A copy of the code is available from the Financial Reporting Council’s website at www.frc.org.uk.
The current governance framework comprises of the Board and the Senior Executive Team, and their respective sub-committees, are as set out below:
Further information regarding governance at Oxford Biomedica can be found in our 2022 Annual Report.
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 that there are robust corporate governance and risk management processes in place.
The Group considers that it was largely in compliance with the terms of the Corporate Governance Code during 2022 but acknowledges that it did not comply in full throughout the year. The Group has highlighted throughout the 2022 Annual Report areas where the Group has not been in compliance with the Corporate Governance Code. Specifically the Group acknowledges that it is not currently in compliance with the requirement in the following Provisions:
Committee Chair engagement with shareholders on significant matters related to their areas of responsibility.
The roles of chair and chief executive should not be exercised by the same individual.
The pension contribution rates for Executive Directors should be aligned with those available for the workforce.
Engagement with the workforce to explain how Executive pay aligns with the wider Company pay policy.
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.
The Board also takes a close interest in Quality, Health, Safety and Environment and Risk Management. Each of these areas prepare reports for the Board ahead of each Board meeting.
Details of the roles of the Chair, the Vice Chair, the CEO and the Senior Independent Director can be accessed via the following links:
• Role of the Chair
• Role of the Vice Chair
• Role of the CEO
• Role of the Senior Independent Director
Factoring stakeholder engagement into Board decisions
By thoroughly understanding the Group’s key stakeholder groups, the Group can factor their needs and concerns into Boardroom discussions (further information on the Group’s stakeholders is on pages 14 to 19 in the 2022 Annual Report available here. The Board’s procedures have been updated to require a stakeholder impact analysis to be completed for all material decisions requiring its approval that could impact on one or more of its stakeholder groups. The stakeholder impact analysis assists the Directors in performing their duties under s.172 of the Companies Act 2006 and provides the Board with assurance that the potential impacts on its stakeholders are being carefully considered by management when developing plans for Board approval.
The stakeholder impact analysis identifies:
- potential benefits and areas of concern for each stakeholder group;
- the procedures and plans being implemented to mitigate against any areas of concern; and
- who is responsible for ensuring the mitigation plans are being effectively implemented.
In accordance with s.172 of the Companies Act 2006, the Group communicates and consults regularly with employees throughout the year. In addition, the Group has designated Non-Executive Director, Stuart Henderson, as its representative for gathering the views of the workforce and to oversee employee engagement.
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 available here.
Each director is provided with an appropriate induction on appointment.
All Directors and the Board and its Committees have access to advice and the services of the Company Secretary, and also to external professional advisors as required. The appointment and removal of the Company Secretary is a matter for the Board as a whole to consider.
The Board meets regularly with the meeting dates agreed for each year in advance. In addition to the regular Board meetings, the Board (or an appointed sub-committee of the Board) also meets on a number of other occasions to consider other ad hoc matters such as the approval of financial statements and the interim financial results.
The Chair holds meetings time to time with Non-Executive Directors, without the Executive Directors in attendance.
The Chair sets the agenda for the Board meetings in consultation with the Chief Executive Officer and the Company Secretary. Board papers, covering the agenda and taking into account items relating to the Board’s responsibilities under s.172 of the Companies Act 2006, are circulated several days ahead of each meeting. Regular Board papers cover Research; Quality; Process Research and Development; Client Programmes and Alliance Management; Analytical Services; Clinical Development and Regulatory; Digital Strategy and Business Change Projects; Business Development; Finance; Investor Relations; HR; Operations; and Safety, Health and Environment; and Risk Management.
Review of performance
In compliance with the Corporate Governance Code, the Company Secretary commissioned an external evaluation of the Board’s performance covering the period from January 2022 to the fourth quarter of 2022. The review process comprised the completion of an anonymous questionnaire covering the various aspects of Board activities and Committees. The resulting report was discussed at the Board meetings in January and March 2023 and the Board plans to implement appropriate changes based on the outcomes of the report.
Retirement of Directors
In accordance with the articles of association and to ensure compliance with the Corporate Governance Code all Directors are subject to annual re-election at each Annual General Meeting (AGM).
Diversity and Inclusion
The Group recognises the importance of diversity and is committed to encouraging equality and diversity among its workforce. The Group aims to create an inclusive working environment based on merit, fairness and respect to enable it to attract and retain the most talented people from all backgrounds and cultures. The Group is also working to achieve a diverse Board and, just as importantly, diverse management teams. Appointments to the Board are based on merit taking into account suitability for the role, composition and balance of the Board to ensure that the Group has the right mix of skills, experience, independence, knowledge and consideration of the Group’s strategic objectives.
