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Welcome to Gama Aviation

November 17 2018

Corporate governance statement

Chairman’s statement

From 28th September 2018 as part of a change to the AIM Rules, the Company is required to maintain on its website details of a recognised corporate governance code that it has adopted, how the Company complies with this code and an explanation of any deviations from such code. The information will need to be reviewed annually and the website should include the date on which the information was last reviewed.

Accordingly, I am pleased to present the Corporate Governance Statement of the Company as at 28 September 2018. I believe that integrity, transparency and accountability are key principles of corporate governance and I intend to take an active lead in upholding those principles in my capacity as Chairman of Gama.

Going forward this statement will be reviewed at least annually, generally at the same time as the Annual Report and Accounts are prepared.

The Board recognises the importance of sound corporate governance and we have commenced a review of our corporate governance procedures across the business in order to both address these new requirements and to strive for continued improvement. This review is ongoing and further changes may be implemented incrementally over the next financial year.

Sir Ralph Robins
Chairman of the Board

Board of directors

THE QCA CODE 2018

The Company has chosen to adopt the QCA Corporate Governance Code as published in 2018 by the Quoted Companies Alliance (“QCA”) (the “Code”) as the benchmark for its corporate governance structures and procedures.

The Company intends to comply fully with the provisions of the Code, although as at the date of this corporate governance statement it does not yet comply fully. Areas of current deviations from the Code are summarised below.

Principle 1: Establish a strategy and business model which promotes long term value for shareholders

We believe that the Board leads the operations and shapes the strategic direction of the Company in a manner consistent with the requirements of the Code. The Annual Report sets out our vision, our mission and addresses the key market opportunities and key business risks as perceived by the Board. The Company’s strategy may be summarised as follows:

“To become the global market leader in business aviation services through organic, joint venture and acquisition-led growth”.

The Board believes that successful execution of the strategy will deliver long-term value for shareholders due to ever increasing globalisation and the fragmented nature of the market in which the Company currently operates.

Principle 2: Seek to understand and meet shareholder needs and expectations

The Board understands the need for effective communication and constructive dialogue with shareholders. The Company currently engages with shareholders primarily through the regular financial reporting roadshows and at the AGM.

However, it is recognised that this is an area where further improvements can be made. Historically, the Chairman has had fairly limited involvement in direct shareholder engagement and liaison, with most of such activities being carried out by the Chief Executive and other senior members of the executive team. This is being reviewed, and the Board is considering other ways in which shareholder engagement can be made more effective.

Principle 3: Take into account the wider stakeholder and social responsibilities and their implications for long term success

Other than shareholders, the Board has identified the Company’s key stakeholders as follows:

  • our clients, who are at the centre of our business model and everything we do
  • our staff
  • our joint venture partners
  • our suppliers
  • the wider community, both in the aviation industry and beyond

Our Annual Report sets out some of the ways in which the Company takes into account the wider social implications of the Company’s business activities. The Company has a corporate and social responsibility (CSR) committee that serves as a forum for gathering internal stakeholder feedback and reporting any matters of concern or proposed new initiatives to the Board. In addition, the Company conducts various philanthropic activities, for example leading an expedition to climb Mount Kilimanjaro, which raised approximately £130,000 for charity.

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation

The Board understands the need to ensure it has an effective framework for risk management in order to execute and deliver strategy. The Board has taken steps to identify the principal risks and opportunities as regards the business. As detailed in the Annual Report, the principal risks to the business and the approach to assessing and managing these risks are as follows:

  • Poor operational performance or air accident damaging the Company’s reputation
  • The Company has systems and monitoring processes in place to ensure that it maintains high standards across all aspects of the Company. The Company carefully reviews any deviations from these standards and implements changes to prevent recurrence.
  • Changes in economic climate that make private air transport less attractive
  • The directors mitigate this risk by regularly reviewing current and anticipated activity levels and reducing the Group’s cost base accordingly.
  • Increasing regulatory burden and costs of compliance
  • The directors have put in place members of staff dedicated to liaising with the various regulatory bodies and have ensured staff are regularly trained and appraised to ensure compliance
  • Foreign exchange risk

The Group does not use derivative financial instruments to hedge these risks, except for material risks on contracts. The approach to managing other risks applicable to the financial instruments concerned is set out in the Annual Report.

