Corporate governance

The Group maintains a high standard of corporate governance and wherever possible complies with the provisions of the Combined Code.

Compliance with the Combined Code
Board of directors
Matters reserved for Main Board
Executive director responsibilities
Sub committees and terms of reference
Board and Committee performance evaluation
Shareholder contact

Compliance with the Combined Code

Except in one respect, the directors believe that the Group has fully complied with the Combined Code during and after the year ended 31 March 2006. The single exception concerns the composition of the Board. The Group has four executive directors, three independent non-executive directors, and a non-executive chairman. The Chairman is not regarded as independent under the Combined Code even though, prior to his appointment in November 2002, he had no relationship with the Group. The Code advises that for FTSE 250 companies the number of independent non-executives should at least equal the number of executive directors. For such compliance by Workspace, this would mean either reducing the number of executive directors or appointing another independent non-executive director. Given the selection process for non-executive directors (described below) and that the Board itself regards the Chairman as independent, the Board feels the balance of skills and experience of the four non-executive directors as shown below is right for the Group. At this stage therefore, the Board does not intend to appoint a further non-executive director, although this matter will be kept under review.

A review of code compliance can be downloaded here.

Board of directors

The normal Board complement of the Company comprises four executive directors and four non-executive directors, three of whom are independent of management (under the 2003 Code) and free from any personal business or other relationship with the Group. The fourth non-executive director is the Chairman.

All directors have written contracts and in the case of non-executive directors these specify those corporate matters that are reserved for decision by the full Board, together with the rights of individual directors to seek independent professional advice and services paid for by the Company. Committees of the Board share these rights of access to independent advice. All directors also have access to the advice and services of the Company Secretary who is responsible to the Board for ensuring that Board procedures are complied with. Both the appointment and removal of the Company Secretary is a Board matter. Executive directors have one-year rolling contracts of employment whilst non-executive directors are appointed by the full Board for a term not exceeding three years.

All directors have induction training on joining the Board including briefings on the Company’s business and visits to estates. Resources are provided for the continued training and development of all directors.

The non-executive directors meet at least annually without the executive directors and on such other occasions as deemed appropriate.

Matters reserved for Main Board

The Board retains full and effective control over the Group’s activities. It has reserved a number of matters for its exclusive consideration and approval. These include (but are not restricted to) the establishment and constitution of Board Committees, identification of strategic objectives, approval of business plans, budgets and financial reports, acquisition of properties valued £5m or more and significant capital projects, provision of guarantees and treasury arrangements, stock issuance and risk management policies. Full details of matters reserved for the full Board can be downloaded here.

Executive director responsibilities

Routine day-to-day matters are delegated by the Board to an Executive Board comprising the executive directors.

The Executive Board comprises the Chief Executive, a Finance Director, an Operations Director and a Property Director, whose responsibilities are described in the Company overview section of this website.

The Board has nominated directors with specific responsibilities in key business areas. These extend to social, environmental ethical issues; health and safety; staff (equal opportunities, remuneration, training and development); customers and suppliers; community involvement and investor relations. These nominated directors report regularly to the Board.

Sub committees and terms of reference

The Board has established Remuneration and Audit Committees, each of which consists exclusively of the three independent nonexecutive directors. The Nominations Committee is chaired by Tony Hales, the Chairman of the Company and also includes the three other non-executive directors. The terms of reference of these committees are as follows: 
• The Audit Committee's Approved Terms of Reference can be downloaded here
• The Nominations Committee's Approved Terms of Reference can be downloaded here
• The Remuneration Committee's Approved Terms of Reference can be downloaded here

The full Board of Directors meets on a fixed bi-monthly frequency with further ad hoc meetings as necessary. Regular quarterly meetings are held of the Audit Committee, whilst the Remuneration Committee has at least four fixed meetings a year.

Board and Committee performance evaluation

The Board reviews its performance and modus operandi and that of each of its committees annually (each Committee having in turn reviewed itself by reference to the needs of the business and required governance standards). Included in this review is consideration of individual directors’ performance (which in the case of the executive directors is undertaken as part of the wider performance appraisal process applied to staff across the entire Group) and a review of the performance of the Board as a whole (including its delegations, risk assessment and management processes, reporting procedures and effectiveness in monitoring performance and developing strategy).

The Board’s reviews of itself, its committees and its members conducted in the last year identified no significant weaknesses or deficiencies. Further, it is the policy of the Board to consider the continuing suitability of all directors who are offered for re-election and review whether their continued contribution would be of benefit to the Group. Such a review has been undertaken this year over the proposed re-appointments of Tony Hales and Bernard Cragg, the review concluded their positive continued effectiveness and commitment to the role. Meetings are held between the non-executive directors without the executives present (usually before the full Board meetings and meetings between the non-executive directors without the Chairman present, to review the Chairman’s performance) and are held at least annually.

Shareholder contact

Meetings are held with principal shareholders following both the announcement of the Group’s preliminary and its interim results. It is the practice of the Company that, ordinarily, meetings with shareholders will be attended by executive directors alone or accompanied by representatives of the Company’s stockbroker. However, it is the Company’s practice also, following the preliminary results, that such contact meetings shall be followed up by a telephone conversation between the Chairman and the shareholder.

The Company also requires its stockbrokers to discuss the outcome of meetings with shareholders and report its findings to the Board. The Board believes that this provides a better form of governance than attendance at meetings by non-executive directors. Other ad-hoc meetings and presentations and site visits are arranged for shareholders throughout the year. In addition, each year a dinner is held with principal shareholders which the full Board attend. This has been found by both the Board and shareholders to be an effective means by which the entire Board may be accessed by major shareholders.