Corporate Governance
Introduction
The Board has decided to adopt the Quoted Companies Alliance (QCA) Corporate Governance Code for Small and Mid-sized Quoted Companies, issued in April 2018.
The Non-Executive Chair has overall responsibility for corporate governance and the Board is committed to providing information on an open basis. The Board understands the role that good corporate governance plays, particularly around the wider areas of culture and accountability, and has overseen a number of changes over the recent past to drive improved performance and accountability throughout the Group, including:
- the appointment of Carolyn Rand as Non-Executive Chair on 21 April 2024 following her appointment as a Non-Executive Director on 17 August 2023;
- the appointment of James Cooper as Chief Operating Officer on 24 May 2024;
- the appointment of James Cooper as Interim Chief Executive Officer on 13 August 2024;
- the resignation of Jag Grewal as Chief Executive Officer on 13 August 2024;
- promoting an enhanced continuous improvement culture across the business;
- increasing knowledge capital through recruitment and training in core areas; and
- systems and process reviews and improvements, including a new Human Resources system developed during the financial year with rollout in the current year.
Board and Committee structure
The size and structure of the Board and its Committees are kept under review to ensure an appropriate level of governance operates throughout the year. The Board currently comprises two Non-Executive Directors and two Executive Directors who meet frequently during the year to discuss strategy and to review progress and outcomes against objectives. We have also taken steps recently to improve our engagement with shareholders and to try and communicate more effectively regarding our long-term growth drivers. We believe the Board has a good mix of skills and experience and a culture that easily enables the Non-Executive members of the Board to challenge and advise the Executive team as appropriate.
The QCA Code encompasses ten principles, against which we are required to explain how we comply or explain why we feel it is appropriate to depart from those principles. We now report against these principles as follows:
The Group is focused on selling a range of products into the consumer health and wellbeing space where we see significant growth opportunities.
Our strategy is to deliver longer-term growth by adopting and implementing the following principles:
- revenue growth – growing the revenue through geographical and new channel expansion;
- operational excellence – further developing processes for continuous improvement, consistent quality culture and growth in gross margin; and
- engaging with our people – through staff surveys, Company updates, social events, and team meetings, providing a platform where all staff can contribute to achieving the Group’s aims.
The key challenges we face are:
- Increasing regulatory hurdles to achieve in-country product registration. More and more countries now require individual product registration and in-country evaluations to be performed before a product can be sold in a territory. We have developed a strategy and plan to address the requirements of the new IVD Regulations due in 2029.
- Technology and cyber security risk. We regularly review our technology to keep our systems within the requirements of the market we operate in. We use third party services with a minimum requirement of Cyber Essentials or equivalent. We review regularly our IT strategy.
- Staff recruitment and retention. We undertake benchmarking exercises to ensure our staff are rewarded fairly and equitably. We offer a wide benefits package to employees which is reviewed annually.
The responsibility for investor relations lies with the Chief Executive Officer. The Group seeks to engage with shareholders on a number of occasions throughout the year to understand shareholders’ needs and expectations. The Company has expanded its communication strategy with shareholders, including hosting webinars on the Investor Meet Company platform and providing video excerpts which can be accessed from the Company’s website.
The Group receives anonymised feedback through its broker, through direct email correspondence and from attendees at all the above events and welcomes both positive feedback and constructive criticism. This feedback has proved very useful in tailoring the content of subsequent presentations.
The Group seeks to ensure it has good relations with employees and external stakeholders including customers, suppliers, regulatory bodies and the wider community with which it interacts.
Employees
- All employees are invited to participate in a survey on which they can give anonymised feedback on a range of issues. The results are collated and presented to all employees along with actions taken by management to address the issues raised.
- Senior management presents business progress updates to all staff twice a year to keep them informed. Feedback from staff indicates that this is a popular exercise undertaken by management.
- All staff undergo performance and development reviews with their managers to ensure that everyone is prioritised and aligned with the Group’s main business objectives. These sessions also allow for additional staff training needs to be addressed.
Customers
- The Group surveys its customers on a regular basis by sending out an online survey for them to complete. A regular post-market surveillance regime is in place that follows up on every customer complaint and technical enquiry received and is an integral part of the Quality Management System. Customer feedback is also sought through formal and informal meetings during customer visits and exhibition meetings. These feedback interactions are documented and reviewed, with any actions recorded.
Suppliers
- Suppliers are evaluated as to the criticality and dependency of the materials or services they provide to the Group. Suitability to supply is determined either by completion of a supplier questionnaire or by supplier audit undertaken by one of the Group’s quality team. Supplier performance is regularly measured, monitored and reviewed and any concerns are escalated through a well-defined process as part of the Quality Management System.
Regulatory bodies
- The Group is regularly audited for ISO 13485:2016 and the Medical Devices Single Audit Program. The Group is also regularly visited by regulatory bodies of overseas jurisdictions and these have included the regulatory agencies from Brazil, and South Korea.
