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 Euronext Growth 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 Directors’ 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.
The Board believes that Amryt’s ambition to create a global leader in rare and orphan diseases with a diversified offering of multiple development stage and commercial assets will provide it with the scale to support further growth. Amryt’s strategy includes:
- (a) driving revenue growth in existing and new territories with existing commercial assets, lomitapide and metreleptin;
- (b) developing commercial opportunities to evaluate lomitapide as a potential treatment for FCS;
- (c) building a franchise in EB through its lead product candidate, Oleogel-S10 (AP101), and gene therapy platform, AP103;
- (d) developing new potential indications for Oleogel-S10 (AP101)1; and
- (e) continue expanding and diversifying the product portfolio through acquisition and in-licensing opportunities.
Amryt has assembled vast commercial and development expertise to drive sustained pipeline growth. With both a pipeline of development and commercial assets, the Directors believe that this strategy can deliver Shareholder value over the medium to the long term.
Principle 2: Seek to understand and meet shareholder needs and expectations
Good and effective communication with Shareholders is given a high priority by the Directors. Amryt currently engages with Shareholders through various different platforms, including industry & market conferences, investor relations roadshows, broker-led introductions and reverse enquiries.
The management team of Amryt consider direct meetings with existing and potential investors an essential part of the on-going operations of Amryt 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 the 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 Amryt to engage with shareholders.
Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success
Amryt operates in the biopharmaceutical sector and has two commercial products as well as a number of development assets in various stages of clinical development. In addition, Amryt continues to exploit other opportunities within the sector in order to expand its present commercial and development pipelines. The Directors recognise that in order to achieve long term success, Amryt relies upon good relationships with a range of different stakeholder groups, both internal and external. Key stakeholders include Amryt’s shareholders, physicians, patients, services providers, employees, regulatory authorities and payers.
Amryt’s ability to source key personnel with the appropriate levels of expertise is vital to its success. This is something Amryt is very proud of and over the last three years it has put in place a commercial infrastructure which is primed and ready for future growth.
Amryt holds group wide meetings multiple times each year to ensure the goals and strategy are aligned and offers a platform for employees to give feedback to management.
Amryt is also conscious that its future success is in part dependent upon its ability to implement its strategy successfully, which includes obtaining approval for its lead product candidate, Oleogel-S10 (AP101). Amryt intends to seek regulatory approvals to commercialise Oleogel-S10 (AP101) in Europe and the US and in order to do so, it must comply with numerous and varying regulatory requirements of these jurisdictions. Amryt is in regular contact with the FDA in the US and the EMA in Europe as it progresses its development pipeline.
Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation
The Directors consider risk assessment to be important in achieving Amryt’s strategic objectives, and the Board intends to regularly review its projects and activities in this regard.
Amryt receives regular feedback from its external auditors on the state of its risk management and internal controls, which are under regular review.
Principle 5: Maintain the board as a well-functioning, balanced team led by the chair
Amryt is managed by the Board and they have the necessary skills and experience to effectively operate and control the business. There are currently seven directors on the Board being; Ray Stafford, Joseph Wiley, George Hampton, Alain Munoz, Donald Stern, Patrick Vink and Stephen Wills comprising six non executive directors, including the Chairman, and one executive director.
The Board believes that the current balance between non-executive and executive directors is appropriate for the requirements of the Company. The Board Amryt is weighted towards non-executive representation, as part of its preparation for a follow-on listing on Nasdaq, and to ensure that there is appropriate independent review, scrutiny and challenge of the management of Amryt and the executive function.
As part of its corporate governance disclosures, Amryt will be required to, explain how its Board composition differs from the typical Board composition set out by the QCA Corporate Governance Code, including for example how its Board has appropriate balance between executive and non-executive directors.
In addition to the Chief Financial Officer of the Company who will not sit on the Board of Amryt, the second tier of senior management comprises of the Chief Medical Officer and Chief Commercial Officer. The Chief Executive Officer, Chief Financial Officer, Chief Medical Officer and Chief Commercial Officer meet each week to discuss key corporate and strategic matters.
