Statement of Compliance with the QCA Corporate Governance Code
Corporate Governance Statement
The Chairman of Fusion Antibodies Plc (“Fusion” or the “Company”) is responsible for leading the board of directors (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 their 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 companies quoted on AIM. The Company has adopted the Quoted Companies Alliance Corporate Governance Code (“QCA Code”)..
The Board’s main objectives are to create value for the Company’s shareholders (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 eight times per year for formal board meetings, and this number is increased if and when circumstances dictate, for example as and when the Company is contemplating a fundraise. The Board 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 the 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 taking into account how a potential candidate’s skills and experience meet the identified need.
Principles of Corporate Governance
Compliance with the QCA Code is set out in broad terms below on a “comply or explain basis”. Like all aspects of the QCA Code, addressing the disclosure requirements is not approached as a compliance exercise; rather it is approached with the mindset of explaining and demonstrating the Company’s good governance to external stakeholders. The Chair has the overall responsibility for implementing an appropriate corporate governance regime at the Company and in this respect, annual updates on corporate governance disclosure will be provided.
Principle 1: Establish a strategy and business model which promote long-term value for shareholders
Fusion is a Collaborative Research Organisation (CRO) providing a range of antibody engineering services for the discovery and development of antibodies for both therapeutic drug and diagnostic applications. The Company’s mission is to deliver services 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 the commercialisation of current services and the development and introduction of new services and the expansion of the business as a CRO. This strategy uses the Company’s proven technology and expertise to target expansion both in the UK market and internationally. Regular strategy review meetings 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 investment in research leading to the development and introduction of new services to enhance shareholder value.
Further details on the Company’s business model and strategy are set out on pages 11 to 18 of the Company’s annual report for the year ended 31 March 2023, available here.
Principle 2: Seek to understand and meet shareholder needs and expectations
The Board recognises the importance of communication with its stakeholders and is committed to establishing constructive relationships with investors and potential investors in order to assist it in developing an understanding of the views of its Shareholders.
Shareholders are kept up to date via announcements made through a regulatory information service on matters of a material substance and/or a regulatory nature. Updates will be provided to the market from time to time, including any financial information, and any expected material deviations to market expectations will be announced through a regulatory information service and in accordance with its obligations under the AIM Rules for Companies and the UK Market Abuse Regulation (“UK MAR”), for which it has adopted appropriate policies to ensure compliance.
In addition, the Company’s annual report and notice of annual general meeting (“AGM”) is sent to all Shareholders and will be available for download from the Company’s website. Related to this, Shareholders are encouraged to attend the AGM in order to express their views on the Company’s business activities and performance and provide an opportunity to ask questions during the formal business or, more informally, following the meeting. The Company’s AGM is considered by the Board to be the main forum for dialogue with its private shareholders. All members of the Board routinely attend the AGM.
Furthermore, the CEO and CFO keep in touch with significant investors throughout the year, either face to face or using online calls, augmented by certain regional investor meetings. Furthermore, the Company uses an online meeting platform to communicate with private investors and potential investors at least twice a year.
The details of shareholder events which are held on an ad-hoc basis, 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 Shareholders to ensure that performance packages align with Shareholder expectations.
All contact details for investor relations are included on the Company’s website (contacts: [email protected])
Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success
The Company’s business model and operations enable the Board to clearly identify key stakeholders on which the Company’s business relies. In addition to communication with Shareholders, the Company has established systems in place for feedback from customers and suppliers which are fed back to senior management as part of the ISO9001 programme. Employees are recognised as a key stakeholder group and regular company-wide updates are provided to all staff on a regular basis. There are also mechanisms in place for employee feedback to senior management. 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.
Throughout the past year the Company has maintained its policy to allow employees to work from home on occasions, subject to business needs, in line with the Company’s strategy to deliver a flexible work environment as part of the staff retention policy.
The Company believes in protecting the wider community and appropriate environmental policies are in place. The Company is an equal opportunities company and encourages 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 is practicable.
