Corporate Governance

Governance overview

Sound and effective governance is at the heart of our business, focussed on ensuring good outcomes for our clients and looking after the interests of the Group’s shareholders and other stakeholders.

During the year the Group reviewed its management and governance structure, resulting in changes designed to improve the management and governance of the Group’s key areas of operation. Historically, each subsidiary has been managed by its own board and each operating segment has been run by a separate committee. We simplified the organisational structure, reflecting our focus on building an integrated business with clear accountabilities across the Group. The Group's Senior Executive Team (“SETgo”) was created, with the ‘go’ highlighting we are set, ready and moving forward to execute the strategy determined by the Board, bringing together the day-to-day management of all key operational areas of the Group under one organisation.

As a result of our improved governance arrangements, our investment and asset management business is now managed through a single management committee, the Asset Management Executive Committee. This has enhanced investment governance by ensuring our risk and investment controls are applied consistently across our various products and services.

Corporate governance code

The Board is committed to achieving high standards of corporate governance, integrity and business ethics. Under the AIM Rules all AIM companies are required to apply a recognised corporate governance code from 28 September 2018. In July 2018 the Board resolved to adopt the Quoted Companies Alliance (“QCA”) revised corporate governance code (“QCA Code”), which requires the Group to apply 10 principles focused on the pursuit of medium to long-term value for shareholders and also to publish certain related disclosures.

In preparing to adopt the QCA Code the Board considered whether the Group’s risk management framework identifies and addresses all relevant risks in order to execute and deliver strategy. One of the Board’s key objectives is to maintain governance structures and processes that are fit for purpose and support good decision-making. Accordingly, in July 2018 the Board also resolved to split the existing Audit, Risk and Compliance Committee into two separate committees with immediate effect: an Audit Committee, whose membership consists of the independent Non-Executive Directors, and a separate Risk and Compliance Committee, whose membership comprises the three independent Non-Executive Directors, Ian Mattioli as CEO and Compliance Oversight Function (temporarily), reflecting the continued improvement of the Group’s three lines of defence model.

The Group’s other governance arrangements remain unchanged.

Our Statement of Compliance with the QCA Corporate Governance Code can be found here:

Board of directors

At the start of the year the Board of Directors comprised five Executive Directors and three independent Non-Executive Directors. Following the review of the Group’s management and governance structure, Mark Smith and Alan Fergusson stepped down from the Board in August 2017, as part of a move designed to eliminate duplication and overlap between the Board and SETgo.

The Board now comprises three Executive and three independent Non-Executive Directors. We believe these changes give the business the optimal management structure to secure continued growth.

Please click here for a short biography of each director.

Time commitments of Board members

The Group embraces the benefits that are brought by a Board from a range of business backgrounds and who are actively involved in other businesses. The Board also recognises its members must be able to dedicate sufficient time to the Company.

The Board has considered the time commitments of each director and is comfortable that each has sufficient available capacity to carry out the required duties for Mattioli Woods:

  • Joanne Lake’s time commitment from her other directorships averages eight to nine working days per month.
  • Ian Mattioli’s time commitment from his roles as Non-Executive Chairman of K3 Capital Group plc and Non-Executive Director of Custodian REIT plc average two and one and a half working days per month respectively.
  • Nathan Imlach’s time commitment from his other appointments averages two to three working days per month.
  • Murray Smith’s other business interests outside of the Group are trivial in time commitment.
  • Carol Duncumb time commitment from her other business interests outside of the Group averages nine to ten working days per month.
  • Anne Gunther’s time commitment from her other directorships averages four and a half working days per month.
Operation of the Board

The Board is responsible to shareholders for the proper management of the Group and has a formal schedule of matters specifically reserved to it for decision. These include strategic planning, business acquisitions and disposals, authorisation of major capital expenditure and material contractual arrangements, setting policies for the conduct of business and approval of budgets and financial statements. Other matters are delegated to SETgo, supported by policies for reporting to the Board. The Company maintains appropriate insurance cover in respect of legal action against the Company’s directors, but no cover exists in the event that a director is found to have acted fraudulently or dishonestly.

The agenda and relevant briefing papers are distributed by the Company Secretary on a timely basis, usually a week in advance of each Board meeting.

