Corporate Governance Report

FY2021

Luke Murphy
Head of Investor Relations & Communications

Head of Investor Relations & Communications for TPXimpact

TPXimpact Holdings plc is committed to operating proper standards of good corporate governance and has established a corporate governance model based on the key principles of the Quoted Companies Alliance Corporate Governance Code (“QCA Code”). The following outlines how the Company addresses the ten broad governing principles defined in the QCA Code. The Non- Executive Chairman is responsible for corporate governance and the overall leadership of the Board and ensuring its effectiveness.

TPXimpact Holdings plc operates a business model and growth strategy that promotes the generation of shareholder value through growth. The company promotes professionalism, openness, honesty and integrity between its customers, staff, shareholders and suppliers.

Principle 1 – Establish a strategy and business model which promote long-term value for shareholders.

TPXimpact is a technology-enabled services group, built to service clients’ digital transformation needs. Founded in 2016, with the aim of identifying and acquiring best-of-breed specialist information technology, design and innovation consulting businesses, we collaborate with our clients to deliver the technology outcomes they’re looking for at the pace that they expect and demand.

We believe an increasingly complex world needs a new model to achieve high impact outcomes for clients and their employees and more value for stakeholders. We combine the dynamism and agility of smaller, expert teams with the scale required to confidently address our clients’ most pressing needs, as they navigate the rapidly changing nature of society and business. Since inception the Group has identified and met numerous potential target companies and has completed twelve acquisitions.

Unlike many buy and build models that have preceded TPXimpact, the Directors are focused on creating a business where employees join a culture of purpose, collaboration and innovation that delivers impactful work, profitable organic growth and agility at scale. The Directors believe that our flexible operating model, our trusted, multidisciplinary teams of experts, and our commitment to making a difference meant we were perfectly placed to deliver long term value for shareholders.

TPXimpact has developed an efficient, formulaic approach for acquiring companies. With an extensive acquisition pipeline, the Directors intend to continue to supplement the organic growth of the Group through the addition of complementary companies.

Key Strengths

The Directors believe that the enlarged Group’s key strengths include:

Significant market opportunity – Tech Market View estimates the UK Software and IT Services (SITS) market is worth an estimated £51.8bn in 2020, growing to £56.9bn by 2023. The public sector comprising 71% of the group’s revenue is worth an estimated £12.1bn of this total. Further details regarding market outlook can be found on pages 6 and 7.

Group platform – The Panoply provides a platform for companies which join the Group to accelerate their organic growth through cross-selling, leveraging The Panoply brand, network, listed status and balance sheet.

Alignment of interests – TPXimpact acquisition model involves a significant proportion of the consideration for an acquisition being issued in Ordinary Shares thereby ensuring alignment of interests with existing shareholders.

Profitable and cash-generative – the Group is profitable, cash generative and only intends to make accretive acquisitions going forward.

Purpose led business – TPXimpact is leading the way in terms of the quantity, quality and frequency of ESG reporting; – The Group recently appointed an ESG Board Committee, led by Isable Kelly, NED; – The Group balances both purpose and profit by setting dedicated targets for by 2023 and 2025; – Set a target to become a B-Corporation by 2023.

Focused growth strategy – TPXimpact’s acquisition model is designed to attract ambitious companies, confident in their ability to grow profitably and rewards cross-selling and collaboration; – The Panoply’s management has an extensive network to help identify, attract and execute future acquisitions.

• Experienced Management and Board with proven track record – TPXimpact is managed by highly experienced executive and non-executive directors combining strong sector, public company and international mergers and acquisitions expertise with a track record of building, growing and exiting services companies.

Principle 2 – Seek to understand and meet shareholder needs and expectations.

TPXimpact proactively engages with its shareholders and potential shareholders alike. This is through a series of mechanisms:

• Formal announcements – as a London Stock Exchange (LSE) AIM listed company, we make all statutory announcements through the LSE’s regulatory news service (RNS). A feed is maintained on our investor area. TPXimpact reports formally to shareholders by the publication of its annual and half-yearly financial statements.

• Analyst and investor presentations – the Executive Directors present the half-yearly and annual results to institutional investors, analysts and the media. The presentations are available on the investor section of the website.

