The Board comprises eight directors; two Executive Directors, an Executive Chairman, Senior Independent Director and four further Non-Executive Directors.
The Board is responsible for the long-term success of the Group, overseeing the development and delivery of strategy and conduct of the business, to generate sustainable value for shareholders. Eight Board meetings are scheduled each year, alongside dedicated strategy days, and additional meetings are held as and when required.
The Company has established committees as follows:
Nomination Committee
The Nomination Committee comprises:
- Chair: Peter George
- Members: Kevin Quinn, Susan Searle
- Secretary: Jennifer Haddouk
Other Non-Executive and Executive Directors may be invited to attend meetings as appropriate.
Frequency of meetings:
The Nomination Committee meets at least once per year and otherwise if required.
Responsibilities:
The main responsibilities of the Nomination Committee are:
- To review the composition of the Board, including its size, balance of skills, knowledge, experience and diversity.
- To lead the process of the Board appointments and recommend the appointment of new Directors.
- To review the re-appointment of Non-Executive Directors.
- To make recommendations on the composition of the Board Committees.
- To consider succession for Board members and senior management.
Audit Committee
The Audit Committee comprises:
- Chairman: Kevin Quinn
- Members: Susan Searle, Hugo Wahnish, Peter George
- Secretary: Jennifer Haddouk
Other Non-executive Directors, the Group Financial Controller, and the Company’s auditors are invited to attend meetings as appropriate.
Frequency of meetings:
The Audit Committee is required to meet not less than twice in each financial year, and usually meets at least three times per year.
Responsibilities:
The main responsibilities of the Audit Committee are:
- To review accounting policies and the integrity and content of the financial statements.
- To monitor disclosure controls and procedures and the Group’s internal controls.
- To monitor the integrity of the financial statements of the Group, and to assist the Board in ensuring that the Annual Report and Accounts when taken as a whole, are fair, balanced and understandable.
- To consider the adequacy and scope of the external audits.
- To monitor the objectivity, independence and effectiveness of the external auditor, including the scope and expenditure on non-audit work.
- To review and approve the statements to be included in the Annual Report on internal control and risk management.
- To review and report on the significant issues considered in relation to the financial statements and how they are addressed.
Remuneration Committee
The Remuneration Committee comprises:
- Chairman: Susan Searle
- Members: Peter George, Kevin Quinn
- Secretary: Jennifer Haddouk
Other Non-executive and Executive Directors may be invited to attend meetings as appropriate.
Frequency of meetings:
The Remuneration Committee meets at least twice per year and otherwise if required.
Responsibilities:
The main responsibilities of the Remuneration Committee are:
- To monitor and develop the Company’s remuneration policy.
- To determine the remuneration of the Executive Directors.
- To approve the service agreements of the Executive Directors.
- To approve the remuneration of the senior managers.
- To determine the fees of the Chairman.
- To review the Company’s annual bonus proposals and to approve bonuses for the Executive Directors and senior managers.
- To approve the design of and oversea awards under the Company’s share incentive plans.
- To consider risks to the Group in light of the remuneration policies.
In exercising this role, the Remuneration Committee has regard to the recommendations put forward in the UK Corporate Governance Code.
Sustainability Committee
The Sustainability Committee comprises:
- Chair: Kevin Quinn
- Members: Ivonne Cantu, Trond Williksen
- Secretary: Jennifer Haddouk
Other Non-executive and Executive Directors may be invited to attend meetings as appropriate.
Frequency of meetings:
The committee meets at least twice per year and otherwise if required.
Responsibilities:
The main responsibilities of the Sustainability Committee include:
- To ensure that the Group’s strategy and operations are aligned with its social responsibilities to its people and those its operations affect, including with regard to labour standards, employee health and wellbeing, health and safety, community initiatives, and human rights and responsibilities.
- To ensure that the Group’s strategy is aligned with its goal to reduce the impact of food production on the environment, and to oversee the impact of its operations on the environment, having regard to the maintenance of biodiversity, fresh water use, climate change, pollution risk, land-use change, and ozone depletion.
- To oversee the impact of the Group’s operations on animals on land and in water, having regard to the health and welfare of animals under our care and those our operations impact, including food animals, wild animals, animals used in R&D and companion animals.
