Corporate Governance
Chairman’s introduction
Our purpose is to provide returns to our shareholders by enabling improvements in outcomes for patients around the world by creating, validating and delivering innovative healthcare solutions associated with haemodynamic monitoring. We aim to achieve this by:
- supporting evidence-based medicine to create sustainable health benefits in the communities which we serve;
- investing in our products, services and people;
- partnering with clinicians to help them adopt the technologies within our TrueVue System;
- communicating openly and honestly with our customers and with each other;
- providing excellent levels of support, education and training, taking into account any constraints imposed directly or indirectly as a result of post-Covid restrictions;
- continuing to be thought-leaders to drive innovation; and
- establishing appropriate committees of the Board and related governance structures, including those required under section 172 of the Companies Act 2006, to help monitor and guide the aims summarised above.
It is the Board’s role to ensure that Deltex Medical Group plc is managed for the long-term benefit of all Deltex Medical’s stakeholders with effective, efficient and timely decision making.
Corporate governance is an important element of that task, which reduces risk and adds value to Deltex Medical.
As your Chairman, I am committed that the Group should uphold the highest standards of governance commensurate to its size and the complexity of its business.
Nigel Keen
Chairman
Corporate governance regime
The Board of Deltex Medical has chosen to adopt the QCA Corporate Governance Code (the QCA Code) that was published by the Quoted Companies Alliance in April 2018. This report sets out how the Group complies with the QCA code and will, in accordance with AIM Rule 26, be updated on an annual basis. In addition, certain disclosures as required by the QCA code are provided in Deltex Medical’s Annual Report & Accounts 2022 which were published in March 2023.
The QCA code is constructed around ten broad principles. Set out below is the Board’s explanation of how Deltex complies with these principles.
1. Establish a strategy and business model which promotes long-term value for shareholders
Deltex Medical’s strategy and business model are disclosed on pages 4-6 and 14-16 of the Annual Report & Accounts 2022 which is freely available on the Group’s website at www.deltexmedical.com.
Deltex Medical’s operations have continued to be affected by the specific challenges facing hospitals around the globe following the Covid pandemic and the sections referenced above describe the strategy the Group has adopted to navigate these specific challenges.
The Board keeps the Group’s strategy and business model under close and continuing review.
2. Seek to understand and meet shareholder needs and expectations
The Board’s primary contact with both institutional and private shareholders is through the Chairman, the Chief Executive (“CEO”) and the Group Finance Director (“FD”). The CEO and FD typically meet with the Group’s institutional and large private shareholders, who wish to meet with them, twice a year around the publication of the annual accounts and interim results.
In 2021 as a result of Covid the majority of these meetings were held via telephone or on-line video systems; however, in 2022 many of these meetings took place on a face-to-face basis, including the AGM.
3. Take into account wider stakeholder and social responsibilities and their implications for long-term success
Engaging with our stakeholders strengthens the Group’s relationships and helps it to make better business decisions which, in turn, helps it deliver on its commitments.
The Board is regularly updated, principally by the CEO and the FD, on wider stakeholder engagement and feedback in order to help it stay abreast of relevant insights into the issues, including social responsibilities, that matter most to the Group’s stakeholders.
This information is discussed at the monthly Board meetings and, as appropriate, is incorporated into the Group’s strategy and execution plans.
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 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 formally reviewed annually, although specific internal controls or risk management issues may be discussed with the Audit Committee on an ad hoc basis throughout the year.
A summary of the Board’s assessment of the principal risks and uncertainties facing the Group are set out on pages 17 to 19 of the Group’s 2022 Annual Report & Accounts.
A comprehensive budgeting process is completed once a year and is reviewed and approved by the Board. The Groups revenue performance, compared with the budget, is reported to senior management on a weekly basis and to the Board at each of its meetings.
The Group maintains appropriate insurance cover against material loss or claims against the Group as well as in respect of actions taken against the Directors because of their roles. The insured values and type of cover are comprehensively reviewed annually.
The executive management team meets at least monthly to consider new risks and opportunities presented to the Group, making recommendations to the Board and/or Audit Committee as appropriate.
