The Board seeks to follow best practice in corporate governance appropriate to the Company’s size and in accordance with the regulatory framework that applies to AIM and ESM companies.
The Quoted Companies Alliance (QCA) has published a corporate governance code for small and medium sized quoted companies, which includes a standard of minimum best practice for AIM companies and recommendations for reporting corporate governance matters (QCA Code). The QCA code is constructed around ten broad principles which the Company has chosen to apply to ensure good governance practices are in place.
Chairman’s Corporate Governance Statement
I am responsible for ensuring that Amryt Pharma maintains the highest standards of corporate governance with a clear framework for the way in which the Board, and the Group as a whole, operates. Good corporate governance is vital in providing effective leadership and assisting in the efficient running of the Company.
I recognise that we must aim to deliver growth in the medium to long-term and create shareholder value and to achieve this we must have an efficient, effective and dynamic management framework and this should be accompanied by good communication with all stakeholders which helps promote confidence and trust.
The Boards approach to corporate governance is also influenced by the following considerations:
- The accountability of the Board to the Company’s shareholders for the conduct and performance of the business
- The interest of all other stakeholders, both internal and external, including our employees, suppliers, customers, payers, patients, physicians and regulatory authorities
- The management of the Company in the most efficient manner with effective risk management
- The effectiveness of the Board to deliver future success and financial stability
The Board acknowledge the importance of the ten principles set out in the QCA Code and this statement briefly sets out how we currently comply with the provisions of the QCA Code.
Principle 1: Establish a strategy and business model which promotes long-term value for shareholders
The Board’s vision and strategy is to build a world leader in rare and orphan diseases by acquiring, developing and commercialising products that help improve the lives of patients where there is a high unmet medical need. Amryt creates shareholder value by participating in a diverse portfolio of development and commercial projects.
- Drive revenue growth in existing and new territories with our existing commercial asset – Lojuxta
- Build a franchise in Epidermolysis Bullosa (“EB”) through our lead development asset, AP101, and our gene therapy platform, AP103. New indications for AP101 represent significant additional opportunities
- Pursue in-licensing opportunities to replicate the success of Lojuxta
The company has assembled vast commercial and development expertise to drive sustained pipeline growth. With both a pipeline of development and commercial assets, we believe our strategy can deliver shareholder value over the medium to the long term.
Our vision and strategy is clearly explained on page 16 of our 2018 Annual Report https://www.amrytpharma.com/wp-content/uploads/2019/06/Amryt-Pharma-Annual-Report-2018.pdf
Principle 2: Seek to understand and meet shareholder needs and expectations
Good and effective communication with shareholders is given a high priority by the Board. The Company engages with shareholders through various different platforms, including industry & market conferences, investor relations roadshows, broker-led introductions and reverse enquiries. Joe Wiley (CEO) and Rory Nealon (CFO) are the primary points of contact for the Company with shareholders.
The investor section of the Company’s website, www.amrytpharma.com/investors provides up-to-date information on the company including press releases, financial calendar events, trading updates, share price information and contact information. Shareholders can also sign up for email alerts on our website which ensures they receive updates from the company.
The management team consider direct meetings with existing and potential investors an essential part of the on-going operations of the Company and often conduct one-to-one and group meetings with investors in the UK, Ireland and the US. These meetings provide great insight into the expectations and motivations of our shareholders and play an important role in the evolution of Amryt’s strategy. Annual General Meetings, at which all shareholders are encouraged to attend, are also an important forum for the Company to engage with shareholders.
The Annual Report, which includes the Company’s financial statements, is published on this website and can be accessed by shareholders at https://www.amrytpharma.com/wp-content/uploads/2019/06/Amryt-Pharma-Annual-Report-2018.pdf
Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success
The Company operates in the biopharmaceutical sector and has a commercial product as well as a number of development assets in various stages of clinical development. In addition, the Company continues to exploit other opportunities within the sector in order to expand its present commercial and development pipelines. The Board recognises that in order to achieve long term success, we rely upon good relationships with a range of different stakeholder groups, both internal and external. Key stakeholders include our shareholders, physicians, patients, services providers, employees, regulatory authorities and payers.
Our ability to source key personnel with the appropriate levels of expertise is vital to our success. This is something the Company is very proud of and over the last 3 years it has put in place a commercial infrastructure which is primed and ready for future growth.