The roles of Chairman and Chief Executive are distinct, as set out in writing and agreed by the Board. The Chairman is responsible for the effectiveness of the Board, directing strategy and ensuring communication with shareholders. The Chief Executive is responsible for overseeing the delivery of this strategy and the day-to-day management of the Group by the senior executive team. The Board is committed to developing the corporate governance and management structures of the Group to ensure they continue to meet the changing needs of the business.

The Non-Executive Directors are considered by the Board to be independent of management and free from any relationship which might materially interfere with the exercise of independent judgement. The Board does not consider the Non-Executive Directors’ shareholdings to impinge on their independence. The Non-Executive Directors provide a strong independent element to the Board and bring experience at a senior level of business operations and strategy. Anne Gunther is the Senior Independent Director.

All directors have access to the Company Secretary, who is responsible for ensuring that Board procedures and applicable rules and regulations are observed. Any director, on appointment and throughout their service, is entitled to receive any training they consider necessary to fulfil their responsibilities effectively.

The Board meets regularly throughout the year as well as on an ad-hoc basis, as required by time critical business needs, and is the principal forum for directing the business of the Group.

Board committees

The Board has delegated authority to four committees. The Chairman of each committee provides a report of any meeting of that committee at the next Board meeting. The Chairman of each committee is present at the Annual General Meeting to answer questions from shareholders.

Risk and Compliance Committee

The Risk and Compliance Committee comprises Anne Gunther (Chairman), Carol Duncumb, Joanne Lake, Ian Mattioli as CEO and temporarily Compliance Oversight Function. Senior managers and representatives from the internal audit, risk and compliance functions attend committee meetings as necessary.

The Risk and Compliance Committee is principally responsible for monitoring identified risks and the effectiveness of mitigating action, keeping risk assessment processes under review, reviewing the impact of key regulatory changes on the Group, assessing material breaches of risk limits and regulations as well as reviewing client complaints.

Risk management framework

The Group’s risk management framework is designed to ensure risks are identified, managed and reported effectively. The Group has been investing in its risk management framework to meet the requirements of key regulatory changes, such as MiFID II, the GDPR and the SM&CR, and the risk management framework remains subject to ongoing review.

We continue to apply a ‘three lines of defence’ model to support our risk management framework, with responsibility and accountability for risk management summarised as follows:

  • First line: Senior management and operational business units are responsible for managing risks, by developing and maintaining effective internal controls to mitigate risk. First-line systems and controls are employed to ensure business activities are conducted in compliance with internal policies and procedures. First-line supervision teams carry out monitoring of business activities on a day-to-day basis.
  • Second line: The risk, compliance and anti-money laundering functions maintain a level of independence from the first line. They are responsible for providing oversight and challenge of the first line’s day-to-day management, monitoring and reporting of risks to both senior management and governing bodies.
  • Third line: The internal audit function is responsible for providing independent assurance to both senior management and governing bodies as to the effectiveness of the group’s governance, risk management and internal controls.
Output from first, second and third-line monitoring is reported to the managers and management information is reported to the Executive Risk and Compliance Committee and the Risk and Compliance Committee.

Risk appetite

Risk appetite is defined as both the amount and type of risk the Group is prepared to accept or retain in pursuit of our strategy. Our appetite is subject to regular review to ensure it remains aligned to our strategic goals. At least annually, the Board, Executive Risk and Compliance Committee and the Risk and Compliance Committee will formally review and approve the Group's risk appetite statement and assess whether the firm has operated in accordance with the stated risk appetite measures during the year.

Notwithstanding its continued expectations for business growth, the Board retains a relatively low overall appetite for risk, ensuring that our internal controls mitigate risk to appropriate levels.

Risk assessment process

Identified risks are tracked in a department-level risk register and used as the basis for a consolidated risk register that provides the Risk and Compliance Committee with an overview of the key risks across the organisation. The board and senior management are actively involved in a continuous risk assessment process as part of our risk management framework, supported by the annual Internal Capital
Adequacy Assessment Process (“ICAAP”), which assesses the principal risks facing the Group.

Stress tests include consideration of the impact of a number of severe but plausible events that could impact the business. The work also takes account of the availability and likely effectiveness of mitigating actions that could be taken to avoid or reduce the impact or occurrence of the underlying risks.

The Group’s risk assessment process considers both the impact and likelihood of risk events which could materialise, affecting the delivery of strategic goals and annual business plans. A top-down and bottom-up approach ensures that our assessment of key risks is challenged and reviewed on a regular basis, with the board and its committees receive regular reports and information from senior management, operational business units and the risk oversight functions.

