L1 recognises that our success rests on maintaining best-in-class corporate governance and a sound business reputation. While L1 is a privately held business, we implement governance practices that are benchmarked against the best public company international standards.

Lord Davies Quote

We are committed to ensuring the highest standards of corporate governance, business practice and ethics.


L1 has made good progress this year putting in place an IT compliance platform across the group to manage all approvals and we continue to adopt policies to uphold the highest standards in the companies which we invest in. We have a strong compliance function, and where appropriate, we proactively engage with authorities to ensure that our structures, processes and procedures meet all relevant standards.

Company structure

LetterOne is an international investment business consisting of two groups:


Board level governance

At a corporate level, L1 operates through two Boards of Directors, each with executive, shareholder and independent directors. The Boards are supported by their Audit & Compliance, and Nomination & Remuneration Committees. The Board of Directors of L1 Holdings is responsible for setting investment strategy and approving investment decisions for L1 Energy. The Board of Directors of L1 Investment Holdings is responsible for setting investment strategy and approving investment decisions for L1 Technology, L1 Treasury, L1 Health and L1 Retail.

L1 Holdings is the ultimate parent of the group comprising L1 Energy, which invests in the energy sector. L1 Investment Holdings is the ultimate parent of the group comprising L1 Technology, L1 Health, L1 Retail and L1 Treasury. L1 Investment Holdings makes investments in the telecoms and technology sectors through L1 Technology, in the healthcare sector through L1 Health and in the retail sector through L1 Retail. L1 Treasury manages L1’s liquidity and financial investments.

The investment teams in L1 Energy, L1 Technology, L1 Health and L1 Retail put forward investment recommendations. The corporate structure of L1 has been carefully designed so that investment decisions are scrutinised thoroughly, before they are presented to the L1 Holdings and L1 Investment Holdings Boards for an investment decision. To challenge our investment teams’ recommendations and to challenge our assumptions, we have recruited sector investment advisory boards consisting of internationally respected chief executives and entrepreneurs. Each advisory board provides advice on whether or not to proceed with a particular opportunity in its sector. The advisory boards play an essential role in our investment governance process. The oversight of our wholly owned companies, and strategic equity holdings, is undertaken by separate teams in L1 Energy, L1 Technology, L1 Health and L1 Retail. They work actively with the management of the companies we invest in, providing strategic input and monitoring the operational performance of each portfolio. They are responsible for setting strategy, finance, capital allocation, performance management and top team talent management within their companies.

L1 Treasury’s investment parameters are set by the Investment and Risk Committee, delegated by the L1 Treasury Board within a framework approved by the Board of L1 Investment Holdings. Individual investment decisions are then taken by a separate L1 Treasury team headed by the CIO of L1 Treasury.

L1 is committed to the highest standards of governance, including transparent financial and tax reporting. L1 strongly believes that pursuing a transparent tax policy is a part of doing business. This is in line with L1’s Code of Conduct. In addition, the interests of all relevant stakeholders – shareholders, employees, governments, suppliers, business partners, and minority investors – are balanced with our policy.


The L1 Tax Director is responsible for our tax policy, which is approved by the main Board and Audit Committees. The L1 Tax Director is also responsible for maintaining and updating this policy and for ensuring that procedures supporting the policy are in place, maintained, and used consistently throughout L1.

To safeguard adherence to its tax policy, L1 maintains a well-educated staff of tax and finance professionals who are in constant contact with L1’s business units and senior management. The L1 Tax Team will provide guidance to the business unit on the tax implications of particular transactions. In addition, L1 makes use of the services of accredited tax advisors at all relevant levels in L1 and has included tax compliance in its internal audit programme.


Tax planning
L1 reports and pays taxes in the jurisdictions in which it operates in accordance with all relevant tax laws and regulations. L1 complies with such laws and regulations as well as what we believe to be the spirit of those laws and regulations.

Transactions must be driven by a legitimate commercial purpose and will consider appropriate tax planning when entering into such commercial arrangements. In addition, consideration is also given to the reputation of L1 and to its corporate and social responsibilities.

