The QCA has identified 10 principles that focus on the pursuit of medium to long-term growth in value for shareholders without stifling the entrepreneurial spirit in which a company was created.

Companies need to deliver growth in long-term shareholder value. This requires an efficient, effective and dynamic management framework and should be accompanied by good communication which helps to promote confidence and trust.

Deliver growth

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

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

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

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

Maintain a dynamic management framework

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

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

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

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

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

Build trust

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

Formal adoption of the QCA Code by Mercia Asset Management PLC requires us to apply the principles set out above and also to publish certain related disclosures; these can appear in our Annual Report, be included on our website or we can adopt a combination of the two approaches. Recommended locations for each disclosure are specified in the QCA Code and we have chosen to follow these.

Deliver growth

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


The board must be able to express a shared view of the company’s purpose, business model and strategy. It should go beyond the simple description of products and corporate structures and set out how the company intends to deliver shareholder value in the medium to long-term. It should demonstrate that the delivery of long-term growth is underpinned by a clear set of values aimed at protecting the company from unnecessary risk and securing its long-term future.

Evidence & disclosure

Mercia’s strategy and business model were established and set out in the Company’s IPO Admission Document. The strategy is reviewed, assessed and revised at annual strategy days and at Board meetings as required. Mercia’s strategy, business model and progress are communicated through the Strategic Report of each Annual Report which clearly explains Mercia’s business model and strategy in detail, including how it expects to create long-term value for shareholders, currently through its ‘Mercia 20:20 Vision’.

A key strand of Mercia’s strategy is its investment policy. This is included within the AIM Rule 26 section of this website.

Principle 2: Seek to understand and meet shareholder needs and expectations


Directors must develop a good understanding of the needs and expectations of all elements of the company’s shareholder base.

The board must manage shareholders’ expectations and should seek to understand the motivations behind shareholder voting decisions.

Evidence & disclosure

Mercia invests in and seeks to understand the needs and expectations of all of its shareholder base, which includes institutional investors, retail investors, staff and several of its university partners, through a wide range of investor relations initiatives, as outlined in the Section 172 – Engaging With Stakeholders (“s172 Statement”) and Corporate Governance sections of the Annual Report. These include:

Mercia’s Executive Directors participate in both institutional and retail investor roadshows throughout the year and following the announcement of its annual and interim results.

The Group’s Chair meets with existing shareholders from time to time as do the Executive Directors.

Mercia holds Capital Market Days every so often, to which all shareholders are invited.

Mecia engages in two-way communication with corporate governance organisations such as PIRC.

Mercia has an active social media presence which seeks to keep all stakeholder groups informed on the Group’s progress. The contact section of the website enables shareholders to make contact with the Executive Directors and ask questions.

Mercia welcomes all attendees to its Annual General Meetings (“AGMs”) and seeks to engage with them both formally and informally on the day.

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


Long-term success relies upon good relations with a range of different stakeholder groups both internal (workforce) and external (suppliers, customers, regulators and others). The board needs to identify the company’s stakeholders and understand their needs, interests and expectations.

Where matters that relate to the company’s impact on society, the communities within which it operates or the environment have the potential to affect the company’s ability to deliver shareholder value over the medium- to long-term, then those matters must be integrated into the company’s strategy and business model.

Feedback is an essential part of all control mechanisms. Systems need to be in place to solicit, consider and act on feedback from all stakeholder groups.

Evidence & disclosure

Mercia’s Annual Report identifies its key stakeholders within the s172 Statement and Responsible Business sections. As a business model that relies on maintaining good connections with all of its stakeholder groups, including regional councils and the wider community in which each of its offices are located, the Company seeks to proactively minimise its impact on the environment through a number of initiatives. These are outlined in the Responsible Business section of the Annual Report.

