We are committed to the principles of corporate governance contained in the Combined Code and for which the Board is accountable to shareholders. This section explains how the Directors will seek to apply the requirements of the Combined Code to procedures across the extended Sagentia Group ('Sagentia').
Statement of compliance with the Code of Best Practice
Sagentia will comply with the Provisions of the Code of Best Practice set out in Section One of the Combined Code except, so as to reflect the size and resources of Sagentia, for the following matters:
- not all of the non-executive directors on the Remuneration Committee or Audit Committee will be independent. Mr. Ahlberg will not be considered an independent Director under the Combined Code
- the Chairman and one of the two non-executive directors on the Board are independent. The Board will seek to appoint one further independent non-executive director
- the Board will not comprise a majority of non-executive directors but will consist of three executive directors and three non-executive directors. The Board will seek to appoint one further independent non-executive director
The roles of the Chairman and Chief Executive of Sagentia will be separated and clearly defined. The Chairman will be primarily responsible for the working of the Board, and the Chief Executive for the running of the business and implementation of the Board strategy and policy. The Chief Executive will be assisted in the managing of the business on a day-to-day basis by the executive team of Sagentia, including its commercial director and finance director.
High-level strategic decisions will be discussed and taken by the full Board, with recommendations as appropriate from the Chief Executive. Operational decisions will be taken by the Chief Executive within the framework approved in the annual budgets.
The Board will define a framework of high-level authorities to map the structure of delegation below Board level, as well as specifying issues which will remain within the Board’s preserve. The Board will meet at least four times a year to consider a formal schedule of matters including the operating performance of the advisory, exploitation and investment businesses and at least once to review Sagentia’s budget, strategy and business model.
Non-executive directors will be appointed for a three-year term after which their appointment may be extended by mutual agreement, after rigorous review by the Board. In accordance with Sagentia’s Articles of Association, one-third of the Board are required to retire by rotation each year so that over a three-year period all directors will have retired from the Board and faced re-election.
All directors will have access to the advice and services of the Company Secretary, group legal adviser, and other independent professional advisers as required. Non-executive directors can familiarise themselves with all aspects of Sagentia and have access to key members of staff.
It will be the responsibility of the Chairman and the Company Secretary to ensure that Board members receive sufficient and timely information regarding corporate and business issues to enable them to discharge their duties. Sagentia’s strategy will be communicated to all employees in regular briefings.
Risk management is crucial to the success of Sagentia, and the Board and audit committee will consider the risks associated with Sagentia’s technology and intellectual property pipeline, technical resources, as well as regulatory and other operational risks. Risks will be reviewed by the Board as part of the strategy review.
Sagentia Board Committees
The Board of Sagentia has established three standing committees, all of which operate within written terms of reference. Their minutes will be circulated for review and consideration by the full complement of directors, supplemented by oral reports from the committee chairmen at Board meetings.
Audit Committee
The audit committee will be chaired by Lars Kylberg and comprise himself, Christopher Masters and Staffan Ahlberg.
The audit committee will be responsible for reviewing a wide range of matters, including the half year and annual financial statements before their submission to the Board, as well as monitoring the controls, in particular regarding processes concerning investments, which are in force to ensure the integrity of the information reported to the shareholders. There is a whistle-blowing policy incorporated within the Sagentia employee handbook. The audit committee will contribute to the Board’s review of the effectiveness of internal controls and risk management systems. The audit committee will advise the Board on the appointment of external auditors and on their remuneration both for audit and non-audit work, and discuss the nature, scope and results of the audit with external auditors. The audit committee will keep under review the cost effectiveness and the independence and objectivity of the auditors. There will be no internal audit function within Sagentia. The audit committee is satisfied that this would be inappropriate for a company of Sagentia's size.
Remuneration Committee
The remuneration committee will be chaired by Staffan Ahlberg and comprise himself, Lars Kylberg and Christopher Masters. Its function will be to monitor the human resources policies of Sagentia to ensure that they are consistent with Sagentia’s business and culture. It will be charged with executing the Board’s policy on executive director and executive management remuneration and reporting decisions made to the Board. The committee will determine both the individual remuneration package of executive directors and review remuneration levels for other senior employees of Sagentia.
Nomination Committee
The nomination committee will be chaired by Christopher Masters and comprise himself, Lars Kylberg and Staffan Ahlberg. The committee will meet when necessary. The committee’s primary function will be to make recommendations to the Board on all new appointments and will also advise generally on issues relating to Board composition and balance. Nominations for executive directors will be submitted by the Chief Executive to the nomination committee.
Catella currently owns 48.8% of Sagentia Switzerland’s issued share capital. As a result of the Offer, Catella will own a minimum of 48.8% of Sagentia’s issued share capital and, taking into account only the irrevocable undertakings to accept the Offer, up to 76.8% Catella has entered into an agreement with Sagentia governing its relationship as a substantial shareholder.