Corporate governance

The Company’s business model and strategy, as detailed on the Company Overview page of this website, is to build a portfolio of capacity of syndicates at Lloyd’s.

As we look forward, we shall continue to tailor the portfolio, using data and analytics, to optimise opportunities mindful of market conditions and origination opportunities. We are in active discussions with Lloyd’s to ensure we are in tune with the market’s ambitions, views and strategies as we seek opportunities to optimise the portfolio and to access the market beyond the current capacity portfolio. We have evolved to become a hard-hitting preferred Funds at Lloyd’s capital provider deploying significant capacity and capital on opportunities that meet or exceed our return requirements.

We try to be innovative and creative, working with our portfolio to determine new ways to build our relationships and relevance. At the heart of what we do is supporting extraordinary Executives across management and underwriting. They are the ones that build and drive their businesses and Helios supports them in that quest with access to knowledgeable committed capital.

The Board is committed to returning capital to shareholders and we are confident that we shall be able to make significant strides in this respect.

The support and engagement of our shareholders is imperative to the future success of the Company and the Board is committed to communicating openly and effectively with all shareholders and to understanding their needs and expectations. To achieve this, the Board encourages two-way communication with shareholders and responds appropriately to ensure all questions or issues received from them are addressed in a timely manner. The Interim Executive Chairman, is a principal point of contact for shareholders. His contact details are disclosed on all announcements made by the Company, together with those of Arthur Manners, Finance Director, these announcements can be found on the Announcements page of this website. In addition, contact details for our Company Secretary, Kristel van der Meijden, are given in all communications to shareholders about General Meetings and on the Advisers page of this website.

The Interim Executive Chairman have regular, direct contact with large shareholders and make sure that their opinions are communicated to the Board as needed. There have been regular dialogues with shareholders during the year including holding briefings with analysts and other investors. The Company uses the Annual General Meeting as an opportunity to engage with its shareholders. In so far as is practicably possible, all Directors are expected to attend the Annual General Meeting, with the Chair of the Audit and Nomination and Remuneration Committees being available to answer shareholders’ questions. Final results of proxy appointments and of voting at General Meetings are disclosed on the Documents & Papers and Announcements pages of this website. Furthermore, if voting decisions stray from Company expectations, the Board will engage with those shareholders concerned to understand and try to address their concerns.

We also have an ongoing dialogue with shareholders through formal communication of financial results on a yearly and half yearly basis and provide periodic market updates and press releases to ensure compliance with the AIM Rules.

The Board is committed to ensuring the Company’s business remains sustainable, for the community, environment and others affected by the Company’s activities and considers participation in quality syndicates, whose key characteristics are conservative reserving and a focus on profit rather than growth, is important in ensuring the Company’s long-term success and sustainability. Whilst the managing agents have direct responsibility for managing the syndicates and the impact of their businesses on the environment and the community, the managing agents’ performance in this respect is periodically reported to and reviewed by the Board. Employees are also encouraged to have regard to the impact on the environment in the conduct of their business affairs.

In addition, for a managing agent to operate at Lloyd’s there are ‘statements of business conduct’ (‘Lloyd’s Minimum Standards’) with which the managing agent must comply. Lloyd’s Minimum Standards encompass matters such as claims management, exposure management, governance, investment management, reserving and conduct (including the requirement to treat customers fairly). The managing agents and senior managers within them are also subject to regulation by the Financial Conduct Authority (‘FCA’) and the Prudential Regulatory Authority (‘PRA’) and must comply with their stringent and regular reporting requirements.

On 23 March 2023 the Board approved an Environmental, Social and Governance (ESG) Policy Statement. Helios offers investors exposure to a diversified portfolio of syndicates at Lloyd’s of London. As a consequence Helios is inexorably aligned to the approach Lloyd’s takes with regard to the society as a whole in addition to those adopted by the various Managing Agencies.

As we construct our portfolio each year, considerable emphasis is given to understanding individual syndicate actions with regard to ESG. This includes an understanding of the risks contemplated as well as the ESG initiatives adopted within the respective businesses and their management teams.

We support the ESG strategy of Lloyd’s, who have outlined their ambition to integrate sustainability into all of Lloyd’s business activities. Lloyd’s have stated that embedding ESG across the market and Corporation is a top priority and is interwoven with their purpose of creating a braver world.