The Company holds group wide meetings multiple times each year to ensure the goals and strategy of the Company and its employees are aligned and offers a platform for employees to give feedback to management.
The Company’s future success is in part dependent upon its ability to develop successfully, obtain regulatory approval for and then commercialise one or more of its development candidates. The Company intends to seek regulatory approvals to commercialise its product candidates in Europe and the US and in order to do so, it must comply with numerous and varying regulatory requirements of these jurisdictions. The Company is in regular contact with the Food & Drug Administration (FDA) in the USA and the European Medicines Agency (EMA) in Europe as we progress through our development pipeline.
Our commercial product, Lojuxta, is rapidly establishing a commercial footprint and infrastructure in our licenced territories. Our payers are key to enable us to continue this positive momentum. The Company is actively negotiating the reimbursement across multiple jurisdictions. If successful, these market-access decisions will allow Amryt to provide access for a cohort of HoFH patients in these new territories which should result in accelerated growth for the business.
Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation
The Board considers risk assessment to be important in achieving its strategic objectives, with the Board regularly reviewing its projects and activities in this regard.
The strategic section included in the 2018 Annual Report includes a section on the principal risks and uncertainties that are specific to Amryt on page 22.
The Company receives regular feedback from its external auditors on the state of its risk management and internal controls.
This is subject to regular review as our business and the risks we face evolve.
Principle 5: Maintain the board as a well-functioning, balanced team led by the chair
The Company is managed by a Board of Directors and they have the necessary skills and experience to effectively operate and control the business. There are currently six directors as at the date of this report, being; Harry Stratford, Joe Wiley, Rory Nealon, James Culverwell, Ray Stafford, and Markus Ziener. The Board comprises 4 non-executive directors, including the Chairman, and 2 executive directors. The Board believes that the current balance between non-executive and executive directors is appropriate for the requirements of the Company. The Board considers that Harry Stratford, James Culverwell and Ray Stafford are independent in character and judgment. See www.amrytpharma.com/about-us/our-team/#board-of-directors for more information on each of the Board members.
The Directors are of the opinion that the Board comprises a suitable balance and that the ten principles outlined in the QCA code have been implemented to an appropriate level. The Board, through the Chairman and the Executive Directors, maintains regular contact with its shareholders and advisers in order to ensure that the Board understands the views of shareholders.
All Directors have access to the advice of the Company’s Solicitors and also have access to independent professional advice, at the Company’s expense, as needed. All necessary information is supplied to the Directors on a timely basis to enable them to discharge their duties effectively.
The Board meets regularly and at least six times per year for formal board meetings. It will consider strategy, performance and approve financial statements, dividends and significant changes in accounting practices and key commercial matters, such as decisions to be taken on whether to take forward or to cancel a research project. There is a formal schedule of matters reserved for decision by the Board in place.
The Board has established the following committees, each of which has its own terms of reference:
The Audit Committee has responsibility for, among other things, the monitoring of the financial integrity of the financial statements of the Company and the involvement of the Company’s auditors in that process.
In particular, it focuses on compliance with accounting policies and ensuring that an effective system of internal and external audit and financial control is maintained, including considering the scope of the annual audit and the extent of the non-audit work undertaken by external auditors and advising on the appointment of external auditors.
The Audit Committee will meet at least two times a year at the appropriate times in the financial reporting and audit cycle.
The Audit Committee comprises two members, who are Non-executive Directors: James Culverwell and Ray Stafford. The committee is chaired by James Culverwell.
Remuneration CommitteeThe Remuneration Committee has responsibility for determination of specific remuneration packages for each of the executive directors, including pension rights and any compensation payments, and recommending and monitoring the level and structure of remuneration for senior management, and the implementation of share option, or other performance related schemes. It meets at least two times a year. The Remuneration Committee comprises three members, who are Non-executive Directors: Harry Stratford, Ray Stafford and James Culverwell. The committee is chaired by Harry Stratford. The Remuneration Committee seeks evidence from independent studies and from appropriate comparators in arriving at its recommendations. In structuring remuneration packages and other incentives, the Company consults external advisors.
The Board has not established a Nominations Committee, instead the whole Board considers matters of nomination and succession. The Board follows a robust process for the appointment of new Board members, to identify the skills, experience, personal qualities and capabilities required for the next stage of the Company’s development. The Board also monitors succession plans and possible internal candidates for future Board roles.
