This statement includes a review of how corporate governance acts as the foundation for our corporate activity and is embedded in our business and the decisions we make. The Board is committed to the creation of long-term sustainable value for the benefit of our shareholders and wider stakeholders.
On 4 December 2019 the entire issued ordinary share capital of the Company was acquired by Connect Bidco Limited, a newly incorporated entity owned by a consortium of (i) funds advised by Apax; (ii) funds advised by Warburg Pincus or its affiliates; (iii) Canada Pension Plan Investment Board; and (iv) Ontario Teachers’ Pension Plan Board. Up to this date, the Company was listed on the London Stock Exchange and subject to the UK Corporate Governance Code. The Company was re-registered as a private limited company on 5 December 2019.
For the period 4 December 2019 to 31 December 2019, the Company ceased to apply the UK Corporate Governance Code and instead followed its own corporate governance practices. The Company was comfortable with its compliance under the UK Corporate Governance Code during the largest part of the year as noted below in further detail. As part of its transition to a privately owned company, the Company carried out a review of its corporate governance practices by benchmarking its corporate governance activities against the Wates Corporate Governance Principles for Large Private Companies. This review has led to several recommendations to enhance its corporate governance arrangements, including the adoption of a corporate governance policy.
This section provides an overview of how the Board applied the Corporate Governance Code during the reporting period up to 4 December 2019.
The Company is committed to the highest standards of governance. The Directors consider that the Company has, throughout the year until 4 December 2019, complied with the provisions of the 2018 UK Corporate Governance Code save as noted below.
Until 4 December 2019, Andrew Sukawaty was Chairman. He did not meet the independence criteria on appointment as he had previously been an Executive Director. Although the Code recommends that the Chairman is independent on appointment, the Board unanimously believed that his wide experience meant that he was extremely well qualified to lead the Company as its Chairman and had the skills and experience to ensure that the Board continued to function effectively. Andrew Sukawaty had also been in post beyond the advisory nine years due to the time served as executive Chairman. The Board recognised the recommended term within the Corporate Governance Code. Out of the 10 Non-Executive Directors (excluding the Chairman), only one was classed as non-independent by the Board. A copy of the UK Corporate Governance Code can be found at frc.co.uk.
This section provides an overview of how the Board applied its corporate governance practices for the period 4 December 2019 to 31 December 2019.
Following the acquisition, the Company has remained committed to achieving the highest standards of governance. The composition of the Board was altered and the Nominations, Telecoms Regulatory, Audit and Remuneration Committees were disbanded due to the resignation of all non-executive directors on 4 December 2019. There are Audit and Remuneration Committees at the holding company level which is responsible for the Inmarsat Group.
The Company remains in a period of transition whilst former key group responsibilities and delegations are being transferred. It is the Board’s intention to adopt a corporate governance policy during 2020, which will reflect the new ownership structure, delegations and operational governance post-acquisition. The corporate governance policy will provide detailed governance principles reserved for the Board and its subsidiaries’ boards. These matters are strictly reserved to ensure the Directors and subsidiaries’ directors can demonstrate sound and competent execution of their statutory duties (including oversight of the management of relationships and engagement with stakeholders on their behalf) in accordance with the Companies Act 2006 (the “Act”) and the Companies (Miscellaneous Reporting) Regulations 2018, as well as applicable local legislation.
The Company has composed a Board with a balance of skills, backgrounds, experience and knowledge required to compliment the promotion of the long term success of the Company and to identify the impacts of the Board’s decisions on their stakeholders, and where relevant, the likely consequences of those decisions in the long-term. Individual directors have sufficient capacity to make a valuable contribution that is aligned to the Company’s activities (details of the skills and experience are set out on page 5 of the 2019 Annual Report and Accounts).
The Directors are mindful of corporate governance and seek to demonstrate understanding of their accountability and statutory responsibilities, including application of their section 172 duties under the Companies Act 2006. The current Board understands their primary duties under the Act and broader regulatory responsibilities, e.g., General Data Protection Regulations, Anti-Money Laundering, Corporate Criminal Offence; and group-wide governance policies remain in place to support these primary duties and broader regulatory requirements.
Until such time that the new corporate governance policy is adopted, the Board continues to delegate key matters and stakeholder engagement to the Executive Management Team. Principal decisions, including the introduction of new business opportunities, product introduction and capital expenditure, are also delegated to the Executive Management Team. In making its decision, the Executive Management Team is required to consider the outcome of any stakeholder impact assessment that has been undertaken to support it making any principal decision (details of the principal decisions made during the reporting period are set out on in the s172 Statement on page 1 and 2 of the 2019 Annual Report and Accounts). The Executive Management Team reports back to the Board as part of the wider risk management and internal controls of the group, allowing the Board to demonstrate its oversight of the delegated responsibilities. To support effective decision-making Directors and the Executive Management Team take into account the Code of Ethics and Anti-Bribery & Corruption Policy when making decisions on behalf of the Company.
The Board is ultimately responsible for organising and directing the affairs of the Company in a manner most likely to promote the success of the Company for the benefit of its members whilst complying with legal and regulatory frameworks. Post-acquisition, the main activities of the Company are that of a holding company with oversight of subsidiaries’ investments and dividend considerations. Directors are required to consider factors which will contribute to the Company’s success, and those that are affected by the Company’s activities (details of the principal risks and uncertainties are set out on page 2 and 3 of the 2019 Annual Report and Accounts).