Principles of corporate governance
The Board recognises the value of good corporate governance not only in the areas of accountability and risk management but also as a positive contribution to delivering and protecting enhanced shareholder value.
As an AIM-listed Company, Scancell intends following the principles of the Quoted Companies Alliance Corporate Governance Code (the “QCA Code”). The QCA Code identifies 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. To see how the Company addresses the ten key governance principles defined in the QCA Code, please see below.
1. Establish a strategy and business model which promote long-term value for shareholders
- Scancell is developing innovative immunotherapies for the treatment of cancer. Our strategy is focused around our two proprietory technology platforms Immunobody® and Moditope®
- The strategy is explained in the Chairman’s statement of the most recent financial statements for the year ended 30 April 2018.
- The key challenges to the business and how these are mitigated are detailed in the Strategic Report of the financial statements for the year ended 30 April 2018.
2. Seek to understand and meet shareholder needs and expectations
- The Scancell Group encourages two-way communication with both its institutional and private investors and responds quickly to all queries received. The Chairman talks regularly with the Group’s major shareholders and ensures that their views are communicated fully to the Board.
- The Board recognises the AGM as an important opportunity to meet private shareholders. The Directors are available to listen to the views of shareholders informally immediately following the AGM.
- Where voting decisions are not in line with the company’s expectations the Board will engage with those shareholders to understand and address any issues. The Chairman is the main point of contact for such matters.
3. Take into account wider stakeholder and social responsibilities and their implications for long-term success
- Scancell is committed to engaging with and maintaining good relations with all of our stakeholders – employees, investors, participants in clinical trials, collaboration partners and suppliers
- Scancell is compliant with safety and other regulations in its laboratories and in treating patients on Clinical Trials.
- Scancell has annual appraisals for all staff and regular meetings between staff and senior management to discuss business related issues.
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation
- The Principal risks and uncertainties are set out on page 11 of our financial statements for the year ended 30 April 2018 and these set out the risks to the business and how they are mitigated
- The Directors are responsible for ensuring that the Group maintains a system of internal control to provide them with reasonable assurance regarding the reliability of financial information used within the business and for publication and that the assets are safeguarded, transactions are authorised and properly recorded and that material errors and irregularities are either prevented or would be detected on a timely basis.
- There are inherent limitations in any system of internal control and accordingly even the most effective system can provide only reasonable, but not absolute, assurance with respect to the preparation of financial reporting and the safeguarding of assets.
- The Group, in administering its business has put in place strict authorisation, approval and control levels within which senior management operates. These controls reflect the Group’s organisational structure and business objectives. The control system includes clear lines of accountability and covers all areas of the organisation. The Board operates procedures which include an appropriate control environment through the definition of the organisation structure and authority levels and the identification of the major business risks.
- The key element of the internal control systems in operation is the Board meeting regularly with a formal agenda to monitor all aspects of the business including monitoring the Group’s financial performance against approved budgets and forecasts.
- There are no significant issues disclosed in the report and financial statements for the year ended 30 April 2018 and up to the date of approval of the report and financial statements that have required the Board to deal with any related material internal control issues.
5. Maintain the Board as a well functioning, balanced team led by the Chair.
- The Board comprises a Non-Executive Chairman, three Executive Directors and three Non-Executive Directors. Two of the Non-Executive Directors, Dr Matthew Frohn and Dr Alan Lewis are Independent Directors.
- The Board meets regularly to consider strategy, performance, approval of major capital projects and the framework of internal controls. In addition, the Executive Directors meet on a weekly basis either face to face or by phone to discuss operational matters. To enable the Board to discharge its duties, all Directors receive appropriate and timely information. Briefing papers are distributed to all Directors in advance of Board meetings. All Directors have access to the advice and services of the Company Secretary, who is responsible for ensuring that the Board procedures are followed, and that applicable rules and regulations are complied with. The appointment and removal of the Company Secretary is a matter for the Board as a whole. In addition, procedures are in place to enable the Directors to obtain independent professional advice in the furtherance of their duties, if necessary, at the Company’s expense. Subject to the terms of the Executive Directors’ service contracts, Directors are subject to retirement by rotation and re-election by the Shareholders at Annual General Meetings on a three-year cycle, as required by the Articles of Association and any Director appointed by the Board shall hold office only until the next Annual General Meeting and shall then be eligible for election.
