As a company listed on AIM, the Group is subject to the AIM Rules for Companies, however, the Group is not required to comply with the UK Corporate Governance Code (the ‘Code’). The Board believes that effective corporate governance will assist the delivery of the corporate strategy, the generation of shareholder value and protect the shareholders’ long-term interests.

Clinigen values corporate governance highly, not only in the Boardroom but across the whole business. The Board, as a matter of good practice, aims to manage the Group in accordance with guidance contained in the Code, as applicable, in addition to complying with the AIM Rules for Companies. The following section outlines how the Board manages the Group’s governance.

The Board and Composition

The Board consists of two Executive Directors and five Non-Executive Directors, including the Chairman. The names of the Directors and their biographies are set out here

The Board is satisfied with its composition and the balance between Executive and Non-Executive Directors.

The Group seeks to recruit the best candidates at Board level and considers candidates on merit and against objective criteria and with due regard for the benefits of diversity on the Board (including gender), taking care that appointees have sufficient time available to allocate to the position. The Group supports the Code in respect of diversity.

Peter George stood down as CEO in November 2016, but remained on the Board as a Non-Executive Director. Shaun Chilton, on the Board since July 2013, took over as CEO in November 2016. At the same time, Robin Sibson retired as a Non-Executive Director.

Each Director appointed by the Board is subject to election by the shareholders at the first AGM after their appointment. Following advice from the Nomination Committee, the Board has concluded that each Director is qualified for election or re-election.

The Board is responsible to the Company’s shareholders with its main objective to increase the value of assets and long-term sustainability of the Company. The Board reviews business opportunities and determines the risks and control framework. It also makes decisions on budgets, Group strategy and major capital expenditure. The day-to day management of the business is delegated to the Executive Directors.

The Board meets regularly throughout the year, with agendas, Committee papers and other appropriate information distributed prior to each meeting to allow the Board to meet its duties.

Effective procedures are in place to deal with conflicts of interest. Other interests and commitments of Directors are known by the Board and any changes to their commitments are reported.

The Board has established a Nomination Committee, Audit and Risk Committee, and Remuneration Committee with each having separate duties and responsibilities. The Audit and Risk Committee and Nomination Committee hold a joint session during the year to cover areas of common interest to both Committees.

Nomination Committee

The Chairman of the Nomination Committee is Peter Allen, with John Hartup and Ian Nicholson the other members of the Committee. The primary role of the Committee is to regularly review the structure, size and composition of the Board, give full consideration to succession planning for Directors and other senior executives and evaluate the balance of skills, knowledge, experience and independence on the Board. The Committee meet at such times as the Chairman of the Committee requires.

Audit and Risk Committee

The Chairman of the Audit and Risk Committee is John Hartup, with Peter Allen and Ian Nicholson the other members of the Committee. The primary role of the Committee is to monitor, review and challenge the financial statements and regulatory environment, monitor the relationship with the external auditor, monitor the Group’s internal control and risk management and ensure compliance with laws and regulations. The Committee meets at least two times a year. The committee carefully considers the key judgements applied in preparation of the consolidated financial statements including the estimated future discounted cash flows supporting the carrying value of goodwill and intangibles, the value and presentation of the Link contingent consideration liability and the going concern assumption. Each of the relevant estimates and judgments have been confirmed as appropriate.

Remuneration Committee

The Chairman of the Remuneration Committee is Ian Nicholson, with Peter Allen and John Hartup the other members of the Committee. The primary role of the Committee is to determine and agree the remuneration of the Company’s Chairman, CEO, Executive Directors and senior managers, with the objective to ensure there is an appropriate remuneration strategy in place to encourage enhanced performance and reward for individual contributions to the success of the Company. The Committee also reviews the design of all Group share incentive plans and oversees major changes to employee benefit structures across the wider business. The Committee reviews the performance targets regularly to ensure that they are both challenging and closely linked to the Group’s strategic priorities. The Group’s remuneration policy is set out in the 2017 Annual Report.

Risk Management and Internal Control

The Board has responsibility for establishing and maintaining the Group’s internal control systems. The Board regularly reviews and evaluates, internal controls, ensuring they meet the needs of the Group. The internal controls are designed to manage risk rather than eliminate it and therefore cannot provide absolute assurance against material misstatement or loss. Primary responsibility for reviewing internal controls has been delegated to the Audit and Risk Committee.

Communicating with Investors

The Board realises effective communication with shareholders on strategy and governance is an important part of its responsibilities. Interim and final results are communicated via formal meetings with roadshows, participation in conferences and additional dialogue with key investor representatives held in the intervening periods. Care is taken to ensure that all price-sensitive information is made available at the same time.

Share Dealing

The Company has established a share dealing code appropriate to an AIM listed company, and all the Directors of the Group understand the importance of compliance to the Code.

AGM

The Company’s AGM is used by the Board to communicate with shareholders, who are all entitled to attend. The presentation of the results will be given by the CEO, followed by the formal business of the meeting. The meeting provides an opportunity to ask questions of each of the Board members as part of the agenda, or more informally after the meeting.

The Notice of AGM and all related papers are sent to each shareholder at least 20 working days before the meeting. The outcomes of the voting on resolutions are announced to the London Stock Exchange via the Regulatory News Service and added to the Clinigen website.

Whistleblowing

We remain confident that we have robust and effective whistleblowing procedures in place to respond to matters that may arise.