Maintain fit for purpose governance structures (QCA Principle 9)

Roles and responsibilities

Chairman: the Chairman is responsible for the leadership of the Board and ensuring the effective running and management of the Board. He is also responsible for the Board’s oversight of the Company’s affairs, which includes ensuring that the Directors receive accurate, timely and clear information, ensuring the effective contribution of the Non-executive Directors and implementing effective communication with shareholders.

Chief Executive Officer: the Chief Executive Officer is responsible for the day-to-day management and the executive leadership of the business. His other responsibilities include the progress and development of objectives for the Company, managing the Company’s risk exposure, implementing the decisions of the Board and ensuring effective communication with shareholders and regulatory bodies.

Non-executive Directors’ independence

The Board considers the Non-executive Directors to be sufficiently independent to provide appropriate oversight and scrutiny (see Principle 5).

Service contracts and letters of appointment

The two Executive Directors, Andrew Newland and Ian Griffiths, have service contracts with the Company dated 9 March 2004 and effective from 17 March 2004, as amended from time to time. The contracts are not set for a specific term but include a rolling 12 month notice period by the Company or the individual. In the event of a change in control, the Executives have the right to terminate their employment without the requirement to work their notice period.

The Chairman, Dr. Jan Groen, has a letter of appointment dated and effective from 1 November 2018. The Non-executive Director Brian Howlett has a letter of appointment dated and effective from 7 January 2013. The Non-executive Director Juliet Thompson has a letter of appointment dated and effective from 5 January 2023. The Non-executive Director Dr. Joseph Eid has a letter of appointment dated and effective from 19 January 2023. These letters are issued in place of service contracts. These appointments are not set for a specific term and are terminable at will without notice by either party.

Re-election and election of Directors

In accordance with the Company’s Articles of Association, Directors are subject to re-election every three years, and newly appointed Directors are subject to election at the first Annual General Meeting (AGM) after their appointment.

Juliet Thompson and Joseph Eid were appointed in January 2023 and were re-elected by the shareholders at the AGM held on 28 June 2023. All other Directors were re-elected by the shareholders at the AGM held on 29 June 2022.

Committees of the Board

The Board maintains Audit, Remuneration and Nomination Committees. All Committees operate with written terms of reference, the details of which can be found on the website. Their minutes are circulated for review and consideration by the full Board of Directors, supplemented by oral reports on matters of particular significance from the Committee Chairmen at Board meetings.

Audit Committee

The members of the Committee are the Non-executive Director Juliet Thompson (Chair of the Audit Committee from appointment in 2023), the Chairman Jan Groen and the Non-executive Director Brian Howlett (former Chairman of the Audit Committee). The Non-executive Director Joe Eid will attend as an observer. The Audit Committee meets at least twice a year to review the annual and interim financial statements before they are submitted to the Board. The external auditors, Chief Financial Officer and Chief Executive may attend by invitation. Provision is made to meet with the auditors at least once a year without any Executive Director present.

The Committee has adopted formal terms of reference and considers financial reporting, corporate governance and internal controls. Its review of financial reporting includes discussion of major accounting issues, policies and compliance with UK-adopted international accounting standards, the law (Companies Act 2006), review of key management judgements and estimates, review and update of the risk register, risk assessment and risk management activities and going concern assumptions. Risks have been described in more detail in QCA Principle 4 and the Principal Risks and Uncertainties are reported on pages 27 to 33 of the Group’s Annual Report and Financial Statements 2023. Note 1.17 and Note C1.3 of the Group’s Annual Report and Financial Statements 2023 describes the critical accounting estimates and judgements. The Committee also reviews the scope and results of the external audit and the independence and objectivity of the auditors and makes recommendations to the Board on issues surrounding their remuneration, rotation of partners/staff, appointment, resignation or removal. The Audit Committee also considers and determines relevant action in respect of any control issues raised by the auditors. The Audit Committee is also responsible for monitoring the provision of non-audit services provided by the Group’s auditors and assesses the likely impact on the auditors’ independence and objectivity when considering an award of any material contract for additional services. The fees in respect of audit and non-audit services are disclosed in Note 3 of the Group’s Annual Report and Financial Statements 2023. An ethical standard for auditors came into force with effect from 15 March 2020 and the Company has a policy to restrict the non-audit services that the auditors can provide.

Remuneration Committee

The members of the Committee are the Non-executive Director Brian Howlett (Chairman of the Remuneration Committee), the Chairman Jan Groen and the Non-executive Directors Juliet Thompson and Joe Eid. The Remuneration Committee meets as required. The Chief Executive and Chief Financial Officer may attend by invitation but are not present when matters affecting their own remuneration arrangements are considered.

The Committee has adopted formal terms of reference and the Committee reviews and sets the remuneration and terms and conditions of employment of the Executive Directors and senior management. It also agrees a policy for the salaries of all staff and is responsible for the development of the Company’s remuneration scheme. The decisions of the Committee are formally ratified by the Board.

The Company is not required by either the AIM Listing Rules or the Companies Act to produce a remuneration report but provides the information in the Annual Report and Financial Statements as recommended by the QCA because of its commitment to maintaining high standards of corporate governance. The Company’s Remuneration Policy is the responsibility of the Remuneration Committee. The Remuneration Policy, in so far as it relates to the Directors, is subject to an advisory vote by Shareholders every three years and was last approved at the 2021 Annual General Meeting (AGM). The Remuneration Policy is therefore due for approval as an advisory vote at the 2024 AGM. The Directors’ Annual Remuneration Report is subject to an advisory vote by Shareholders at each AGM.

The Remuneration Report on pages 58 to 61 of the Group’s Annual Report and Financial Statements 2023 provides details of the Remuneration Policy and the Directors’ Annual Remuneration.

Nomination Committee

The members of the Committee are the Chairman Jan Groen (Chairman of the Nomination Committee) and the Non-executive Directors Brian Howlett, Juliet Thompson and Joe Eid. The Nomination Committee meets as required. The Chief Executive and Chief Financial Officer may attend by invitation.

The Committee has adopted formal terms of reference and is responsible for reviewing the structure, size and composition of the Board, planning for succession and for identifying and recommending to the Board suitable candidates for both executive and non-executive Board appointments.

Information

Management supplies the Board and/or Committees with appropriate and timely information, including a business update and management accounts so that trading performance can be regularly reviewed.

Matters reserved for the Board

The Board has a schedule of matters specifically reserved to it for decision, including the review and approval of:

Share dealing code

The Company has adopted and operates a share dealing code governing the share dealings of the Directors and applicable employees to ensure compliance with the AIM and MAR Rules.

Commitment

Directors are required to allocate sufficient time to the Company to discharge their responsibilities effectively. The Chairman is required to commit approximately three to five days per month. Non-executive Directors are required to commit approximately two to four days per month. Executive Directors work full-time.

Directors’ attendance

The Board has at least eight main Board meetings per year with additional special meetings as required. Meetings have been held as a mixture of face-to-face and by video conference. Certain Directors may be appointed as a Committee of the Board of Directors. Directors’ attendance at Board and Committee meetings during the year ended 31 December 2023 is set out below:

^{* Garth Selvey retired and resigned from the Board effective 29 September 2023}

Scoring represents individual Directors’ attendance for those meetings when they were members of the Board or Committee.

In addition, the Board has other non-Board meetings to discuss strategy, certain meetings with advisors and key business areas with the senior management team.