Activities during the year

The committee met six times during the year (in conjunction with the now separate Audit Committee) with future meetings to be structured around the financial calendar of the Company. The committee’s activities during the year included:

  • Review and challenge of the key components of the Group’s risk management framework;
  • Review and challenge of the ICAAP, exploring scenarios and stress tests to determine an appropriate regulatory capital requirement prior to recommendation to the Board;
  • Regulatory changes including MiFID II, GDPR and SM&CR were considered in discussion with management and their impact on the Group assessed; and
  • Review of recommendation of the Group’s risk appetite statement and tolerance for key risks to the Board.
Audit Committee

The Audit Committee comprises Anne Gunther (Chairman), Carol Duncumb and Joanne Lake. Anne Gunther is a Chartered Banker and the Board is satisfied that all members of the committee have recent and relevant financial experience. The Board believes the committee is independent, with all members being Non-Executive Directors.

The key responsibilities of the Audit Committee are:

  • To review the Group’s accounting procedures and internal financial controls;
  • To review the reporting of financial and other information to the shareholders of the Company and to monitor the integrity of the financial statements;
  • To review the effectiveness of the external audit process and the independence and objectivity of the external auditors; and
  • To report to the Board on how it has discharged its responsibilities.
Committee meetings are normally attended by Chief Financial Officer and Chief Operating Officer and by representatives of the external auditors by way of invitation. The presence of other senior executives from the Group may be requested. The committee meets with representatives of the external auditors without management present at least once a year.

External auditor

The Audit Committee considers the appointment of, and fees payable to, the external auditor and discusses with them the scope of the annual audit. An analysis of fees payable to the external audit firm in respect of audit and non-audit services during the year is set out in Note 7 to the financial statements. The Company is satisfied the external auditor remains independent in the discharge of their audit responsibilities.

Having reviewed the provisions of the UK Corporate Governance Code with regard to putting the external audit contract out to tender at least every 10 years, the Audit Committee determined that the audit would be put out to tender in 2018. Three audit firms were invited to participate in the process. No contractual obligations restricted the Audit Committee’s choice of external auditor. Having concluded a competitive tender in line with best practice in March, the Audit Committee has recommended to the Board that Deloitte LLP be appointed as the Group’s statutory auditor for the financial year ending 31 May 2019.

A resolution to approve the appointment of Deloitte LLP will be put to shareholders at the Company’s Annual General Meeting (“AGM”) on 25 October 2018. RSM UK Audit LLP (“RSM”), or its predecessor firms, has been the auditor of the Company since 2005 and the Audit Committee would like to thank RSM for its years of diligent service to the Company.

Internal Audit

The Internal Audit function is responsible for providing assurance on the internal controls related to the Group’s key activities, and during the year has engaged in a number of activities, including:
  • Audits over user access to the Group’s property and accounting software, banking arrangements and the operation of the Mattioli Woods Structured Products Fund. Each review identified control improvements to enhance our business operations.
  • Consultancy-style reviews, where internal audit has partnered with the business to strengthen a number of key processes, including our approach to cyber risks.
As the third line of defence, the Internal Audit function (together with the external auditors in connection with their audit of the financial statements) is building risk awareness within the organisation by challenging the first and second lines of defence to continue improving the controls framework.

Activities during the year

The committee met six times during the year (in conjunction with the now separate Risk and Compliance Committee) with future meetings to be structured around the financial calendar of the Company. The committee considered significant financial and audit issues, the judgements made in connection with the financial statements and reviewed the narrative within the Annual Report and the Interim Report. Specific audit issues the committee discussed included:

  • Management’s assessment of the fair value of the call option to acquire the remaining 51% of Amati as at 31 May 2018, reviewing and challenging the key assumptions adopted in the valuation to support the fair value reported.
  • Provisions recognised in respect of contingent consideration payable on past business combinations and management’s key assumptions and estimates applied in reaching these recognition and measurement decisions.
  • The New Walk development and additions made during the year to ensure treatment remains in accordance with IAS 16.
  • Property leases in respect of MW House and Gateway House that were identified as onerous due to management’s intention to vacate these properties within 12 months of the year end.
  • The accounting treatment and disclosures required on the hive-up of the trade and business assets of Boyd Coughlin Limited during the year.
  • The disclosure of management’s assessed impact of IFRS 9, IFRS 15 and IFRS 16 on the financial statements in future accounting periods.
Remuneration Committee

The Remuneration Committee comprises Carol Duncumb (Chairman), Joanne Lake and Anne Gunther. The Committee meets not less than twice a year. It is responsible for determining and reviewing the Group’s policy on executive remuneration and other benefits and terms of employment, including performance related bonuses and share options. The Committee also administers the operation of the share option and share incentive schemes established by the Company.

