Chairman’s Corporate Governance statement

Simon To

Despite the challenges of dealing with the impact of the COVID-19 pandemic on our staff, clients and industry, Gama Aviation continues to enhance its corporate governance structures and processes and its efforts to improve adherence to the QCA Code which the Board has adopted in 2018.

I regard one of the key elements of my role as Chairman of Gama Aviation Plc is to ensure that we have good corporate governance and an effective Board in order to promote the success of the Company and the long-term value for shareholders. Good governance is one of the main foundations of a sustainable corporate growth strategy. At the heart of our business is a commitment to the highest standards of integrity, honesty and fairness in our dealings with all our stakeholders. The Board recognises its responsibility to promote the success of the Company for the benefit of all its stakeholders and has a responsibility towards our shareholders, staff, regulators, partners, clients, suppliers and the local communities in which we operate.
In December 2021 the Audit Committee’s oversight of and governance over the financial integrity of the Group’s financial reporting has been further strengthened by the appointment of KPMG to provide internal audit services to the Group. This will support the Group’s financial and non-financial process improvements agenda which seeks to ensure appropriate robust controls are put in place across all parts of our global business, focusing on the most important and critical business risks to fully support the achievement of agreed business goals and objectives.

The Board has responsibility for the Group Risk Register which is developed through a bottom-up collection of risks from each Business Unit, consolidated and refined by the Executive team and approved by the Board. The overall risk landscape and risk mitigation strategy will continue to be closely monitored by the Board to ensure that the Group Risk Register remains appropriate and sufficiently comprehensive in light of the Company’s strategy and business model as it evolves over time.
The Company shall continue to allocate appropriate resources in its efforts to enhance its compliance and ethics programme and to drive improvements in areas including anti-bribery and corruption, sanctions, KYC/AML policy, gifts and hospitality, modern slavery and whistleblowing.

The Board recognises that continued and improved adherence to the QCA Code contributes to the business’s medium to long-term success while ensuring risks are appropriately controlled and mitigated together with a commitment of transparent communication with stakeholders. The Group strives to operate in line with the principles of the QCA Code and further detail on how it applies the principles of the QCA Code are set out below.

We will give annual updates on our QCA Code compliance.

SIMON TO

Chairman of the Board

QCA Principles

1. Establish a strategy and business model which promotes long-term value for shareholders

Following a five-year review of the Company’s strategy and performance, the Board concluded that the Group:

  • should continue to target, as a priority, long-term contracts with major aviation operators and government departments that rely on stable, large scale partners such as Gama Aviation to deliver their mission;
  • focus its resources on building share in distinct, high value, customer focused markets where its depth and breadth of services have established competitive advantage;
  • improve margin performance by delivering highly valued services within the business aviation and special mission markets in areas where the Group has full control and established competitive advantage.

The Board approved a series of strategic initiatives with the implementation of a new organisational structure in 2021 that comprises three market facing strategic Business Units: Technology & Outsourcing, Special Mission, and Business Aviation. The Board believes the new structure will provide a direct line of sight for shareholders, better enabling them to understand and assess the strategic business units’ market activities, investment requirements and performance. The ‘Fix and Optimise’ Programme as reported in the Annual Report underpins the processes by which efficiencies and competitive advantage will be enhanced. The Board holds periodic strategic meetings to align with and address any changes in the economy and in the industry.

The Annual Report also outlines the process of holding regular workshops at divisional level to assess delivery of strategic plans, financial and operational risks and implementation of mitigation that are reported via the Risk Register.

The Company’s Purpose & Values are set out at its website https://www.gamaaviation.com/investors/strategy/our-purpose-values/.

2. Seek to understand and meet shareholder needs and expectations

The Board places importance on communication with its stakeholders and is committed to establishing constructive relationships with investors and potential investors to ensure that its strategy and performance are clearly understood.

The Company aims to engage with its shareholders through an active investor relations programme, receiving feedback on shareholder views in various ways, including through the Chairman, CEO and CFO as well as through the results of independent studies and report. It is acknowledged that direct shareholder liaison and engagement continues to be somewhat limited to a small number of significant shareholders, where any such activity is primarily handled by the executive directors (mainly CEO and CFO).