Helios fully supports Lloyd’s approach and oversight of the market. More information can be found at https://www.lloyds.com/about-lloyds/responsible-business/esgreport2021

The Executive Directors are in regular contact with the managing agents to review performance of the portfolio and discuss the market, competition, emerging issues and opportunities. Periodically, managing agents are invited to attend Board meetings to provide market updates. Information provided by the managing agents is considered when making decisions about improvements to the Company’s products or business, or about developing new products or exploring new opportunities.

Interests of the Company’s employees are also key. Engaged, enabled and empowered employees who contribute to the best of their potential are fundamental to the long-term success of the business. We have six employees, including the Chief Operating Officer and the Finance Director and we actively seek to understand their values and what motivates employees and to take this into account in the way we operate. We have a flexible remote working model which has proved effective and worked well for our employees, whilst enabling the Company to adapt over the past three years. In all instances, two-way communication is actively sought and encouraged. Oversight of performance is maintained through an annual performance and development review process conducted by the Nomination and Remuneration Committee and we seek to offer appropriate levels of remuneration and incentives, drawing on comparator benchmark surveys as appropriate. The Company’s operations are reliant on key staff. The Directors believe that its policies, remuneration and benefit packages are appropriate to recruit and retain such staff.

Helios also believes that diversity and inclusion initiatives are essential for fostering an environment where everyone feels valued, respected and empowered. This is a key metric for our success. While Helios’ workforce is small and growing, we aim to organically promote and provide equitable opportunities for growth and success to not only employees but also external partners, where possible. In addition Helios is a signatory to the UN Principles For Responsible Investment (www.unpri.org) and we strive to adopt the 6 key principles for responsible investment.

Community engagement activities and philanthropic endeavours form a key area of focus for Helios. A new charity policy was developed in 2023 and we have sponsored several projects that ranged from supporting local communities to collaborating projects aimed at addressing societal and local issues.

At Helios, the effective management of risk is central to our business. We are committed to maintaining a robust risk management framework, which includes comprehensive strategies, policies and procedures to manage risk across all levels of our operations. Our team has regular communication with syndicates to understand how they manage a wide range of risks, including underwriting, operational, market, credit and liquidity risks. We also understand the importance of stress testing and scenario analysis in managing risk. We regularly conduct these exercises to assess the resilience of the Helios Capacity Portfolio under different conditions. The results of these analyses are used to inform our strategic decision making and capital allocation processes.

Designing and implementing an effective risk management framework is a continuous process, and we are committed to its ongoing development to ensure that it remains fit for purpose as our business evolves. We are confident that our approach to risk management positions us well to mitigate potential risks and capitalise on opportunities as they arise.

The majority of risks to the Company’s future cash flows arise from the subsidiaries’ participations in the results of Lloyd’s syndicates, as detailed on pages 13 to 14 and 44 to 48 (inclusive) of the Company’s 31 December 2023 Report and Accounts. These risks are mostly managed by the syndicates’ managing agents. The Company’s role in managing these risks, together with its subsidiaries and members’ agents, is focussed on selection of the syndicate participations; monitoring syndicate performance; and purchasing appropriate member level reinsurance.

The Executive Directors meet regularly to review the Company’s ongoing trading performance, discuss budgets and forecasts and any new or emerging risks associated with ongoing trading. The Board regularly reviews actual performance against budgets and forecasts, as well as anything brought to its attention. Project milestones and timelines are also reviewed regularly.

Opportunities and threats to the Company’s business model and strategy are also periodically considered at dedicated Board strategy meetings.

As detailed on the Directors & Management page of this website and on page 20 of the 31 December 2023 Report and Accounts, the Board comprises three Executive Directors and four Non-Executive Directors. All Directors have agreed in the terms of their engagement to commit such time as is necessary to discharge their responsibilities to the Company effectively; to attend all scheduled Board, Committee, Strategy, Non-executive Directors (where applicable) and Shareholder meetings; and to be available at all times to discharge their duties effectively.

The Board considers the majority of the Non-executive Directors independent in character and judgement and reviews, on an on-going basis, whether there are any relationships or circumstances which are likely to or could affect the independence they bring to matters considered by the Board.

Each Director’s attendance at Board and Committee meetings is disclosed on page 24 of the Annual Report and Accounts for the year ending 31 December 2023.

It is evident from the Directors’ profiles on page 20 of the Annual Report and Accounts for the year ending 31 December 2023 and on the Directors & Management page of the Company website that there is a good balance of experience and skills that each Director brings to the Board.

