Compliance Principles

COMPLIANCE WITH THE PROVISIONS OF THE QCA CORPORATE GOVERNANCE CODE

PRINCIPLE ONE

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

Goals

As a public company the Board is focused on delivering value to Shareholders by optimising the value of client spending on energy through providing them innovative solutions to reduce their consumption so they can focus on their core activities.

Vision

The eEnergy Group vision is to be able to provide a customer with a complete one-stop solution for energy efficiency services and allow the customer to: (i) reduce its energy consumption through a capital free, EEaaS solution; (ii) switch to the most efficient green energy supply and outsource the management of that supply; and (iii) provide a capital free on-site power generation service by combining Solar and Battery Storage technologies with an ESaaS (Energy Storage as a Service) solution.

Strategy

eEnergy’s growth strategy is underpinned by three pillars:

  1. Continuing the growth in LaaS by scaling its “direct to customer” commercial strategy, with a particular focus on the education, commercial and retail sectors;
  2. Expansion of the LaaS proposition to the SME market via a channel partner network by licensing a proprietary “eLight App” to enable regional electrical contractors to offer LaaS to their existing SME customer base; and
  3. Broadening eEnergy’s range of services within EEaaS by acquiring and integrating selected providers of energy management and service solutions which provide complementary services to existing and new customers.
Principle two

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

The Directors will meet with major Shareholders periodically throughout the year and will engage with the financial press to ensure that the Company’s strategy and objectives are communicated through public announcements.

The Company has and will host site visits for brokers and institutional investors and the Executive Directors are in ongoing contact with its Broker, which communicates more closely with the market.

Shareholders with questions can use the “contact us” page on the eEnergy website or contact the Company Secretary, who will refer questions to the Directors. In addition, the AGM operates as a forum for all Shareholders to meet with the Board.

The Company will consider the benefit of additional independent research being published and made available to Shareholders.

At Admission, officers and employees of the Company will own approximately 45 per cent. of the equity of the Company.

Principle three

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

The Board recognises that the Group has responsibilities to many stakeholders other than its Shareholders.

This includes employees, clients, suppliers and the wider society in which we operate. Communications are relevant to the stakeholder and may take the form of formal announcements, individual meetings (for example, appraisals with employees) and negotiations with other stakeholders.

The environmental impact of our business is monitored along with our impact on and commitment to the community and our clients, who increasingly look for suppliers and supply chains with strong ethical values.

The business seeks feedback from clients and has a process in place to share this feedback with the senior management team and will report on the feedback received and action being taken as a result in the annual report.

Principle four

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

The Board meets regularly during which business and other risks are assessed. Risk factors are described in Part II of the Admission Document.

Principle five

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

The Non-Executive Chairman, David Nicholl, with the full support of the rest of the Board, is responsible for ensuring the Group maintains the highest standards of corporate governance. The Executive Directors are responsible for implementing the Board’s strategy.

All the Directors have appropriate skills and experience for the roles they perform, including as members of Board Committees.

A monthly report is provided to the Board of the financial and operational performance of the Group, which is circulated in advance of meetings. The Board is responsible for all strategic decisions and the overall governance and culture of the Group.

All the Directors have access to the services and advice of the Company Secretary and are able to take independent professional advice. The Board operates an Audit & Risk Committee, a Nomination Committee and Remuneration Committee providing governance and experience for these topic areas.

The Company recognises the importance of having independent directors on the Board.  However the Company recognises that Andrew Lawley is no longer considered an Independent Director, following the recent award to him of Growth Shares under the Management Incentive Plan. The Company is actively seeking to recruit a further Independent Non-Executive Director, but until it has made the appointment it does not satisfy this principle.

Principle six

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

The Board evaluates regularly the skills that are required and whether they are adequately provided for. In doing so, where relevant, it will consider guidance available on appointment and training of Board members.

The Company Secretary has the responsibility of making the Board aware of legal changes.

The Nominations Committee oversees the process of identifying candidates and makes recommendations to the Board. Appointments are made on merit against objective criteria and with regard to the benefits that will be brought to the Board and the Group. The Nominations Committee also considers succession planning.

The Company Secretary supports the Chairman in addressing the training and development needs of the Directors. In the case of new Directors, there is an induction to ensure they become aware of the operations of the Group. The Directors are aware of their individual responsibility to undertake appropriate continuing development.

Principle seven

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

The FRC’s 2018 Guidance on Board Effectiveness is used as the basis of the Board’s performance

evaluation. Input will be sought from third parties, such as the auditors (who meet the Audit & Risk Committee at least biannually and, beyond the audit report, comment on the systems, procedures and efficacy of the management) and the nominated advisor.

The annual review of Board effectiveness undertaken by the Nomination Committee includes evaluating the performance of the Board collectively as well as individual directors, for whom we will also consider whether they remain independent. Director’s re-election will be considered by the shareholders at an AGM in due course, at which shareholders have the opportunity as a body to approve or otherwise Board membership.

The Remuneration Committee meets formally and is tasked with not only the remuneration of the Executive Directors but also evaluation of performance. To this end the Board is circulated with press comment and market feedback on the business. Market share data and peer group analysis are available.

Principle eight

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

The Board expects the highest ethical standards of its members and management across the Group. The Group aims to engender an environment based on transparency, trust and engagement where all members of the Company feel recognised and valued for the contribution they make both directly to the well-being of the Company and its broader eco-system. The Group has documented procedures with respect to its responsibilities regarding ethical behaviour, specifically bribery, corrupt practices and modern slavery, and these are applicable across its operations including supply and customer chains.

The Board takes seriously its responsibilities towards the sustainability of its operations and the impact on the environment. As an employer and member of the community, strong ethical and cultural values along with a robust recruitment process are vital to ensuring the Group is a ‘good member of the community’.

Principle nine

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

The roles and responsibilities of specific Directors and membership of the Board Committees are available on our website.

The Board formally meets ten times per year. Each Board Committee has terms of reference outlining the specific responsibilities delegated to it.

The Board assesses at least annually whether the structures and processes are fit for purpose alongside the evaluation of the Board and Director’s effectiveness.

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

The AGM is a key forum for communications with any shareholder who wishes to attend, and the Directors are available here to listen to views expressed both formally and informally. This, combined with the normal cycle of announcements, is the key method of communication.

The outcomes of resolutions put to the AGM are published and available on the Company’s website. The Company uses the London Stock Exchange Regulatory News Service (RNS) to advise the market (i.e. shareholders and others) of performance and significant matters.

The contact us page of the Company’s website is designed to receive comment and questions from shareholders and other stakeholders.