The policy of the Board is to manage the affairs of Oxford BioMedica to the highest standards of corporate governance and in accordance with the principles of good governance and the code of best practice as set out in the Financial Reporting Council combined code on corporate governance issued in June 2006 (the ‘Combined Code’ (2006)).
A copy of the code is available from the Financial Reporting Council’s website at: www.frc.org.uk.
Within their area of responsibility these committees cover objective and target setting, monitoring performance against targets, ensuring compliance with GxP and other relevant requirements, monitoring expenditure against budget and risk management.
All senior managers come together monthly in the Senior Management Group to cover those aspects of the Group’s activities which are not covered in the above committees. These include, for example, organisational and HR matters, health and safety monitoring, and internal and external communication.
The Executive Directors meet as needed but also monthly after the cycle of committee meetings to agree what matters should be reported up to the Board.
The Board is collectively responsible for promoting the success of the Group by directing and supervising the Group’s activities to create shareholder value. In doing so it ensures there are robust corporate governance and risk management processes in place.
The Board considers that it has complied throughout the year with the UK Corporate Governance Code (the “Code”) except where indicated below in this report.
The Board’s powers and responsibilities are set out in the Company’s articles of association and it has a formal schedule of matters reserved for the Board’s approval which include:
The Group’s strategy
- The financial statements and accounting policies
- Acquisitions, disposals and capital expenditure
- Financing and capital structure
- Corporate governance
- Internal control and risk management
- Board membership and remuneration
- Appointment and remuneration of auditors
Each director is provided with an appropriate induction on appointment, and is supplied on a timely basis with financial and operational information sufficient for the Board to discharge its duties. Certain responsibilities are delegated to three board committees – the Audit, Nomination and Remuneration committees. These committees operate under clearly defined terms of reference which are disclosed on the Group’s website.
The Board meets regularly with meeting dates agreed for each year in advance. There is a formal schedule of matters reserved to the Board for its decision. The schedule covers senior appointments, business strategy and budgets, substantial transactions, contracts and commitments, financing treasury and risk policies, and the approval of certain documents and announcements including the Annual Report and Accounts. There is frequent contact between Executive and non-Executive Directors, and each Director is supplied on a timely basis with financial and operational information sufficient for the Board to discharge its duties. The Chairman holds meetings from time to time with non-Executive Directors without the Executive Directors in attendance. All Directors have access, as required, to independent professional advice.
As appropriate, the Board has delegated certain responsibilities to Board committees, which operate within defined terms of reference and constitution: Remuneration Committee, Audit Committee and Nomination Committee. For further information on each, please visit: Board committees
Retirement of Directors
In accordance with the articles of association, at each Annual General Meeting any Director who has served for three years, and one third of the other Directors (or if their number is not a multiple of three the number nearest to but not exceeding one third) retire from office by rotation.
Review of performance
In accordance with the articles of association, at each annual meeting any Director who was appointed after the last annual general meeting or has served for three years, and one third of the other Directors (or if their number is not a multiple of three the number nearest to but not exceeding one third) retire from office by rotation.
The Board retains overall responsibility for, and control of, the Company. Management is conducted by the Chief Executive Officer and the Executive Directors who, together with other senior managers, form the senior management team. The Executive Directors participate actively in the functional and cross-functional activities of the Company such that a direct link exists between the determination of strategy by the Board and the execution of the Company’s policies by management and employees.
Relations with shareholders
We attach a high priority to effective communication with both private and institutional shareholders. The Annual Report and Accounts contains a detailed business and financial review. The preliminary and interim results announcements are followed with an analyst briefing and simultaneous conference call which can be accessed by all shareholders. With these documents and the Company’s announcements of material developments through the London Stock Exchange and other news services, we seek to present a balanced and understandable assessment of Oxford BioMedica’s position and prospects.
The Annual General Meeting is the principal forum for dialogue with private shareholders. A presentation is typically made by the Chief Executive Officer and there is an opportunity for shareholders to put questions to the Directors. We maintain regular contact with institutional shareholders through a programme of one-to-one visits and briefings, and the Company’s Investor Relations manager regularly discusses Company matters with current and potential investors.
The Board is responsible for determining the nature and extent of the risks it is willing to take in achieving the objectives of the Group. The Executive Directors and other senior managers are accountable for identifying the risks and formulating risk mitigation plans. The active involvement of the Executive Directors in the management committees allows them to monitor and assess significant business, operational, financial, compliance and other risks. The Executive Directors provide reports to each board meeting covering, inter alia, financing, investor relations, research and development, clinical development, financial performance, commercial interactions and intellectual property management.
The Directors are responsible for Oxford BioMedica’s system of internal control and for reviewing its effectiveness. The system is designed to manage, rather than eliminate, the risk of failure to achieve business objectives, and can only provide reasonable, and not absolute, assurance against material misstatement or loss. As described above, the active involvement of the Executive Directors in our management committees allows the Board continually to monitor and assess significant business, operational, financial, compliance and other risks, and to review the effectiveness of internal control. In addition the Board annually reviews the effectiveness of all significant aspects of internal control.
Oxford BioMedica has procedures in place which incorporate the recommendations on internal control: guidance for Directors on the Combined Code (Turnbull).
Tim Watts resigned from the Board on 29 September 2017 and retired from the Company on the same day. As required by section 430(2B) of the Companies Act 2006, the elements of Tim Watt's remuneration, which will be paid at or following the date of his retirement, are stated below; he will not receive any payment for loss of office or any other payments in relation to the cessation of his employment.
Tim will be eligible to receive an annual bonus in respect of the financial year ending on 31 December 2017 reflecting his period of employment with the Company to the date of retirement. The bonus will be assessed against the prescribed performance targets and may be paid fully in cash.
Tim will, consistent with the terms of the Company’s remuneration policy and the rules of the Long Term Incentive Plan (the “LTIP”), retain the unvested share awards made under the LTIP. These awards were granted in 2015 and 2016. The awards will vest on their normal vesting dates, subject to the performance conditions. The awards made in 2016 will be prorated such that two thirds of the original award will vest, (subject to the performance conditions).
Tim will retain the deferred bonus shares earned but as yet unvested, in respect of the 2014, 2015 and 2016 bonuses. These will vest at the usual time.