Since the Company have a small number of major shareholders, the Board recognises the need to act fairly between all its investors. Decisions are taken on the basis of the Board’s objective appraisal of whether a particular course of action will benefit shareholders as a whole and any conflicts of interest are carefully managed. This has become increasingly relevant following the further concentration of the Group’s shareholders amongst a limited number of investors which has occurred during the pandemic period. The Board remains mindful of the liquidity of the market for the Company’s shares, and the consequences it may have for the Group’s future development.

Improvements have been made to the website to make it easier to navigate and communicate developments and highlight achievements to inspire confidence in the Company and its performance. The investor section of the website has been updated and re-designed to include highlights of each Half Year and Full Year results, Annual Reports, share price analysis, the investor presentations to date, the latest as well as archived RNSs by the Company and the current and archived details of AGMs.

In addition, a Shareholder Feedback section has been incorporated within the website with a view to obtain direct feedback from shareholders.

Further initiatives being considered by the Board include a Shareholder Satisfaction survey and follow up by the Company on significant shareholder voting dissents at AGMs.

3. Take into account wider stakeholder and social responsibilities and their implications for long-term success
The Board recognises its responsibility to promote the success of the Group for the benefits of its stakeholders and understands that the business has a responsibility towards its shareholders, employees, regulators, partners, customers, suppliers and to the local community. Our customers and the aviation services we provide to them are the constant focus of our business. Feedback and insights gained from customers, suppliers and employees enable the Company to continually improve and develop its service line offerings and to be better aligned to our customers’ changing requirements.

The Company’s direct interaction with customers and suppliers are through the new market facing Business Units of Technology & Outsourcing, Special Missions, and Business Aviation. The directors are regularly updated on these relationships in periodic formal business reviews that are held at least quarterly as well as roundtable events for industry sector participants, and strategic partnerships and collaborations with providers of complementary services.
It is important to us that we have a strong relationship with our suppliers. We are always looking to work with companies across the globe that can help us deliver our business in a more efficient and effective way. Our suppliers are crucial to the business services we provide and are fundamental to the quality of our product offering, our brand and reputation.

We strive to ensure that our suppliers are aligned to our strategic objectives, and we maintain and develop these relationships through senior management engagement where appropriate for key suppliers. We aim to work with suppliers and business partners that share our understanding and commitments to ethical standards and act with integrity. This means adopting our Procurement Charter found at https://www.gamaaviation.com/procurement-charter/.

All our employees within the Group are valued members of the team, and we seek to implement provisions to retain, motivate and incentivise them. Mental wellbeing continued to be a strong focus for us in 2021, as we support our people through the challenges of the global pandemic, the changing restrictions, and effects on our professional and personal lives. Through our regular wellbeing surveys, we listened to our people, and have introduced a hybrid working policy, allowing a large number of employees to find the work life balance that works for them, with a mix of working from home and working from our new facilities. Our IT infrastructure continues to support remote working, and our H&S teams are on hand to advise our people how to work safely whilst in the office and from home. Our EAP (employee assistance programme) has been revamped and now benefits from “We-Care”, a support platform available for all our employees, to access advice with mental wellbeing, financial wellbeing, legal advice, general health advice and bereavement.

In 2021, the Company signed up to a number of charters aimed at supporting a diverse and inclusive workforce; for example, the Government Disability Committed scheme, Apprenticeships schemes, Women in Aerospace and Aviation and more recently, the Armed Forces Covenant. Our goal is simple, to create a safe workspace where people feel they belong. Our people purpose is clear, to support, enable and empower our people to achieve our Company purpose to provide aviation services that equip our clients with decisive advantage.

The environmental impact of the Company’s business activities has been considered. The Company has been awarded the internationally recognised Carbon Footprint Standard for demonstrating low carbon credentials and the Group works to identify and carry out carbon and energy reduction opportunities where possible. In addition, the Company engaged an external organisation to measure greenhouse gas emissions to comply with the UK Government’s Streamlined Energy and Carbon reporting (SECR). Waste recycling schemes were also implemented throughout the Group’s operations to limit environmental impact.

The Group has participated in schemes that support local communities and has provided internship and apprenticeship opportunities in years prior to Covid-19 pandemic (see website disclosure at https://www.gamaaviation.com/careers/stem-subjects-assistance/).

