The Board is led by the Chairman Michael Redmond and comprises four Executive Directors and four Non-Executive Directors. The biographical details of the Board of Directors are shown on the Board of Directors page.
The primary role of the Chairman is to:
- ensure the effectiveness of the Board in all aspects of its role;
- facilitate the effective contribution of the Non-Executive Directors, ensuring that all decisions are subject to constructive debate and supported by sound decision making processes; and
- lead the Board in the determination of its strategy and the achievement of its objectives.
The Chairman has a strong working relationship with Ian Page, the Chief Executive Officer, and works closely with him to ensure that Board decisions and strategy are implemented throughout the Group. There is a clear division of the roles and responsibilities of the Chairman and the Chief Executive Officer. These have been defined in writing and agreed by the Board.
The Chairman, at the time of his appointment, did meet and continues to meet the independence criteria defined within the Code. As reported in the previous Annual Report, Dechra's top ten Shareholders were consulted in August 2012 with regard to the tenure of the Chairman and the Senior Independent Director, each having held their respective positions for in excess of nine years. It was agreed with the Shareholders that it was deemed to be in the best interests of the Company and its stakeholders that the Chairman should remain in position for a further three years in order to oversee the induction and development of the new Non-Executive and Executive Directors to the Board. The Nomination Committee considers that Michael Redmond continues to lead the Board effectively, maintaining his independence and integrity at all times. He provides an invaluable contribution and insight to the Board by reason of both his previous pharmaceutical experience and the longevity of his association with the Company.
Therefore as agreed with the Shareholders, the Chairman's tenure will be reviewed prior to the 2014 Annual General Meeting.
Throughout the year the Non-Executive Directors have provided a solid, independent element to the Board ensuring that decisions are constructively challenged and debated.
During the year an independent recruitment consultant, JCA Group, was retained to assist in the recruitment of two new Non-Executive Directors. At the commencement of the recruitment process an objective role description was defined and agreed by the Nomination Committee detailing the skills and experience required for the Board positions.
As a result, on 1 January 2013 and 1 February 2013, Julian Heslop and Ishbel Macpherson, respectively, were appointed to the Board and also as members of the Remuneration, Audit and Nomination Committees. It is intended that Julian will be appointed as Chairman of the Audit Committee upon Neil Warner's retirement at the forthcoming Annual General Meeting and further detail of this is provided in the Audit Committee Report. It is considered that each of the newly appointed Non-Executive Directors brings with them a breadth of experience which will add value to the decision making of the Board and the formulation and progression of the Group strategy.
Senior Independent Director
The Senior Independent Director is available to Shareholders if they have concerns which contact through the normal channels has failed to resolve or for which such contact is inappropriate. The Senior Independent Director also carries out the annual evaluation of the performance of the Chairman and chairs the Nomination Committee when it is considering the succession of that role.
Neil Warner has held the position of Senior Independent Director since 5 November 2010, having been appointed as a Non-Executive Director with the Company on 2 May 2003. Following Neil's retirement from the Board at the 2013 Annual General Meeting it has been agreed that Ishbel Macpherson will be appointed as the Senior Independent Director.
Chief Executive Officer
The Chief Executive Officer has day-to-day responsibility for the management of the Group. He develops the Group strategy and, once approved by the Board, implements this throughout the business.
Ian Page is also the Non-Executive Chairman of Sanford DeLand Asset Management Limited ("Sanford"). The Board fully considered at the time of his appointment whether this would materially impact on his current time commitment as Chief Executive Officer and whether it could give rise to any conflict. As Ian Page is not involved in any investment decision made by Sanford it was not considered that any conflict would arise nor would there be any impact on his time commitment. Further details in relation to the appointment can be found in the Remuneration Report.
Chief Financial Officer
The Chief Financial Officer has day-to-day responsibility for financial planning and reporting for the Group. She is also responsible for managing the financial risks and works with the Chief Executive Officer on all strategic matters.
