Corporate Governance

Statement of compliance with the QCA Corporate Governance code

Chairman’s Introduction

The Directors recognise the importance of and are committed to high standards of corporate governance. The corporate governance framework within which the Stanley Gibbons Group operates, including Board leadership and effectiveness, Board remuneration and internal control is based upon practices which the Board believes are appropriate to the size, risks, complexity and operation of the business.

In the statement below, we explain our approach to governance, and how the Board and its committees operate. It is the role of the Board to ensure that the Group is managed for the long-term benefit of all shareholders, with effective and efficient decision making. Effective corporate governance is an essential part of that role, reducing risk and adding value to our business.

Harry Wilson, Chairman

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Corporate Governance regime

Prior to 7 September 2022 the Company’s shares were traded on LSE AIM. The Company’s shares are no longer traded on a recognised Exchange. The Board continues to adhere to the Quoted Companies Alliance Corporate Governance Code for small and mid-size quoted companies (the QCA Code).

The QCA Code is constructed around ten broad principles and a set of disclosures. We have considered how we apply each principle to the extent that the Board judges these to be appropriate in the circumstances and below we provide an explanation of the approach taken in relation to each. The Board considers that it does not depart from any of the principles of the QCA Code.

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

Stanley Gibbons is a global leader in the world of stamp and coin collecting acting as dealer, auctioneer and publisher of related literature.

Our strategy is to build on the unrivalled heritage and market positions of our two main brands, ensuring that they are at the forefront of industry developments and encourage more people into the hobbies.

The key elements of this are:

To increasingly exploit the opportunities which are provided by the use of modern technology both in terms of marketing our products to a wider audience, making them more accessible and creating a more engaging experience around stamp and coin collecting.

Combining this with a physical presence which is immersive, enjoyable and a true ‘destination location’ for those who are or may become interested in the hobbies.

Gradually building a greater and wider appreciation of the attributes of the hobbies to a greater proportion of the population.

We are in a privileged position to be able to do this more effectively than our competitors and if we are successful, combined with then offering a truly exceptional customer experience, the whole industry will benefit. Our job is to ensure Stanley Gibbons benefits disproportionately, so our goal is to grow the size of the market as well as our share thereof.

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

The Group is committed to communicating openly with its shareholders to ensure that its strategy and performance are clearly understood. Understanding what our investors and analysts think about us, and in turn helping these audiences understand our business, is a key part of driving our business forward and we actively seek dialogue with the market.

We communicate with shareholders through the Annual Report and Accounts and Interim Accounts, and the Annual General Meeting (AGM) where the Directors are available for further discussion with shareholders. A range of corporate information is also available to shareholders, investors and the public on our website.

The directors actively seek to build relationships with both private and institutional shareholders and potential investors. Shareholder relations are managed principally by our Chairman who is supported in this role by the Chief Executive Officer, Chief Finance Officer and Company Secretary. Contact details of the above are as follows:

Harry Wilson – Chairman

Tom Pickford – Chief Executive Officer (Tel +44 (0)207 836 8444)

Kevin Fitzpatrick – Chief Finance Officer & Company Secretary

TEL + 44 (0)207 836 8444 or [email protected]

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

The Group is aware of its corporate social responsibilities and the need to maintain effective working relationships across a range of stakeholder Groups. In addition to its shareholders, these include the Group’s employees and pensioners, customers, local partners and suppliers. The Group’s operating and working methodologies under its Code of Business Conduct (which can be found here) 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 Group for the benefit of its shareholders as a whole. The Group endeavours to take account of feedback received from stakeholders, making amendments to arrangements and plans where appropriate and where such amendments are consistent with the Group’s longer-term strategy. We are fortunate in that our stakeholders (in particular our employees and customers) are passionate about what we do so we are never short of feedback as to how we can improve our products and services.

In terms of environmental responsibility, the Group takes due account of any impact its activities may have on the environment and has an Environmental and Social Policy, which can be found here which is updated annually.