- The Board is supported by the following committees: Audit Committee, Remuneration Committee and Nominations Committee whose terms of reference and membership are set out under Principle 9 Corporate Governance.
6. Ensure that between them the directors have the necessary up-to date experience skills and capabilities
- The Scancell Board has the broad range of skills and capabilities required to direct the Group. These include sector-specific experience in the Business Development and Research and Development functions, as well as more general finance, accounting and business management skills. Profiles of the Directors are shown at www.scancell.co.uk/company/board-of-directors
- The Nomination Committee of the Board oversees the process and makes recommendations to the Board on all new Board appointments. Where new Board appointments are considered the search for candidates is conducted, and appointments are made, on merit, against objective criteria and with due regard for the benefits of diversity on the Board, including gender. The Nomination Committee also considers succession planning.
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
- Since the adoption of the QCA Code the Board will be adopting a new process for assessing the effectiveness of individual members of the Board and the separate Committees of the Board. This process will be overseen by the Senior Independent Director, Dr Alan Lewis and will be reported upon in the next annual accounts for the year ended 30 April 2019.
- The Nomination Committee is responsible for ensuring succession planning and determining board and other senior management appointments.
8. Promote a corporate culture that is based on ethical values and behaviours
- Scancell is committed to a responsible and ethical corporate behaviour
- Scancell promotes a positive health and safety culture throughout the business to ensure that all of our people consider health, safety and welfare issues while at work and make an effective contribution towards maintaining and improving health and safety standards.
9. Maintain governance structures and process that are fit for purpose and support good decision-making by the board
The Board is supported by the following Committees:
The Audit Committee is responsible for the relationship with the Group’s external auditor, the review of the Group’s financial reporting and the Group’s internal controls.
The members of the Audit Committee are: Dr Matthew Frohn (Chairman), Dr John Chiplin and Dr Alan Lewis.
The Committee will normally meet at least twice per year and has primary responsibility for monitoring the quality of internal controls ensuring that the financial performance of the Company is properly measured and reported on and reviewing reports from the Company’s auditors relating to the Company’s accounting and internal controls, in all cases having due regard to the interests of Shareholders. The Audit Committee meets with the auditor at least once a year. The Audit Committee has undertaken an assessment of the auditor’s independence, including:
- A review of non-audit services provided to the Group and related fees;
- Discussion with the auditor of a written report detailing all relationships with the Group and any other parties that could affect independence or the perception of independence;
- A review of the auditor’s own procedures for ensuring the independence of the audit firm and partners and staff involved in the audit, including regular rotation of the audit partner; and
- Obtaining written confirmation from the auditor that, in their professional judgement, they are independent.
The Audit Committee is satisfied that the external auditor is independent in the discharge of their audit responsibilities.
The Company has established a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual Directors. No Director is involved in deciding his own remuneration.
The Committee meets at least once a year and more frequently if required. The Committee is responsible for setting the remuneration policy of the Executive Directors, including terms of employment, salaries, any performance bonuses and share option awards. The Executive Directors also consult the Committee in relation to the remuneration of senior employees and staff share option schemes. The remuneration of the Non-Executive Directors is determined by the Board as a whole.
The members of the Remuneration Committee are: Dr Alan Lewis (Chairman), Dr Matthew Frohn and Dr John Chiplin.
The Nominations Committee meets as necessary and its responsibilities include the review of the structure, size and composition of the Board, together with skills, knowledge, experience and diversity, succession planning, review of leadership needs and identification, evaluation and nomination of candidates to fill Board vacancies.
The members of the Nominations Committee are Dr John Chiplin (Chairman), Dr Matthew Frohn and Dr Alan Lewis.
10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.
The Group’s Board maintains ongoing communication with existing and potential investors. This is achieved by:
- talking to institutional and private investors through direct meetings;
- individual shareholders talking to Board members at the Annual General Meeting;
- financial PR consultants;
- the release of information through the Group’s website;
- the Regulatory News Service of the London Stock Exchange.
UK City Code on Takeovers and Mergers
The Company is subject to the UK City Code on Takeovers and Mergers.
Last updated 25 January 2019.