There is a further weekly meeting of a wider group of ten management team members, which, in addition to the Chief Executive Officer, Chief Financial Officer, Chief Medical Officer and Chief Commercial Officer includes the heads of the regulatory, medical affairs and marketing functions. At these meetings, executive management are able to discuss and challenge the Chief Financial Officer. The Chief Medical Officer, Chief Commercial Officer and Chief Financial Officer will be able to, and will be expected to, present to Board meetings in respect of key matters of which they are responsible, and will have direct dialogue with the non-executive directors on the Board.
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 an audit committee and a remuneration committee and also intends to establish a compliance committee.
The Board has not established a nominations committee, instead the whole Board considers matters of nomination and succession. The Board will follow 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 Amryt’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 Directors consider that the Board has the appropriate balance of sector, financial and public markets skills and experience as well as balance of personal qualities and capabilities.
The Directors recognise the need for continuous improvement in order to best serve Shareholders and intend to constantly review the mix of skills and experiences required in order to deliver Amryt’s strategic goals. Amryt 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 Directors consider 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 the size and the complexity of the business of Amryt the Directors consider it appropriate to complete a formal Board evaluation every two years or as needed. Amryt expects to provide more detailed information on the evaluation cycle adopted and the ways in which this has been updated on Amryt’s website over the next year.
The results of, and issues raised by the Board Evaluation will form an integral part of the Director’s future planning and the Director’s place significant emphasis on feedback received in the Board Evaluation process.
Principle 8: Promote a corporate culture that is based on ethical values and behaviours
Amryt believes it has a responsibility to its patients and their families, which goes beyond the products. Amryt listens and learns from the patient groups it works with and places huge importance in engaging with its clinical, patient and caregiver communities. Amryt appreciates that it does not have all of the answers, but believes that it has 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 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.
The Directors believe that Amryt has a responsibility to the environment and the communities where it works. As such Amryt will continue to seek to maintain good lines of communication with the communities where it operates 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
Amryt 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 Amryts and following plans for growth.
The Board sets out the overall strategic direction for Amryt and the Board is responsible for formulating, reviewing and approving 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 Amryt’s long-term strategy and for ensuring the Board’s integrity and effectiveness.
The role of the Chief Executive Officer is to manage the Amryt Group on a day-to-day basis, to ensure the Board decisions are implemented effectively and to develop and present Amryt Group strategy to the Board. Independent Directors will sit on the audit committee and remuneration committees and will be responsible for reporting to the full board their conclusions.
The Board of Amryt intends to continue to adopt the practices set out above in relation to governance structures and processes that are fit for purpose and support good decision-making by the Board.
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 Directors. Amryt regards good communication with investors (both institutional and retail) and analysts as an essential part of the on-going operations of the company. Amryt intends to maintain such level of communication with its Shareholders and will be committed to providing accurate and relevant corporate information to all shareholders.
The Board has established the following committees, each of which has its own terms of reference:
The Audit committee of the Company has responsibility for, among other things, the monitoring of the financial integrity of the financial statements of the Amryt Group and the involvement of the Amryt Group’s auditors in that process. It focuses in particular 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 ultimate responsibility for reviewing and approving the annual report and accounts and the half yearly reports remains with the Board. 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 three members, Stephen Wills, Ray Stafford and Donald Stern, all of whom are Non-executive members. The committee is chaired by Stephen Wills.
The 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 will meet at least two times a year. The Remuneration Committee comprises three members, George Hampton, Alain Munoz and Stephen Wills, all of whom will be Non-executive Directors, and the committee is chaired by George Hampton.
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 Compliance Committee has responsibility for overseeing compliance with laws, regulations, internal procedures and industry standards that may cause significant business, regulatory, or reputational damage, as well as legal and business trends and public policy issues. The primary function of the Compliance Committee is to oversee the development and implementation of compliance and ethics policies and practices. The Compliance Committee comprises three members, Donald Stern, Patrick Vink and Stephen Wills, all of whom are Non-executive Directors, and the committee is chaired by Donald Stern.
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.