Statement by the Directors in relation to Performance of their Statutory Duties in accordance with Section 172(1) Companies Act 2006
Our Directors confirm they have acted in a way that they consider, in good faith, would be most likely to promote the success of the business for the benefit of its members as a whole, taking into consideration the interests of stakeholders in their decision-making, and having regard to the matters set out in Section 172(1)(a)-(f) of the Companies Act 2006.
Everyday Loans is the trading name of the FCA regulated trading entity - Everyday Lending Limited. Clareant Lending Holdco Limited is considered the ultimate parent company of the Group comprising the following entities: Clareant Lending Holdco Limited, Clareant Lending Holdco2 Limited, Clareant Lending Newco Limited, NSF Finco Limited, Non-Standard Finance Subsidiary II Limited, Non-Standard Finance Subsidiary III Limited, Everyday Loans Holdings Limited, Everyday Loans Limited, Everyday Lending Limited, George Banco Limited, and George Banco.Com Limited.
Clareant Lending Holdco Limited had no employees or customers of its own, and whilst its main stakeholders are currently its shareholders and its subsidiaries, due to its level of oversight over Everyday Lending Limited, the approach taken in considering the matters set out in Section 172(1) set out below is applicable to all subsidiaries across the Group.
The strategy of the Group is to grow the business and increase the profitability in a controlled and compliant manner, maintaining the desired reputation for high standards of business conduct, and recognising that companies are run for the benefit of shareholders (all the interests of whom are considered), but that the long-term success of a business is dependent on maintaining relationships with stakeholders and ensuring consideration of the external impact of the Group’s activities.
The Group carries out regular assessments of its stakeholders. This information helps inform our stakeholder engagement strategy, which includes taking into consideration stakeholder views in Board decision-making. We offer multiple channels for stakeholder engagement and for example, in addition to the immediacy of face-to-face contact that our business model provides, customer surveys and online recommendation surveys also have proven effective channels to gain valuable customer feedback. Similarly annual employee opinion surveys, regular employee forums, together with the introduction of regular face-to-face ‘stand-ups’ as well as live online Q&A ‘Town Halls’ have proven very popular feedback channels for our workforce.
Decisions & Activity of the Group in 2023
Whilst not an exhaustive list of the stakeholders, in 2023 the following were considered key in terms of strategic importance: customers, regulators, employees, ultimate Group shareholders, lenders, partners & suppliers, the environment, and the communities in which we operate.
Strategically, 2023 was a busy year for the Group, whereby a restructure of financial obligations with secured lenders resulted in a transfer of NSF Finco Limited and its subsidiaries to a legal entity owned by secured lenders (Clareant Lending Newco Limited). The Directors had to carefully consider the short-term needs of the business, as well as the Company’s long-term prospects and value, together with considering the linkage between its principal risks and Section 172 matters.
As part of the workstream in relation to preparing for the FCA’s enhanced Consumer Duty regulations, we set ourselves the objective to ensure and demonstrate that all our products and services are fit for purpose, designed to meet consumers’ needs, characteristics and objectives, and are distributed appropriately. Reviews have been carried out on product governance processes, including consideration of vulnerable customers, together with the creation of a suite of qualitative and quantitative management information designed to evidence products and services are performing as expected within our target market. In addition, and also in the light of macroeconomic events such as the cost of living increases, we also carried out an exercise to evidence that consumers receive fair value (there is a reasonable relationship between price paid and benefit received) and continue to design and tailor our products to meet our customers’ needs at a price they can afford.
An independent Skilled Person review conducted under Section 166 of the Financial Services & Markets Act in Everyday Lending Limited focussed on creditworthiness and complaints handling processes, and was finalised in 2023. Key learnings from regulatory and assurance reviews have been captured and embedded into our policies and procedures, training, organisation structure and incentive arrangements.
The Scheme of Arrangement by Everyday Lending Limited was launched in March 2023 and sanctioned by the Court in June 2023. The application deadline for customers falling under the Scheme of Arrangement was 31 December 2023. Submissions will continue to be processed into 2024 with the Scheme likely coming to a close during 2024. Whilst choosing to conduct a Scheme of Arrangement was a difficult decision for the Directors, after careful consultation with the FCA and legal advisors, entering into the Scheme of Arrangement was the only path that allowed the Group to continue to trade and which in turn provided customers with the best available outcome in terms of redress.
Culture is continually monitored closely through a series of measures that are reviewed as part of a continuous assessment process. Development opportunities for new and existing employees was given significant focus in 2023, and we continue to develop our learning and development proposition and measure the impact and value of any initiatives through various feedback channels. Operational efficiency is another strategic focus and ongoing efficiencies obtained in 2023 were helped by the collaboration of the workforce providing their feedback to enhance internal processes.
We recognise our supplier relationships and robust due diligence are critical to operating responsibly. Culturally, we are focused on ensuring we are always professional and want to establish a reputation as being a reliable customer with whom other firms can and want to do business. During 2023, we completed a due diligence exercise for introducers, specifically focused on Consumer Duty. The results were collated and assessed, and Consumer Duty due diligence questions were added into the existing annual due diligence process as applicable.
Customer feedback has demonstrated there is appetite to enhance the customer journey via digitalisation where practicable, and technological enhancements continue to be high on the Board’s agenda, with emphasis on making the customer journey as simple as possible under the regulatory backdrop, and increasing customer choice.
We continue to assess our impact on the environment as well as how climate change might create additional risks as well as opportunities to the business. We carry out energy assessments under the Energy Savings Opportunity Scheme (‘ESOS’), established by the Energy Savings Opportunity Scheme Regulations 2014, and we report under the Streamlined Energy and Carbon Reporting (‘SECR’) scheme on an annual basis (see page 6 in the Clareant Lending Holdco Limited consolidated annual report & financial statements available on Companies House). For further information on our environmental strategy, as well as our social strategy, which include the communities in which we operate, please see page 9 in the Clareant Lending Holdco Limited consolidated annual report & financial statements available on Companies House. All subsidiaries which have met the relevant reporting criteria have also included this required s172 statement within their annual accounts & financial statements which is available on Companies House.