As detailed above, the Nomination and Remuneration Committee periodically reviews the size, structure and composition of the Board and, in doing so, considers the balance of skills, knowledge, experience and diversity on the Board. Any recommendations from such review are reported to the Board and, should they identify a need for training and development or indeed a change in composition of the Board, they would be actioned appropriately.

The Company Secretary supports the Chairman in addressing the training and development needs of Directors to ensure they are kept up-to-date with changes to law, regulations and corporate governance best practice. Where necessary expert professional assistance is sought to keep Directors appraised of developments of a detailed technical or regulatory nature. Notably, an annual update is provided to the Directors by the Company’s Nominated Advisor on requirements arising from AIM Regulation, the Disclosure and Transparency Rules and the Market Abuse Regime and any changes that might have occurred.

In addition to the Nomination and Remuneration Committee’s review of succession planning, the performance and effectiveness of the Board, its Committees and of individual Directors is reviewed annually. On an on-going basis Directors are encouraged to raise any issues or concerns with the Chairman as soon as appropriate, as the Chairman will do in the event there are any matters causing the Company concern.

In addition, the performance of all continuing Directors is considered before they are proposed for re-election at each AGM.

The Board conducted a formal review of its own performance and the performance of the Board’s Committees and the Chairman in 2022. Views and recommendations were implemented during 2023 and with the appointment of a new Chairman, CEO (2023) and COO, the next evaluation of the Board will take place in 2024 to measure progress against the 2022 evaluation.

The Board requires that the Company’s strategy of building a portfolio of underwriting capacity at Lloyd’s through the purchase of corporate members is carried out in a manner that is ethical and sustainable. This is achieved by focussing on syndicate portfolios comprising quality syndicates which are managed by leading managing agents at Lloyd’s.

The Directors and the Board determine, support and will observe the Company’s ethical values in order to promote and preserve the Company’s reputation. It is the policy of the Company to conduct business in an honest and ethical manner and steps taken by the Company to prevent modern slavery, human rights violations or trafficking in its business and supply chains are detailed in the Company’s Modern Slavery Statement. Furthermore, the Company takes a zero-tolerance approach to bribery and corruption and is committed to acting professionally, fairly and with integrity in all its business dealings and relationships, wherever it operates, and implementing and enforcing effective systems to counter bribery. How this is ensured is detailed in the Company’s Anti-Corruption and Bribery Policy which, together with the Company’s Modern Slavery Statement, is available in the Documents and Papers section of the Company’s website.

The Board has adopted a Share Dealing Code and Disclosure Policy that any Director, employee or person engaged by the Company who is in possession of ‘inside information’ must comply with. All such persons are prohibited from trading in the Company’s securities if they are in possession of ‘inside information’. The Directors will also comply with Rule 21 of the AIM Rules relating to Directors’ dealings.

In addition, in the interests of openness and transparency, a record is kept of Directors’ interests and of persons closely associated with them to ensure they have no conflicts or possible conflicts with the interests of the Company. The Board also reviews whether there are relationships or circumstances which do, or are likely to, affect independence of the Non-executive Directors.

Arrangements made by the Company and structures in place to appropriately address corporate governance are set out above and are detailed in the Corporate Governance Statement on pages 21-26 of our Report and Accounts for the year ended 31 December 2023.

These arrangements and all policies and practices are periodically reviewed by the Board throughout the year to ensure they remain effective and, wherever possible and appropriate, are in accordance with corporate governance best practice.

The Board expects the Company’s governance structures and processes to evolve over time as the Company develop and grows in accordance with strategy. Disclosures on this website will therefore be periodically updated to reflect these changes.

The Board is collectively responsible for formulating, reviewing and approving the Company’s strategy; determining the budget; approving corporate actions; monitoring performance and progress against plans and strategy; and for corporate governance within the Company. In order to do this effectively, regular informal discussions are held between the Executive and Non-executive Directors. The Board meets formally at least four times each calendar year, and at such other times as required. The Board also holds dedicated strategy meetings and regular informal discussions are held between the Executive and Non-executive Directors.

The Company’s Interim Executive Chairman, Michael Wade, is responsible for running the Board effectively and ensuring the Company’s approach to corporate governance is appropriate, with assistance from the Company Secretary. The Interim Executive Chairman has also been instrumental in formalising regular, dedicated strategy meetings.

