Statement of Corporate Governance
QCA Code Compliance
In accordance with the requirement of AIM, all listed companies have to adopt a corporate code. The Group has adopted the Quoted Companies Alliance Corporate Governance Code (the “QCA Code”) and this report follows the structure of these guidelines and explains how we have applied the guidance. The Board considers that the Group complies with the QCA Code in all respects.
The Board believes that corporate governance is more than just a set of guidelines; rather it is a framework that underpins the core values for running the business in which we all believe, including a commitment to open and transparent communications with stakeholders. We believe that good corporate governance improves performance while reducing or mitigating risks.
The Group’s purpose is to improve health outcomes by providing highly advanced medical technology. Our mission is to develop outcome-enhancing products for intensive care patients and to promote these globally. Our strategy is defined clearly in Our Business Strategy section of our Annual Report. Our business model is set out clearly in our Annual Report and on our website (click here). Our strategy and business model are underpinned by a clear set of values: patient focus, outcome changing, pioneering and research driven, which reflect our long-term objective of enhancing patient care and delivering business growth and profitability.
Our Key Performance Indicators (“KPIs”), which are set out in the Chief Executive Officer’s Review in our Annual Report measure growth and profitability reflecting our business model.
Relationships with our shareholders are important to us and we seek to provide effective communications through our Interim and Annual Reports along with Regulatory News Service announcements, including RNS Reach. We also use the Group’s website, www.inspirationhealthcaregroup.plc.uk for both financial and general news relevant to shareholders.
The Executive Directors meet shareholders and other investors/potential investors at regular intervals during the year. The Chief Executive Officer and the Chief Financial Officer make presentations to institutional shareholders and analysts each year immediately following the release of interim and full year results. They also attend retail shareholder events. The slides used for such presentations are made available on the Group’s website under the Annual Reports section. The Group’s NOMAD and broker, Cenkos Securities plc, is briefed regularly and updates the Board during the year on shareholder expectations. The Group retains a professional investor relations company, Cadogan PR, to be the main contact point for our shareholders and to assist us with communicating with and receiving feedback from shareholders and financial analysts.
The Annual General Meeting (“AGM”) is regarded as an opportunity to meet, listen and present to shareholders and their participation is encouraged; all Directors attend the AGM and are available to meet shareholders individually or as a group. For each resolution the number of proxy votes received for, against and withheld is circulated to all attendees. The results for the AGM are subsequently published on the Group’s corporate website. All 2020 AGM resolutions were passed comfortably and there have been no significant actions that have been taken as a result of shareholder engagement in the period.
The Non-executive Chair, Mark Abrahams, Remuneration Committee Chair, Liz Shanahan and the Audit Committee Chair, Bob Beveridge, are available to meet major shareholders if required to discuss issues of importance to them.
The Board considers that it has operated in full regard of its responsibilities under section 172 of the 2006 Companies Act (see our Annual Report for further detail). The Group’s Purpose is widely understood and drives the decision-making which aims to optimise the long-term value of the business.
A. People. Our continued success is built on the talented people who work here, and employee engagement forms a major part of our strategy. Our senior independent Director has the additional responsibility of representing employees’ interests at the Board and has hosted two all Company question time meetings. He is also the Board level point of contact for the Group’s whistleblowing policy.
Everyone at Inspiration Healthcare Group is a valued member of the team, and our aim is to help every individual achieve their full potential. We offer equal opportunities regardless of race, sex, gender identity or reassignment, age, disability, religion or belief, marital status, pregnancy and maternity or sexual orientation.
We hold regular all-staff gatherings, including an annual conference, to keep employees updated on business progress and we also operate an incentivised Improvement Ideas scheme. Our new cloud based HR system allows greater ease of access for employees to their records as well as reduces our paper-based processes.
B. Customers. A key element of our business model is to work closely with key opinion leaders in the healthcare system and to develop, evaluate and enhance our propositions in full co-operation with those partners. Our reputation for innovative, outcome-enhancing products and excellent service is key and we regularly seek feedback on the performance of our products.