AGM – Notification of the date of the AGM is sent to shareholders at least 21 working days in advance of the meeting. Details are set out in the Notice of Meeting. The Directors (and the external auditor) are available at the AGM to answer questions, both during the course of the meeting, and informally afterwards. All details can be found on the Investor Announcements Section of the website

• News releases – in addition to statutory announcements, we use RNS Reach to present regular business news and updates to shareholders. We also have a full news service available on The Panoply website.

• Interactive sessions – TPXimpact’s Executive Directors arrange regular (six, monthly) face to face sessions with any interested shareholders or potential shareholders, and are also available for updates at any point in the year. See contact details below.

• Investor focused micro-site – we maintain a full section on the main TPXimpact website for investors. This includes real-time RNS announcements; the latest Investor Documents, presentations and reports; share information and share dealing interactive feeds; this corporate governance statement; a full list of investor related contacts.

• LSE Profile – we also maintain a profile on the London Stock Exchange Issuer services website.

• Investor Email – we also manage an investor email account for any direct queries – investors@tpximpact.com. Contact with major shareholders is principally maintained by the Executive Directors, who ensure that their views are communicated to the Board as a whole. The Chair is also available to discuss governance and other matters directly with major shareholders. At every Board meeting, the Board is provided with the latest brokers’ reports and a summary of the contents of any meetings with shareholders. The Board considers that the provision of these documents is a practical and efficient way for both the Chair and Senior Independent Director to be informed of major shareholders’ opinions on governance and strategy and to understand any shareholder issues and concerns. If you would like to know more about TPXimpact as a shareholder, or potential shareholder, please contact us through our investors email address and we will put you in touch with one of our Executive Directors.

Principle 3 – Take into account wider stakeholder and social responsibilities and their implications for long-term success.

Please see further details in the ESG Section

Principle 4 – Embed effective risk management, considering both opportunities and threats, throughout the organisation.

Risk management activity is overseen by the Chief Executive Officer, Chief Financial Officer and Chief Operating Officer, with the support of the Executive Management Team. Our framework enables us to remain vigilant to all known and emerging risks and opportunities. Effective risk management supports informed decision making; enables us to minimise impact from unforeseen internal or external events; and allows us to fully exploit emerging opportunities. Our objectives for risk management are to:

• Identify, measure, control and report on business risk that may undermine the achievement of objectives, both strategically and operationally, through appropriate analysis and assessment criteria

• Effectively allocate effort and resources for the management of key and emerging risks

• Build an accurate picture at the highest level of the key risks facing our business, and use this information to drive business improvements in a considered and coordinated way

• Support and develop our reputation as a well governed and trusted organisation

• Minimise costs and drive efficiencies in the way that pervasive risk is controlled across the business

• Identify weaknesses in, and opportunities to improve, our business processes

Risk Registers

At the Operational level, a risk register is maintained within every business of the Group. Risks are recorded and managed within as required and are reviewed regularly by the management of each business. At a central level, there is a single central risk register for Group Significant risks, which records the top risks to the business. Risk registers are reviewed on a quarterly basis which supports the escalation of any risks with a high residual impact, or potentially pervasive risks, to a higher level risk register as appropriate.

Risk Appetite

The Board determines the amount and type of risk that TPXimpact is willing to take on in pursuit of its strategic objectives. The Board’s appetite for risk is influenced by various key factors including (but not limited to) the overall economic, regulatory and operational landscape in which we operate. The Executive Management Team advise the Board of these key influences which enables the Board to adjust the amount of risk that TPXimpact takes on. Risk tolerance may, by business choice, differ in different parts of the company.

Review and Assurance

Risk registers are updated as and when required. A full review is undertaken quarterly. The highest rated risks are presented to the Board every quarter by the CEO. Every six months the Board is presented with the detailed risk registers for each line of business. Further details can be found in our Risk Section of the Annual Report on pages 75 to 77 .

Principle 5 – Maintain the Board as a well functioning, balanced team led by the Chair.

