The Edinburgh Investment Trust Plc Annual Financial Report 2022 - Flipbook - Page 37
THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 35
Directors’ Report
For the year ended 31 March 2022
BUSINESS AND STATUS
The Company was incorporated and registered in Scotland on
1 March 1889 as a public limited company, registered number
SC1836. It is an investment company as defined by section 833
of the Companies Act 2006 and operates as an investment trust
within the meaning of the Corporation Tax Act 2010 and the
Investment Trust (Approved Company) (Tax) Regulations 2011.
HM Revenue & Customs have approved the Company’s status
as an investment trust and, in the opinion of the Directors, the
Company has conducted its affairs so as to enable it to maintain
such approval.
CORPORATE GOVERNANCE
The Corporate Governance Statement set out on page 31 is
included in this Directors’ Report by reference.
THE BOARD
At the year end the Board comprised five non-executive Directors.
The Company’s Corporate Governance Framework is set out on
page 30. This shows the key objectives of the Board and also
the membership and key objectives of the Board’s supporting
committees which deal with specific aspects of the Company’s
affairs: the Audit, Management Engagement and Nomination
Committees.
The Board regards all of the Directors to be wholly independent of
the Company’s Manager.
Chairman
The Chairman of the Company is Glen Suarez. He has been a
member of the Board since 2013 and was appointed Chairman on
22 November 2017.
Senior Independent Director
The Company’s Senior Independent Director is Vicky Hastings who
was appointed to the role on 25 July 2019.
Board Balance and Diversity
The Board’s policy for the appointment of non-executive directors
is based on its belief in the benefits of having a diverse range of
experience, skills, length of service and backgrounds, including
but not limited to gender diversity. The Board has considered
the recommendations of the Davies and Hampton-Alexander
reviews as well as the Parker review, but does not consider it
appropriate to establish targets or quotas in these regards. The
policy is always to appoint the best person for the job and there
will be no discrimination on the grounds of gender, race, ethnicity,
religion, sexual orientation, age or physical ability. The overriding
aim of the policy is to ensure that the Board is composed of a
combination of people with a range of business, financial or asset
management skills and experience relevant to the direction and
control of the Company for ensuring effective oversight of the
Company and constructive support and challenge to the Manager.
The Board comprises five non-executive directors of which, at
present, two are female. Summary biographical details of the
Directors are set out on pages 28 and 29.
BOARD RESPONSIBILITIES
The Board has overall responsibility for the Company’s affairs.
The Directors are equally responsible under UK law for promoting
the success of the Company and for the proper conduct of the
Company’s affairs taking into consideration the likely consequences
of any decision in the long-term; the need to foster business
relationships with its Manager, other service providers and advisors;
the impact of the Company’s operations on the community and
the environment; the desirability of the Company maintaining a
reputation for high standards of business conduct; and the need to
act fairly between shareholders of the Company. This is reported
in the Strategic Report on page 23. The Board is committed to the
prevention of corruption in the conduct of the Company’s affairs
and, taking account of the nature of the Company’s business
and operations, has put in place procedures for and on behalf
of the Company that the Board considers adequate to prevent
persons associated with it from engaging in bribery. It has a zero
tolerance approach towards the criminal facilitation of tax evasion.
In addition, the Directors are responsible for ensuring that their
policies and operations are in the interest of all of the Company’s
shareholders and that the interests of creditors and suppliers to the
Company are properly considered.
The Board has a schedule of matters reserved for its consideration,
which clearly define the Directors’ responsibilities. The main
responsibilities include: setting long-term strategy; setting the
Company’s objectives, policies and standards; ensuring that the
Company’s obligations to shareholders and others are understood
and complied with; selecting an appropriate Manager; approving
accounting policies and dividend policy; determining dividends
payable; managing the capital structure; reviewing investment
performance; assessing risk; approving borrowing; and reviewing,
and, if agreed, approving recommendations made by the Board’s
committees. The schedule of matters reserved for the Board will be
available for inspection at the AGM and is otherwise available at the
registered office of the Company and on the Company’s website.
The Board ensures that shareholders are provided with sufficient
information in order to understand the risk-reward balance to
which they are exposed by holding their shares, through the
portfolio details given in the half-yearly and annual financial reports,
factsheets and daily NAV disclosures.
The Board meets at least five times each year. Additional meetings
are arranged as necessary. Regular contact is maintained by
the Manager with the Board between formal meetings. Board
meetings follow a formal agenda, which includes a review of the
investment portfolio with a report from the Manager on the current
investment position and outlook, strategic direction, performance
against stock market indices and the Company’s peer group, asset
allocation, gearing policy, cash management, revenue forecasts