The members of the Remuneration Committee have no personal interest in the outcome of their decisions and seek to serve the interests of shareholders to ensure the continuing success of the Company. The remuneration of the Non-Executive Directors is determined by the Board itself. No director is permitted to participate in decisions concerning their own remuneration.

The committee met five times during the year. with key items considered including:
  • The Group’s remuneration policy;
  • Annual review of Executive Directors’ and other senior managers’ base salaries and bonus arrangements;
  • Awards to be granted under the share option and share incentive schemes established by the Company;
  • New regulatory requirements on gender pay reporting;
  • Trends in executive pay in the wider market; and
  • The implications new corporate governance requirements may have for the design of the Group’s remuneration policy and remuneration disclosures.
The Committee continues to review the Group’s long-term incentive plans to ensure it can continue to attract, retain and incentivise appropriately qualified staff to achieve its goals.

Nominations Committee

The Nominations Committee comprises Joanne Lake (Chairman), Carol Duncumb and Anne Gunther. The Committee is responsible for reviewing the size, structure and composition of the Board, establishing appropriate succession plans for the Executive Directors and other senior executives in the Group and for the nomination of candidates to fill Board vacancies where required. The Committee works in close consultation with the Executive Directors, with its main priorities being Board structure and management succession.

Meetings and attendance

All directors are encouraged to attend all Board meetings and meetings of Committees they are members of. Directors’ attendance at Board and Committee meetings during the year (including the AGM) was as follows:

Other committees

These committees form part of the Corporate Governance framework, but are not formally appointed Non-Executive committees of the Board. The main committees are SETgo, the Asset Management Executive Committee and the Executive Risk and Compliance Committee.


SETgo, our Senior Executive Team, with the ‘go’ highlighting that we are set, ready and moving forward. The introduction of SETgo gives all our people – clients, shareholders, employees and suppliers – a very clear operational structure that is enhancing our management of the Company and will enable it to further grow and develop. The new SETgo structure combined with a smaller Board is logical, practical and in all our people’s best interests.

The Board has delegated full authority to SETgo subject to a list of matters which are reserved for decision by the full Board only. In particular, SETgo is responsible to the Chief Executive for developing and monitoring all aspects of the Group’s business on a continuing basis, for developing and implementing business strategy as agreed by the Board and ensuring that day-to-day operations are conducted in accordance with the relevant regulatory and statutory requirements. SETgo meets at least monthly but more frequently if required.

SETgo is chaired by the Chief Executive and comprises the following members:

  • Ian Mattioli, Chief Executive Officer;
  • Murray Smith, Group Managing Director;
  • Nathan Imlach, Chief Financial Officer;
  • Sara Andrews, Chief People Officer; and
  • Simon Gibson, Chief Investment Officer.

Asset Management Executive Committee

SETgo has delegated authority to the Asset Management Executive Committee to oversee the Group’s investment management approach, developing the ‘house view’ on economics, investment markets and asset allocation; and considering how the Group should best apply these views.

In particular, the Asset Management Executive Committee is responsible for developing and implementing the Group’s asset management strategy, for developing and monitoring all aspects of the Group’s investment business on a continuing basis, receiving reports from the board of Custodian Capital, the Structured Products Fund Oversight Committee and the Multi-Asset Team (including the Asset Allocation Committee). The committee is also responsible for ensuring that the Group’s day-to-day investment and asset management operations are conducted in accordance with the relevant regulatory and statutory requirements through the investment research and investment operations teams.

The Asset Management Executive Committee meets at least six times a year but more frequently if required. The committee is chaired by the Chief Investment Officer and comprises the following members:

  • Simon Gibson, Chief Investment Officer;
  • Ben Wattam, Investment Director;
  • Ian Goodchild, Investment Director;
  • Alex Nix, Assistant Fund Manager (Custodian Capital);
  • Alex Brown, Wealth Management Director;
  • George Houston, Technical Director;
  • Emma Vincent, Compliance Manager; and
  • Chris Smith, Compliance Partner.
You can read more about our SETgo team here.