The Group’s leadership team (LT), chaired by the Chief Executive Officer, includes a number of senior managers. The LT meets on a monthly basis to review key management objectives and has the responsibility for preparing a risk register which is analysed for changes using a scoring system of impact and probability, as well as the identification of new risks.
The Board members have a collective responsibility and legal obligation to promote the interests of the Group and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the Chair of the Board.
The Board currently comprises the Non-Executive Chair, one Non-Executive Director and two Executive Directors who are the Chief Executive Officer and the Chief Operating Officer.
The Non-Executive Directors are considered by the Board to be independent. However, it is noted that the Non-Executive Directors have been granted share options as disclosed. At the instigation of, and in consultation with, a number of major shareholders, the Company awarded options to the two Non-Executive Directors in June 2024. Neither the major shareholders, nor the Board of the Company, consider that these awards compromise the independence of either of the Non-Executive Directors.
The Non-Executive Directors act in the interests of the Group at all times and are not influenced by the factors pointed out above. The Board has a good mix of skills and experience and a culture that easily enables the Non-Executive members of the Board to challenge and advise the Executive team as appropriate.
The Board meets at monthly intervals and has a schedule of matters reserved for the Board including setting corporate strategy, approving the annual budget, reviewing financial performance, agreeing the renewal of and any new banking/ treasury facilities, approving major items of capital expenditure and reviewing and approving acquisitions. The Board is provided with appropriate information in advance of Board meetings to enable it to discharge its duties effectively and this includes a report from the Executive members of the Board, along with summary reports from senior managers providing updates on key issues.
The Company has procured appropriate Directors’ and Officers’ liability insurance. Each of the Directors benefit from deeds of indemnity provided by the Company.
The Non-Executive Chair is committed to providing not less than 30 days annually to the Group and the Non-Executive Director is committed to providing not less than 20 days annually to the Group. In reality, the Non-Executive Chair and the Non-Executive Director consistently provide more than this minimum time requirement. The Executive Directors are all full-time positions.
The Group also has an Audit Committee and a Remuneration Committee. The Board does not have a separate nominations committee due to its small size and the Board itself adopts a consensus-based approach in making changes to its composition.
For the year ended 31 March 2024, the number of meetings held, and attendance by each Board member at those meetings for which they are entitled to attend, is as follows:
| Board meetings | Audit Committee | Remuneration Committee | |
|---|---|---|---|
| Simon Douglas* | 12/12 | 3/3 | 1/1 |
| Jeremy Millard | 12/12 | 3/3 | 1/1 |
| Carolyn Rand** | 6/6 | 1/1 | — |
| Jag Grewal | 12/12 | — | — |
| Chris Lea*** | 4/4 | — | — |
* Resigned 21 April 2024.
** Appointed as Non-Executive Director and member of Audit Committee from 17 August 2023. Chair of Remuneration Committee from 21 April 2024.
*** Resigned 21 August 2023.
Collectively, the Board has many years of experience with a number of public and private companies. This experience includes areas of immunoassay development, operational supply and logistics and commercial and finance activities. The Board remains confident that the opportunities in the Group are not excluded or limited by any diversity issues and that the Board nevertheless contains the mix of experience, skills and other personal qualities and capabilities necessary to deliver its strategy. The Non-Executive Chair fosters a culture during Board meetings that encourages debate and enables any Director to feel comfortable in communicating and explaining alternative viewpoints. The Board is of the view that it has a balance of experience and skills to enable it to deliver on its strategy. Directors ensure their skills and capabilities are kept up to date including:
- attending continuing professional development courses as part of a professional qualification; and
- attending industry trade shows and exhibitions to remain up to date with competitor activities.
The Board seeks advice from external advisers where necessary. This includes its nominated adviser/broker in relation to compliance with the AIM Rules for Companies and advice regarding secondary fundraisings. The Board also regularly seeks legal advice in relation to commercial and property matters.
The Board has not undertaken any formal external review of its members’ performance to date. Beneath Board level, members of the senior management team are included in the twice-yearly review process which is carried out across the entire Group.
In reviewing its own performance, the Board is aware of its perception amongst shareholders, both through formal face-to-face meetings and subsequent feedback from these, and informal discussions which take place from time to time. As Non-Executive Chair, Carolyn Rand invites all Board members to suggest any candidates who they feel may be capable of adding value to the Board as a whole.
The Group has adopted the following core values:
- Accountability
- Ask what more I can do
- Take ownership
- Collaboration
- Actively support our colleagues
- Be clear in communication
- Celebrate success and have fun together
- Respect
- Treat others as we would wish to be treated
- Respect the environment we work and live in
- Honesty
- Aspire to be open and transparent
- Take pride in building trust between ourselves and others
- Customer focus
- Customer satisfaction is not a department; everyone is responsible
- Listening to customers drives improvement
The Executive members of the Board are very aware of the importance in living up to these core values and in setting examples for all staff to follow.