Finally, through various procedures and systems, the Group ensures full compliance with health and safety legislation relevant to its activities.

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

The Board reviews risks facing the business on a regular basis. The identified principal risks and uncertainties are outlined in the Corporate Governance section of the Annual Report and Accounts, which can be found here.

Key Controls and Procedures

The Board maintains full control and direction over appropriate strategic, financial, organisational and compliance issues, and has put in place an organisational structure with defined lines of responsibility and delegation of authority.

The annual budget and forecasts are reviewed by the Board prior to approval being given. This includes the identification and assessment of the business risks inherent in the Company and the sector as a whole along with associated financial risks.

The system of internal financial control is designed to provide reasonably, but not absolute, assurance against material misstatement or loss. The key procedures include:

· detailed budgeting programme with an annual budget approved by the Board;

· regular review by the Board of actual results compared with budget and forecasts;

· regular reviews by the Board of full-year expectations;

· establishment of procedures for acquisitions, capital expenditure and expenditure incurred in the ordinary course of business;

· detailed budgeting and monitoring of costs incurred on the development of new products;

· reporting to the Board on changes in legislation and practices within the sector and accounting and legal developments pertaining to the Company;

· appointing experienced and suitably qualified staff to take responsibility for key business functions to ensure the maintenance of high standards of performance; and

· appraisal and approval of significant acquisitions and capital projects by the Board.

In October 2019 the Board established a cyber security sub-committee, of the Audit Committee, This committee has appropriate expertise to review and monitor response to this specialist subject and the growing business risks in this area and through the Audit Committee report back to the Board on this specific risk.

The Company’s auditors are encouraged to raise comments on internal control in their management letter following their audit, and the points raised and actions arising are monitored through to completion by the Audit Committee.

Principle 5: Maintain the Board as a well-functioning, balanced team led by the Chairman

The Board

The Board consists of two Executive Directors, Tom Pickford (CEO) and Kevin Fitzpatrick (CFO), and two Non-Executive Directors, Harry Wilson (Chairman), and Graham Shircore (NED). Mr Shircore is an appointee of Phoenix Asset Management Partners Limited, the investment manager to Phoenix SG Ltd which (at 12 September 2022) held 348,800,000 Ordinary shares, representing 84% of the Company’s issued share capital.

Description of Roles

Different Directors hold the roles of Chairman and Chief Executive Officer and there is a clear division of responsibilities between them.

The Chairman is responsible for overseeing the running of the Board and ensuring its effectiveness, and that no individual dominates the Board’s decision-making. He is also responsible for making sure that the Board operates in the interests of the shareholders and other stakeholders.

The CEO’s primary role is to provide overall leadership and vision in developing, with the Board, the strategic direction of the Company. Additionally, the CEO is responsible for managing the day-to-day business activities and for the implementation of the strategy, working with the Chief Finance Officer and senior managers. Tom Pickford was appointed Chief Executive Officer on 12 September 2022 and was appointed a Director on 31 October 2022.

The role of the Non-Executive Director is to constructively review, challenge and help to develop strategy, whilst also scrutinising the performance of management.

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

The Directors believes that the composition and breadth of experience of the Board are appropriate for the Group at present and that its blend of relevant experience, skills and personal qualities and capabilities is sufficient to enable it to successfully execute its strategy. The skills and experience required for future development of the Group are kept under continual review and appropriate actions taken when needs are identified. See here for biographies of the Board.

The Articles of Association require that one-third of Directors must stand for re-election by shareholders at every AGM. The Board has adopted a policy whereby all Directors retire and stand for re-election every year.

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

The Directors have carried out an internal evaluation of the performance of the Board and its Committees for the last financial year ending 31 March 2022.

