As an AIM-listed company, ReNeuron intends to adopt as far as possible the principles of the Quoted Companies Alliance Corporate Governance Code (the “QCA Code”). The QCA Code identifies ten principles to be followed in order for companies to deliver growth in long-term shareholder value, encompassing an efficient, effective and dynamic management framework accompanied by good communication to promote confidence and trust.

The sections below set out the ways in which the Group applies the ten principles of the QCA Code in support of the Group’s medium to long-term success. The QCA code can be found on the QCA’s website www.theqca.com.

 

1. Establish a strategy and business model which promote long-term value for shareholders

The strategy and business operations of the Group are set out in the Strategic Report on pages 06 to 29 of the Group’s 2022 Annual Report.

The Group’s strategy and business model, and amendments thereto, were developed by the Chairman, who at the time was acting temporarily in an Executive capacity, supported by the then Chief Financial Officer (now appointed Chief Executive officer) and the leadership team, and approved by the Board. Going forward, the Chief Executive Officer, Chief Financial Officer and the leadership team are responsible for implementing the strategy and managing the business at an operational level.

The Group’s overall strategic objective is to develop a best-in-class exosomes delivery platform harnessing its unique stem cell technologies develop off-the-shelf treatments for diseases with significant unmet needs, either alone or with partners.

The Group deploys its financial and other resources towards gaining collaborative development opportunities in areas of scientific and commercial interest for its exosome and induced pluripotent stem cell (iPSC) technology platforms. Concurrently, it continues to seek further out-licensing opportunities for its CTX and hRPC therapeutic products which have already been licensed to Fosun Pharma in China. Ultimately, the Directors believe that this approach will deliver significant long-term value for shareholders if the resulting clinical trial data are compelling.

At the appropriate stage of development, the Group may choose to realise monetary value in a platform technology or a therapeutic product via high-value out-licensing deals with pharmaceutical or biotechnology companies with interests in the relevant therapeutic field and/or geographical territories. Alternatively, if resources permit, and with shareholder support, the Group may choose to advance a therapeutic candidate through early-stage clinical development unpartnered in order to increase value in the programme prior to out-licensing to a suitable partner to complete further clinical development.

The Group operates in an inherently high risk and heavily regulated sector and this is reflected in the principal risks and uncertainties set out on pages 27 to 29 of the 2022 Annual Report. In executing the Group’s strategy and operational plans, management will typically confront a range of day-to-day challenges associated with these key risks and uncertainties, and will seek to deploy the identified mitigation steps to manage these risks as they manifest themselves

2. Seek to understand and meet shareholder needs and expectations

The Group seeks to maintain a regular dialogue with both existing and potential new shareholders in order to communicate the Group’s strategy and progress and to understand the needs and expectations of shareholders.

Beyond the Annual General Meeting, going forward, the CEO, CFO and, where appropriate, the Chairman and other members of the senior management team will meet regularly with investors and analysts to provide them with updates on the Group’s business and to obtain feedback regarding the market’s expectations of the Group.

The Group’s investor relations activities encompass dialogue with both institutional and private investors. The Company is a regular presenter at private investor events, providing an opportunity for those investors to meet with representatives from the Group in a more informal setting.

3. Take into account wider stakeholder and social responsibilities and their implications for long-term success

The Group is aware of its corporate social responsibilities and the need to maintain effective working relationships across a range of stakeholder groups. These include the Group’s employees, partners, suppliers, regulatory authorities and the patients that have been involved in the Group’s clinical development activities. The Group’s operations and working methodologies take account of the need to balance the needs of all of these stakeholder groups while maintaining focus on the Board’s primary responsibility to promote the success of the Group for the benefit of its members as a whole. The Group endeavours to take account of feedback received from stakeholders, making amendments to working arrangements and operational plans where appropriate and where such amendments are consistent with the Group’s longer term strategy.

The Group takes due account of any impact that its activities may have on the environment and seeks to minimise this impact wherever possible. Through the various procedures and systems it operates, the Group ensures full compliance with health and safety and environmental legislation relevant to its activities.

4. Embed effective risk management, considering both opportunities and threats, throughout the organisation

The Board is responsible for the systems of risk management and internal control and for reviewing their effectiveness. The internal controls are appropriate to a business of this size and complexity and are designed to manage rather than eliminate risk and provide reasonable but not absolute assurance against material misstatement or loss. Through the activities of the Audit Committee, the effectiveness of these internal controls is reviewed annually. Key elements of the system of internal control include:

  • setting and communicating clear strategic goals;
  • a comprehensive budgeting process is completed once a year and is reviewed and approved by the Board;
  • the Group’s results, compared with the budget, are reported on a monthly basis;
  • the Group reforecasts the budget as necessary during the financial year, with the results reviewed and approved by the Board;
  • working within a defined set of delegated authorities, approved by the Board; and
  • all material contracts are reviewed by an Executive Director of the Company and external legal advice is taken as appropriate.

