Corporate Governance

Lorne Park Capital Partners Inc. ["LPCP"] believes that sound corporate governance is essential to the well-being of the corporation and its stakeholders. We believe good corporate governance starts with leadership and decision-makers, and we understand the importance and central role played by the Board in the governance process.

The Board is comprised of a Non-Executive Chair, two Executive members and three Non-Executive Directors. The Directors have a balance and depth of skills and experience, together with long-standing knowledge of LPCP, which enables them to discharge their respective duties and responsibilities effectively.

The Board is collectively responsible for the long-term success of the Company. LPCP’s strategy, business model, and annual budget are developed by the Chief Executive Officer and the senior leadership team and approved by the Board. The management team, led by the Chief Executive Officer, is responsible for implementing the strategy and managing the business at an operational level. The strategy and business model are designed to promote long-term value for shareholders.

The Board controls the Company and has established Committees for Audit, Compensation, and nominations, to which it has delegated clearly defined powers. The terms of reference for all the Committees are reviewed regularly, and the Board ensures they remain fit for purpose.

There is a formal schedule of matters reserved for consideration by the Board, which includes responsibility for the following:

approval of overall strategy and objectives;
approval of the annual budget and monitoring progress towards its achievement;
changes to capital structure;
changes to principal activities;
review and approval of annual financial statements;
changes to the senior management structure;
approval of related-party transactions;
approval of financing arrangements and treasury policy;
approval of material investments and disposals; and
approval of material unbudgeted expenditures.

These reserved matters are reviewed by the Board, at least annually, to ensure they remain appropriate and complete. In tandem, the Board also reviews an approved schedule of operational matters, which are delegated to the management of the operating subsidiaries.

Prior to the beginning of each year, Board meetings are scheduled in line with the key financial reporting dates. A document pack, comprising a full agenda and documents to be tabled, is distributed to all relevant Directors in advance of each meeting. Any specific actions arising during meetings are agreed upon by the Board or Committee, and a follow-up procedure monitors their completion. Quarterly financial reviews are distributed to the Board, irrespective of whether a scheduled meeting is to take place. This facilitates the Board staying informed of developments on a regular basis.

All Directors are invited to submit items for discussion for each meeting's agenda, and time is also allocated at each meeting to discuss any other business, which all Directors are invited by the Chair to raise. During the year, there was 100% eligible attendance at all meetings of the Board and Committees.

The Chair is responsible for the effective running of the Board and for ensuring that all Directors play a full and constructive part in the development and determination of LPCP’s strategy and overall commercial objectives. The Chief Executive Officer’s primary role is to deal with the running of the business and executive management of LPCP. There is a clear division of responsibilities between the Chair and Chief Executive Officer, with no one individual having unfettered powers of decision.

The Directors are also able to take independent professional advice in furtherance of their duties as necessary.

Independence

The independence of all Non-Executive Directors is reviewed annually with reference to their independence of character and judgement and whether any circumstances or relationships exist that could affect their judgement. The Board assesses what would be the most desirable number of Non-Executive Directors for the Board, having regard to the size of LPCP, the scope of its operations, and the efficient functioning of the Board. The Board looks at the manner in which the component parts of the Board function together, the skills and external experiences of the Non-Executive Directors, their involvement and insight in Board and Committee meetings, and their ability to objectively challenge management.

Each of the Directors has a duty to avoid situations where they have, or might have, a direct or indirect interest that conflicts, or potentially conflicts, with the Company’s interests. The Company has established procedures for the disclosure by Directors of any such conflicts for the Board to consider and, if appropriate, authorize. If such a conflict exists, the relevant Director is excused from consideration of the relevant matter. The Board is satisfied that the independence of the Directors who have additional external responsibilities is not compromised.

Engagement with shareholders

The Board seeks to engage with shareholders to maintain a mutual understanding of objectives between them and the Company and to manage their expectations. Relations with shareholders and potential investors are managed principally by the Executive Board members. We will again be holding our AGM digitally, providing all shareholders with the facility to attend, vote, and submit questions regardless of any then-prevailing travel or meeting restrictions.

Stakeholders and social responsibilities

LPCP’s business model relies on developing and maintaining strong relationships with our employees, clients, and regulatory authorities. The Board is conscious of its responsibility toward all stakeholders and believes this is an important consideration for the long-term growth of the business. Stakeholder engagement and feedback are taken seriously throughout the Company. Regular communication is made with all employees. LPCP places considerable value on the involvement of our employees and keeps them informed on matters affecting them as employees and on the various factors affecting the performance of the Company. This is achieved through formal and informal meetings, as well as information available on the Company’s website and newsletter. The events of the past two years highlighted how critical alternative methods of communication are, with employees and other stakeholders working from home and the cessation of business travel bringing an immediate and lengthy halt to physical meetings. LPCP uses social media to engage directly with stakeholders through various channels, including Facebook and LinkedIn. The Company also engages with regulators and government agencies, for example in response to consultations or proposals, both directly and through membership in industry associations.

Risk management

Risk management remains the responsibility of the Board. The Audit Committee has been delegated responsibility for keeping under review the adequacy and effectiveness of the Company’s internal financial controls and its internal control and risk management system. Risk management is reviewed at Board meetings as part of the formal Board process. The Board has identified and evaluated the significant risks faced by the Company in delivering its strategy. The Board has agreed on how each risk is to be addressed and the necessary actions to be taken. Details of the principal risks identified are set out in the Company’s Annual Report. The Audit Committee meets specifically to review the effectiveness of the Group’s risk management and internal control systems and to review the risks identified and the progress of actions taken to manage the risks. Following the review, progress and actions are reported to the Board.

Promotion of corporate culture

The Company actively promotes integrity in its dealings with its employees, shareholders, clients, and suppliers. The Company has well-articulated core values that are outlined on this website and regularly reviewed with all employees and agents. Employees are evaluated at least annually on their embodiment of the Company’s core values. The Board recognizes that the reputation of LPCP is a valuable asset gained over a long period and must be protected. The Company has a number of policies, including those for dealing with bribery, gifts, hospitality, corruption, fraud, tax evasion, and inside information. The Board requires that all LPCP employees and those of its subsidiaries adhere to the Company’s Code of Conduct.

All employees must comply with the laws and regulations of the countries in which they operate, and those responsible for the management of each operating subsidiary confirm annually to the Board their compliance with these and with its policies and Code of Conduct. There are a number of methods by which employees may ask questions of and provide feedback directly to members of the Company’s senior management and the Board.

Our operating subsidiaries are required to ensure that advertising and public communications avoid untruths or overstatements. They are also expected to build relationships with suppliers based on mutual trust and endeavour to pay suppliers on time and in accordance with agreed-upon business terms.

We have launched a diversity, equality, and inclusion initiative, including the appointment of a DE&I committee with a wide remit to help us shape the Company’s approach to this critical area, and we look forward to providing further updates on this in due course.