5. Maintain the Board as a well-functioning, balanced team led by the Chairman
The Group is led by the Board of Directors which comprises the Non-Executive Chairman, two Executive Directors and four Non-Executive Directors. Nigel Keen, the Non-Executive Chairman, is responsible for the running of the Board and Andy Mears, the Chief Executive Officer, has executive responsibility both for managing the Group’s business activities and implementing the Group’s strategy. The Group is satisfied that the composition of the current Board is sufficient to enable it to carry out its governance obligations on behalf of the Group’s stakeholders.
To allow the Board to discharge its duties effectively, all Directors are provided with relevant information on a timely basis. In this regard, management reports and appropriate supporting documentation are provided to all Directors in advance of all Board and Committee meetings. All of the Directors have unfettered access to the services of the Group Finance Director who also fulfils the role of Company Secretary. In addition, if required, all Directors are freely able to obtain independent advice in the furtherance of their duties at the Group’s expense.
The Board considers that, with the exception of the Chairman, all of the Non-Executive directors are independent notwithstanding their varying lengths of tenure in office. In this context, Julian Cazalet and Mark Wippell served on the Board for around 15 and 9 years respectively. However, the Board has concluded that their length of service has not impaired their independence of judgement. All the Non-Executive directors receive a fixed fee for their services which is usually settled by the issue of new ordinary shares in the Group. None of the Non-Executive directors has an interest in any of the Group’s share option schemes.
The Board is supported in its work by an Audit Committee and a Remuneration Committee. The Audit Committee is chaired by Julian Cazalet and the Remuneration Committee is chaired by Nigel Keen. The remaining Non-Executive directors are members of both committees. The Executive Directors are invited to attend meetings of these committees when appropriate.
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
The Board comprises individuals with wide ranging commercial and business management experience in the healthcare sector, supported by other Directors with careers in investment banking and the law. Each Director brings experience of other relevant businesses which helps the Board, as a whole, benchmark and appraise the Group’s progress and strategy.
7. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
The Chairman periodically discusses the input of each Director with the individual concerned to ensure that their contribution to the Board is, and remains, both effective and relevant; and that they remain committed to the success of the Group. Separate Audit, Remuneration and Nomination committees have been established. At least twice a year the Chairman informally discusses Board and committee performance with the other Directors to explore how further improvements to the performance of the Board could be made.
8. Promote a corporate culture that is based on ethical values and behaviours
As a provider of regulated medical devices to patients across the world, ethical behaviour by its Directors and employees is critically important to the Group. Our products are designed and manufactured by our well-trained employees in Chichester (UK) who comply with our established Quality System. Our sales teams and clinical educators promote our products, and their benefits, to clinicians and healthcare systems in an open way. Further, we provide extensive training to customers, or prospective customers, to allow them to gain the maximum advantage from Deltex Medical’s products and their use in the clinical setting.
9. Maintain governance structures and processes that are fit for purpose and support good decision making by the Board
The Board has established a regular programme of Board Meetings at which the Executive Directors report on the progress of the business, and their assessment of the actual or prospective risks and opportunities for the Group.
There are a minimum of ten Board meetings scheduled per year. The Non-Executive Directors spend approximately a day a month working on Deltex Medical related matters, including reviewing the Board papers. The Chairman maintains contact both with the Board, the Executive Directors and employees between Board Meetings, and typically spends approximately three days a month working on Group-related matters. As a result, Board decisions are made in the light of up to date and relevant information.
The Group’s Quality System, which is regularly audited by outside regulatory bodies, also helps augment the governance regime of the Group.
10. Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
Extensive dialogue is maintained with shareholders and other stakeholders to discuss the opportunities for and challenges facing the Group.
Although this shareholder and stakeholder dialogue is primarily built around the Group’s annual and interim results, shareholders are informed of significant developments relating to the business through periodic stock exchange Regulatory Announcements or news updates uploaded to the Group’s website.
Historical annual reports and other governance related material can be found here
The outcome of votes at General Meetings can be found here
Last updated 23rd May 2023