The Group believes that members of the Board and senior management should collectively possess a diverse range of skills and expertise and should come from a diverse range of ethnic and societal backgrounds. In terms of the next level of management, as at 31 December 2022, the SET, excluding the Executive Directors, totalled ten, of which there were two female members. In the gender pay gap report for 2022, the Group had more females (54%) than males (46%) at the Head of Department level and senior management level, thereby meeting the FTSE Women Leaders Review’s recommendation that 40% of senior leadership roles (defined as the SET and their direct reports) be held by women at the end of 2025. Part of the Group’s strategy will be to maintain and improve on the targets so that the objectives of the FTSE Women Leaders Review will continue to be met during 2023/2024.
The Board is aware of the recommendations of the Parker Review on Ethnic Diversity (Parker Review). The Parker Review set a target for FTSE 250 companies to have at least one Board member from a minority ethnic background by 2024. Whilst during the first 3 months of 2022 none of the serving Board members identified as belonging to an ethnic minority, the Nomination Committee had initiated a search during 2021 for an additional Independent Non-Executive Director. The search targeted female and ethnically diverse candidates, whilst taking into account suitability for the role to ensure that the Group has the right mix of skills, experience, independence and knowledge for the Group’s strategic objectives. In April 2022, the Group welcomed Namrata Patel to the Board, further strengthening and diversifying the Board and aligning the Board’s composition with both the recommendations of the Parker Review and also the forthcoming recommendation set out in Listing Rule 9.8.6(9)(a)(iii) that at least one individual of the board of directors is from a minority ethnic background.
Communication with shareholders
The Board recognises the importance of effective communication with shareholders and potential investors. The primary points of contact are the Chief Executive Officer, and Chief Financial Officer.
On behalf of the Board, the Audit Committee oversees the risk management strategy and appetite, the appropriateness and effectiveness of internal control processes, and Corporate Governance Code compliance.
At least annually, the Chair of the Risk Management Committee (RMC) presents the Audit Committee with an update on the significant current and emerging risks including, inter alia, the ongoing war in Ukraine, and the reputational and financial risks related to the launch, alignment and financial and operational success of Oxford Biomedica Solutions, and the associated steps that the Group takes to mitigate such risks via updates from the RMC. Further details of these risks can be found on pages 64 and 68 of the 2022 Annual Report and Accounts. During 2022, the RMC extended the Corporate Risk Register to include potential scenarios where fraud could arise across the Group. The Audit Committee reviewed and had the opportunity to provide feedback on the identified high and medium risk scenarios.
The Directors are responsible for the Group’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. The Audit Committee annually reviews the effectiveness of all significant aspects of internal control, including financial, operational and compliance controls, and risk management.
Senior Executive Team
The Board retains overall responsibility for, and control of, the Group. The Chief Executive Officer is Dr. Frank Mathias, and the Chief Financial Officer is Stuart Paynter. Operational management is conducted by the Executive Directors who, together with James Miskin, Kyriacos Mitrophanous, Nick Page, Sébastien Ribault, Matthew Treagus, Mark Caswell, Ravi Rao, Lisa James and Natalie Walter form the senior executive team (SET). The SET meets every week, has daily update meetings and has an extended SET meeting held every two weeks, with the agenda covering the full range of activities of the Group, including financial performance, organisational and employment matters, risk management and Safety, Health and Environment.
There are three SET sub-committees covering the major business operational areas. These sub-committees meet monthly and are attended by SET members and other relevant senior managers from the business. These sub-committees are:
- Technical Development Committee (TDC) – covering the development of new and improved assays and production and other processes, including cell and vector engineering; and
- Extended Operational Leadership Team (eOLT) – incorporates the Quality and Manufacturing Operations Committee and covers quality, operational and manufacturing matters.
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.
There are two other important committees:
- Commercial Development Committee (CDC) – which covers the external opportunities to out-licence and in-licence technology or product candidates, and also to generate partnership opportunities for manufacturing and product development; and
- Risk Management Committee (RMC) – this committee comprises senior managers from all parts of the business. The committee meets at least quarterly to identify and assess risks facing the business and to propose risk mitigation and management actions.
Important matters from all of these committees are referred to the SET.