Corporate Governance

As an AIM listed company, Paragon Entertainment Limited is not required to comply with the provisions of the UK Corporate Governance Code (“the Code”) that applies to companies with a premium London Stock Exchange listing. However, the Board recognises the importance and value of good corporate governance procedures and accordingly has selected those elements of the Code that it considers relevant and appropriate to the Group, given its size and structure.  An overview of the Group’s corporate governance procedures is given below.

Principles of the Code

Board of Directors

The Group is controlled through the Board of Directors which comprises the Non-Executive Chairman, the Chief Executive Officer and one other Executive Director. The roles of Chairman and Chief Executive are separate and have been so throughout the year.

Non-Executive Directors are appointed on a six month rolling term and are subject to re-election along with the Executive Directors.

Board meetings are scheduled to take place quarterly, with additional Board meetings held when and as the Chairman or other Board members deem necessary.  The Board is provided with Board papers, usually during the week before each Board meeting.

There is a Company procedure which describes the matters which are reserved for the Board and all members of the Board have access to this document. These matters routinely include:

If required, the Directors are entitled to take independent advice and, if the Board is informed in advance, the cost of the advice will be reimbursed by the Company. The Company Secretary’s services are available to all members of the Board. The appointment and removal of the Company Secretary is a decision for the Board as a whole.

Board Effectiveness
The Chairman is responsible for conducting an annual assessment of the effectiveness of the Board and its Committees through one-to-one discussions with each Director.  Consideration is given to a number of areas, including board composition, meeting structure, strategic oversight, risk management, succession planning, with the outcomes and principal findings raised with the Board for consideration.

The performance of the Chief Executive Officer is appraised annually by the Chairman.  The performance of the remaining Executive Directors is appraised annually by the Chief Executive Officer.

Committees

Remuneration Committee

The Remuneration Committee comprises of the Non-Executive Chairman, Mr. M Taylor, Non-Executive Director, Mr D Bridgford and the Chief Executive Officer, Mr M Pyrah.  It is responsible for the terms and conditions of employment and remuneration of the Executive Directors. The Remuneration Committee may consult external agencies when ascertaining market salaries. The Remuneration Committee has written terms of reference and the Chairman of the Remuneration Committee is available at the Annual General Meeting to answer any Shareholder questions. The Remuneration Committee also fulfils the role of Nomination Committee for the purpose of reviewing and recommending board appointments.

Audit Committee

The Company has an Audit Committee chaired by Mr. M Taylor and includes Mr D Bridgford and Mr. M Pyrah. No-one other than the members is entitled to be present at a meeting of the Audit Committee, however, the committee can and does invite other persons of the Company to attend including the Financial Director and the Group’s Auditor.  The Committee meets at least twice a year and has written terms of reference. It monitors the adequacy of the Group’s financial controls and provides the opportunity for the external Auditor to communicate directly with the Non-Executive Chairman.

The Audit Committee also undertakes a formal assessment of the Auditor’s independence each year which includes: a review of non-audit services provided to the Group and related fees; discussion with the Auditor detailing all relationships with the Group and any other parties that could affect independence or the perception of independence; a review of the Auditor’s own procedures for ensuring the independence of the audit firm and partners and staff involved in the audit, including the regular rotation of the audit partner; and obtaining written confirmation from the Auditor that, in their professional judgement, they are independent. An analysis of the fees payable to the external audit firm in respect of both audit and non-audit services during the year is set out in the financial statements.

Executive Operational Committees

Mananagement Committee

The Management Committee, chaired by Mr. M Pyrah, deals with the implementation of business strategy and significant operational matters. It meets monthly to discuss the core activities of the Group, current performance, progress on management initiatives and other relevant matters.