The PLC Board (“the Board”) is responsible for the Company’s corporate governance systems and processes that support good decision making. The Non-Executive Directors, Mark Smith (Chair), Isabel Kelly, Rachel Neaman and Chris Sweetland are considered independent of management and free from any business or other relationships that could materially interfere with the exercise of their independent judgement. Both Mark Smith, Chris Sweetland and Rachel Neaman own shares in The Panoply and all three Non- Executive Directors hold options, however this is not considered to alter their independent status.

Director’s Commitment to TPXimpact

The Directors acknowledge the importance of the principles set out in the QCA Code. Our Non-executive Directors have committed in their letters of appointment to attend all reasonable board and committee meetings in addition to being reasonably available at other times for TPXimpact business.

Our Executive Directors have entered into employment contracts which require them to attend all board and committee (of which they are a member) meetings. The Non-Executive Directors meet at least once a year without the Executive Directors present. All Directors submit to re-election each year at the Annual General Meeting (“AGM”) of the Company.

The Board meets at least four times each year with additional meetings when circumstances and urgent business dictate. At each meeting the Board reviews a schedule of reserved matters including trading performance, financial strength, strategy (including investment and acquisition opportunities), risk management, controls, compliance, reports to shareholders and succession management.

The Directors have established three committees of its Board, namely the Audit, Risk and AIM Rules Compliance Committee, the Remuneration Committee and the Environmental, Social and Governance Committee (ESG Committee).

The Audit, Risk and AIM Rules Compliance Committee is chaired by Chris Sweetland and has primary responsibility for monitoring the quality of internal controls, ensuring that the financial performance of the Company is properly measured and reported on and reviewing reports from the Company’s auditors relating to the Enlarged Group’s accounting and internal controls, in all cases having due regard to the interests of Shareholders.

The Audit, Risk and AIM Rules Compliance Committee meets at least twice a year. Mark Smith is the other member of the Audit, Risk and AIM Rules Compliance Committee. Oliver Rigby, CFO, attends Audit, Risk and AIM Rules Compliance Committee meetings by invitation.

The Remuneration Committee is chaired by Isabel Kelly, and reviews the performance of the Executive Directors and determines their terms and conditions of service, including their remuneration and the grant of options, having due regard to the interests of Shareholders. The Remuneration Committee meet at least once a year. Mark Smith is the other member of the Remuneration Committee.

The Remuneration Committee also considers Board policy in relation to the remuneration of the Chairman of the Board. Non-Executive Director remuneration is a matter for the Chairman and the executive members of the Board. No Director is involved in any decisions as to their own remuneration or benefits.

The Environmental, Social and Governance Committee (ESG Committee) is chaired by Isabel Kelly, and has the primary responsibility to Assist Executive Management in setting the Company’s general strategy with respect to ESG Matters, and to consider and recommend policies, practices, and disclosures that conform with the strategy.

The ESG Committee meets at least twice a year. Christopher Sweetland and Rachel Neaman are the other members of the ESG Committee.

Principle 6 – Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities.

The Board members and their relevant experience and skills are detailed on pages 84 and 85. The Non-Executive Chairman believes that, as a whole, the Board has a suitable mix of skills and competencies covering all essential disciplines bringing a balanced perspective that is beneficial both strategically and operationally and will enable the Company to deliver its strategy. The Board consists of two executive directors and four non-executive directors, all of whom are independent. The nature of the Company’s business requires the Directors to keep their skillset up to date. Updates to the Board on regulatory matters are given by Company’s professional advisers when appropriate.

In addition to the support provided by the Company’s retained professional advisers (Nominated Adviser, lawyers, auditor and M&A adviser), external consultants have been engaged to advise on a number of matters including tax planning and market research. External advisers attend Board meetings or committee meetings as invited by the Non-Executive Chairman to report and/or discuss specific matters relevant to the Company.

Principle 7 – Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement.

Board performance effectiveness process The Chairman is responsible for the regular evaluation of the Board’s performance and that of its committees and individual Directors.