The Group’s regulated activities are governed by appropriate Standard Operating Procedures. Staff behaviour is governed by appropriate policies including an Anti-Bribery Policy.

The Group maintains appropriate insurance cover in respect of actions taken against the Directors because of their roles, as well as against material loss or claims against the Group. The insured values and type of cover are comprehensively reviewed on a periodic basis.

The senior management team meet at least twice monthly to consider new risks and opportunities presented to the Group, making recommendations to the Board and/or Audit Committee as appropriate.

A summary of the principal risks and uncertainties facing the Group, as well as mitigating actions, are set out on pages 27 to 29 of the Group’s 2022 Annual Report.

5. Maintain the Board as a well-functioning, balanced team led by the Chair

The Board currently comprises three Non-Executive Directors, a Non-Executive Chairman and two Executive Directors.

All of the Directors are subject to election by shareholders at the first Annual General Meeting after their appointment to the Board and will continue to seek re-election at least once every three years.

Directors’ biographies are set out here…ReNeuron Board of Directors

The Board is responsible to the shareholders for the proper management of the Group and meets at least six times a year to set the overall direction and strategy of the Group, to review scientific, operational and financial performance and to advise on management appointments. All key operational and investment decisions are subject to Board approval. A schedule of Matters Reserved for the Board may be found here…

Corporate Governance Policies September 2021

A summary of Board and Committee meetings held during the year ended 31 March 2022 is set out in the Group’s 2022 Annual Report.

The Board considers itself to be sufficiently independent. The QCA Code suggests that a board should have at least two independent Non-Executive Directors. Barbara Staehelin was appointed as Senior Independent Non-Executive Director on 14 July 2021. She, Dr Mike Owen and Martin Walton are regarded as independent Non-Executive Directors under the QCA’s Code’s guidance for determining such independence.

Iain Ross was appointed as Chairman on 1 July 2021. The Board has deemed that Iain Ross is not independent because his remuneration package includes eligibility to receive share options with a performance condition.

Non-Executive Directors receive their fees in the form of a basic cash fee. Following the recent Board reorganisation in 2021, the Non-Executive Directors’ basic remuneration was increased and, except in respect of the Chairman, the award of share options under the Company’s Non-Executive Share Option Scheme has been discontinued. The current remuneration structure for the Board’s Non-Executive Directors is deemed to be proportionate and in line with general market practice.

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6. Ensure that between them, the Directors have the necessary up-to-date experience, skills and capabilities

The Board considers that all of the Non-Executive Directors are of sufficient competence and calibre to add strength and objectivity to the Board, and bring considerable experience in scientific, operational and financial development of biopharmaceutical products and companies.

Directors’ biographies are set out here…ReNeuron Board of Directors

The Board regularly reviews its composition to ensure that it has the necessary breadth and depth of skills to support the ongoing development of the Group.

The Chairman, in conjunction with the Company Secretary, ensures that the Directors’ knowledge is kept up to date on key issues and developments pertaining to the Group, its operational environment and to the Directors’ responsibilities as members of the Board. During the course of the year, Directors received updates from the Company Secretary and various external advisers on a number of corporate governance matters.

Directors’ service contracts or appointment letters make provision for a Director to seek personal advice in furtherance of his or her duties and responsibilities, normally via the Company Secretary

7. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

The Board has a process for evaluation of its own performance, that of its committees and individual Directors, including the Chairman. This process is conducted biennially and last took place in April 2021. The Board utilises the services of an independent third party organisation to manage the evaluation process, analyse the results and report back to the Board for subsequent follow-up. Evaluation criteria include Controls and Procedures, Strategic Aims, Entrepreneurial Leadership and Communications and Relationships.

The Board may utilise the results of the evaluation process when considering the adequacy of the composition of the Board and for succession planning.

8. Promote a corporate culture that is based on ethical values and behaviours

The Board seeks to maintain the highest standards of integrity and probity in the conduct of the Group’s operations. These values are enshrined in the written policies and working practices adopted by all employees in the Group. An open culture is encouraged within the Group, with regular communications to staff regarding progress and staff feedback regularly sought. Monthly meetings are held with an opportunity for anonymous Q&A and suggestions on any aspect of the business. The Executive Committee regularly monitors the Group’s cultural environment and seeks to address any concerns that may arise, escalating these to Board level as necessary.

The Group is committed to providing a safe environment for its staff and all other parties for which the Group has a legal or moral responsibility in this area. The Group operates a Health and Safety Committee which meets bi-monthly to monitor, review and make decisions concerning health and safety matters. The Group’s health and safety policies and procedures are enshrined in the Group’s documented quality systems, which encompass all aspects of the Group’s day-to-day operations.

9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

The Board has overall responsibility for promoting the success of the Group. The CEO and CFO have day-to-day responsibility for the operational management of the Group’s activities. The Non-Executive Directors are responsible for bringing independent and objective judgement to Board decisions.

