Workspace Understands Work Space

CORPORATE GOVERNANCE STRUCTURE

The Board of Workspace is committed to maintaining a high standard of corporate governance in terms of leadership, remuneration matters, accountability, and in our relationship with our shareholders, all as identified by the UK Corporate Governance Code.

We believe that good governance, based on robust practices and processes, is a fundamental part of being a responsible business.

BOARD APPOINTMENTS AND SUCCESSION
In order to implement our strategy successfully, the Board monitors and reviews succession planning and development requirements for key Executives and senior managers across the Company.

Consequently, since last year's report, we have welcomed two new Non-Executive Directors to our Board. In February 2013, we announced the appointment of Chris Girling. Chris was previously Finance Director at Carillion PLC and in recognition of his background and extensive experience it is intended that he will succeed Bernard Cragg as Chairman of the Audit Committee in due course. In May 2013 we appointed Damon Russell, the Chairman of New Telecom Express Group, an interactive media service provider. Damon brings over 20 years of experience across the telecommunications, internet, digital and media sectors.

As I explained last year, Bernard Cragg will remain as a Board Director until the Annual General Meeting in 2014. We have been mindful to ensure that a certain level of continuity is retained given the Board changes last year and of course the experience and skills required in performing the role of Chair of the Audit Committee and Senior Independent Director.

After nine years on the Board, John Bywater will be retiring at this year's Annual General Meeting and we would like to thank him for his valued contribution to the Board's activities over the years and in his role as Chairman of the Remuneration Committee.

We continue to review and monitor Board and Board Committee composition against our skills and experience requirements and expect to appoint one further Non-Executive Director this year. We recognise the benefits of diversity of skills, gender, knowledge and independence and we will continue to ensure that this is taken into account when considering any particular appointment. The Company's policy remains that selection should be based on the best person for the role. We will continue to review candidates from a wide range of backgrounds with our foremost priority being to ensure that we appoint the most appropriate individuals and maintain our merit-based approach to recruitment.

In accordance with the UK Corporate Governance Code, all of the Directors have submitted themselves for re-election at the Annual General Meeting. This practice will continue at the Annual General Meeting in 2013.

BOARD AND COMMITTEE PERFORMANCE
In the previous financial year, we conducted our annual evaluation of the Board and Committee performance through an independent external consultancy. This year, the evaluation was conducted by me with support from the Company Secretary. The process covered Board, Committee and personal performance and the output was reviewed by the Board. The process confirmed that the Board and its Committees continued to work effectively.

COMMUNICATION WITH SHAREHOLDERS
Communication with shareholders is given a high priority by the Board. During the year, the Remuneration Committee reviewed the remuneration structure in place at Workspace. As part of its review, the Committee identified some modifications for long-term incentive arrangements. These were discussed with the Company's largest shareholders.

When the Company announces its annual and half year results, the Chief Executive Officer, and Chief Financial Officer make presentations to institutional investors and analysts and hold one-to-one briefings with key shareholders. In addition, I am available to meet with shareholders if they wish to raise any matters separately.

Daniel Kitchen
Chairman