessary to enable them to discharge their duties.
The Board is supported by the Audit, Risk and Sustainability Committee, and the Remuneration and Nominations Committee. Each committee has a terms of reference, on which additional details on these committees can be found on pages 44, 45 and 46 of the Annual Report, including how many times a year they are scheduled to meet. To further help and support the Board, Amati Global Investors Limited as the appointed Investment Manager of Amati AIM VCT plc have appointed a Board observer to attend all of its meetings in a non-voting capacity.
Key Board activities in the coming year will include reviewing of the progress made towards the Groups goal/mission and continued monitoring of the Groups development goals following the AIM IPO. In addition to these two main goals, the Board will:
- Review feedback from shareholders post full and half-year results;
- Discuss internal governance processes;
- Review the Company’s risk profile, with input from the Audit, Risk and Sustainability
Committee; - Discuss strategic priorities, including product updates and potential new markets; and
- Review and discuss the sustainability/ESG policy in place, including a review of the
internal culture of the Group.
The Board regularly asks Directors to confirm that they have no conflicts of interest and that they are independent. The Company is satisfied that the current Board is sufficiently resourced to discharge its governance obligations on behalf of all stakeholders.
The Non-Executive Chair leads the Board, and the ultimate responsibility for the Company’s governance structures and their effectiveness resides with the Non-Executive Chair. The three Non-Executive Directors are responsible for bringing independence and objectivity to decisions whilst the Executive Directors are responsible for the day-to-day operations of the business, and delivering the
strategic aims.
The Directors’ skills and experience are summarised on the Board of Directors page on our website, and the Board considers that taking its overall size and current composition into account, has an appropriate balance of sector, financial and market skills and experience. This is supplemented by any identified training and support required. All Directors can take independent professional advice in respect of their duties, if necessary, at the Company’s expense and with prior agreement from the Board. In addition, the Directors have direct access to the advice and services of the Company Secretary.
All Directors are encouraged to attend update sessions to ensure that they are kept up-to-date of any changes to regulatory codes and best practices. In addition, Board meeting agendas include updates from advisors on changes in regulations or requirements that are specifically pertinent to the Group.
The Board was appointed on Admission to AIM in April 2023, with two members having resigned from the Board and one new member since that point with corresponding RNS announcements found on the Company website (https://investors.fadel.com/investors/regulatory-news/).
The Chair, Ken West, is responsible for ensuring the Company has an effective Board, who takes an active role in the effectiveness of the Company in reaching its goals and is updated on a monthly basis by the Chief Executive Officer.
In the future, the Board will continuously assess the contributions made to the Board by the individual members, ensuring their contributions are relevant, continuously drive the business forward and, where relevant, maintain their independence. Where required the Board will also consider succession planning, including for the potential sudden availability of key members to the Board and Executive team, as this would create a particular challenge in a Company of Fadel’s size.
The Board has set out and promotes a corporate culture based on sound ethical values and behaviour, which they believe are essential in engaging with all stakeholders. The Company promotes its corporate culture based on its five core values:
- Passion
- Innovation
- Respect
- Trust
- Integrity
The Company embeds all of the above core values in everything it does, including annual staff training and development conversations. The Board takes responsibility for the promotion of the above-mentioned core values, alongside ethical values and behaviours throughout the Group. Employees have access to the policies that promote this culture through the employee handbook, and the annual training/updates required on these items.
The Group’s purpose, strategy and business model is based on its award-winning enterprise-ready cloud software built over the last sixteen years with a products suite that provides solutions for content and IP creators (licensors) and content and IP users (licensees), built on a highly scalable architecture. Its customers have complex needs, which our IPM software helps manage and process complex contracts and licensing requirements. Our Brand Vision software helps marketers and licensees accelerate their digital strategy to manage large volumes of content and associated usage rights. The Group has a customer-centric approach, with a significant amount of product development taking place continuously in collaboration with customers ensuring current market relevance.
The Board has a zero-tolerance approach to bribery, corruption, bullying, harassment, and dishonesty. This commitment is communicated clearly to all employees through training and communication, and specific policies that employee are made to sign on an annual basis.
The Board also looks beyond its stakeholders to ensure the Company and its Group entities make a meaningful contribution society as a whole. During the year ended 31 December 2023, the Company made $3k in donations across three charitable organisations in two countries, the US and Lebanon.
The Company is also taking steps to reduce its carbon footprint, through less printing of Company documents, only making necessary business trips and making use of video conferencing solutions where possible.
The Board will meet at least six times each year in accordance with a scheduled meetings calendar. Prior to the start of the financial year, the dates of that year’s Board meetings will be circulated to all Board members. This is compiled to focus on the Company’s financial calendar while also ensuring all the remaining meeting still take place, as and when required.
The Board and its Committees receive an agenda for each meeting, alongside the appropriate information prior to each meeting. These papers are distributed at least two days before the meetings take place. The Board meetings involve open conversation and any Director is given the opportunity to voice any concerns. Any specific actions required after the Board meetings are noted in the minutes, and are agreed upon by the Board, and/or the relevant Committee. Where management input is required this is requested on a case by case basis.
The Board is ultimately responsible for the long-term success of the Company, and its Group entities. As part of the Company’s admission to AIM the Board formally adopted a schedule of matter reserved for the Board. The Board is responsible for:
- Overall Group strategy;
- Structure and capital;
- Financial reporting and controls;
- Approval of the annual and interim results;
- Annual budgets and forecasts; and
- Board structure
The Board, alongside its Committee’s and Management, continually monitors the business risks and reviews the annual budgets and the performance in relation to those budgets. The three Non-Executive Directors (including the Chair) are responsible for bringing independence and objectivity to decisions whilst the Executive Directors are responsible for the day-to-day operations of the business, and delivering the strategic aims.
The Board is supported by the Audit, Risk and Sustainability Committee, and the Remuneration and Nominations Committee. Each committee has a terms of reference, on which additional details on these committees can be found on pages 44, 45 and 46 of the Annual Report, including how many times a year they are scheduled to meet. Each committee has access to such resources, information, and advice as it deems necessary, at the cost of the Company, to enable the committee to discharge its duties with prior Board agreement.
The Company communicates with its shareholders mainly through the following four channels:
- The Company’s Investors website;
- The Annual General Meetings;
- The Annual Report; and
- The half-year and full-year results announcements, and other trading updates (where
required and appropriate).
A range of corporate information (including all Company announcements and presentations) is also available to shareholders, investors, and the public on the Company’s corporate website (https://investors.fadel.com/). The Company’s website is updated frequently with information regarding the Group’s activities and performance. This includes the Company’s reports, presentations, notices of AGM’s and results of voting.
The Company has retained an investor relations agency to facilitate awareness of the business and performance of its stock amongst analysts, retail investors and others. For the period since Admission to AIM in April 2023, the agency retained was Alma Strategic Communications, 71-73 Carter Lane, London, EC4V 5EQ.
In addition, analysts’ notes and brokers’ briefings are reviewed to achieve a wide understanding of investors’ views. The Company communicates with institutional investors frequently through briefings with management. As applicable The Company will also communicate to individual investors and private client brokers through a dedicated email address, investor roadshows and presentations at investor conferences.
Last updated: 16th May 2024