CORPORATE GOVERNANCE 

Statement of Compliance with the 2018 QCA Corporate Governance Code

Chairman’s Introduction

High standards of corporate governance are a key priority for the Board of Insig AI and the Board has adopted the 2018 Quoted Companies Alliance Corporate Governance Code (the “QCA Code”) as the basis of the Company’s governance framework. It is the responsibility of the Board to ensure that the Company is managed for the long-term benefit of all shareholders and stakeholders, with effective and efficient decision-making. Corporate governance is an important aspect of this, reducing risk and adding value to our business.

The Directors acknowledge the importance of the ten principles set out in the QCA Code and, in this section, the Company’s current approach to complying with those principles is set out.

M Farnum-Schneider, Chairman

The corporate governance framework within which the Company operates is based upon practices which the Board believes are appropriate and proportionate to the size and complexity of the Company and its business. The Board has chosen to adhere to the Quoted Companies Alliance Corporate Governance Code for small and mid-size quoted companies (“QCA Code”).

The QCA Code identifies 10 principles that they consider to be appropriate and asks companies to provide an explanation on how they meet those principles. The Board has considered these principles and how the Company meets them given the size of the Company. The results of our review are set our below.

These disclosures are set out on the basis of the current Company and the Board highlights where it has departed from the QCA Code presently. The Board will continue to develop its governance processes in the coming year where appropriate

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

Insig AI’s business model is designed to promote long-term value for customers, shareholders and other stakeholders.

Insig AI’s business strategy is the development of Artificial Learning (AL) and Machine Learning (ML) SaaS products and services to enable asset managers to optimise their investment decisions and business performance through the use of enhanced technologies and data science techniques.

The Company has developed a suite of products to support client needs to as they transition to a data-centric and machine learning enabled business model and advance and scale their analytical capabilities driving value, speed and strategic leverage.

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

The Company recognises the importance of engaging with its shareholders and reports formally to them through the publication of its full-year and half-year results and via additional updates throughout the year. The Chairman presents the results to existing shareholders, potential investors, brokers and the media, where appropriate. The Non-Executive Directors are also available to discuss any matter with shareholders.

Meetings with these stakeholders are reported on at monthly board meetings by the Chairman to ensure that shareholders’ views are communicated. This process enables the Board to be kept aware of shareholders’ opinions on strategy and governance, and for them to understand any issues or concerns.

Shareholders are encouraged to attend the annual general meeting at which the Company’s activities and results are considered, and questions answered by the Directors. General information about the Company is also available on the Company’s website: insg.ai.

Since January 2020, the Board of Insig AI has announced detailed results of shareholder voting to the market shortly after each shareholder vote.

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

The Board considers the interests of shareholders and all relevant stakeholders in line with section 172 of the Companies Act 2006.  The Company is aware of its corporate social responsibilities and the need to maintain effective working relationships across a range of stakeholder groups, which include the Company’s employees, customers, suppliers, and regulatory authorities.

The Company’s operations take account of the need to balance the needs of all stakeholder groups while maintaining focus on the Board’s primary responsibility to promote the success of the Company for the benefit of its shareholders. The Company endeavours to take account of feedback received from stakeholder groups, making amendments to working arrangements and operational plans where appropriate and where such amendments are consistent with the Company’s long-term strategy.

Customer engagement and satisfaction is core to Insig’s success. Thus we maintain consistent and constructive dialogue with our clients. We regularly review the customer communication channels and will continue to adapt the customer engagement structure as the Company and its customer base grows to ensure that customer feedback is easily received and addressed.

The Company prioritises the satisfaction and engagement of its employees, particularly as the Company and its employees adapt to the changing work environment brought on by the global COVID-19 pandemic. “All Hands” meetings are held regularly as well as individual employee “check-ins” to ensure employees are kept informed and supported.  The Board regularly considers employee issues raised via feedback sessions. All employees share in the creation of long-term shareholder value through participation in our employee share plan.

The Company considers its actions and likely impact that they may have on the environment and seeks to mitigate any negative impact wherever practicable. Through the various procedures and operating systems, the Company complies with health and safety and environmental legislation relevant to its activities.

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

The Board has overall responsibility for the Company’s risk management and internal control systems and for monitoring their effectiveness. The Board, with the full support of the Audit and Risk Committee, maintains a system of internal controls to safeguard shareholders’ investment and the Company’s assets, and has established a continuous process for identifying, evaluating and managing the significant risks the Company faces.

The Directors are responsible for the Company’s system of internal control. Although no system of internal control can provide absolute assurance against material misstatement or loss, the Company’s system is designed to provide the Directors with reasonable assurance that problems are identified on a timely basis and dealt with appropriately. The key procedures that have been established and which are designed to provide effective internal control are as follows:

  • Management structure – the Board meets regularly and minutes of its meetings are maintained;
  • Financial reporting – budgets are prepared and then presented to and, if appropriate, approved by, the Board. Any material variances from budgeted to actual results are investigated; and
  • Investment appraisal – the Company has a clearly defined framework for capital expenditure requiring approval of the Board where appropriate.

Further details of the business risks and how they are mitigated as far as possible are contained in the Strategic Report section of the Annual Report. Both the Board and senior management are responsible for reviewing and evaluating risk on an ongoing basis and the Executive Directors regularly review trading performance, discuss budgets and forecasts and any new risks associated with trading, the outcome of which is reported to the Board.

