Board leadership and purpose
Division of responsibilities
Composition, succession and evaluation
Audit, risk and internal control
Remuneration
Principle A
A successful company is led by an effective Board, whose role is to promote the long-term sustainable success of the Company, generating value for shareholders and contributing to wider society.
Company position and update
Long-term sustainability, strategy development and the financial prospects of the Company’s business model are considered regularly as part of actively engaged discussions by the Board.
This is premised upon the repeatedly proven value-creation success of the Oakley Funds, driven by earnings growth in underlying portfolio companies. The Board manages the Company’s cash position to enable existing commitments to Oakley Funds and share buy-backs when appropriate.
The Company aim is to provide consistent long-term returns in excess of the FTSE, and its investment policy is included as part of this Annual Report. To ensure there is continuous enhancement in Board practices, the Nomination Committee performs an annual effectiveness assessment of the Board and each of its committees, with a focus on both risks and opportunities.
Principle B
The Board should establish the Company’s purpose, values and strategy, and satisfy itself that these align with its culture. All Directors must act with integrity, lead by example and promote the desired culture.
Company position and update
OCI aims to provide shareholders with consistent long-term returns in excess of the FTSE All-Share Index by providing exposure to private equity returns, where value can be created through market growth, consolidation and performance improvement.
OCI invests in funds and direct investments managed and/or advised by the Oakley group, enabling investors, who may otherwise not have access to private equity, to share in the growth and performance of high-quality, private European companies in attractive sectors.
The Board actively fosters and supports a culture that is open to new ideas and influences its service providers through effective challenge and regular and robust review of performance.
OCI keenly focuses on overseeing its Investment Adviser and Operational Services provider, and as part of this, due consideration is given to alignment between the Company’s purpose, values, strategy and culture with that of Oakley.
Principle C
The Board should ensure that the necessary resources are in place for the Company to meet its objectives and measure performance against them. The Board should also establish a framework of prudent and effective controls, which enable risk to be assessed and managed.
Company position and update
Through the work of its regular committee and Board meetings, the Board ensures frequent measurement against the Company’s objectives. The adequacy, effectiveness and appropriateness of the resources available to the Board, and the controls that it oversees, are monitored regularly at Board meetings, and form a key element of the Board’s annual effectiveness assessment. The Directors’ report outlines the activities of the Board in more detail. Please refer to the various Committee reports for the respective purposes and activities of each of the committees.
Risk appetite is set at least annually, a risk report is issued quarterly and levels of risk are maintained within Board-approved limits.
If any risk is above the early warning threshold, mitigating control to reduce the risk will be prioritised.
The overall objective is to preserve value and make improvements for observed opportunities or inefficiencies, while monitoring and managing current and emerging risks.
Principle D
In order for the Company to meet its responsibilities to shareholders and stakeholders, the Board should ensure effective engagement with, and encourage participation from, these parties.
Company position and update
The Board is committed to maintaining the Company’s reputation for high standards of conduct and engagement with its shareholders and stakeholders. Refer to stakeholder engagement reporting section.
The Management Engagement Committee oversees the relationships with key service providers and ensures accountability and continuous value-added performance.
The Board remains committed to transparent reporting in all communications including in Annual and Half-yearly Reports and Accounts via the Company website, through quarterly trading updates, and by means of annual shareholder meetings and Capital Markets Days. The Company has an Investor Relations programme with outreach to existing and potential shareholders, which includes regular quarterly feedback on the Company’s investor relations activities.
Board leadership and purpose
Division of responsibilities
Composition, succession and evaluation
Audit, risk and internal control
Remuneration
Principle F
The Chair leads the Board and is responsible for its overall effectiveness in directing the Company. They should demonstrate objective judgement throughout their tenure and promote a culture of openness and debate. In addition, the Chair facilitates constructive Board relations and the effective contribution of all Non-Executive Directors, and ensures that Directors receive accurate, timely and clear information.
