The Board is committed to the highest standards of corporate governance.
The Board also recognises its responsibility to serve the interests of shareholders by creating sustainable growth and shareholder value over the medium to long-term, whilst also reducing or mitigating risk.
As a quoted company, Urban Logistics REIT plc is required to declare which recognised corporate governance code it has adopted and state how that code has been applied. The Board has decided to adopt the AIC Code of Corporate Governance (the “AIC Code”) as it considers it to be suitable for the current size and stage of development of the Company. The AIC Code has been considered and applied where appropriate.
The Board of Urban Logistics REIT plc (the “Company” or “Urban Logistics”) is committed to the highest standards of corporate governance and recognises its responsibility to serve the interests of shareholders by creating sustainable growth and shareholder value over the medium to long-term, whilst also reducing or mitigating risk.
Updated 21 June 2023
The Board has determined that the Chairman, Nigel Rich CBE, Lynda Haywood, Heather Hancock and Bruce Anderson are independent. Heather Hancock has been appointed as the Senior Independent Director. As Richard Moffitt has an interest in the Investment Adviser he is not considered independent and excludes himself from voting on matters that involve Logistics Asset Management LLP, or where there is a perceived potential conflict of interest. Whilst not independent, the Board considers that Richard remains able to provide constructive challenge and scrutiny to the Board, as well as valuable and relevant skills and experience.
The Directors believe that the Board is well balanced and that between the Directors, it possesses sufficient breadth of skills, variety of backgrounds, relevant experience and knowledge to ensure it functions correctly and is not dominated by any one Director. There are no Executive Directors.
The Board holds formal scheduled meetings each quarter, with additional ad hoc meetings as required. These meetings are typically held at the Company’s head office and are subject to a quorum of two Directors.
The Board follows a formal agenda at its quarterly meetings, which the Company circulates in advance of the meeting. This agenda includes reviewing investment performance, assessing the progress of new investment opportunities, reviewing the Group’s strategy in the context of a broader market outlook, reviewing the Group’s historical financial performance and future forecasting, an update on investor relations and an update on any regulatory or compliance issues advised by the Investment Adviser or other advisers.
When considering investment opportunities, the Board reviews detailed proposals prepared by the Investment Adviser and approves investment decisions, as appropriate.
All Directors are expected to attend Board and Committee meetings and to devote sufficient time to the Company’s affairs to fulfil their duties as Directors.
The Board has delegated a number of responsibilities to its Audit, Nomination, Environmental, Social & Governance (“ESG”) and Management Engagement Committees. Each Committee has prepared Terms of Reference which have been reviewed and approved by the Board. Further information on each Committee can be found below.
The Nomination Committee comprises the independent Directors and is chaired by Nigel Rich. The Committee regularly reviews the structure, size and composition of the Board and leads the appointment of new Directors to the Board as and when appropriate. The Nomination Committee considers resolutions relating to the election and re-election of Directors at each Annual General Meeting and considers the orderly succession planning of the Board.
The Audit Committee comprises Bruce Anderson as Chairman, Nigel Rich, Heather Hancock and Lynda Haywood, all of whom are independent non-executive directors.
The role of the Audit Committee is to review and report to the Board of Directors on financial reporting, internal control and risk management. It has also considered the independence, effectiveness and performance of the external auditor and the audit process. The key responsibilities and principal activities of the Committee are as follows:
- Make recommendations to the Board of Directors that the Interim Report, Annual Report and financial statements were fair, balanced and understandable and provided the necessary information for Shareholders to assess the Group’s position and performance, business model and strategy;
- To review any formal announcements on the Group’s financial performance, including as assessment of the estimates and judgements.
- The appropriateness of the interim and year end individual property valuations and the independence of the external valuers.
- To review the Investment Adviser system of internal control and risk management.
- Review any changes in accounting policies that may impact the financial statements.
- To review and approve the external auditor’s terms of engagement, remuneration and tenure of appointment.
The Board has not established a Remuneration Committee and the Board as a whole is responsible for the consideration and approval of Director remuneration.
The Company has established a Management Engagement Committee which comprises all of the independent Directors, with Nigel Rich as Chair. The Management Engagement Committee meets at least once a year. The Management Engagement Committee’s main function is to review and make recommendations on any proposed amendment to the Investment Adviser Agreement and keep under review the performance of the Company and examine the effectiveness of its internal control systems.