- To oversee appropriate governance across the group, including in relation to anti-corruption and shareholder and tax transparency.
The Company’s values live in all that we do:
- We are collaborative.
- We are practical
- We are courteous and have fun
- We are brave and ambitious
- We are focused
Disclosure Committee
The Disclosure Committee comprises as permanent members:
- Chair: Septima Maguire
- Members: Kevin Quinn, Trond Williksen
- Secretary: Jennifer Haddouk
In the absence of the permanent members of the Disclosure Committee, any two Directors, one of which is Septima Maguire or Peter George, may exercise the powers of the Disclosure Committee. Other Non-executive and Executive Directors may be invited to attend meetings as appropriate.
Frequency of meetings:
The Disclosure Committee meets when required during the year.
Responsibilities:
The main responsibilities of the Disclosure Committee include:
- To identify inside information giving rise to the need for the Company to create new insider lists or amend its existing insider lists and alert the Company Secretary to the existence of such inside information.
- To review the need to make market announcements of inside information.
- To consult where necessary with the Company’s advisers regarding the identification and treatment of inside information.
- To keep the adequacy of the Disclosure Procedures under review and monitor compliance with the same.
- To keep a written record of any decision to delay disclosure in accordance with MAR, and to consider the requirements for announcements in the case of rumours or leaks, including the need to issue holding announcements
- To oversee and, if deemed fit, approve any proposed market soundings and compliance with applicable regulatory requirements.
- To ensure that all regulatory announcements, shareholder circulars, prospectuses and other documents issued by the Company under any legal or regulatory requirements comply with applicable disclosure requirements.
We have agreed to report against the UK Corporate Governance Code (the “Code”).
A copy of the Code is available from the website of the Financial Reporting Council.
An overview of the Company’s compliance with the principles of the UK Corporate Governance Code applicable to the company during the financial year 2019 is set out in the Directors’ Report included in the latest annual report and accounts, a copy of which can be found here and below. This information is reviewed annually and was last reviewed on 19 March 2020 based on the Company’s compliance against the Code as disclosed in the latest annual report and accounts.
A. Leadership
A.1 Role of Board
The Board is collectively responsible for the long-term success of the Group and oversees the development and delivery of strategy and operations. It does this by exercising oversight and control over the performance of the Company through review of management financial information; agreeing budgetary targets; approving investment programmes and monitoring their execution against budget and returns on investment.
A.2 Clear division of responsibilities
There is a clear division of responsibilities between Chairman and CEO as described below. However, note that for the period from 19 August 2019 until the appointment of a new CEO to replace Malcolm Pye, Peter George has been appointed as an Executive Chairman in order to ensure a smooth transition period.
Chairman
- Leads the Board to ensure effective functioning in all aspects of its role.
- Promotes an open culture of debate.
- Ensures that the membership of the Board is appropriate for the needs of the business.
- Oversees Board committees as they carry out their duties, including reporting to the Board.
- Sets and manages the agenda for Board meetings.
- Ensures the provision of information necessary for Directors to take a full and constructive part in Board discussions.
- Develops and maintains effective communications with shareholders.
- Establishes appropriate personal objectives for the Chief Executive Officer.
- Ensures the Directors are up to date and receive suitable training and development.
Chief Executive Officer
- Leads the development and delivery of strategy and budget, to enable the Group to meet the requirements of its shareholders.
- Oversees operation of the day-to-day business of the Group.
- Leads and oversees the executive management of the Group.
- Establishes an environment which allows the recruitment, engagement, retention and development of the people needed to deliver the Group’s strategy.
A.3 Role of Chairman
The Chairman leads the Board, setting and managing the agenda, and promoting open and constructive discussion and challenge. The Chairman is responsible for ensuring that new Directors receive a comprehensive and formal induction. This includes:
- An overview of the Group, its functions and governance framework.
- Briefings on Directors’ responsibilities and compliance responsibilities.
- Site visits to key Group locations.
- Detailed reviews of the Group’s strategic projects and initiatives.
- One-to-one meetings with senior management.