Company position and update
Caroline Foulger, as Chair, leads the Board of Directors with a culture of demonstrative challenge, openness and accountability. She was independent at appointment, and is considered by the Board to remain so, as assessed consistently with the circumstances listed in AIC Provision 13.
The responsibilities of the Board are set out in the Company’s bye-laws, which are published on its website: https://www.oakleycapitalinvestments.com/media/x0bhfpdm/bye-laws-of-oakley-capital-investments-2020.pdf.
The number of meetings of the Board and its committees, and the individual attendance by Directors, are reported on in the Nomination Committee’s report to the Board, which is included in this Annual Report.
The effectiveness of the Chair is a component of the annual Board Effectiveness Review and the consideration of that is led by the Senior Independent Director.
Principle G
The Board should consist of an appropriate combination of Directors (and, in particular, Independent Non-Executive Directors) such that no one individual or small group of individuals dominates the Board’s decision-making.
Company position and update
Three of four Directors are considered independent (Caroline Foulger, Richard Lightowler and Fiona Beck).
Richard Lightowler serves as Senior Independent Director, providing an available path of intermediation for shareholders and other Directors, while also acting as trusted adviser and sounding board to the Chair.
Peter Dubens is the founder and Managing Partner of the Oakley group, and hence is not considered independent. The independent members of the Board consider the membership of Peter Dubens, and his alternate, David Till, to be a valuable component of the Board’s effectiveness. The Company implements a strict conflicts of interest Policy to mitigate any potential interference with Directors’ exercise of judgement.
The culture of open and honest communication and forthright discussion means no individual dominates conversations that result in key decisions being taken by the Board.
Committees of the Board are open for other non-conflicted Board members to attend, which typically occurs, thus enhancing transparency.
Principle H
Non-Executive Directors should have sufficient time to meet their Board responsibilities. They should provide constructive challenge and strategic guidance, offer specialist advice and hold third-party service providers to account.
Company position and update
The Company regularly reviews and considers the number of board and chair positions (for both public and private companies) each Director holds to ensure they have adequate time to dedicate to the Company.
A regular Board calendar is established to enable relevant meeting materials to be provided in advance. Meeting timetables allow sufficient time for agenda items and debate. Adhoc meetings are arranged from time to time with advance materials for time-sensitive matters.
Directors have regular direct access to both senior and junior level employees at Oakley as a key service provider. The Management Engagement Committee promotes and supports continuous improvement from both a tactical service delivery and a high-level strategic engagement perspective.
Operational services and administration services are provided by the existing Investment Adviser, Oakley Capital. Clear separation is observed between the administration function, accounting and investment advisory services.
Principle I
The Board, supported by the Company Secretary, should ensure that it has the policies, processes, information, time and resources it needs in order to function effectively and efficiently.
Company position and update
The Board has appointed Carey Olsen Bermuda for corporate secretarial services, and the Company has its registered address at the Carey Olsen offices.
The Governance, Regulatory and Compliance Committee oversees the review of all policies and procedures, which is performed at least annually and updated where appropriate.
Directors and committees of the Board continue to have access to independent professional advice, at the Company’s expense, as appropriate.
The Risk Committee commissioned an independent assessment of the Company’s risk register during the year, which validated the scope of risk considered and the robustness of existing arrangements.
Board leadership and purpose
Division of responsibilities
Composition, succession and evaluation
Audit, risk and internal control
Remuneration
Principle J
Appointments to the Board should be subject to a formal, rigorous and transparent procedure, and an effective succession plan should be maintained. Both appointments and succession plans should be based on merit and objective criteria and, within this context, should promote diversity of gender, social and ethnic backgrounds and cognitive and personal strengths.
Company position and update
The Nomination Committee completes a formal due diligence process on all appointments, and reviews annually the continued suitability of Directors by means of self-declaration questionnaires.
Promotion of inclusiveness, diversity and variety of professional experience as well as personal strengths are thoroughly incorporated in decision-making for Director selection and effective succession planning.
During 2023, Stewart Porter retired from the Board. While discussions were held with a potential successor, these did not come to fruition. The search for a new director will continue in earnest in 2024.
