The disclosures were last updated on 28 August 2018
Corporate Governance Statement
The Chairman is responsible for leading the board in the setting and monitoring of its strategic objectives. The Chairman ensures that the executive directors and non-executive directors work as a team to fulfil the objectives, and is responsible for organising the business of the Board, ensuring its effectiveness and setting its agenda. This includes following best practice in corporate governance appropriate to the company's size and in accordance with the regulatory framework that applies to AIM companies. As part of the preparation for the company's admission to trading on AIM in December 2017 the company updated its governance practices to follow best practice and has formally adopted the Quoted Companies Alliance Corporate Governance Code 2018 ("QCA Code").
The board's main objectives are to create value for the Shareholders in an ethical and sustainable manner, and to ensure the appropriate resources are in place to meet the objectives. The board meets regularly and at least nine times per year for formal board meetings. It will set strategy, consider performance and approve financial statements, dividends and significant changes in accounting practices and key commercial matters. The company has an audit committee and remuneration committee. Decisions regarding the appointment of new directors are taken at board level as the board does not consider it appropriate to establish a nomination committee at this stage of the company's development. Appointments are made following a thorough assessment of need and of how a potential candidate's skills experience meet the identified need.
Principles of Corporate Governance
Compliance with the QCA Code is set out in broad terms below. Annual updates on compliance will be provided.
Principle 1: Establish a strategy and business model which promote long-term value for shareholders
Fusion is a CRO providing a range of antibody engineering services for the development of antibodies for both therapeutic drug and diagnostic applications. The Company's mission is to enable biopharmaceutical and diagnostic companies to develop innovative products in a timely and cost-effective manner for the benefit of the global healthcare industry.
The Board has set a strategy and prepared a business plan for new services and the expansion of the business as a CRO. This strategy uses the Company's proven technology and expertise and targets expansion both in the UK market and internationally. Regular strategy reviews are held and the business plan and budgets are kept up to date as appropriate.
This strategy covers company growth in revenues and profitability and introduction of new services to enhance shareholder value.
Further details on the company's business model and strategy are set out on pages 2 to 5 of the company's annual report for the year ended 31 March 2018, available here.
Principle 2: Seek to understand and meet shareholder needs and expectations
CEO and CFO keep in touch with significant investors throughout the year, augmented by certain regional investor meetings, for which the CEO is responsible.
The AGM is the main forum for dialogue with private shareholders. All members of the Board routinely attend the AGM and are available to answer questions raised by shareholders. Private shareholder events are also held on an ad-hoc basis, the details of which are announced in advance and the relevant presentations are added to the Company's corporate website.
This approach provides an opportunity for the Board to engage with a range of investors. The Chair of the Remuneration Committee liaises with selected shareholders to ensure that performance packages align with shareholder expectations.
Principle 3: Take in account wider stakeholder and social responsibilities and their implications for long-term success
In addition to communication with shareholders, the company has established systems in place for feedback from staff, customers and suppliers which are fed back to senior management as part of the ISO9001:2015 programme. This ensures that stakeholder responsibilities are taken into account in company decisions and strategy. In particular customer feedback is sought which allows us to continuously improve the quality and range of services. The advent of the antibody affinity maturation project is a result of such feedback.
The Company believes in protecting the wider community and appropriate environmental policies are in place. The Company is an equal opportunities company and encourage applicants for positions irrespective of age, disability, gender, race, religious or political views or sexual orientation and are committed to providing an inclusive working environment. With particular reference to Northern Ireland legislation, we comply with the Fair Employment and Treatment (NI) Order 1998.
Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation
The company has compiled and maintains a Risk and Opportunities Register through the operational assessment of the activities of each department, and the Company as a whole, by senior management. This is reviewed as part of the ISO management programme. Risk identification can come from several sources: employee or other stakeholder feedback; ISO management processes; executive meetings; and decisions taken at Audit Committee and Board. Senior management evaluate potential risks in terms of both the assessed impact and likelihood of occurrence and as then take actions to mitigate the risk as far as practicable. These evaluations and actions are assessed by Audit Committee and any amendments recommended to the Board.
