Corporate Governance

Our Board members firmly believe in the significance of corporate governance. We have implemented a corporate governance framework that aligns with the Quoted Companies Alliance Corporate Governance Code for small and mid-size quoted companies (the ‘QCA Code’). The QCA Code is founded on ten broad principles and related disclosures, outlining what the QCA deems suitable for growing companies, which then explain how they adhere to these principles. On 13 November 2023, the Quoted Companies Alliance published the latest version of its corporate governance code (2023 Code) which will apply to financial years beginning on or after 1 April 2024. The Board is committed to further aligning with the updated code from the next financial year.

The Board believes that good corporate governance is an integral part of the mid and long-term success of the Group. The following sections provide information about how such principles have been adopted and are being applied by the Group and are set out on our website (www.arecor.com).

Arecor’s purpose, business model and strategy is set out within the Strategic Report in these annual accounts and includes how the company intends to deliver shareholder value in the medium to long-term whilst simultaneously protecting the company from unnecessary risk and securing its long-term future.

The Board is committed to open and ongoing engagement with shareholders through:

• annual report and accounts;
• interim and full-year results announcements;
• trading updates;
• the Annual General Meeting; and
• the Company’s website, in particular, the Investor Centre pages.

Regular meetings are held between the Chief Executive Officer, Chief Financial Officer and institutional investors and analysts to ensure that the Company’s strategy, financial and business development activities are communicated effectively. The Chair is available for discussions with shareholders as required.

The Board recognises the importance of corporate social responsibility and seeks to take account of the interests of the Group’s broad stakeholder groups. The Board works to build and maintain an environment within which employees, suppliers and customers involved in the Group’s business activities behave in an ethical and socially responsible way.

The Group is a committed equal opportunities employer. Employees and job applicants are given equal treatment regardless of their gender, marital status, sexual orientation, age, race, colour, nationality, ethnic origin, disability, or religious or philosophical beliefs.

Arecor is committed to a responsible and ethical corporate behaviour. Arecor promotes a positive health and safety culture throughout the business to ensure that all our people consider health, safety and welfare issues while at work and make an effective contribution towards maintaining and improving health and safety standards.

The Board has identified principal business risks which are included in the Strategic Report on pages 20 to 21 of our 2024 Annual Report.

The Board is responsible for establishing the system of internal control used by the Group and reviewing its effectiveness. This system is intended to understand and manage risk which could potentially impact the business. The Board also monitors expenditure and information used in decision making.

The Board has a collective responsibility and legal obligation to promote the interests of the Group and to define the corporate governance framework. At 31 December 2024, the Board comprised five Non-Executive Directors and one Executive Director: the Chair, Chief Executive Officer, and four Non-Executive Directors. The profiles of the Directors are set out on pages 25 to 26 of our 2024 Annual Report. The Directors believe that the Board has an appropriate balance of sector, financial, and public markets skills and experience. As the company evolves, the mix of skills and experience required on the board will change, and board composition will need to evolve to reflect this. All Directors are subject to election by the shareholders at the general meeting immediately following their appointment to the Board and at re-election intervals of not more than three years.

In accordance with the principles of the QCA Code, Christine Soden, Jeremy Morgan and Sam Fazeli are regarded as independent. Andrew Richards and Alan Smith have served on the board of directors for more than nine years and are not regarded as independent.

The Board believes that the board of Non-Executive Directors and the Non-Executive Chair provide a blend of different experiences and backgrounds to bring an independent judgement to bear.

Internal evaluation of the Board and individual Directors is carried out to determine effectiveness and performance of the Board and the Directors’ continued independence and capacity. The criteria against which effectiveness is considered is aligned to the strategy and business plans of the Company. The annual evaluation of Board performance is co-ordinated and led by the Chair. The Board considers a more formal, externally facilitated review process has not been required in the past year but will continue to consider whether such a review is necessary in future.

The Directors, together, act in the best interests of the Group via the Board and its Committees. They devote sufficient time and consideration as necessary to fulfil their duties.

Matters specifically reserved for the Board include strategy and capital; financial reporting and internal controls; significant contracts and partnerships; communication; board membership and other appointments; remuneration; delegation of authority and corporate governance matters including policies.

To discharge its responsibilities effectively, the Board has a system of delegated authorities, which enables the day-to-day operation of the business and so that significant matters are brought to the attention of the Leadership Team and the Board, as appropriate. Through this system the Board is able to provide oversight and direction to the Executive Directors, the Leadership Team and the wider business. The ultimate authority for all aspects of the Company’s activities rests with the Board with the respective responsibilities of the Non-Executive Chair and Chief Executive Officer as delegated by the Board.

Non-Executive Chair – key responsibilities

• Responsible for the effectiveness and leadership of the Board
• Builds and maintains an effective and complementary Board of Directors
• Sets the agenda, style and tone of Board discussions
• Promotes a culture of openness and debate by facilitating the effective contribution of Non-Executive Directors
• Ensures active engagement in meetings, through effective relationships between the Executive and the Non-Executive Directors.

Chief Executive Officer – key responsibilities

• Is responsible for day-to-day leadership and management of the Group
• Develops the Group’s objectives and strategy for Board review and approval
• Creates and recommends to the Board an annual business plan, including an annual budget
• Delivers the annual business plan
• Executes the agreed Group strategy and other agreed objectives

Non-Executive Directors – key responsibilities

• Evaluate and appraise the performance of the Executive Directors and Leadership Team against agreed objectives
• Participate in defining and developing the Group’s strategy and monitor against it
• Monitor the financial information, risk management and controls processes of the Group
• Approve annual budget
• Formulate Executive Director remuneration and succession planning

Board Committees

The Board’s principal committees are the Audit and Risk Committee, Remuneration Committee and Nomination Committee. Each committee has written terms of reference that set out specific authorities and duties.

Audit and Risk Committee

The Audit and Risk Committee assists the Board in discharging its responsibilities of corporate governance, financial reporting, external and internal audits and controls. This includes reviewing the Company’s annual and interim financial statements, reviewing and monitoring the extent of the non-audit services undertaken by external auditors, and reviewing the effectiveness of the Company’s internal controls and risk management systems. The ultimate responsibility for reviewing and approving the annual report and accounts and the half yearly reports rests with the Board. The Audit and Risk Committee meet not less than three times a year and otherwise as required.

Membership: Christine Soden, Jeremy Morgan and Sam Fazeli.
Committee Chair: Christine Soden.

Remuneration Committee

The Remuneration Committee is responsible for executive remuneration and the remuneration packages of individual Directors. This includes agreeing with the Board the framework for remuneration of the Executive Directors and members of the Leadership Team. The Committee is responsible for determining the total individual remuneration packages of each Director including, where appropriate, short and long-term incentive awards and share option grants. No Director is involved in any decision as to their own remuneration. The Remuneration Committee meet not less than three times a year and otherwise as required.

Membership: Jeremy Morgan, Christine Soden and Sam Fazeli.
Committee Chair: Jeremy Morgan.

Nomination Committee

The Nomination Committee is responsible for the structure and composition of the Board and its committees, taking into account the balance of skills and diversity. This includes consideration of the appointment and succession planning of Executive and Non-Executive Directors. The Nomination Committee meet each year and as required.

Membership: Andrew Richards, Christine Soden, Jeremy Morgan, Alan Smith and Sam Fazeli.
Committee Chair: Andrew Richards.

Board meetings

The Board meets at least eight times each year or any other time deemed necessary for the good management of the business. They meet at a location agreed between the Board members: face-to-face meetings are held at the Company’s premises at Chesterford Research Park when practical.

Last updated 6 May 2025