The importance of, and nature of its stakeholder relationships, is that if it were not regarded as a trusted and socially responsible organisation, its reputation would suffer, leading to lower deal flow, fewer fund mandate wins and lower staff retention rates. Feedback would therefore be evidential from reductions in all three of these key business drivers and it is for this reason that the Company maintains an active and responsive dialogue with each of these key stakeholder groups. There are mechanisms in place to obtain feedback from internal stakeholders e.g. employee feedback surveys, 3600 reviews, formal and informal staff gatherings.

ESG is now entrenched within Mercia. The Responsible Investment Committee ensures delivery against Mercia’s guiding principles, inspired by the UN’s Sustainable Development Goals (“SDGs”):

  • Sustainable economic growth
  • Reducing inequalities within our communities
  • Health and wellbeing for all

Mercia requires all potential investee companies to complete an ESG questionnaire as a condition to investment.  This is designed to positively foster the principle of responsibility within each company that we invest in. We require each portfolio to establish ESG policies relevant to its activities, which could include an anti bribery and corruption policy, a modern slavery policy, a diversity and inclusion policy, etc.

Portfolio businesses will be further encouraged to submit their responses to an ESG questionnaire to Mercia annually. We intend that this mandatory questionnaire will keep ESG on the investee company’s agenda and the responses will be reviewed regularly by management so that we can monitor our portfolio businesses’ ESG progress, actions and improvements.

As a people-centric business, much of their ‘day job’ involves communication/meetings with both external third parties and Mercia staff. Minimising the environmental impact of these activities is actively encouraged through the Group’s:

  • Employment policies eg travel, use of public transport, working from home
  • Cycle to work and electric vehicle schemes
  • Use of Zoom, a web-based meeting facility.

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


The board needs to ensure that the company’s risk management framework identifies and addresses all relevant risks in order to execute and deliver strategy; companies need to consider their extended business, including the company’s supply chain, from key suppliers to end-customer.

Setting strategy includes determining the extent of exposure to the identified risks that the company is able to bear and willing to take (risk tolerance and risk appetite).

Evidence & disclosure

The Group’s approach to risk management together with the principal risks and uncertainties applicable to Mercia, their possible consequences and mitigation are set out in the Principal Risks and Uncertainties section of the Group’s Annual Report. Mercia’s Board reviews, evaluates and prioritises risks to ensure that appropriate measures are in place to effectively manage and mitigate those identified – for risk tolerance (focusing on Mercia-specific internal, external and strategic risks) and risk appetite (specifically in terms of the Group’s investing policy).

As a Group operating in a highly regulated market investing third parties’ money, the Board has from day one embedded effective risk management within Mercia’s culture, in order to facilitate the execution of its business strategy. It has established a Risk Management Framework, led by the Chief Financial Officer and Group Compliance Director, who have responsibility in terms of monitoring and reporting on the Group’s principal risks together with their mitigation. The Group Compliance Director reports to the Board at each Board meeting on the continuing function of the Group’s FCA related and general compliance control environment. Internal audits are conducted throughout the year in respect of the Group’s investment activities and reported on to the Audit and Risk Committee by the Group Compliance Director. As with many companies, Mercia’s Audit and Risk Committee remit is also evolving to encompass not just financial risks but the Group’s overall risk framework.

Maintain a dynamic management framework

Principle 5: Maintain the board as a well-functioning, balanced team led by the Chair


The board members have a collective responsibility and legal obligation to promote the interests of the company and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the Chair of the board.

The board (and any committees) should be provided with high-quality information in a timely manner to facilitate proper assessment of the matters requiring a decision or insight.

The board should have an appropriate balance between executive and non-executive directors and should have at least two independent non-executive directors. Independence is a board judgement.

The board should be supported by committees (e.g. audit, remuneration, nomination) that have the necessary skills and knowledge to discharge their duties and responsibilities effectively.

Directors must commit the time necessary to fulfil their roles.

Evidence & disclosure

The Corporate Governance section of Mercia’s Annual Report details the composition of its Board and Committees. These are also included within the Investor Relations section of its website, under the “Meet the Board” and “Organisational Structure” pages.