The Company Secretary ensures that all Directors receive regular and timely information about the Company’s operational and financial performance and that all necessary information is circulated to the Directors sufficiently in advance of meetings to enable the Board to have meaningful discussions and make informed decisions. In addition, all Directors have access to advice and assistance from the Company Secretary and are permitted to obtain independent professional advice at the Company’s expense where they consider it is necessary for them to effectively discharge their duties.

The Executive Directors are responsible for the day-to-day management of the Company, running the business and informing and consulting with the Board about any significant financial and operational matters.

Arthur Manners, the Finance Director, has overall control and responsibility for all financial aspects of the Company’s strategy. The Finance Director is responsible for the Company’s out-sourced accounting function and ensures all financial systems are robust, compliant and support current activities and plans for future growth. The Finance Director also co-ordinates corporate finance and has responsibility for funding and capital requirements, debt, taxation, equity and acquisition finance.

Other key areas of responsibility for the Non-executive Directors include constructively challenging and helping to develop proposals on strategy: monitoring and scrutinising reporting of performance against agreed goals and objectives; determining the integrity of financial information and that financial controls and risk management systems are robust and defensible; and determining remuneration of the Executive Directors, appointing and removing Executive Directors and planning succession (through the Nomination and Remuneration Committee as detailed below).

The Board has a formal schedule of matters that require approval by the Board and is supported by the Audit and Nomination and Remuneration Committees as detailed below.

A copy of the Schedule of Matters Reserved to the Board and of the Audit Committee and Nomination and Remuneration Committee Terms of Reference are available on the Documents & Papers page of this website.

Audit Committee

The Audit Committee meets at least twice a year and is responsible for ensuring that the Group’s financial performance is properly monitored, controlled and reported. The major tasks undertaken by the Committee include monitoring the integrity of the Company’s financial reporting, reviewing internal controls and risk management systems and oversight of the external audit process. The Executive Directors are invited to attend the Audit Committee meetings if appropriate.

The Audit Committee meets the auditors and reviews reports from the auditors relating to the accounting and internal control systems. It also oversees the relationship with the external auditors including reviewing the effectiveness of the audit and assessing annually their independence and objectivity, taking into account relevant UK professional and regulatory requirements, and the relationship with the auditors as a whole, including non-audit services and monitoring the auditors’ compliance with relevant ethical and professional guidance. The Committee reviews the Company’s compliance with accounting, legal and listing requirements. The members of the Audit Committee are all Non-executive Directors, being Andrew Christie, who is also Chairman of the Committee, John Chambers, Katie Wade and Tom Libassi.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee meets at least twice a year and is responsible for determining and agreeing the Board policies for pay, bonuses, incentives and other rewards; employee benefits; and the conditions of employment. The Committee’s Terms of Reference try to ensure that members of the executive management are provided with sufficient incentives to encourage enhanced performance and are in a fair and responsible manner rewarded for their individual contribution to the success of the Company.

The Nomination and Remuneration Committee has responsibility for periodically reviewing the structure, size and composition of the Board with a view to the Company’s strategy and likely future requirements; considering succession planning; and identifying candidates and recommending new appointments to the Board.

The members of the Nomination and Remuneration Committee are all Non-executive Directors, being Katie Wade, John Chambers, Tom Libassi and Andrew Christie, who is also the Committee Chairman.

As detailed under QCA Code Principle 2 above, the Board is committed to communicating effectively with the Company’s shareholders and other stakeholders, and to understanding their needs and expectations. To achieve this the Board encourages two-way communication with investors and stakeholders and responds appropriately to ensure all questions or issues received from them are addressed in a timely manner. The Executive Directors have regular, direct contact with large shareholders and make sure that their views are communicated to the Board as needed.

Shareholders and stakeholders are advised about trading performance and any significant developments through timely announcements made to the market electronically via the London Stock Exchange’s Regulatory New Service (‘RNS’). These announcements are also automatically uploaded on the Announcements page of this website and copies of press releases, broker notes and analysts’ presentations are placed on the Press and Presentations pages of the website.

In addition, the Board recognises the opportunity the AGM provides for them to meet the Company’s shareholders. At the AGM shareholders can pose questions and raise issues either formally during the meeting or informally immediately following the AGM. The Company uses the Annual General Meeting as an opportunity to communicate with its shareholders. In so far as is practicably possible, all Directors are expected to attend the Annual General Meeting, with the Chair of the Audit and Nomination and Remuneration Committees being available to answer shareholders’ questions. All outcomes of votes and historical annual reports and other governance-related material are included on the Announcements, Corporate Governance and Reports & Accounts pages of this website.