Principle K
The Board and its committees should have a combination of skills, experience and knowledge. Consideration should be given to the length of service of the Board as a whole and membership regularly refreshed.
Company position and update
The Board continues to consider its level of diversity of demographic and soft and hard skills, as well as a balance of appropriate experience and tenure. Each of the Directors retires and is subject to re-election at each AGM. Nomination decisions are taken by the Nomination Committee of the Board.
Refer to the Directors’ report for the biography of each Director.
All Directors were re-elected to the Board during the November 2023 Annual General Meeting, with the exception of Stewart Porter, who retired from his position. Due to the long-term nature of the Company’s investments in the Oakley Funds, director continuity and succession planning are important considerations that are considered and assessed by the Nomination Committee of the Board.
Principle L
Annual evaluation of the Board should consider its composition, diversity and how effectively members work together to achieve objectives. Individual evaluation should demonstrate whether each Director continues to contribute effectively.
Company position and update
Board and committee effectiveness is formally assessed annually.
The objective of Board diversity, inclusion and collaboration is considered during the Board nomination and evaluation process, and feeds into the annual diversity disclosure within this report.
Board leadership and purpose
Division of responsibilities
Composition, succession and evaluation
Audit, risk and internal control
Remuneration
Principle M
The Board should establish formal and transparent policies and procedures to ensure the independence and effectiveness of the external audit function and satisfy itself on the integrity of financial and narrative statements.
Company position and update
The Audit Committee considers the independence, quality and effectiveness of the external auditors at least annually.
The Company rigorously follows policy and procedure to ensure independence and effectiveness of external audit and integrity of the Financial Statements and narrative reporting. During 2023, the non-audit services policy was reviewed by the Company. Refer to the Audit Committee report.
Principle N
The Board should present a fair, balanced and understandable assessment of the Company’s position and prospects.
Company position and update
The Company’s financial position and prospects are reviewed on an ongoing basis; refer to the viability statement. This includes assessment and monitoring of emerging and principal risks relevant to the business model of the Company. The Annual and Half-yearly Reports published in 2023 provided fair, balanced and understandable commentary on the Company’s position and prospects.
Principle O
The Board should establish procedures to manage risk, oversee the internal control framework and determine the nature and extent of the principal risks the Company is willing to take in order to achieve its long-term strategic objectives.
Company position and update
The Risk Committee of the Board proposes at least annually to the Board the level of risk tolerances, balancing risk and opportunity. Quarterly risk monitoring clearly distinguishes where the Board can set tolerances and control risk, or where it can monitor for early warning signals to trigger engagement with service providers or other external parties for other potential actions.
Emerging risks are monitored and incorporated into the risk appetite framework as opportunities arise or new market or strategic objectives emerge.
The Audit Committee also maintains oversight of the Company’s internal financial reporting controls and consider the internal financial reporting controls of Oakley.
Principle P
Remuneration policies and practices should be designed to support strategy and promote long-term sustainable success.
Company position and update
All Independent Directors of the Company, excluding Peter Dubens (no fees), are paid a fixed Directors’ fee only.
The Company has adopted a policy whereby Independent Directors are required to hold shares in the Company to the value of one year’s fees within three years of appointment. As at 31 December 2023, all Directors that have reached the three-year threshold met this requirement.
Principle Q
A formal and transparent procedure for developing remuneration policy should be established. No Director should be involved in deciding their own remuneration outcome.
Company position and update
The Remuneration Committee reviews market appropriateness and fairness of Director remuneration at least annually. The annual fees were reviewed in September 2023 and maintained at the levels set during 2022. Further detail is included within the Remuneration Committee’s Remuneration report.
Principle R
Directors should exercise independent judgement and discretion when authorising remuneration outcomes, taking account of Company and individual performance, and wider circumstances.
Company position and update
Company performance, operating complexities, individual contribution and market circumstances are all considered by the Remuneration Committee in setting Directors’ fees. The Company has in place a Remuneration Committee, which is responsible for the remuneration of the Board, while ensuring that no Director determines their own remuneration.