The new director appointed during the year, Kristian Eikre, received a formal induction and exposure to senior management, including strategy day and informal dinners with the Operations Board.
A.4 Role of Non-Executive Directors
The Board has a culture of transparency and open debate, and the Non-Executive Directors constructively challenge the Executive Directors regarding the strategy and its implementation.
The Executive Directors are responsible for the delivery of strategy, business operations, risk management, and ensuring that the right financial and people resources are in place to achieve the Company’s aims. The Non-Executive Directors are responsible for assisting in the development of and constructively challenging strategy, overseeing the performance of management, satisfying themselves that financial controls and risk management systems are robust, and safeguarding the integrity of financial information, determining the Directors’ remuneration, and succession planning for the Executive Directors and senior management.
A formal schedule of matters reserved for the Board is maintained and communicated throughout the Group with regular training, to ensure that decisions which are significant due to their strategic, financial or reputational implications are reserved for approval by the Board. The key areas of decision-making reserved for the Board are set as follows:
Matters reserved for the Board
Strategic decisions
- Review and approval of the long-term objectives and strategic direction of the Group
- Approval and monitoring of strategic and annual business plans and budget
- Approval of significant acquisitions, mergers, disposals and other transactions
- Approval of diversification into new business activities and new geographies
Reporting
- Approval of the Annual Report and Accounts and of the interim financial statements
- Oversight and approval of significant changes to reporting policies and practices
Regulatory matters
- Compliance with the AIM Rules for Companies, principles of the UK Corporate Governance Code, procedures for regulating dealing in the Company’s shares by its employees and Directors
Finance, governance and controls
- Review and approval of internal control and risk management systems
- Approval of significant projects, contracts and disputes
- Approval of financing policy including the issue of shares and significant borrowings
- Appointment or removal of the auditors and determination of the audit fee
- Oversight and approval of Directors’ conflicts of interests
- Approval of interim dividends and recommendation of final dividends
Succession planning and reward
- Ensuring adequate succession planning is in place
- Appointment and removal of Directors on the Board and its Committees, and of the Company Secretary
- Approving and recommending to shareholders the terms of employee share schemes, and approving significant changes to pension schemes
- Approval of remuneration of senior management
Executive Management Team
In September 2019, Peter George set up an Executive Management Team, to work alongside the Operations Board and focus on the strategy and vision, as well as delivering on commitments that had been made to the investors. The Executive Management Team is composed of the CSO, CFO, interim managing Director, each divisional head and Group Legal Counsel.
Operations Board
Responsible for developing and delivering cross-Group opportunities, revenue and costs synergies, advancing integration, and overseeing the financial and operational performance of the Group as a whole.
Divisional Boards — Advanced Nutrition; Genetics; Animal Health; Knowledge Services
Responsible for the development and delivery of the strategy of the relevant division and its businesses, its financial performance, and the implementation of cross-Group opportunities and synergies.
B. Effectiveness
B.1 Composition of the Board
During FY2019 we completed the appointment of Kristian Eikre, as a Non-Executive Director, whose experience brings significant commercial and industry expertise to the Board. Following the resignation of the CFO — Mark Plampin, we appointed a new CFO, Septima Maguire. Septima has extensive strategic, investor and operational finance experience and proven expertise in driving improved business performance. In 2019 we also saw the resignation as CEO of Malcolm Pye, and began recruiting for his replacement. The Board and the Nomination Committee is of the view that the Board contains an appropriate breadth and balance of skills, knowledge, experience and independence.
B.2 Board appointments
The Nomination Committee leads the process for the appointment of new Directors, and follow a formal and rigorous process, with the assistance of independent external recruiters, and taking into account the Group’s policies regarding diversity. This process was followed in relation to the appointments of Kristian Eikre and Septima Maguire in 2019.
B.3 Time commitments
Non-Executive Directors are notified of and agree to the required time commitments prior to appointment, and external directorships which may impact existing time commitments must be agreed with the Chairman.
B.4 Training and development
New Directors receive a comprehensive and formal induction programme which is tailored to their role and needs, and the Board receives updates regarding the business and regulatory developments.
B.5 Provision of information and support
The Chairman, supported by the Company Secretary, ensures that Board members receive accurate and timely information and other support requested, including access to external legal advice.