At the heart of all successful businesses are balanced teams. Mercia’s Board comprises three Executive and five Non-executive Directors, each with proven listed company and/or corporate growth success, combining shareholder value creation with good corporate governance at their core.

Mercia’s Executive Directors have a highly complementary skill set, which is essential to realise the growth potential of the Mercia Model. All the Non-executive Directors are considered to be independent by Mercia. All Directors retire by rotation in accordance with the Company’s Articles of Association and must be re-elected at the Company’s AGM. Non-executive Directors’ letters of engagement stipulate the time commitment expected of them (typically a minimum of 24 days per year) and the anticipated term of appointment (reviewed formally every three years and on an ongoing basis as part of the review of the composition of the Board against the strategy of the Company).

All of the Directors (both Executive and Non-executive) are committing the time necessary to fulfil their roles. Three Non-executive Directors sit on the Audit and Risk and Remuneration Committee and four Non-Executive Directors sit on the Nominations Committee. The Board meets formally at least seven times a year. During the year to 31 March 2022, the Board met seven times, the Remuneration Committee met seven times, the Audit and Risk Committee met three times and the Nominations Committee met once.

A schedule of matters specifically reserved for the Board, as well as the current terms of reference for each Committee are available to view in this section of the Company’s website.

The Corporate Governance section of the Annual Report discloses Directors’ attendance records for all Board meetings.

Principle 6: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities


The board must have an appropriate balance of sector, financial and public markets skills and experience, as well as an appropriate balance of personal qualities and capabilities. The Board should understand and challenge its own diversity, including gender balance, as part of its composition.

The board should not be dominated by one person or a group of people. Strong personal bonds can be important but can also divide a board.

As companies evolve, the mix of skills and experience required on the board will change, and board composition will need to evolve to reflect this change.

Evidence & disclosure

Mercia’s Annual Report includes a biography of each Board member within the Corporate Governance section. These are also included within the Investor Relations section of its website, under “Meet the Board”. These list current and past roles of each Board member and also describe the relevant business experience that each Director brings to the Board, plus their academic and professional qualifications.

The biographies show the balanced blend of skills and experience required to enable to Mercia to execute its strategic objectives within a corporate governance framework which has been tailored to its business activities. There is depth in venture investing, entrepreneurial business building, financial expertise and legal/corporate governance expertise – and all Directors have proven successful track records in their chosen fields. To ensure that the Directors maintain appropriate skills they are provided training when identified as appropriate by the Chair.

The Corporate Governance section of the Annual Report describes and explains where external advisers have been engaged (eg by the Board in January 2022). Internal advisory responsibilities, such as the role performed by the Company Secretary, in advising and supporting the Board, are described in the Corporate Governance section of the Annual Report.


Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement


The board should regularly review the effectiveness of its performance as a unit, as well as that of its committees and the individual directors.

The board performance review may be carried out internally or, ideally, externally facilitated from time to time. The review should identify development or mentoring needs of individual directors or the wider senior management team.

It is healthy for membership of the board to be periodically refreshed. Succession planning is a vital task for boards. No member of the board should become indispensable.

Evidence & disclosure

The Corporate Governance section of the Annual Report describes the function of the Board and its Committees. The Nominations Committee’s duties include, inter alia, to regularly review the structure, size, composition (including the skills, knowledge, experiences and diversity) of the Board and make recommendations to the Board with regard to any changes. The Committee’s remit also includes succession planning, leadership needs and conducting periodic performance evaluation exercises.

An externally facilitated Board effectiveness review was undertaken in January 2022 and its results were considered carefully by both the Committee and Board as a whole.

The process comprised observation of a Board meeting, a review of Board and committee papers issued during the year, questionnaires completed by the Board relating to competency and experience and confidential one-to-one discussions.


The review identified what was working well and those areas where there was scope for development. Overall, the review concluded that the Board appears to be performing very well. Matters recommended for development included:


  • The Nominations Committee to develop an emergency succession plan
  • Diane Seymour-Williams to formally join the Committees
  • Allocate more Board meeting time to risk governance, including risk appetite.