The Chairman is responsible for overseeing the running of the Board, ensuring that no individual or group dominates the Board’s decision-making and ensuring the Non-Executive Directors are properly briefed on matters. The Chairman has overall responsibility for corporate governance matters in the Group.

Senior Independent Non-Executive Director

The principal role of the Senior Independent Non-Executive Director (SINED) is to support the Chairman in his role; to act as an intermediary for other non-executive directors when necessary; to lead the non-executive directors in the oversight of the Chairman and to ensure there is an appropriate division of responsibility between the Chairman and the CFO and leadership team.

The SINED provides an alternative to the Chairman or CEO for communication with shareholders, providing an additional conduit for issues, concerns or observations to be expressed. Additionally, the SINED will lead the Non-Executive Directors in the annual performance evaluation of the Chairman, including the working relationship between the Chairman, the CEO and the leadership team.

The CEO, supported by the CFO and the leadership team, has the responsibility for implementing the strategy of the Board and managing the day-to-day business activities of the Group. The Company Secretary is responsible for ensuring that Board procedures are followed and applicable rules and regulations are complied with.

Board Committees

The Board has established an Audit Committee, Remuneration Committee and Nominations and Corporate Governance Committee with formally delegated duties and responsibilities. Barbara Staehelin Chairs the Audit Committee, Iain Ross Chairs the Nominations and Corporate Governance Committee and Dr Mike Owen Chairs the Remuneration Committee.

Audit Committee

The Audit Committee normally meets twice a year, which the Board deems to be sufficiently frequent in order for the Committee to discharge its responsibilities in the normal course of annual events. It has responsibility for, amongst other things, planning and reviewing the Annual Report and Accounts and interim statements involving, where appropriate, the external auditors. The Committee also approves external auditors’ fees and ensures the auditors’ independence as well as focusing on compliance with legal requirements and accounting standards. It is also responsible for ensuring that an effective system of internal control is maintained. The ultimate responsibility for reviewing and approving the annual financial statements and interim statements remains with the Board.

The Audit Committee Report is set out on pages 42 to 43 of the Group’s 2022 Annual Report.

Remuneration Committee

The Remuneration Committee, which meets as required, but at least once a year, has responsibility for making recommendations to the Board on the compensation of senior executives and determining, within agreed terms of reference, the specific remuneration packages for each of the Executive Directors. It also supervises the Company’s share incentive schemes and sets performance conditions for share options granted under the schemes.

A summary of the work of the Remuneration Committee during the year ended 31 March 2022 is set out on page 40 of the Group’s 2022 Annual Report.

The Directors’ Remuneration Report is set out on pages 44 to 47 of the Group’s 2022 Annual Report. The Directors believe that this, together with the above mentioned summary of the work of the Remuneration Committee, constitutes sufficient disclosure to meet the QCA Code’s requirement for a Remuneration Committee Report. Consequently, a separate Remuneration Committee Report is not presented.

Nominations and Corporate Governance Committee

The Nominations and Corporate Governance Committee, which meets as required, but at least twice a year, has responsibility for reviewing the size and composition of the Board, the appointment of replacement or additional Directors, the monitoring of compliance with applicable laws, regulations and corporate governance guidance and making appropriate recommendations to the Board.

A summary of the work undertaken by the Nominations and Corporate Governance Committee during the year ended 31 March 2022 is set out on page 41 of the Group’s 2022 Annual report.

The terms of reference of the above Committees are set out in the Company’s Corporate Governance Policies, which is regularly updated and can be found here…

Corporate Governance Policies September 2021

The Corporate Governance Policies also contain a schedule of matters specifically reserved for Board decision or approval and sets out the Company’s share dealing code and its public interest disclosure (“whistle-blowing”) policy and procedures. The background to the Corporate Governance Policies is set out in the Corporate Governance Memorandum.

ReNeuron Corporate Governance Memorandum 2018

10. Communicate how the Group is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

The Group places a high priority on regular communications with its various stakeholder groups and aims to ensure that all communications concerning the Group’s activities are clear, fair and accurate. The Group’s website is regularly updated and users can register to be alerted when announcements or details of presentations and events are posted onto the website.

Historical annual reports and other governance-related material can be found on the Group’s website in the relevant sections in the Investor Centre section of the site.

The results of voting on all resolutions in future general meetings will be posted to the Group’s website, including any actions to be taken as a result of resolutions for which votes against have been received from at least 20 per cent of independent shareholders.

The Group’s financial reports can be found here…ReNeuron Financial Reports

Notices of General Meetings of the Company can be found here General Meetings and indicative dates of such meetings can be found here…ReNeuron financial calendar

The results of voting on all resolutions in future general meetings will be posted to the Group’s website, including any actions to be taken as a result of resolutions for which votes against have been received from at least 20 per cent of independent shareholders

Click here for Annual Report 2022

Click here for ReNeuron Group plc Corporate Governance Policies

Click here for ReNeuron Group plc Corporate Governance Memorandum

Date of last review: September 2021