C. Suppliers. Our key strategic suppliers are long term in nature and work with the Group on product innovations. As a medical device Company, we regularly assess key supplier performance and engage with them to discuss and agree objectives and to enhance product capability and performance.
The Board recognises the need for a robust system of internal controls and risk management. The assessment of risks and the development of strategies for dealing with these risks are achieved on an ongoing basis through both a quarterly review of risks by the Board and the way in which the Group is controlled and managed internally. Risk management is integral to the ability of the Group to deliver on its strategic objectives and the Board’s appetite for risk is communicated to shareholders in our Annual Report.
The system of internal control is structured around an assessment of the various risks to the business and is designed to address those risks that the Board considers to be material, to safeguard assets against unauthorised use or disposition and to maintain proper accounting records which produce reliable financial and management information. However, any such system of internal control can provide only reasonable, but not absolute, assurance against material misstatement or loss. The Board considers that the internal controls in place are appropriate for the size, complexity and risk profile of the Group.
The Board is responsible for reviewing and approving overall Group strategy, approving revenue and capital budgets and plans, for determining the financial structure of the Group including treasury, tax and dividend policy. Monthly results and variances from plans and forecasts are reported to the Board.
The Audit Committee assists the Board in discharging its duties regarding the financial statements, accounting policies and the maintenance of proper internal business and operational and financial controls, including liaison with the Group’s external auditors.
The key features of the Group’s system of internal control are as follows:
- an ongoing process of risk assessment to identify, evaluate and manage business risks
- management structure with clearly defined responsibilities and authority limits
- a comprehensive system of reporting financial results to the Board
- the Group’s operating companies all maintain Quality Management Systems certified to ISO 13485:2016 for industry regulatory compliance
- a comprehensive system of reporting health and safety along with other well-being matters to the Board
- appraisal and authorisation of major capital expenditure, research & development projects
- dual signatories on all bank accounts
The Board is made of up three Executive Directors and two independent Non-executive Directors, chaired by Mark Abrahams. Meetings are open and constructive, with every Director participating fully. Meetings take place at our various sites or through ‘virtual’ meetings using platforms such as TEAMS or ZOOM. Face to face meetings are preferable as it allows the Board to see different operating facilities and meet other staff.
The Chair is responsible for the leadership of the Board and ensuring its effectiveness in all aspects of its role. The Chair is also responsible for creating the right Board dynamic and for ensuring that all-important matters, in particular strategic decisions, receive adequate time and attention at Board meetings. The Executive Directors are responsible for the day-to-day running of the business and developing corporate strategy, while the Non-executive Directors are tasked with constructively challenging the decisions of executive management and satisfying themselves that the systems of business risk management and internal financial controls are robust. The Non-executive Directors give informal advice to the Executives between meetings and devote sufficient time to be effective in this regard.
The Board meets regularly during the year as planned as well as ad-hoc meetings relating to such matters that arise from time to time; a calendar of meetings and principal matters to be discussed is agreed at the beginning of each year. Board papers are circulated at least one week before meetings, allowing time for full consideration and necessary clarifications before the meetings. Board dinners are held from time to time on the evening before meetings and allow broader discussion and development of effective Board relations.
The Group has effective procedures in place to monitor and deal with conflicts of interest. The Board is aware of the other commitments and interests of its Directors. Changes to these commitments and interests are reported to and, where appropriate, agreed with the rest of the Board.
The Chief Financial Officer is also the Company Secretary and is responsible for ensuring that Board procedures are followed and that the Group complies with all applicable rules, regulations and obligations governing its operation. If required, the Directors are entitled to take independent legal advice and, if the Board is informed in advance, the cost of such advice will be reimbursed by the Group.
The Non-executive Directors have both a breadth and depth of skills and experience to fulfil their roles. All have experience of being on other Boards of companies listed on the London Stock Exchange. Details of the Directors’ experience and areas of expertise are outlined in the Board of Directors section on our website. They typically meet each year without Executives present and maintain ongoing communications with Executives between formal meetings.
