The QCA Code is constructed around ten principles, which the Company intends to adhere to wherever possible. The Company’s application of the QCA Code reflects a revenue-generating commercially-focused business, which is pursuing long-term shareholder value by targeting existing and future partnering opportunities. Set out below is an explanation of how the Company currently complies with the principles of the QCA Code and, to the extent applicable, those areas where the Company’s corporate governance structures and practices differ from the expectations set out in the QCA Code. Annual updates will be provided on the Company’s compliance with the QCA Code.

Arecor Therapeutics plc: Corporate Governance Statement

As Chair, I assume principal responsibility for the Group’s corporate governance environment and together with my fellow Board members, set clear expectations concerning the Group’s culture and conduct.

The Board comprises seven Directors including a Non-Executive Chair, two full-time Executive Directors and four Non-Executive Directors, of which three are independent. The Directors provide a blend of different skills, experience, independence and knowledge of the business.

The Board meet regularly to review the Group’s progress towards its strategic goals and to approve budgets, corporate actions and financial reporting. The Board is supported by committees with clear terms of reference that set out defined duties and responsibilities.

The Audit & Risk Committee and Remuneration Committee meet at least three times per year and otherwise as required. The Nomination Committee meets at least once per year and otherwise as required.

As Directors we acknowledge the importance of high standards of corporate governance and intend to comply with the principles set out in the Corporate Governance Code issued by the QCA (“QCA Code”), to the extent that is appropriate for a business of the Group’s size and nature.

 

Andrew J.M. Richards

Chair

3rd June 2021

 

Last updated: 3 June 2021

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

The Board holds at least one session each year dedicated to strategy, including input from the leadership team and external advisers as appropriate. A strategic report reflecting the outcome of such sessions will be included in the Company annual report and accounts.

The Board monitors internal controls and systems which identify, assess, monitor and manage business risks. This includes a corporate risk register which sets out risks and mitigation steps in the normal course of business. See in addition, Principle 4 below.

Seek to understand and meet shareholder needs and expectations

The Board is committed to open and ongoing engagement between itself and shareholders. The Board will communicate with shareholders through:

  • annual report and accounts;
  • interim and full-year results announcements;
  • trading updates (where required or appropriate);
  • the annual general meetings; and
  • the Company’s investor relations website (in particular, the “RNS News” and “AIM Rule 26” pages).

Regular meetings will be 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 also available for discussions with shareholders as and when appropriate.

The Chief Financial Officer as Company Secretary is the primary contact for shareholders. There is a dedicated e-mail address for shareholder questions and comments.

Board members will attend the Annual General Meeting (‘AGM’) and be available to answer questions raised by shareholders. After the conclusion of the AGM, the Company will provide an opportunity for shareholders to speak or raise questions with the Board on a more informal basis.

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

The Company takes its corporate social responsibilities very seriously and is focused on maintaining effective working relationships across a wide range of stakeholders including employees, existing and new customers, academic and advisory groups as part of the normal course of business.

The Chief Executive Officer and Chief Financial Officer communicate with stakeholders as part of the day-to-day running of the business. The Company’s business strategy includes a social purpose to improve health wellbeing.

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

The Board has ultimate responsibility for the Company’s system of risk management and internal control, including reviewing its effectiveness. The Board’s oversight of internal controls includes financial controls through a framework of policies and procedures with authorisation procedures for operating and capital expenditure. The leadership team operates within an organisational structure with defined levels of responsibility.

The Company’s risk framework includes a risk register that is managed by the Chief Financial Officer with inputs from Risk Officers who are members of the leadership team and responsible for managing risk in their business functions. The risk register is reviewed by the Audit and Risk Committee and approved by the Board. Key business risks will be included in the annual report and accounts.

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

The Board comprises seven directors: Andrew Richards (Chair), Sam Fazeli, Alan Smith, Christine Soden and Jeremy Morgan as Non-Executive Directors; Sarah Howell (Chief Executive Officer) and Susan Lowther (Chief Financial Officer) as Executive Directors.

Christine Soden, Jeremy Morgan and Sam Fazeli are considered by the Board to be independent Non-Executive Directors and were selected with the objective of bringing experience and independent judgement to the Board. Andrew Richards, Sam Fazeli and Alan Smith bring extensive knowledge of the business, the sector it operates in and experience of public markets to the Board.

The Board is also supported by the Audit and Risk Committee, Nomination Committee and Remuneration Committee.

The Board meets regularly and at least eight times a year.

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

The Board has been constructed to ensure that it has the right balance of skills, experience, independence and knowledge of the business.

Processes are in place to ensure that each member of the Board is provided with such information as is necessary for them to discharge their duties. The Board also has access to professional advisers and independent advice in the performance of their duties. Directors also receive updates from external advisers on corporate governance matters.

The Company’s Articles of Association require that the Directors stand for re-election every three years.

Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

The Chair is responsible for ensuring an effective Board. The Company will establish a process for evaluating the performance of the Board, the committees, and the individual Directors against its objectives to ensure that members of the Board provide a relevant and effective contribution.

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

The Company promotes a culture of integrity, transparency, honesty, trust and respect. All employees of the Company are expected to operate in an ethical manner in all of their internal and external dealings.

The staff handbook and policies promote this culture and include such matters as whistleblowing, social media, anti-bribery and corruption, communication and general conduct of employees.

The Board takes responsibility for the promotion of ethical values and behaviours throughout the Company, and for ensuring that such values and behaviours guide the objectives and strategy of the Company.

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

The Chair leads the Board and is responsible for its governance structures, performance and effectiveness. The Non-Executive Directors are responsible for bringing independent and objective judgement to Board decisions. The Executive Directors are responsible for the operation of the business and delivering the strategic goals agreed by the Board.

The Chief Financial Officer as Company Secretary is the primary contact for the Company’s shareholders and responsible for ensuring that the link between the Board and the shareholders is strong and efficient.

The Board has adopted Terms of Reference, which have a clear and specific schedule of matters reserved for the Board, including corporate governance, strategy, major investments, financial reporting and internal controls.

The Board is supported by the Audit and Risk Committee, Nomination Committee and Remuneration Committee.  The Remuneration Committee includes two members, Andrew Richards and Alan Smith, who are not considered independent. However, the Company’s considers their membership appropriate in view of the Company’s size and the participation of two independent Non-Executive Directors on the Committee.

From time to time, separate committees may be established to consider and address specific issues, as and when they arise.

The Board intends to review the governance framework on an annual basis to ensure it remains effective and appropriate for the business.

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

The Company intends to use the following principal methods of communication with its shareholders:

  • the annual report and accounts;
  • the interim and full-year results announcements;
  • trading updates (where required or appropriate)
  • the annual general meetings; and
  • the Company’s investor relations website (in particular, the “RNS News” and “AIM Rule 26” pages).

The Company’s website is updated on a regular basis with information regarding the Company’s activities and performance. The Company’s reports, presentations, notices of annual general meetings, and results of voting at shareholder meetings are also available on the website.

Date Title View

28 May 2021

Arecor Therapeutics plc Audit and Risk Committee Terms of Reference

28 May 2021

Arecor Therapeutics plc Remuneration Committee Terms of Reference

2 November 2021

Arecor Therapeutics plc Environmental and Social Governance Policy