The Company’s Corporate & Social Responsibility related activities involving stakeholders are set out on its website https://www.gamaaviation.com/careers/volunteering-working-community/.

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

The Board recognises the need for an effective and well-defined risk management framework and internal control systems. The overall risk landscape and risk mitigation strategy are reviewed on a bi-annual basis by the Board with the support of the Audit Committee, that reviews and considers the effectiveness of the processes that underpin risk assessments and our system of internal control.

The Board has responsibility for the Group Risk Register which is developed through a bottom-up collection of risks from each of the Business Units, consolidated and refined by the Executive team and finally approved by the Board. Our internal audit function and plan ensures work is focused on the most important and critical business risks across the Group and that it fully supports the achievement of business goals and objectives. The Annual Report outlines the principal risks and uncertainties to the business.

Our risk management process is designed to support the business in meeting its strategic objectives, protect the interests of shareholders and key stakeholders, and enhance the quality of our decision making through the awareness of risk-assessed outcomes. It also assists in the safeguarding of company assets, including people, finances, property and reputation. Group policies, standards and internal controls, together with our values and our focus on safety, underpin our approach to risk management.  In 2021 the Company has appointed KPMG to assist it with its internal audit function.

5. Maintain the Board as a well-functioning, balanced team led by the Chair

The Board is responsible for guidance and direction in reviewing strategy, monitoring performance, understanding risk and reviewing controls, procedures and processes of the Company. It is collectively responsible for the success of the Group.

The Board comprises of three Executive Directors and five Non-Executive Directors. 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 calendar of meetings set out at the beginning of each year. Prior to each Board meeting an Agenda and a Board Report together with ancillary documents covering the matters under consideration are circulated to the Board. Meetings are open and constructive, with every Director participating fully.

The Directors of the Board has the appropriate balance of skills, experience, independence and knowledge of the Company and its business in the aviation industry in which it operates to enable it to discharge its duties effectively. The Annual Report details the skills and experience of each member of the Board.

In 2021 the individual Board members have attended all the scheduled Board meetings as itemised in the Annual Report.

The Board is supported by the Audit Committee, Remuneration Committee and a Nomination Committee and the Annual Report summarises the work done by each committee supporting the Board. The members of the respective committees have the necessary skills and knowledge to discharge their duties effectively.

In 2021 the Board initiated a Board Effectiveness Survey led by the Non-Executive Directors and the results of that survey and the actions implemented will be taken into account by the Board to further enhance the Company’s compliance of this particular QCA principle.

6. Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities

The Non-Executive Directors have the breadth and depth of skills and experience across many different sectors, from transport to leisure, airline to media, tech to finance and from private to public companies, enabling them to provide the necessary guidance, oversight and advice for the Board to operate effectively. The Company believes that the current balance of skills in the Board as a whole reflect a very broad range of personal, commercial and professional skills, providing the ability to deliver the Company’s strategy for the benefit of shareholders over the medium and long-term. The Board is not dominated by any person or group of people. In accordance with the Company’s Articles of Association, one third of the directors are required to retire by rotation annually and this allows the shareholders to provide feedback on the composition of the Board.

The Non-Executive Directors meet without the presence of the Executive Directors during the year and also maintain ongoing communications with Executive Directors between formal Board meetings. The Board has nominated senior Non-Executive Director on a specific project basis. Biographical details of the Directors can be found on the Company’s website.

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.

7. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

Continuous improvement is an ongoing process. The internal Board Effectiveness Survey led by the Non-Executive Director Stephen Mount, reflected any areas for further improvement and was aimed to assist the Board to identify the appropriate steps to take as well as to determine whether an external Board evaluation is required as an additional step.

The Remuneration Committee, Audit Committee, and Nomination Committee led by the Non-Executive Directors consider a variety of governance issues appropriate to their respective scopes of activity and report to the Board to assist with decisions that affect the Company. The Board will further consider its ‘succession plan’ with a view to firm it up which provides flexibility for changes in the market and the Company’s strategic direction.