Principle 6: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
The Board considers that it has the appropriate balance of sector, financial and public markets skills and experience as well as balance of personal qualities and capabilities. The names and biographies of our directors are detailed at www.amrytpharma.com/about-us/our-team/#board-of-directors/
The Board recognises the need for continuous improvement in order to best serve its stakeholders and constantly reviews the mix of skills and experiences required in order to deliver Amryt’s strategic goals. The Company will ensure that Directors have available to them any and all appropriate resources they require to improve their skills and keep them current.
Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
The Board considers it important to review the effectiveness of its performance as a unit, as well as that of its committees and the individual members on a regular basis.
Due to our size and the complexity of our business, the Board considers it appropriate to complete a formal Board Evaluation every 2 years or as needed. We expect to provide more detailed information on the evaluation cycle adopted and the ways in which this has been updated on the Company’s website over the next year and in our next Annual Report and Accounts.
The results of, and issues raised by the Board Evaluation will form an integral part of the Board’s future planning and the Board places significant emphasis on feedback received in the Board Evaluation process.
Principle 8: Promote a corporate culture that is based on ethical values and behaviours
At Amryt, we believe that we have a responsibility to our patients and their families, which goes beyond our products.
We listen and learn from the patient groups we work with and place huge importance in engaging with our clinical, patient and caregiver communities. We appreciate that we do not have all of the answers, but we believe that we have a valuable contribution to make in transforming the lives of those living with and affected by rare diseases.
All employees and the Board receive a copy of the Whistleblowing Policy and our Code of Ethics. This ensures that all employees and the Board are aware of the procedures and protocols to be adhered to should they have any issues.
We believe that we have a responsibility to the environment around us and the communities where we work. As such, the Board always seeks to maintain good lines of communication with the communities where we operate and amongst all stakeholders to ensure that their issues and concerns are addressed appropriately and in a timely manner.
Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the board
The Company has an Audit Committee and a Remuneration Committee with formally delegated duties and responsibilities. The Board as a whole considers matters of nomination and succession. The composition of these committees may change over time in line with the Company’s plans for growth.
Our website details the role and make-up of our Board Committees and this is also detailed on page 27 in our 2018 Annual Report https://www.amrytpharma.com/wp-content/uploads/2019/06/Amryt-Pharma-Annual-Report-2018.pdf
The Boars sets out the overall strategic direction for Amryt Pharma. The Board is responsible for formulating, reviewing and approving the Company’s strategy, financial activities and operating performance. Day to day management is devolved to the Executive Directors who are charged with consulting the Board on all significant financial and operational matters.
The Board approves the annual budget, the issue of shares or other securities, significant financing transactions and all significant acquisitions and in-licencing arrangements. The Board is satisfied that the necessary control and resources are in place such that these responsibilities can be properly addressed.
The role of the Chairman is to manage the Board in the best interests of its stakeholders. His responsibilities include taking the Chair at Board Meetings and General Meetings, where he is responsible for ensuring the appropriate supply of information. He is also responsible for leading the development and execution of the Company’s long-term strategy and for ensuring the Board’s integrity and effectiveness.
The role of the Chief Executive officer is to manage the Group on a day-to-day basis, to ensure the Board decisions are implemented effectively and to develop and present Group strategy to the Board.
Independent Directors will sit on the Audit and Remuneration Committees and will be responsible for reporting to the full board their conclusions.
The Corporate Governance section on pages 27 to 37 of our 2018 Annual Report details the roles and responsibilities of the Board of directors https://www.amrytpharma.com/wp-content/uploads/2019/06/Amryt-Pharma-Annual-Report-2018.pdf
Principle 10: Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
Good and effective communication with shareholders has been given a high priority by the Board. We regard good communication with investors (both institutional and retail) and analysts as an essential part of the on-going operations of the Company. Amryt is committed to providing accurate and relevant corporate information to all shareholders. The Group’s website – www.amrytpharma.com – contains an Investors & Media section where shareholders can access Company information and reports, contact the Company and register to receive email alerts.
Annual reports for the last 3 years are available on the company website at www.amrytpharma.com/investors/reports/.
Notice of AGMs and associated proxy form are also included on the website at www.amrytpharma.com/investors/circulars-and-admission-document/.
The results of the last AGM are also included on the website at www.amrytpharma.com/investors/circulars-and-admission-document/.
This webpage will also be updated in the event of any changes in our application of the QCA Code.