L1 staff are required to file all the required tax-relevant filings with the appropriate tax authorities in a timely and complete manner. To assure timeliness and completeness, tax filings are monitored through L1’s comprehensive tax control framework, which is regularly reviewed and updated. L1 has a very low tolerance for errors in tax processes, including tax compliance processes.

Transactions conducted between L1 companies located in different countries are conducted on an arm’s length basis and in line with current OECD principles and other local transfer-pricing regulations. L1 has implemented a Transfer Pricing Policy to ensure consistent application of international recharging throughout L1.


Tax risk management
L1 adopts a neutral tax risk position and adheres to very high standards of governance in its approach to managing tax risk. This includes the signoff of complex matters by external advisors. To ensure that tax matters are appropriately addressed in transactional activity undertaken by L1 (both in its corporate capacity and in respect of joint ventures), the L1 Tax Team is notified whenever a transaction is proposed.

The tax positions adopted by L1 must be those, which we are confident are robust and in accordance with relevant legislation, based on the tax laws at the particular time. L1 will obtain external opinions in relation to the level of risk for more significant transactions, and consultation may be sought from a tax authority, if appropriate.

All notifications of tax audits or enquiries must immediately be referred to the L1 Tax Director, who will determine, in consultation with the business unit, the approach to be taken and which advisors to use.


Relationships with governments
L1 aims for open and constructive dialogue with tax authorities, including HMRC, on the basis of disclosure of all relevant facts and circumstances. L1 intends to be clear about all aspects pertaining to its tax position and share these in a transparent manner with tax authorities to achieve upfront certainty on tax matters.

This tax strategy applies to the accounting period ended 31 December 2017. L1 adopts the same tax strategy for its global group and does not alter this policy for the UK. Accordingly, L1 regards this publication as complying with its duties under Schedule 19 of the Finance Act 2016.

Ernst & Young UK LLP (Luxembourg and London)

Dear All

The COVID-19 pandemic made 2020 a year of rapid change in terms of the way we work. Despite the challenges of remote working, we have maintained the highest standards of corporate governance, training, business practice, and ethics at L1. While L1 is a privately held business, we implement governance practices that aim to meet public company international standards.

L1 has continued to update its policies and procedures to address the compliance risks that its businesses faced in 2020 and to ensure that its processes are robust and in line with the strictest international standards.

“Despite the challenges of remote working, we have maintained the highest standards of corporate governance, training, business practice, and ethics at L1”


This year, L1 staff have undergone virtual classroom training and six online compliance training courses, and refreshed their knowledge through testing, to ensure that all persons working for L1 operate to the highest standards of business ethics and have a high level of awareness of market conduct regulations, anti-bribery legislation, sanctions compliance, and anti-money laundering laws.

In 2020, L1 has continued to focus on high standards of business ethics in its businesses, dedicating resources to its compliance monitoring programme, both within L1 and within its investee companies. The L1 compliance team has worked closely with its investee companies to support their compliance risk monitoring processes, to ensure that even remote and indirect connection with any high-risk person is flagged and requires compliance approval.

L1 has maintained its excellent banking relationships this year and prides itself on being open and transparent with all its relationships. L1 has relationships with many of the major global banking institutions.

Working from home represented a paradigm shift in terms of IT infrastructure – a massive challenge, which L1 IT masterfully rose to and handled. All systems have the best levels of protection and patching available, and L1 continues to commit significant spend to its cyber security defences. Staff training also continued to be a focus in 2020, ensuring that all persons working for L1 are aware of their personal responsibilities to act as the “human firewall”.

L1 takes its compliance stance extremely seriously and has a strong compliance function. Any violations of internal compliance rules are investigated by the Group Compliance Director immediately and are escalated to the CEO and the Audit & Compliance Committee. Whistleblowing procedures are in effect in L1 and in investee companies, and we ensure that any allegations are investigated and action taken where required.

Kind regards

Lord Davies of Abersoch
Non-Executive Chairman