This year the Group undertook a board review, which focused on assessing the board’s effectiveness and governance. The results focused on four key areas where the following scores were recorded:

• Strategy and Business: 84%

• Risk Management and ESG: 80%

• Composition and Diversity: 75%

• Board Dynamics and Process: 81%

As this is the first time undertaking this review these results will be used as a benchmark for the board and will be reviewed again on a yearly basis. Some of the actions coming out of the review include the following:

• More in-person meetings and dedicated strategy away-day once Covid restrictions are lifted

• Improvement in ethnic diversity on the board

• Further integration of financial and non-financial reporting

Succession planning and Board appointments

The Remuneration Committee meet as and when necessary to consider the appointment of new executive and non-executive directors, although the Board as a whole take responsibility for succession planning. Board members all have appropriate notice periods so that if a Board member indicates his/her intention to step down, there would be sufficient time to appoint a replacement, whether internal or external.

The Company’s Articles of Association require that one third of the Directors must stand for re-election by shareholders annually in rotation and that any new Directors appointed by the Board during the relevant year must stand for election at the annual general meeting immediately following their appointment.

Any Directors who are not employed by the Company or holding executive office who have served on the Board for at least nine years will be subject to annual re-election. Board appointments are made after consultation with advisers including the Nominated Adviser who undertakes due diligence on all new potential Board candidates.

Following consultation with the Remuneration Committee and Nominated Advisers On the 19th October 2020, Rachel Neaman was appointed to the Board as a non-executive director.

Principle 8 – Promote a corporate culture that is based on ethical values and behaviours.

We are bound together by a collective belief that business can be a force for good and that the work we undertake delivers impact beyond just financial gain. As our Group evolves and grows so should the values that drive us. As we finalise the new power brand to launch in September 2021, we will be developing unified values and behaviours for the integrated business.

As a people-focussed business, the four values that underpin our culture are:

• Collaboration for impact

• Ambition with inclusion

• Difference with authenticity

• Agility with trust Further details on our culture and four themes can be found on page 13.

Principle 9 – Maintain governance structures and processes that are fit for purpose and support good decision making by the Board.

On behalf of the Board, the CEO has overall responsibility for managing the day to day operations and the Board as a whole is responsible for monitoring performance against the Group’s goals and objectives. The individual Board members’ specific responsibilities, contributions and skills are set out on pages 84 and 85.

The Board has established three standing Committees, the Audit, Risk and AIM Rules and Compliance Committee (Audit Committee), the Remuneration Committee, and the Environmental, Social and Governance Committee (ESG Committee). Membership of the Audit Committee, the Remuneration Committee and the ESG Committee during the year under review was exclusively Non- Executive.

Principle 10 – Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.

The Company maintains a regular dialogue with key stakeholders including shareholders to enable interested parties to make informed decisions about the Group and its performance. Further details regarding the Directors’ engagement with stakeholders can be found in Section 172 on pages 78 to 81.

Historical annual reports and notices of general meetings can be found in the Financial Reports section of the Group’s website.

The Board discloses the results of Annual General Meetings and these can be found in the Regulatory News section of the website. The Audit Committee meets at least twice a year, although the Company’s Auditors or any member of the Audit Committee may request a meeting at any time, should they consider that one is necessary.

The role of the Audit Committee is to make recommendations to the directors and shareholders, in relation to the appointment, re-appointment and removal of the Company’s External Auditors and to approve their remuneration and terms of engagement. Prior to the commencement of each annual or interim audit, the Audit Committee will discuss and agree the nature and scope of the audit with the External Auditors and in discussion with them, will monitor the integrity of the financial statements of the Group and approve any formal announcements relating to the Company’s financial performance.

The Audit Committee develops and implements policies on the engagement of the External Auditors to supply non-audit services and will report to the Directors, identifying any matters where the Audit Committee considers that action or improvement is needed, making recommendations as to the steps to be taken. The Audit Committee is authorised by the Board to investigate any activity within its terms of reference and may seek information it requires from any employee of the Company. The Audit Committee may seek outside professional advice at the cost of the Company, in order to secure any relevant experience or expertise it considers necessary to fulfil its duties.

The Audit Committee report can be found on pages 94 to 95 with the Independent Auditors report found on pages 102 to 108. The Remuneration Committee report can be found on pages 92 and 93. The ESG Committee report can be found on page 91.

Luke Murphy
Head of Investor Relations & Communications

Head of Investor Relations & Communications for TPXimpact