Introduction from the Chairman

To the extent applicable, and to the extent able (given the current size and structure of KCR Residential REIT plc ("the Company" or "KCR") and the board of directors ("the Board"), the Company has adopted the Quoted Companies Alliance Corporate Governance Code. Details of how KCR complies with the Code, and the reasons for any non-compliance, are set out in the table below, together with the principles contained in the Code.

Prior to the formal adoption of the Code, the Company has, for several years, operated in compliance with recommendations of the QCA, in so far as the size of both the Company and its Board permitted. For that reason, no significant changes in governance-related matters have been needed. No key governance matters have arisen since the publication of the last Annual Report.

The Board considers that the structure of the Board is a cost-effective and practical method of directing and managing the Company. As the Company's activities develop in size, nature and scope, the size of the Board and the implementation of additional corporate governance policies and structures will be reviewed.

Michael Davies


The principles set out in the Code which require disclosure on the website and the required disclosure are set out in the table below.

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

KCR's objective is to build a substantial UK low-to-mid-priced residential property portfolio that generates both secure income flow from rents and increasing net asset value for shareholders. KCR acquires blocks of studio, one-and two-bed apartments that are close to transport links, shopping and leisure, predominantly in the South East.

Over the medium to long term, the Company expects rental and property values to increase in line with inflation. These increases will drive KCR's ability to pay dividends from cashflow generated by rents and deliver net asset value increases through positive property revaluations. Active asset management of the properties may also deliver value increases.

As a REIT, KCR is required to distribute 90 per cent of its rental profits, assuming that it has sufficient distributable reserves.

It is KCR's intention to conduct its activities in a professional and responsible manner for the benefit of its shareholders, its employees, and the communities where it operates.

Seek to understand and meet shareholder needs and expectations

As the large majority of the Company's shares are held in CREST, with the beneficial owners not disclosed, KCR seeks to communicate with shareholders primarily by indirect methods. Announcements through RNS are as comprehensive as possible. Digital communications platforms such as Vox Markets are used from time to time to communicate via video and podcast. Use of these platforms is limited to senior executives such as the CEO and only once appropriate media training has been completed.

The chief executive, Dominic White, and the property director, Tim James, attend and present at investor forums wherever possible, as well as holding discussions with analysts, shareholders and investment managers.

It is apparent from such interaction that shareholders have several concerns, including:

  • How do the directors propose to expand operations without dilution to existing shareholdings?
    Since property companies are capital-intensive, KCR will raise equity over time to fund the acquisition of new properties. The Board will aim to maximise the issuance price such that issuances are accretive or, if that is not possible, such that raises will lead to accretive investments that compensate for any dilution due to share issuance price.
  • When will the Company become profitable?
    Based on current overheads and interest forecasts, the Company may become profitable (cashflow positive) once it has £50m of investments generating rental income. This is expected to be in 2019.

Shareholder liaison is managed by Dominic White (

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

KCR operates in the UK. It identifies the main stakeholders in the UK as being investors, suppliers of services (accountant, auditor, nomad, broker, lawyers), employees, directors, third-party property managers, banks and other debt providers and property agents introducing investment opportunities.)

KCR also realises that it has a social responsibility in its role as a landlord of residential housing. We commit to delivering great service to our tenants, which includes providing safe and high-quality residential units, at market prices, managed in a professional way.

Treating all our stakeholders well, and in particular our key customers - our tenants, is key to growing a sustainable business that will have long-term success.

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

The board of KCR is responsible for setting the risk framework within which the Company operates and ensuring that suitable risk-management controls and reporting structures are in place throughout the group.

The board seeks to minimise risk in the management of its operations. The Company uses third-party advisors to address specific issues that arise during operations where they bring complementary expertise and experience.

Maintain the board as a well-functioning, balanced team led by the chair

The KCR board comprises a balance of independent and non-independent directors with collective, specific and complementary skills that enable the Company to manage and direct its affairs in a professional manner, with embedded corporate governance procedures that are fit for purpose.

Board meetings are held at least ten times a year and all necessary documentation is provided to the board in advance, so that they can understand the issues under review and make well-considered decisions.

The board has audit and remuneration sub-committees that are chaired by non-executive directors.

The directors devote such time to the Company's affairs as the board considers appropriate.

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

The board of KCR maintains up-do-date skills, knowledge and experience to enable it to direct and manage the Company's operations, finances and its interface with investors, the public markets and its other stakeholders.

It takes great care to appoint managers and staff with the appropriate skills and experience, and is aware the importance of encouraging diversity among its workforce.