This involved each Director completing an evaluation questionnaire which covered effectiveness from multiple angles including: Board structure and committees; Board arrangements, frequency and time; content of Board meetings; Board culture; Board evaluation and succession; and individual contributions. The completed questionnaires were collated into an anonymous summary of results by the Group Secretary. All comments and any areas of concern were highlighted, and the Chairman led an open discussion of these with the Board.

The Board considers that it has been effective during the current stage of the Group’s development which is to steer the business through the rebuilding phase to sustainable long term profitability.

It is the Board’s intention to continue to review annually its performance and that of its Committees.

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

The Board is committed to delivering high standards of corporate governance, a key element of which is managing the Company in a socially responsible way. We are mindful of the Company’s impact on our all our stakeholders, including employees, pensioners, clients, suppliers, shareholders and local communities. As a global business, the Group is able to make a positive contribution to society and to the environment. We aim to continually improve our work in these areas and will maintain a quality system appropriate to the standards required for a Company of its size.

The Executive Directors communicate regularly with staff through meetings and available media, including video conferencing. The Board has supported the introduction of more flexible working for employees, establishing a culture of individual responsibility to deliver collective goals

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

The Board provides strategic leadership for the Group and operates within the scope of a robust corporate governance framework. The Executive Directors have day-to-day responsibility for the operational management of the Group’s activities. The Non-Executive Directors are responsible for bringing independent and objective judgement to Board decisions.

Matters Reserved for the Board

The Board operates both formally, through Board and Committee meetings, and informally, through regular contact amongst Directors. High-level decisions on such matters as strategy, financial performance and reporting, dividends, risk management, major capital expenditure, acquisitions and disposals are reserved for the Board or Committees. See here the Matters Reserved for the Board.

Appointment of Directors

The Board formally approves the appointment of all new Directors, following consideration of the recommendation from the Nomination Committee. All Directors are required to submit themselves for re-election at each Annual General Meeting following their appointment.

BOARD COMMITTEES

The Board has three Committees, each with their own specific areas of responsibility – Audit, Remuneration and Nomination. Each Committee meets in accordance with its Terms of Reference and on an ad hoc basis as required.

Audit Committee

Terms of Reference: The Committee operates under Terms of Reference agreed by the whole Board, see here.

Activities:

In particular, the Committee is responsible for:

· ensuring that the financial performance of the Group is properly monitored and reported;

· monitoring and reviewing formal announcements relating to financial performance;

· meeting the auditors and agreeing on audit strategy;

· reviewing reports from the auditors and management relating to accounts and internal control systems; and

· making recommendations to the Board in respect of external auditor appointment and remuneration.

The Committee reports to the Board on any matters in respect of which it considers that action or improvement is needed and makes recommendations as to the steps to be taken.

Remuneration Committee

Terms of Reference:

The Remuneration Committee operates under Terms of Reference agreed by the whole Board, see here.

Activities:

The Remuneration Policy developed by the Committee and details of each Director’s remuneration are presented in the Directors’ Remuneration Report of the Annual Report and Accounts, which can be found here.

Nomination Committee

Terms of Reference: The Committee operates under Terms of Reference agreed by the whole Board, see here.

Activities:

In particular the Committee is responsible for:

· identifying the skills and experience required for the next stage in the Company’s development;

· keeping close watch on succession planning and possible internal candidates for future board roles; and

· providing assistance to the Chairman of the Board in taking steps to remove any underperforming director.

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

The Group places a high priority on regular communications with its various stakeholder Groups and aims to ensure that all communications concerning the Group’s activities are clear, fair and accurate. It communicates with its shareholders through the Annual Report and Accounts and Interim Accounts, full and half-year announcements, the Annual General Meeting (AGM) and one to one meetings with existing or potential new shareholders.

A range of corporate information (including all Company announcements and Annual Reports) is also available to shareholders, investors and the public on the Group’s corporate website, www.stanleygibbonsplc.com Click here to see Notices of all General Meetings held over the last five years.

31 October 2022