The Nominations Committee will recommend to the Board actions to support the development of such areas.

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


The board should embody and promote a corporate culture that is based on sound ethical values and behaviours and use it as an asset and a source of competitive advantage.

The policy set by the board should be visible in the actions and decisions of the chief executive and the rest of the management team. Corporate values should guide the objectives and strategy of the company.

The culture should be visible in every aspect of the business, including recruitment, nominations, training and engagement. The performance and reward system should endorse the desired ethical behaviours across all levels of the company.

The corporate culture should be recognisable throughout the disclosures in the Annual Report, website and any other statements issued by the company.

Evidence & disclosure

Within the Annual Report, the Chair’s statement provides further evidence of the iteration and implementation of the #OneMercia framework that continues to develop Mercia’s culture and support both existing and new employees. This sets out Mercia’s purpose, values and culture. A summary of its content is shown earlier in this section of the Company’s website.

The People, Culture and Values section of the Annual Report includes a section on business ethics. The Remuneration Report refers to the Executive Directors’ KPIs, which include Mercia’s cultural values.

Mercia prioritises staff engagement through What We Do Days, State-of-the-business updates, 3600 reviews and Performance Development Reviews. Our corporate culture is based on ethical values and behaviours at their core, which are fully understood and respected by all.

The People, Culture and Values and Responsible Business sections of the Annual Report provides further details on how Mercia’s culture is consistent with the Group’s objectives, strategy, business model and approach to risk management.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the board.


The company should maintain governance structures and processes in line with its corporate culture and appropriate to its size and complexity; and capacity, appetite and tolerance for risk.

The governance structures should evolve over time in parallel with its objectives, strategy and business model to reflect the development of the company.

Evidence & disclosure

The Investor Relations area of Mercia’s website includes, within the AIM Rule 26 page, a Corporate Governance section which, in addition to the high-level explanation of the application of the QCA Code, describes the composition of the Board and its Committees, together with a brief biography of each Board member.

The roles of Committees are described, along with their terms of reference and matters reserved by the Board for its consideration.

The Corporate Governance section of the Annual Report also details the composition of the Board and its Committees, and the role of each Committee.

As a regulated business, Mercia’s corporate governance framework will continue to evolve as the Group progresses. Such evolution will be driven by both the needs of the business and any regulatory changes.

The roles and responsibilities of the Chair, Chief Executive Officer and any other Directors who have specific individual responsibilities or remits (eg for engagement with shareholders or other stakeholder groups) are outlined in the Corporate Governance section of the Annual Report.

Build trust

Principle 10: Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders


A healthy dialogue should exist between the Board and all of its stakeholders, including shareholders, to enable all interested parties to come to informed decisions about the company.

In particular, appropriate communication and reporting structures should exist between the Board and all constituent parts of its shareholder base. This will assist the communication of shareholders’ views to the Board; and the shareholders’ understanding of the unique circumstances and constraints faced by the company.

It should be clear where these communication practices are described (Annual Report or website).

Application & disclosure

The Corporate Governance section of the Annual Report includes disclosure of Board Committees, their composition and where relevant, any work undertaken during the year. It includes a detailed Remuneration Report. The s172 Statement section of the Annual Report provides details of Mercia’s stakeholder communication practices.

Mercia’s website includes all historic Annual Reports, results announcements and presentations, and other governance-related material. These can be found in the Investor Relations section, under Regulatory News. This section of the website also includes the results of all AGMs.

To date, none of the resolutions proposed at Mercia’s AGMs have resulted in a material proportion of votes (e.g. 20% of independent votes) having been cast against them, but were this to happen the Company would announce this in a timely basis, including an explanation of what actions it intended to take to understand the reasons behind such a vote result and, where appropriate, any action it had taken, or would take, as a result of the vote.

The 2022 Annual Report contains reports on the activities of the Remuneration, Audit and Nominations Committees.

This information was last reviewed on 19 August 2022.