The core values are highly visible throughout the organisation.
The core values that the organisation promotes are included within recruitment processes as well as within the personal development reviews which all staff undergo twice a year.
The Board is collectively responsible for defining and implementing a strategy to deliver long-term value to shareholders, but which operates within a framework of good corporate governance and in line with the Board’s assessment of risk.
The roles and responsibilities of the various Board positions are as follows:
Non-Executive Chair – has responsibility for leading an orderly and effective Board and providing overall guidance to other members of the Board to ensure it delivers on its stated strategy. The Chair also attends some results presentations demonstrating a level of commitment which is visible to shareholders. The Chair is also responsible for overseeing the Group’s corporate governance practices to ensure they remain relevant for an organisation of our size.
Non-Executive Director – has responsibility to be independent in judgement and thought and for scrutinising and, if necessary, challenging the Chief Executive Officer (CEO) and Chief Operating Officer (COO) to ensure the Group delivers its strategy whilst maintaining acceptable levels of risk. The Non-Executive Director also provides a sounding board for the Chair as and when necessary.
Chief Executive Officer – has responsibility for leading the organisation and implementing the Group’s objectives in line with its agreed strategy, assessing risks to ensure they are managed and mitigated, safeguarding the Group’s assets with appropriate policies and controls, leading an investor relations programme ensuring effective communication with shareholders and ensuring effective communication and reporting between the Executive members of the Board and the Non-Executive members.
Chief Operating Officer – has responsibility for implementing the Group’s business plan and ensuring that the day-to-day operations run smoothly. The COO is also responsible for developing and implementing the continuous improvement, product development and quality management strategies within the Group. The COO works closely with the CEO and Board to ensure that the information flowing into the Board is accurate and relevant and that the communication from the Board is clear and comprehensible.
The Board has a schedule of matters which it reserves for its review including:
- setting corporate strategy;
- approving the annual budget;
- reviewing financial performance;
- agreeing the renewal of and any new banking/treasury facilities;
- approving major items of capital expenditure; and
- reviewing and approving acquisitions.
The Board delegates authority to two Committees which operate under terms of reference and include:
The Audit Committee
The Audit Committee is comprised of Jeremy Millard as Chair and Carolyn Rand, Non-Executive Chair, and has primary responsibility for monitoring the quality of internal controls, ensuring that the financial performance of the Group is properly measured and reported on, and for reviewing reports from the Group’s auditors relating to the Group’s accounting and financial reporting, in all cases having due regard to the interests of shareholders. The Committee shall also review preliminary results announcements, summary financial statements, significant financial returns to regulators and any financial information contained in certain other documents, such as announcements of a price-sensitive nature.
The Committee considers and makes recommendations to the Board, to be put to shareholders for approval at the Annual General Meeting, in relation to the appointment, re-appointment and removal of the Group’s external auditors. The Committee also oversees the relationship with the external auditors including approval of remuneration levels, approval of terms of engagement and assessment of their independence and objectivity. In doing so, they take into account relevant UK professional and regulatory requirements and the relationship with the auditors as a whole, including the provision of any non-audit services. RSM UK Audit LLP were appointed in March 2023 and will be proposed for re-appointment at the forthcoming Annual General Meeting.
The Committee has reviewed the effectiveness of the Group’s system of internal controls and has considered the need for an internal audit function. At this stage of the Group’s size and development, the Committee has decided that an internal audit function is not required, as the Group’s internal controls system in place is appropriate for its size. The Committee will review this position on an annual basis.
The Committee also reviews the Group’s arrangements for its employees raising concerns, in confidence, about possible wrongdoing in financial reporting or other matters. The Committee ensures that such arrangements allow for independent investigation and follow-up action.
No separate Audit Committee report has been included as the Corporate Governance Statement adequately covers the content we would include in the Audit Committee report.
The Remuneration Committee
The Remuneration Committee is comprised of Carolyn Rand as Chair and Jeremy Millard, Non-Executive Director, and has primary responsibility for determining and agreeing with the Board the remuneration arrangements of the Group’s Executive and Non-Executive Directors and Leadership Team or any other employee whose total compensation may be equal to, or higher than, that of the lower paid Leadership Team member. No Director or manager shall be involved in any decisions regarding their own remuneration.
The Remuneration Committee will review and approve the level and structure of key decisions paid in the financial year.
The Company has not previously issued an Audit Committee Report but does include a Directors’ Remuneration Report for the financial year in this Annual Report.
The Group publishes current and historical Annual Reports on its website.
In addition, the Group publishes current and previous shareholder presentations on its website.
By order of the Board
Carolyn Rand
Non-Executive Chair
24 July 2024