  • Remuneration Committee: Verbal reports are provided to the Board and their work led to a review and modification of the annual salary awards and bonuses as well as share option schemes for the Company to be in keeping with the current economic climate.
  • Audit Committee: Meet twice a year and during the global pandemic all Board Members were invited to attend the Audit Committee meetings which were held virtually and more regularly (5 times in 2021).
  • Nomination Committee: Instigated an internal Board Effectiveness Survey of the Board and its Committees with the intention that action will be taken to optimise the modus operandi of the Board and its Committees.
  • CSR Committee: Its work led to the audit under the ISO 14064-1:2018 methodology by a third party of 2019 and 2020 CO2 emissions and the subsequent plan to offset 2020 scope 1, 2 and part of scope 3 emissions for the business internationally as detailed in the Annual Report.

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

The Board recognises that its decisions will impact all aspects of the Company as a whole and the way that employees behave. The corporate governance arrangements that the Board and Executive team have adopted are designed to ensure that the Company delivers long term value to its shareholders and that all stakeholders have the opportunity to express their views and expectations for the Company in a manner that encourages open dialogue.

At the heart of our business is a commitment to the highest standards of integrity, honesty and fairness in our dealings with all our stakeholders. The Board aims to create and maintain a corporate culture based on shared values and expected behaviours as set out in the Employee Handbook. This is being enhanced with the launching of a Code of Ethics (the Code) that promotes an open, responsible and safe culture wherever we operate. The Code sets out the behaviour expected of all our people and the ethical principles that underpin our values and the way we conduct business. We aim to be demanded and trusted by our clients, valued by our shareholders, prized by our people and admired by our peers. There will be a requirement for all employees to formally confirm their compliance with the Code through an annual compliance declaration.

The Company has established an overall mission and vision and our core values are based on:

  • Safe & Dependable
  • Performance Driven
  • Experts
  • Client Focused
  • Authentic & True

These values are an integral part of our mission and strategy as they provide a guide as to how the Company should behave and operate in order to deliver its Purpose.

As a responsible business, we devote significant resources to our full compliance with laws and regulations. The Company’s recently appointed Corporate Compliance Officer has the mandate to implement, review and update a range of corporate compliance initiatives with the overall oversight of the Executive directors and the Board.

9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

The Board is committed to, and ultimately responsible for, high standards of corporate governance, and has chosen to adopt the QCA Code which it aims to regularly review. The Board reviews the Company’s corporate governance arrangements regularly for continued and enhanced adherence to the Code and expect to evolve these over time, in line with the Company’s growth. The Board delegates responsibilities to Committees and individuals as it sees fit.

The Non-Executives Directors are tasked with constructively challenging the decisions of executive management and satisfying themselves that the systems of business risk management and internal financial controls are robust.

The Audit, Nomination and Remuneration committees report to and support the Board within their respective scope of work and have been delegated the authority to approve certain functions such as.

  • the Audit Committee has been delegated approvals for derivatives and financial instruments and changes in accounting policies and practices;
  • the Nomination Committee has been delegated the approval for appointment of the Group Executive Team members; and
  • the Remuneration Committee has approval for Executive and Senior Management Remuneration (Salary, Bonus and Share schemes).

The Annual Report includes the Terms of Reference for each committee which are also set out on the Company’s website.

The Company is also supported by its Nominated Adviser and other professional advisers as required and appropriate.  Any issues, concerns or dissenting opinions of the Directors are noted in the minutes of the Board meetings before they are formally adopted by the Board.

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

The Board is committed to maintaining effective communication and having constructive dialogue with its shareholders, customers and other relevant stakeholders. We engage with Government agencies and Regulators where appropriate to communicate our views and to better understand policy makers’ decisions relevant to our business.

The Company engages with its shareholders through an investor relations programme, receiving feedback on shareholder views in several ways, including through the Chairman, CEO and CFO as well as through the results of independent study and report. The Company is also considering utilising Satisfaction Surveys with shareholders, customers and suppliers to evaluate the Company’s performance.

Reports of work conducted by the Audit Committee, Nomination Committee, CSR Committee and Remuneration Committee are published in its Annual Report.

The Company announces to the market via RNS the major developments within the Company and its business.  The Company engages a dedicated PR Consultant to ensure proper communication of significant matters to shareholders and the public on a timely basis. The Company’s website provides detailed information to shareholders including the Company’s strategy, updates on its business divisions, share price analysis, Annual and Half Year highlights as well as governance matters.

The Company publishes the results of shareholder votes at AGMs.