As well as assisting in the recruitment of two new Non-Executive Directors during the year, JCA Group was engaged in relation to the appointment of the Chief Financial Officer following the resignation of Simon Evans. Following a rigorous recruitment process, Anne-Francoise Nesmes was appointed to the Board in April 2013. Anne-Francoise is a high calibre finance professional who has valuable international, pharmaceutical, manufacturing and commercial experience gained during her extensive tenure with GlaxoSmithKline PLC over a 15 year period.
Zoe Goulding was appointed as Company Secretary on 2 July 2007 and acts as Secretary to the Board and its Committees. The primary role of the Company Secretary is to advise the Board on matters of procedure and governance, ensuring that all required information is made available to the Board on a timely basis. Both the appointment and removal of the Company Secretary is a matter for the Board as a whole.
Corporate Governance Framework
The Board is collectively responsible for the success of the Company, ensuring that the Group is appropriately managed and achieves its strategic objectives. The Board fulfils this responsibility by monitoring the performance of the Group, inter alia, by:
- assisting, in a challenging and constructive manner, the Executive Directors in the setting of objectives for Group operating performance, financial goals and strategic progress;
- evaluating the progress of the achievement of the objectives and plans; and
- monitoring all significant risks which face the Group.
There is a formal schedule of matters reserved to the Board. The schedule of matters covers a number of areas, including the following:
|Strategy and Management||Approval and monitoring of long term objectives and strategy|
Approval of the Group's operating and capital expenditure budgets
Major organisational changes
Regular reviews of business performance
|Financial Reporting||Approval of the Annual Report and dividend policy|
Approval of development expenditure
Approval of treasury policy
|Internal Controls||Review and approval of internal controls and risk management policies and processes|
|Corporate Governance||Board and Committee composition (including succession planning)|
Corporate Governance matters
Approval of policies such as Health and Safety and the Business Code of Conduct
In addition, the Board also focuses on the financial controls operated by the Executive Directors with a view to ensuring that these are at the requisite levels so as not to hinder day-to-day administration of the business, but to ensure adequate internal control. Below Board level, operational and financial controls are contained in the delegated authorities document. This document is reviewed on an annual basis along with the schedule of matters reserved to the Board. Where necessary these documents are updated in line with best practice with a view to ensuring that the processes remain robust.
The Board is scheduled to meet nine times per year. During the year two additional meetings were required to discuss the disposal of the Services Segment.
Attendance at the Board and Nomination Committee meetings during the year to 30 June 2013 was as follows (details of attendance at the Audit Committee meetings are provided within the Audit Committee Report and attendance at the Remuneration Committee meetings are provided within the Directors' Remuneration Report):
|Julian Heslop (appointed 1 January 2013)||7/7*||1/1*|
|Ishbel Macpherson (appointed 1 February 2013)||6/6*||0/0*|
|Dr Chris Richards||11/11||4/4|
|Bryan Morton (resigned 9 July 2012)||0/1†||0/0†|
|Simon Evans (resigned 18 October 2012)||2/2†||n/a|
|Tony Griffin (appointed 1 November 2012)||8/8*||n/a|
|Anne-Francoise Nesmes (appointed 22 April 2013)||3/3*||n/a|
Note: n/a denotes that the Director is not a member of this committee, but may attend by invitation.
* Actual attendance/maximum number of meetings Director could attend based on date of appointment.
† Actual attendance/maximum number of meetings Director could attend based on date of retirement.
It is understood that there may be situations, either due to prior commitments or circumstances beyond their control, which mean a Director is unable to attend a Board or Committee meeting. In this situation the Board pack is still provided allowing the Director to raise any queries or discussion points either through the Chairman or Company Secretary, thereby allowing their views to be fully discussed at the meeting. Following the meeting any Director who was unable to attend is provided with the opportunity to discuss the meeting with either the Chairman, Company Secretary or any Executive Director.
The Company Secretary ensures that an accurate record of each Board meeting is made which is circulated to the Board as soon as practicable after the meeting. Should Directors have concerns of any nature which cannot be resolved within the Board meeting, they have the right to ensure their view is recorded in the minutes. On resignation, should a Non-Executive Director have any concerns, they have a right to provide a written statement for circulation to the Board.