The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and experience, needed at this stage of the Group’s development, including in the areas of medical devices, sales and marketing, external communications, product development, finance, innovation, international trading, risk management, corporate governance and M&A.
The Audit Committee Chair updates his technical and financial experience by attending workshops held by the major accounting firms.
The Chair of the Remuneration Committee obtains regular updates on best practice for executive remuneration packages and initiates periodic reviews, taking account of changes to the business. Other Directors are regularly kept up-to-date via the latest governance and business updates from major accountancy or legal firms and via membership of various professional bodies.
All Directors stand for re-election by shareholders each year.
The Board holds eight meetings per year plus additional ad-hoc meetings related to acquisitions; two meetings per year focus on strategic matters and specific dates for other key areas, e.g. risk management, R&D reviews, financial forecasts, employee engagement, and shareholder feedback. The Board intends to use a 360-degree evaluation process during 2021.
The Board considers succession planning for the Executive Directors on an ad-hoc basis. On 26 February 2020, the Group announced that our Chief Financial Officer, Mike Briant would be retiring and that Jon Ballard, the Group’s Financial Controller, who had previously been identified as Mike’s successor, would become the Group’s Chief Financial Officer from 1 July 2020. Upon the acquisition of SLE Ltd, a transformational transaction, the Group took the opportunity to re-structure the Board by the addition of Brook Nolson as Chief Operating Officer adding expertise into operational delivery to the enlarged Group. Toby Foster, the Commercial Director subsequently took the role of Managing Director of Inspiration Healthcare Ltd.
The Group also added to its senior team’s experience by recruiting Dr Peter Reynolds, a consultant neonatologist as Vice President - Clinical, Innovation and Compliance. External recruitment is currently the most likely source of immediate replacements for any of the other Executive Directors.
The Group’s culture is understood and led by the example set by the behaviours of the three Executive Directors, one of whom was the founder of Inspiration Healthcare Limited. Taking into account that the Group is relatively small with approx. 200 employees, this is considered an effective means of conveying the Group’s approach to ethical behaviour. The common culture is based upon four core values:
- Patient focus
- Outcome changing
- Research driven
By visiting sites during the year, the Board is able to talk to staff and observe behaviours in order to satisfy itself on the status of the culture.
The Group places the health and safety of its workforce as its top priority with health and safety updates being provided at every Board meeting and actions arising are followed up by the Chief Operating Officer overseen by the Chief Executive Officer.
The Board is committed to high standards of corporate governance. It is an active member of the QCA and adopts the QCA Corporate Governance Code. We review our corporate governance arrangements regularly and expect to evolve these over time as the business grows. There is a clear division of responsibilities between the Chair and the Chief Executive Officer. The Chair is responsible for leading the Board, setting its agenda and monitoring its effectiveness. He meets regularly and separately with the Chief Executive Officer and the other Non-executive Directors.
Matters reserved for Board decision include:
- overall business strategy
- review of key operational and commercial matters
- review of key financial matters, including approval of financial plans, changes to capital structure
- acquisitions and disposals of businesses, material capital expenditure, treasury policy, and dividends
- governance, including the appointment and removal of Board members, remuneration of Directors, set up and delegation of matters to committees and the reviewing of reporting back thereof
- approval of financial statements
- stock exchange-related issues including the approval of communications
All Directors receive regular and timely information on the Group’s operational and financial performance which is circulated to the Board in advance of meetings.
The Board delegates authority to three committees to assist in meeting its business objectives while ensuring a sound system of internal control and risk management. The committees meet independently of Board meetings.
The Audit Committee has two members, Bob Beveridge (Chair) and Liz Shanahan. The Chief Financial Officer and external auditors attend meetings by invitation. The Audit Committee’s responsibilities include the review of the scope, results, and effectiveness of the external audit, the review of half-year and Annual Financial Statements, and the review of the Group’s risk management and internal control systems. A separate report of the Audit Committee activities is in our Annual Report.