The board works as a team and regularly reviews its procedures and composition.

Evaluate Board performance based on clear and relevant objectives, seeking continual improvement

Current membership of the Board is as follows:





Michael Davies

Non-executive chairman

12 November 2015


Dominic White


1 January 2017


James Cane

Finance director

22 September 2014


Timothy James

Property director

10 June 2014


Oliver Vaughan

Non-executive director

10 June 2014


In view of the size of the Board, the Directors do not believe that it is practical to undertake an external or a wide-ranging evaluation of the performance of Board members. Based on an informal evaluation carried out by the non-executive directors, the Board considers the recent performance of the executive directors to have been successful in achieving the Company's objectives for the first half of 2018.

The primary tasks of the chief executive, Dominic White, have been to grow the Company's asset base and revenue through the delivery of additional assets to the portfolio. This has included developing capital and asset partnerships and finding ways to raise capital in an uncertain equity market. He is a key point of contact for the capital markets.

The primary task of the Chairman, Michael Davies, has been to ensure that the Board has performed its role correctly, that governance is adhered to, and that the Company works towards delivering value to shareholders in accordance with the Company's strategy. He is also a point of contact with many of the Company's shareholders and professional advisers.

James Cane's main task is to oversee the Company's administrative function and, in particular, its financial affairs. His knowledge of all aspects of the Company's affairs remains invaluable. He has successfully managed the process for completing the financial statements within the statutory time limits and supervised the Company's administration.

Succession planning remains an important issue for the Board, and in particular the chairman.

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

The Board strives to promote a corporate culture based on sound ethical values and behaviours.

The Company has adopted a code for directors' and employees' dealings in securities, which is appropriate for a company whose securities are traded on AIM. The code is in accordance with the requirements of the Market Abuse Regulation that came into effect in 2016.

The Board is also aware that the tone and culture it sets will greatly impact all aspects of the Company and the way that employees behave, as well as the achievement of corporate objectives. A significant part of the Company's activities is centred upon an open dialogue with shareholders, employees and other stakeholders. Therefore, the importance of sound ethical values and behaviours is crucial to the ability of the Company to successfully achieve its corporate objectives.

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

The corporate governance structures which the Company is able to operate are limited by the size of the Board, and in particular the small number of executive directors, which is itself dictated by the current size of the Company's operations. With this limitation, the Board is dedicated to upholding the highest possible standards of governance and probity.

The chairman, Michael Davies:

  • leads the Board and is primarily responsible for the effective working of the Board;
  • in consultation with the Board, ensures good corporate governance and sets clear expectations with regards to Company culture, values and behaviour;
  • sets the Board's agenda and ensures that all Directors are encouraged to participate fully in the activities and decision-making process of the Board;
  • takes responsibility for relationships with the Company's professional advisers and major shareholders.

The chief executive, Dominic White:

  • is primarily responsible for developing KCR's strategy in consultation with the Board, for its implementation and for the operational management of the business;
  • is primarily responsible for new projects and expansion;
  • runs the Company on a day-to-day basis;
  • implements the decisions of the Board;
  • monitors, reviews and manages key risks;
  • is the Company's primary spokesperson, communicating with external audiences, such as investors, analysts and the media.

The finance director, James Cane:

  • is responsible for the administration of all aspects of the Group;
  • oversees the accounting function of all group companies;
  • deals with all matters relating to the independent audit.

The remuneration committee is chaired by Michael Davies and comprises Oliver Vaughan and Michael Davies. It meets on an ad hoc basis when required.

The audit committee is chaired by Michael Davies and comprises Oliver Vaughan and Michael Davies. It normally meets twice each financial year to consider the interim and final results. In the latter case, the auditors are present and the meeting considers and takes action on any matters raised by the auditors arising from their audit.

Matters reserved for the Board include:

  • Vision and strategy
  • Production and trading results
  • Financial statements and reporting
  • Financing strategy, including debt and other external financing sources
  • Budgets, acquisitions and expansion projects, divestments and capital expenditure and business plans
  • Corporate governance and compliance
  • Risk management and internal controls
  • Appointments and succession plans
  • Directors' remuneration.

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

Shareholders are encouraged to participate at the AGM, to ensure that there is a high level of accountability and identification with the Group's strategy and goals.

All directors were present at the AGM held on 22 December 2017. The resolutions proposed at the AGM and at all general meetings held since Admission have been passed with no material proxy votes against such resolutions.

Annual reports and notices of general meetings are included separately in the appropriate section of this website.


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