267694 EdinburghIT AR 2024 WEB - Flipbook - Page 35
THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 33
CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
COMPLIANCE WITH THE AIC CODE
This Corporate Governance statement forms part of the
Directors’ Report. The Board is committed to maintaining
high standards of Corporate Governance and is accountable
to shareholders for the governance of the Company’s affairs.
The Board of the Company has considered reporting against
the principles and provisions of the AIC Code of Corporate
Governance (the “AIC Code”). The AIC Code adapts the
principles and provisions set out in the UK Corporate
Governance Code (the “UK Code”) to make them relevant for
investment companies and includes supplementary guidance
on issues that are of specific relevance to the Company.
The Board considers that reporting against the principles
and provisions of the AIC Code, which has been endorsed
by the Financial Reporting Council provides more relevant
information to shareholders. This enables boards to make a
statement that, by reporting against the AIC Code, they are
meeting their obligations under the UK Code and associated
disclosure requirements under paragraph 9.8.6 of the FCA’s
Listing Rules.
The AIC Code is available on the AIC website
(www.theaic.co.uk) and the UK Corporate Governance Code
can be found on the Financial Reporting Council’s website
(www.frc.org.uk)
The Board recognises that UK Code was updated in January
2024 following a consultation which concentrated on a
limited number of changes. The AIC has welcomed the
final amendments to the UK Code and confirmed that it is
reviewing these changes, and where appropriate, will be
updating the AIC Code. The Board will report against the
2024 AIC Code, which is expected to apply to financial years
beginning on or after 1 January 2025.
Throughout the year ended 31 March 2024, the Company
complied with the principles and provisions of the AIC
Code, except for one provision regarding the remuneration
committee as explained below.
Provision 37 states that the board should establish a
remuneration committee of independent non-executive
directors with a minimum membership of three, or in the
case of smaller companies, two. The Board has resolved
that a remuneration committee is not appropriate for a
company of this size and nature. Remuneration is therefore
regarded as part of the Board’s responsibilities to be
addressed regularly. The Board as a whole, comprising of
independent non-executive directors, performs the function
of the remuneration committee with the key responsibility
to set the remuneration policy of the Company. Please see
Directors Report on page 38 for the Board’s responsibilities.
The UK Corporate Governance Code includes provisions
relating to the role of the chief executive, executive directors’
remuneration and the need for an internal audit function.
For reasons set out in the AIC Code, the Board considers
these provisions not relevant to the position of the Company,
being an externally managed investment company with no
executive Directors, employees, or internal operations. It
further considers an internal audit function unnecessary as
the relevant issues are addressed through the Manager’s own
control environment which itself is subject to routine external
independent review.
Information on how the Company has applied the principles
of the AIC Code is provided in the Governance Section,
including the Directors’ Report as follows:
–
the composition and operation of the Board and its
committees are summarised on page 32, and page 34 in
respect of the Audit Committee;
–
the Company’s approach to internal control and risk
management is summarised on page 21;
–
the contractual arrangements with, and assessment of,
the Manager are summarised on pages 42 and 43:
–
the Company’s capital structure and voting rights are
summarised on page 42;
–
the substantial shareholders in the Company are listed on
page 43;
–
the rules concerning the appointment and replacement
of directors are contained in the Company’s Articles of
Association and are discussed on page 39. There are
no agreements between the Company and its directors
concerning compensation for loss of office;
–
the annual powers to issue or buy back the Company’s
shares are explained in the notice of AGM on page 79;
and
–
any amendments to the Company’s Articles of Association
require a resolution to be passed by shareholders.
By order of the Board
NSM FUNDS (UK) LIMITED
COMPANY SECRETARY
24 MAY 2024