The report of the Remuneration Committee is set out in our Annual Report. The Remuneration Committee has two members, Liz Shanahan (Chair) and Bob Beveridge. The Committee is responsible for setting the remuneration arrangements, including short-term bonus and long-term incentives, for Executive Directors as well as approving the remuneration principles for senior staff.
A more detailed terms of reference for the Remuneration Committee can be found here.
The Nominations Committee has four members, Mark Abrahams (Chair), Bob Beveridge, Liz Shanahan and Neil Campbell. The Nominations Committee considers succession planning, reviews the structure, size and composition of the Board and nominates candidates to fill Board vacancies.
A more detailed terms of reference for the Nominations Committee can be found here.
Membership of the committees is as follows:
|Mark Abrahams||Liz Shanahan||Neil Campbell||Bob Beveridge|
|Audit Committee (AC)||n/a||Member||n/a||Chair|
|Remuneration Committee (RC)||n/a||Chair||n/a||Member|
|Nominations Committee (NC)||Chair||Member||Member||Member|
The following table sets out the member attendance at Board and Committee meetings during the year ended 31 January 2021.
|Board Members||Number of meetings attended|
|Mark Abrahams, Chairman||8/8||2/5||n/a||1/1|
|Neil Campbell, Chief Executive Officer||8/8||n/a||n/a||1/1|
|Bob Beveridge, Senior Independent Non-executive Director||8/8||5/5||3/3||1/1|
|Brook Nolson**, Chief Operating Officer||3/8||n/a||n/a||1/1|
|Brook Nolson**, Non-executive Director||5/8||2/5||2/3||n/a|
|Liz Shanahan*, Non-executive Director||2/8||1/5||1/3||n/a|
|Jonathan Ballard‡, Chief Financial Officer||3/8||n/a||n/a||n/a|
|Mike Briant†, Chief Financial Officer||5/8||n/a||n/a||n/a|
|Toby Foster***, Commericial Director||5/8||n/a||n/a||n/a|
* joined the board on 26 October 2020
** a member of the Board until 6 July 2020 as a Non-executive Director and from 7 July 2020 as Chief Operating Officer
*** resigned from the board effective 7 July 2020
† resigned from the board effective 30 June 2020
‡ joined the board on 1 July 2020
Non-members are invited to attend committees as appropriate.
The Board has formal responsibilities and agendas and three sub-committees; in addition, strong informal relations are maintained between Executive and Non-executive Directors.
Non-executive Directors meet with other senior managers and give advice and assistance between meetings. Board dinners and informal on-line meetings are held from time to time to provide opportunities for broader discussions. During the Covid-19 pandemic, the focus has been on minimising face-to-face meetings and conducting them virtually.
The Chief Executive Officer and Chief Financial Officer regularly meet with investors after results announcements have been made and at other shareholder participant events. They also meet regularly with the Group’s Nomad/ broker and discuss any shareholder feedback – the Board is briefed accordingly.
All Directors attend the Annual General Meeting and engage both formally and informally with shareholders during and after the meeting. The results of voting at the AGM is communicated to shareholders via RNS and on the Group’s website.
The Chief Executive Officer and the Chief Financial Officer make presentations to institutional shareholders and analysts each year immediately following the release of interim and full-year results. They also attend retail shareholder events. The slides used for such presentations are made available on the Group’s website under the Annual Reports section.
The Group engages a professional investor relations company to be the main contact point for our shareholders and to assist us with communicating with and receiving feedback from shareholders and financial analysts.
Date of Review: 28th May 2021
Please click here to see the full Principal Risks and Uncertainties faced by the Group.
The Company (Company number 03587944) was incorporated on 25 June 1998 in England and Wales. Following a reverse takeover by Inspiration Healthcare Limited, completed on 24 June 2015, the Company changed its name to Inspiration Healthcare Group plc and was re-admitted to the London Stock Exchange’s Alternative Investment Market (LSE:IHC).
Inspiration Healthcare Group plc’s main country of operation is the United Kingdom, although some of our staff may be domiciled overseas to provide more localised service and support.
Inspiration Healthcare Group plc is traded on the London Stock Exchange AIM market and no securities are listed on any other Exchanges.