The Company’s next Annual Report will contain a more detailed report on the Board’s review of the effectiveness of the Company’s risk management framework and how it identifies and addresses opportunities and threats (including risk tolerance and appetite) in order to execute and deliver strategy throughout the organisation and its supply chain. The next Annual Report will also contain a more detailed explanation of how the Board has assessed the prospects of the Company, over what period it has done so and why it considers that period to be appropriate.

Principle 5: Maintain the board as a well-functioning, balanced team led by the chair

The Board is comprised of 4 executive directors and 5 non-executive directors (including the Chairman). With the exception of Simon To (due to his association with Hutchinson, a significant shareholder), all non-executive directors are considered independent.

The Board meets at least ten times a year and has a formal schedule of matters specifically referred to it for decision. The Board is supported by the audit committee, remuneration committee and nomination committee which must each meet twice a year. The committees have the necessary skills and knowledge to discharge their duties, as further set out in the Annual Report.

The members of the Board are required to give such time commitment as is required in order to effectively discharge their responsibility for guidance and direction, reviewing strategy, monitoring performance, understanding risk, reviewing controls and collectively being responsible for the success of the Group. The attendance of each director and time commitment required from each of the directors will be addressed more fully in the next Annual Report.

In order to facilitate a proper assessment of the matters requiring a decision or insight, meetings of the Board are conducted in an open and transparent manner. The non-executive directors provide both strategic guidance and constructive challenge to management and all directors receive appropriate and timely information.

The meeting minutes of each of the committees of the Board are circulated to the Board at the next available Board meeting, at which the relevant chairman provides a verbal report of its proceedings.

Principle 6: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities

The Board has the appropriate balance of skills, experience, independence and knowledge of the Company and the business aviation industry in which it operates to enable it to discharge its duties effectively. The members of the Board have been selected primarily for the skills and experience that they bring to the Company and such skills and experience are identified in the Annual Report. The Board has not yet designated a Senior Independent Director.

The Company Secretary supports the Board and ensures that it functions in an orderly manner and has the resources that it needs in order to operate in line with the requirements of the Code.

The Company has historically used the firm Odgers Berndtson as an external consultant on recruitment and remuneration matters.

As part of its corporate governance review, the Company is reviewing ways in which directors can keep their skillset up to date, as well as introducing a regular review of Board performance and effectiveness (see further below).

Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

It is recognised that formal, rigorous and transparent procedures are required for Board appointments, that a succession plan should be maintained, and that a thorough evaluation of the Board and its individual members should be conducted regularly.

The Company does not currently conduct a formal evaluation of the performance of the Board on an annual basis.

Historically, directors retire by rotation and may be re-elected according to the procedure set out in the Company’s articles of association. It is intended that, with effect from the Company’s 2019 AGM, all directors will be subject to annual re-election.

A detailed remuneration report is set out in the Annual Report. The next Annual Report will contain a more detailed description of the work of the Remuneration Committee as required by the Code.

Principle 8: Promote a corporate culture that is based on ethical values and behaviours

The Board monitors and promotes a healthy corporate culture. This approach is reflected in the corporate responsibility statement set out in our Annual Report which explains our rigorous approach to health and safety and promoting and developing diversity, employee well-being, skills and careers.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the board

The matters for which the Board has responsibility are set out in the Annual Report. A document detailing the responsibilities of the chair, chief executive, and senior independent director will be published in due course.

As further detailed in this Corporate Governance Statement, the Board recognises the importance of sound corporate governance and has commenced an ongoing review of corporate governance procedures across the business in order to both address the new requirements and to strive for continued improvement.

A formal schedule of matters reserved to the Board will be published in due course.

Principle 10: Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

Whilst the Company has informal processes for collating stakeholder feedback, it does not currently have formal structures in place other than a Corporate and Social Responsibility Committee which has an internal remit. This is being reviewed.

The Company has not historically published detailed results of shareholder votes. However, at AGMs to date, none of the recommended resolutions have had 20% or more votes cast against it.