The Audit Committee also considers the risks of the company in conjunction with the Risk and Opportunities Register as well as the internal controls in place and whether they are sufficient in light of the risks. Executive Directors meet at least monthly to review ongoing trading performance and forecasts and any new risks associated with ongoing trading.
Risk management is considered at every board meeting so that risk appetite can be evaluated and the impact of any developments are properly identified and managed.
MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK
Principle 5: Maintaining the board as a well-functioning, balanced team led by the Chair
The board has three executive and five non-executive directors (including the Chairman) providing a balanced mix of skills and experience. Remuneration and audit committees are in place and are chaired by suitably experienced non-executive directors. The board meets 9-10 times per year and the sub-committees three times per year. Sonya Ferguson and Tim Watts are considered to be independent directors with Sonya acting as Senior Independent Director.
The Corporate Governance report on pages 8 to 19 of the FY18 annual report contain further details on the board.
Principle 6: Ensure that between them the directors have the necessary up to date skills and capabilities
The ability of individual members and the board as a whole to deliver the company strategy is reviewed annually in an exercise undertaken by the Chairman. Board composition was last reviewed and refreshed in financial year 2017-18. The chairman and sub-committee chairpersons can call on external advisers as the need arises.
The Corporate Governance report on pages 8 to 19 of the FY18 annual report contain further details on the board.
Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
The chairman performs an annual review of the board and the contribution of individual board members. In each of the last two years the review has resulted in new board members being recruited to address identified needs and also at the last review two directors resigned.
Performance criteria are: contribution; strategy; market development; service development and innovation; sector experience; financial stewardship; and public company requirements. These are related to the company's needs and projected needs at the time of each annual review.
The board has a succession plan in place for the Chairman and executive directors, to ensure continuity in the event of an unexpected absence. Planned succession is taken into consideration at the annual board evaluation and when considering board and senior management appointments.
Principle 8: Promote a culture that is based on ethical values and behaviours
The company conducts its business in a socially responsible manner, acting with integrity and professionalism. This attitude is lead from the board, demonstrated by our actions and communicated to all staff. Where appropriate formal policies and staff handbook will outline these principles in detail to all staff.
Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the board
The chairman is responsible for leading the company and board in setting strategy and developing approaches to deliver that strategy. The CEO leads the executive team and is responsible for implementing those actions required to deliver on the agreed strategy. The CEO is also responsible for engagement with shareholders, customers and developing strategic alliances within the industry.
The remuneration committee reviews the performance of the executive directors and makes recommendations to the Board on matters relating to their remuneration and terms of employment. The committee also makes recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any share option scheme or equity incentive scheme in operation from time to time. In exercising this role, the members of the remuneration committee shall have regard to the recommendations put forward in the Corporate Governance Code and the QCA Code. The remuneration committee meets not less than twice in each financial year. The members of the remuneration committee are Colin Walsh, who acts as chairman of the committee, and Sonya Ferguson.
The audit committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Company is properly measured and reported on. As well as ensuring compliance with the AIM Rules, it receives and reviews reports from the Company's management and auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Company. The audit committee meets not less than three times in each financial year and has unrestricted access to the Company's auditors. The members of the audit committee are Timothy Watts, who acts as chairman of the committee, and Alan Mawson.
Matters reserved for the board fall under the following headings:
As is common for companies of this size, the board does not have a nominations sub-committee, so appointments and succession planning remain with the full board. This is being kept under review as the company grows.
The post of Company Secretary is currently held by the Chief Financial Officer. As the company grows this will be kept under review with an expectation that the roles will be separated when the size of the company will support this.
Principle 10: Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
The company discloses all relevant information in its annual report, copies of which are available on the company website along with governance related information issued from the date of admission to trading on AIM (www.fusionantibodies.com).
The company also discloses the outcomes of votes at general meetings, and where more than 20% of independent votes have been cast against a resolution at any general meeting the company will indicate its actions to understand the reason for that vote and any decisions or actions taken as a result.
For the most recent voting results click here