The Board believes in the necessity for challenge and debate at Board meetings and considers that the existing Board dynamics and processes encourage honest and open debate with the Executive Directors. The Board believes that the decision making process is inclusive and is not dominated by any individual or group of individuals.
Board Meeting Agenda and Papers
The Directors are supplied in a timely manner with all relevant documentation and financial information to assist them in the discharge of their duties. Prior to all Board meetings an agenda and supporting documentation is circulated to the Board. Every meeting agenda comprises reports from the following individuals:
- Chief Executive Officer;
- Chief Financial Officer;
- Managing Director and Finance Director of each Business Unit;
- Group HR Director; and
- Product Development and Regulatory Affairs Director.
In addition, twice a year the Board receives detailed health, safety and environmental reviews encompassing all operating segments, plus the activities of the Transport Risk and Sustainability Committees. Three times a year the Board receives a full risk assessment review for discussion, following detailed risk reviews within each of the business units. Other ad hoc material relating to specific projects, legal, company secretarial and regulatory matters are included as necessary. The reports ensure that the Board is updated on all major items of strategic planning, business performance, personnel, investments and significant policy issues. This allows the Board to monitor the progress of the business and provides transparency across all areas within the Group.
Each year an annual strategic agenda is drawn up and approved by the Board. This enables the Board to focus on and discuss key strategic areas on a regular basis. Additionally, every six months, a comprehensive review of the Group strategy is carried out. This agenda provides the Board with an opportunity to speak with the senior managers on a one to one basis and gain a more in-depth understanding of their area of responsibility. During the year the following business presentations have been made:
|Date of Meeting||Presentation Subject||Delivered by|
|August 2012||Group IT Strategy||Allen Mellor (Group IT Director)|
|December 2012||DVP US update||Mike Eldred (President, DVP US)|
|January 2013||Oracle implementation||Allen Mellor (Group IT Director)|
|April 2013||Product Development and lifecycle management — review of key development projects and an outline of exploratory projects||Susan Longhofer (Group Director, Product Development and Regulatory Affairs) and|
Rob Joosten (Product Development and Regulatory Affairs)
|May 2013||Manufacturing and Sourcing||Mike Annice (Managing Director of Dechra Pharmaceuticals Manufacturing)|
The Chairman and the Non-Executive Directors generally meet before each Board meeting which allows them time to review and discuss any matters arising from the agenda without the Executive Directors being present. The Chairman also meets regularly with the Chief Executive Officer outside of the scheduled Board meetings.
The Board has formally delegated specific responsibilities to Board Committees, in particular the Audit, Remuneration and Nomination Committees. The terms of reference for each of these Committees are available on the Company's website or on request from the Company Secretary. The Board also appoints Committees on an ad hoc basis to approve specific projects as deemed necessary.
During the year the Chief Executive Officer and Chief Financial Officer have attended the Board meetings of the businesses which make up the operating segments (in relation to the US these meetings are generally held by video conference). The meetings are chaired by the Chief Executive Officer allowing him and the Chief Financial Officer the opportunity to obtain detailed information on the businesses' strategic, operational and financial progress including any issues potentially preventing the achievement of their targets. Key operational information obtained from these meetings is then reported back to the Board.
The Chief Executive Officer has also chaired a number of product development meetings during the year. Representatives from the finance, marketing and manufacturing departments also attend these meetings thereby allowing the product pipeline to be comprehensively reviewed.
Following the disposal of the Services Segment a review of the operational Board meetings has taken place and it has been agreed that six meetings a year will be held for DVP EU, DVP US, Manufacturing and Product Development. Furthermore, four Executive Board meetings have been scheduled. It is the intention that these meetings will be attended by the four Executive Directors, the Managing Directors of the operating businesses along with the IT and HR Directors.
The Company maintains an appropriate level of Directors' and Officers' insurance in respect of legal action against Directors.