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

The members of the Board have a collective responsibility and legal obligation to promote the interests of the Company and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the Chairman of the Board.

The QCA Code requires that the Boards of AIM companies have an appropriate balance between executive and non-executive directors of which at least two should be independent. The Board has considered its current establishment – being two non-executive directors (two independent), and three executive directors – and is satisfied it meets this requirement with the understanding that an additional independent non-executive director will be appointed in the coming months. In May 2020, the Board appointed John Murray to act as a non-executive director.  In May 2021, the Board appointed Peter Rutter to act as a non-executive director. The Board is supported by two committees, the Audit and Risk Committee and the Remuneration Committee.

The Chairman is responsible for leadership of the Board, ensuring its effectiveness on all aspects of its role, setting its agenda and ensuring that the Directors receive accurate, timely and clear information. He also ensures effective communication with shareholders and facilitates the effective contribution of the other Non-Executive Directors. The Company is satisfied that the current Board is sufficiently resourced to discharge its governance obligations on behalf of all stakeholders.

Non-executive directors are required to attend all Board and Board Committee meetings convened each year and to be available at other times as required for face-to-face and virtual meetings with the executive team and investors.

To enable the Board to discharge its duties, all Directors receive appropriate and timely information. Briefing papers are distributed to all Directors in advance of Board and Committee meetings. All Directors also have access to the advice and services of the Chief Financial Officer. In addition, procedures are in place to enable the Directors to obtain independent professional advice in the furtherance of their duties, if necessary, at the Company’s expense.

The Board is responsible to the shareholders and sets the Company’s strategy for achieving long-term success. It is ultimately responsible for the management, governance, controls, risk management, direction and performance of the Company. Further details of the composition of the Board are given in the Admission Document dated April 2021.

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

The Board currently comprises three Executive and two Non-Executive Directors with an appropriate balance of sector, financial and public market skills and experience. The experience and knowledge of each of the Directors gives them the ability to constructively challenge the strategy and to scrutinise performance. The Board also has access to external advisors where necessary. Further details of the Board are included in the Admission Document dated April 2021.

The Directors are consistently updated on the Company’s business and operations, and legal, regulatory and governance requirements through briefings and meetings with senior executives and advisers.

The Company’s Nominated Adviser assists with AIM and related regulatory matters and ensures that all Directors are aware of their responsibilities. The Directors also have access to the Company’s lawyers and auditors as and when required and are able to obtain advice from other external bodies when necessary.

Board composition is always a factor for contemplation in relation to succession planning. The Board will seek to take into account any Board imbalances for future nominations as well as board independence.

The Company considers that at this stage of its development and given the current size of its Board, it is not necessary to establish a formal Nominations Committee. Instead, appointments to the Board are made by the Board as a whole. This position, however, is reviewed on a regular basis by the Board.

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

 Given the small size and complexity of the Company, the Board has not appointed external consultants to evaluate the performance of the directors and board overall. The Board will continue to review this requirement as the size and the complexity of the Company evolves.

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

The Board and executive management are committed to maintaining the highest standards of integrity in the conduct. Culture is key to successfully implementing the Company’s strategy and achieving its objectives. The executive management consistently reviews its employee training and communication practices to ensure these values continue to form an integral part of the day-to-day operations and that any misalignment is rapidly addressed.

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

The Chairman ensures effective communication with shareholders. The Company’s Chief Executive, Steve Cracknell, is responsible for the operational management of the Company and the implementation of Board strategy and policy. By dividing responsibilities in this way, no one individual has unfettered powers of decision-making.

The appropriateness of the Board’s composition and corporate governance structures are regularly reviewed by the Board as a whole, and these will evolve in parallel with the Company’s objectives, strategy and business model.

Board Committees

The Board has established an Audit and Risk Committee and a Remuneration Committee.

The Audit and Risk Committee is comprised of two non-executive directors. Its primary responsibility is to monitor the quality of internal controls, ensuring that the financial performance of the Company is properly measured and reported on, and for reviewing reports from the Company’s auditors relating to the Company’s accounting and internal controls, in all cases having due regard to the interests of shareholders.

In accordance with the QCA Code, the Audit and Risk Committee meets at least three times a year to review the Company’s interim and final results and liaises with the Company’s Auditors.

The Remuneration Committee is comprised of two non-executive directors.  Its primary responsibility is to set the level of remuneration for both Directors and Key management personnel, determining terms and conditions of service, including the grant of share options, having due regard to the interests of shareholders.

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

Aside from the distribution to shareholders of an Annual Report and an Interim Report at the half year, shareholders are invited to attend an annual general meeting each year and other meetings where their input and approval is required. Insig AI’s website is regularly updated for regulatory announcements and other required information and is accessible online at: insg.ai

Comments and written communications from Shareholders and other stakeholders are welcome.

The Board has ultimate responsibility for reviewing and approving the Annual Report and Financial Statements and it has considered and endorsed the arrangements for their preparation, under the guidance of its Audit and Risk Committee. The Directors confirm that the Admission Document dated April 2021, taken as a whole, is fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s position and performance, business model and strategy.

Last updated on 10 May 2021