The Audit Committee also considers the financial risks of the Company in conjunction with the Risk and Opportunities Register and the internal controls in place. The 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 three non-executive directors (including the Chairman) providing a balanced mix of skills and experience. The Board considers that it combines a blend of sector and market expertise, with an effective executive management team and appropriate oversight by independent Non-Executive Directors. The Company is satisfied that the current Board is sufficiently resourced to effectively discharge its governance obligations on behalf of all its Shareholders and other stakeholders in the Company.
Remuneration and audit committees are in place and are chaired by suitably experienced non-executive directors. The Board meets at least eight times per year and the sub-committees at least two times per year.
The QCA Code recommends that the Board should comprise of a balance of executive and non-executive directors, with at least two non-executive directors being independent. The QCA Code suggests that independence is a board judgement, but where there are grounds to question the independence of a director, through length of service or otherwise, this must be explained. Matthew Bakeer is considered to be the Senior Independent Director. While we continue to acknowledge that Colin Walsh is not an independent director due to his tenure with the Company (a presumption that the QCA Code states is rebuttable) and his board role as a representative of a significant shareholder, we continue to believe that Colin Walsh meets the QCA’s less prescriptive assessment of independence. In particular, he brings independent judgment to bear in his role as a non-executive director and is therefore able to resist inappropriate demands from executive directors and senior management.
The Corporate Governance report on pages 29 to 31 of the FY2023 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 Directors believe that the Board has a balance of sector, financial and public market skills and experience appropriate for the size and stage of current development of the Company and that the Board has the skills and requisite experience necessary to execute the Company’s strategy and business plan whilst also enabling each director to discharge his or her fiduciary duties effectively. Experiences are varied and contribute to maintaining a balanced board that has the appropriate level and range of skill to develop the Company. The Board is not dominated by one individual and all Directors have the ability to challenge proposals put forward to the meeting, democratically.
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. Changes in the Board composition during the year ending 31 March 2023 included the appointment Adrian Kinkaid as the new Chief Executive Officer and the appointment of Stephen Smyth as the interim Chief Financial Officer / Company Secretary following the resignation of James Fair from the Board.
The Company retains the services of independent advisors including financial, legal, and investor relations advisers that are available to the Board and who provide support and guidance to the Board and complement the Company’s internal expertise.
The Corporate Governance report on pages 29 to 31 of the FY 2021 annual report contains further details on the Board.
Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
The chairman performs a regular review of the Board and the contribution of individual Board members. Performance criteria concerning the Board review includes: contribution; strategy; market development; service development and innovation; sector experience; financial stewardship; and public company requirements.
The performance criteria may evolve each year and are based on 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.
The Board considers that the corporate governance policies it has currently in place for Board performance reviews are commensurate with the size and development stage of the Company. As the Company grows, the Board, will re-consider the need for Board evaluation.
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 the staff handbook will outline these principles in detail to all staff.
The Board regularly monitors the Company’s cultural environment and seeks to address any concerns that may arise. The Board will consider the Company’s cultural environment when seeking to recruit staff, and Board directors.
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 Chief Executive Officer leads the executive team and is responsible for implementing those actions required to deliver on the agreed strategy. The Chief Executive Officer 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 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 two times in each financial year and has unrestricted access to the Company's auditors.
Matters reserved for the board fall under the following headings:
- Setting values, standards, strategic aims and objectives
- Approval of operating budgets
- Oversight of company operations
- Changes to capital structure
- Approval of half-yearly report and annual report and accounts
- Setting dividend policy
- Ensuring maintenance of a sound system of control and risk management
- Approval of capital contracts and expenditure action in excess of £20,000
- Approval of loans or capital repayments in excess of £20,000
- Ensuring a satisfactory dialogue with shareholders
- Membership, evaluation and remuneration policy of the board
- Approval of Company Policies
- Appointment of principal advisers
- Approval of overall levels of insurance
- Any decisions likely to have a material impact on the group.
As is common for companies of this size, the Board does not have a nominations sub-committee so responsibility for appointments and succession planning rests with the full Board. This is being kept under review as the Company grows.
The position of Company Secretary is currently held by the Interim Chief Financial Officer (CFO). 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 .
This statement was last updated on 02 November 2023