B.6 Board and Committee performance evaluations
The Nomination Committee reviews the skills, experience, independence and knowledge of the Directors as a whole to ensure the composition of the Board is suitable for the Company as it grows and diversifies. A total of two new appointments were made to the Board in FY19 to strengthen and broaden the range of skills, knowledge and experience represented. The Nomination Committee and the Board actively considers and discusses Board diversity, which remains a focus. As mentioned above, due to the changes in composition of the board and its committees over the year, the Company has not carried out an annual appraisal of the Board in its current form during the FY19 year, but an appraisal process will commence shortly on the Board’s now settled form.
B.7 Re-election of Directors
The Articles of Association as adopted by the Company at its annual general meeting on 12 March 2020 require Directors to be re-elected annually.
C. Accountability
C.1 Financial and business reporting
The Board reviewed the Annual Report and the results for the year to 30 September 2019 to ensure that the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable.
C.2 Risk management and internal control systems
The Board is responsible for ensuring that the Company has in place effective procedures for the management of risk, and that the principal risks faced by the Group are identified, assessed, appropriately mitigated and monitored.
C.3 Role and responsibilities of the Audit Committee
Responsibility for oversight of the Group’s financial reporting procedures, internal controls and audit process is delegated to the Audit Committee, which also oversees the Group’s risk management framework.
D. Remuneration
D.1 Executive Directors’ remuneration
The policy for determining the remuneration of Executive Directors is set out in the Remuneration Report of our latest Annual Report. No Director is involved in setting his/her own remuneration.
D.2 Remuneration policy
The Company’s remuneration policy is set out in the Remuneration Report in its latest Annual Report.
E. Relations with Shareholders
E.1 Shareholder engagement
The Board recognises that it is vital for the Company’s success that the shareholders understand the strategy and the means by which it will be delivered. All Directors welcome regular and open engagement with shareholders.
A focus of the Company during the year was strengthening its engagement and communication with shareholders. The Company’s Chairman, Peter George, proactively met with the Company’s shareholders throughout the year, communicating the Company’s strategy and addressing shareholders concerns. Feedback received from shareholders was communicated to the Board and the senior management team and was considered regularly at Board meetings and at the Company’s annual strategy review. During the year, Kristian Eikre, Head of Ferd Capital at Ferd, the Company’s largest shareholder, joined the Board as a Non-Executive Director. In addition, the Company’s Investor Relations Director, Ivonne Cantu, has been working to improve the Company’s engagement and communication with shareholders and prospective shareholders to ensure that these are clear and accurate.
Regular meetings were held during the year with the Company’s institutional shareholders, involving both Executive and Non-Executive Directors (together and independently).
The Directors also attend the Annual General Meeting, at which formal and informal discussion is welcome.
The Chairman has primary responsibility for ensuring that major shareholders are able to engage with the Company and Board. The Chairman is also responsible for ensuring that the Board is aware of feedback from its shareholders and that these views are taken into account in the development of the Company’s strategy. The Senior Independent Director is also available to shareholders, particularly where they have concerns that have not been resolved through other means, or for which other channels are inappropriate. Accordingly, shareholders are welcomed to contact the Chairman or Senior Independent Director.
E.2 Use of general meetings
The Directors are always available at the AGM to meet with shareholders, who are invited to raise questions and also to meet with the Board following the formal business of the meeting.
The Company has taken authority under the Companies Act 2006 to call general meetings of the Company, other than AGMs, on 14 days notice. The 14 day notice period will only be used where the flexibility is merited by the business of the meeting, and is thought to be in the best interests of shareholders as a whole. The Company offers the facility for shareholders to vote by electronic means. This facility is open to all shareholders and would be available if the Company were to call a meeting on 14 clear days’ notice.
Areas of code not applicable to the Company
During the financial year 2019, the Board considers that it complied with the Corporate Governance Code 2016, except from the period from 19 August 2019, when Peter George transitioned from a Non-Executive to Executive Chairman role following Malcolm Pye ‘s resignation as CEO. Peter’s executive position is only a temporary measure during the transition period until the appointment of a successor, and the Company has commenced an external search process for the new CEO.