Corporate Governance

A copy of the code is available from the Financial Reporting Council’s website at www.frc.org.uk.

The current governance framework comprised of the Board and the Corporate Executive Team, and their respective sub-committees, is set out below:

Further information regarding governance at OXB can be found in our 2023 Annual Report.

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 that there are robust corporate governance and risk management processes in place. The Board comprises both Non-Executive and Executive Directors and provides the forum for external and independent review and challenge to the executive management.

The Group considers that it was largely in compliance with the terms of the Corporate Governance Code during 2023 but acknowledges that it did not comply in full throughout the year. The Group has set out in the Corporate Governance Report how it has applied the principles of the 2018 UK Corporate Governance Code and notes that, save as set out below (with reference to the 2018 Corporate Governance Code provisions), it was in full compliance:

Provision 9:

The roles of chair and chief executive should not be exercised by the same individual.

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 15 to 19 in the 2023 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.

Board Committees

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.

Board Meetings

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 reports from the Chief Financial Officer on Finance and Investor Relations; the Chief Operations Officer on Safety, Health and Environment and UK Operations; the Chief Technical Officer on Quality, Process Research and Development, Client Programmes and Alliance Management and Analytical Services; the Chief Scientific Officer on Research; the Chief Medical Officer on the external funding opportunities for the Group’s therapeutics portfolio and regulatory matters; the Chief Commercial Officer on Commercial CDMO activities; the Chief Information Officer on Cyber security and Digital Strategy; the Chief People Officer on Human Resources; Site Heads on the Site Operations; and a Risk Management Report.

Review of Performance

In December 2023, the Company Secretary conducted an internal evaluation of the Board’s performance covering the period from January 2023 to the fourth quarter of 2023. The review process comprised the completion of an anonymised questionnaire covering the various aspects of the activities of the Board and its Committees. The resulting report was discussed at the in-person Board meeting in January 2024 and the Board plans to implement appropriate changes based on the outcome of the report. In addition to the Board evaluation in December 2023, the Nomination Committee initiated a skills review of the Board with the aim of realigning the skills with the Group’s new strategy to become a pure-play CDMO.

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, 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 2023, the Corporate Executive Team excluding the Executive Directors, totalled seven, of which there were two female members. In the gender pay gap report for 2023 (for the full report, please see links below), the population at the Head of Department and senior management level was made up of 49% females and 51% males, thereby meeting the FTSE Women Leaders Review’s recommendation that 40% of senior leadership roles 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 2024/2025.

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. Two of the Group’s Directors, Namrata Patel and Leone Patterson identify themselves from ethnic minority background strengthening and diversifying the Board and aligning the Board’s composition with both the recommendations of the Parker Review and also the 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.

• Gender Pay Gap Report 2021
• Gender Pay Gap Report 2022
• Gender Pay Gap Report 2023

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. The Chair, Vice-Chair, Senior Independent Director and Chair of the Remuneration Committee are also available for meetings with investors, if required.

Risk Management

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) presented the Audit Committee with an update on the existing principal risks, emerging risks and any significant operational risks identified by the respective risk management committees of the UK and US sites, and the associated steps that the Group takes to mitigate such risks. The Audit Committee acknowledge that the risks concerning failure in the execution of the business plan for Oxford Biomedica (US) LLC, and the closure of the product development programmes have been removed as principal risks. The Audit Committee also recognise the Group has spent significant effort in revising its corporate strategy, details of which can be found on pages 4-5. As mentioned above, further details of the Group’s principal risks can be found on pages 67-72 of the 2023 Annual Report and accounts. On an annual basis the RMC performs an update to the corporate fraud risk register to refresh the 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 Audit Committee also noted the importance of maintaining the fraud risk register in preparation for the upcoming Economic Crime and Corporate Transparency Act 2023.

Internal Control

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. At least annually, the Group Financial Controller, and Director of Financial Controls, presents the Audit Committee with an update on control activity performed during the year, including financial, operational and compliance controls. In addition to the formal Audit Committee updates, the Audit Committee Chair met with the Chief Financial Officer, Director of Financial Controls and Finance Leadership Team at least twice during 2023 for more detailed review and conversation on the progress on internal control improvements, and key accounting estimates.

Corporate Executive Team

From December 2023, the composition of the Senior Executive Team (SET) changed to align with the transformation of the Company to a pure-play CDMO. The SET became known as the Corporate Executive Team (CET) and became responsible for the global management of the Company. The CET focuses on overall global governance (including ESG and risk management), Company culture and management, strategic direction, financial performance, including regular measurement of the Company objectives and KPI’s. The CET meets on a bi-weekly basis. The Site Heads join the CET meetings every other meeting. Operations are covered by the respective Site Leadership Teams (SLTs) in Bedford, US and Oxford, UK replacing the eOLT.

From December 2023, the five SET committees were restructured into four CET sub-committees covering the major business operational areas. These sub-committees meet on a regular basis and are attended by certain CET members and other relevant senior managers from the business. The CET sub-committees are:

• Environment, Social, Governance and Risk Committee (ESGRC) – this new committee combines ESG and Risk Management Committees comprising senior managers from all parts of the business across all Oxford Biomedica sites;
• Global Technical and Innovation Committee (GTIC) – this committee is authorised by the CET to review all technical and innovation activities associated with the Group’s capabilities, platform technologies and technical innovations across all Oxford Biomedica sites, and is the successor of the previous TDC. It will be the primary forum for discussing new projects related to the technology / innovation roadmap and making strategic and budgetary decisions on the best uses of Oxford Biomedica resources;
• Intellectual Property Management Committee (IPMC) – this committee comprises senior members of technical and IP teams and is responsible for ensuring the protection of Intellectual Property across all Oxford Biomedica sites; and
• Quality Management Review Committee (QMRC) – this committee provides global oversight in relation to quality and compliance across all Oxford Biomedica sites and is supported by more frequent location/site specific quality forums where each of the sites review quality related KPIs, compliance, etc. to evaluate the overall health of the Quality Management System at the site level.

Within their area of responsibility these committees set objectives and targets, monitor performance against KPI’s, ensure compliance with GxP and other relevant requirements, monitor expenditure against budget and risk management. Important matters from all of these committees are referred to the CET.