Under the Investment Adviser Agreement, the Board has delegated the execution of its investment strategy and business model to the Adviser. Richard Moffitt and team, on behalf of the Adviser, deal with all the property transactions including rentals. Richard Moffitt and team report to the Board at each meeting.
The Adviser regularly (but not exclusively) uses for its purchase and sales of assets, M1 Agency LLP, a limited liability partnership in which Richard Moffitt has an interest. Each transaction is reviewed by the Adviser excluding Richard Moffitt and by the Independent Directors to ensure that the fees payable are in line with market fees and practice and are disclosed to the market where appropriate.
The Board formally reviews the Adviser’s performance each year, to allow the Board to consider and approve, if appropriate, that the Adviser’s continued appointment is in shareholders’ interests as a whole.
In May 2021 the Board formed an ESG Committee whose membership comprises all of the independent Directors, with Heather Hancock as Chair.
The ESG Committee advises on and recommends to the Board its ESG policy, and ensures this remains up to date with the Board’s strategic objective regarding ESG, which is to achieve high governance standards and to scrutinise the Investment Adviser progress in addressing the Board’s ESG priorities and targets.
The ESG Committee will take a strategic approach and will identify and pursue sustainability issues whereby the Company has optimal capacity to make a meaningful impact.
We are very proud of our approach to communications with our shareholders as we recognise the value in positive shareholder engagement. Our website is kept up to date with information to help our investors keep in touch and understand our business and we have found our shareholder roadshows to discuss our results to be a popular and effective way for us to meet with shareholders and develop our understanding of their needs and expectations.
The Company encourages two-way communication with both its institutional and private investors and responds quickly to all queries received either orally or in writing. All shareholders have at least 21 days’ notice of the AGM, where all directors and committee members are available to answer questions.
At the AGM all votes are dealt with on a show of hands and the number of proxy votes cast is indicated. Votes on separate issues are proposed as separate resolutions. The Adviser also regularly updates the Board with the views of shareholders and analysts.
The Articles of Association allow the Board to authorise potential conflicts of interest that may arise, subject to imposing limits or conditions when giving authorisation if this is appropriate.
Only independent Directors (who have no interest in the matter being considered) will be able to take the relevant decision and, in taking the decision, the Directors must act in a way they consider will be most likely to promote the Group’s success. Procedures have been established to monitor actual and potential conflicts of interest on a regular basis, and the Board is satisfied that these procedures are working effectively.
The Adviser is responsible for operating the Group’s system of internal control and reviewing of the effectiveness of this. Such a system is designed to manage, rather than eliminate, the risk of failure to achieve business objectives and can provide only reasonable but not absolute assurance against material misstatement or loss.
The Adviser has a zero-tolerance policy and is committed to carrying out business fairly, honestly and openly. The Adviser undertakes annual regulatory training on AML, anti-bribery and corruption and there is a whistle blowing policy in place with the company and also with the Manager.
The Board is responsible for preparing the Annual Report. As the Directors’ Responsibility Statement confirms, the Board believes its Annual Report, taken as a whole, is fair, balanced and understandable, and provides the information necessary to assess the Group’s performance.
The Adviser is committed to good ethical conduct in all aspects of it’s business.
The Adviser has established a formal Ethics Committee to assist the Board in the establishment, embedding and oversight of values, the ethical policy framework and ensuring and monitoring the overall ethical health of the Company and compliance with professional and ethical standards. The committee comprises the most senior operational management of the Adviser, and all findings are reviewed on an annual basis. More information can be found via the terms of reference for this committee here.
In addition, all Adviser employees (including part time staff and contractors) undertake training in ethics and best practice on joining the Adviser, and on an annual basis thereafter.
G10 Capital has been appointed by the Company as its AIFM pursuant to the AIFM Agreement under which it has overall responsibility for the risk management and portfolio management of the Company, providing alternative investment fund manager services and ensuring compliance with the requirements of the UK AIFM Regime, subject to the overall supervision of the Directors in accordance with the policies laid down by the Directors from time to time and the investment restrictions referred to in the AIFM Agreement.
G10 Capital has provided portfolio management and risk management services to funds and investment managers since 2015. G10 Capital currently provides services to funds investing across a range of asset classes, including real estate, with an aggregate asset value in excess of €6 billion on a leveraged basis. G10 Capital is part of IQ-EQ, a leading investor services firm providing a comprehensive range of compliance, 11 administration, asset and advisory services to investment funds, multinational companies, family offices and private clients operating worldwide.