Executive Risk and Compliance Committee

SETgo has delegated authority to the Executive Risk and Compliance Committee to oversee the operation of the Group’s risk and compliance framework and activity. The Executive Risk and Compliance Committee is responsible for ensuring that risk, compliance and Internal Audit are considered, reviewed and actions implemented across all areas of the Group including wealth management advice, asset management, pension administration and employee benefits. The committee is also responsible for ensuring that risks are fully considered in context of the Group’s ICAAP and the impact on the Group’s capital requirements.

The Executive Risk and Compliance Committee meets at least four times a year but more frequently if required. The committee is chaired by the Chief Executive Officer and comprises the following members:
  • Ian Mattioli, Chief Executive Officer;
  • Emma Vincent, Compliance Manager;
  • Iain McKenzie, Executive Risk Consultant, Internal Audit Oversight;
  • Michael Wright, Wealth Management Director; and
  • Alan Cowan, Client Operations Director.
Induction, training and performance evaluation

New directors receive an induction on their appointment covering the activities of the Group, its key business and financial risks, the terms of reference of the Board and its Committees and the latest financial information.

The Chairman ensures directors update their skills, knowledge and familiarity with the Group as required to fulfil their roles on the Board and its Committees. Ongoing training is provided as necessary and includes updates from the Company Secretary on changes to the AIM Rules, requirements under the Companies Acts and other regulatory matters. All directors have access to independent professional advice at the Company’s expense where they judge it necessary to discharge their duties, with requests for such advice being authorised by the Chairman or two other directors, one of whom is a Non-Executive.

Evaluation of the Board’s performance

During the year an external review of the Board’s effectiveness was undertaken by an independent third party. This involved one-to-one interviews with directors and a review of Board and Board committee papers and minutes. The key points raised in the review were around board composition and succession planning.

In response, we reduced the size of our Board to eliminate duplication of documentation and discussion between the Board and SETgo, ensuring clearer lines of responsibility within the management team and creating a balanced Board of three executive directors and three non-executive directors.

Individual appraisal of each director’s performance is undertaken either by the Chief Executive Officer or Chairman each year and involves meetings with each director on a one-to-one basis. The Non-Executive Directors, led by the Senior Independent Director, carry out an appraisal of the performance of the Chairman and Chief Executive Officer.

Retirement and re-election

All directors are subject to election by shareholders after their appointment and to re-election thereafter at intervals of no more than three years.

Non-Executive Directors’ appointments are initially for 12 months, and continue thereafter until terminated by either party giving six months’ prior written notice to expire at any time on or after the initial 12 month period. The terms and conditions of appointment of the Non-Executive Directors are available for inspection at the Company’s registered office during normal business hours and prior to the AGM.

Communications with shareholders

The Board is committed to maintaining an ongoing dialogue with the Company’s shareholders. The principal methods of communication with private investors remain the Annual Report and financial statements, the Interim Report, the AGM and the Group’s website (

It is intended that all directors will attend each AGM and shareholders will be given the opportunity to ask questions at the AGM on 25 October 2018. In addition, the Chairman, Chief Executive Officer and Chief Financial Officer welcome dialogue with individual institutional shareholders to understand their views and feed these back to the Board. General presentations are also given to analysts and investors covering the annual and interim results.

Details of the Company’s major shareholders can be found here.

Shareholders who wish to contact the Company can do so here.

Internal control and risk management

The Board is ultimately responsible for the Group’s system of internal control and for reviewing its effectiveness. Such systems are designed to manage rather than eliminate risks and can only provide reasonable not absolute assurance against material misstatement or loss.

In accordance with the guidance of the Turnbull Committee on internal control, an ongoing process has been established for identifying, evaluating and managing significant risks faced by the Group. This process has been in place throughout the year under review and up to the date of approval of the Annual Report and financial statements.

The Board routinely reviews the effectiveness of the system of internal control and risk management to ensure controls react to changes in the nature of the Group’s operations.

The Group maintains appropriate insurance cover and reviews the adequacy of the cover regularly, in conjunction with the Group’s insurance brokers.

There are clearly defined procedures for reviewing and approving all bids, acquisitions and capital expenditure within the Group.

On behalf of the Board

Nathan Imlach
Chief Financial Officer

Last updated: 29 March 2019