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Corporate Governance Statement

The Directors acknowledge the importance of good corporate governance and believe that good corporate governance creates shareholder value by improving performance, whilst reducing or mitigating the risks that a company faces as it seeks to create sustainable growth over the medium to long-term. The Directors have formally taken the decision to adopt the Quoted Companies Alliance Corporate Governance Code for small and mid size quoted companies (the “Corporate Governance Code") which has become a widely recognised benchmark for corporate governance of small and mid-sized companies, particularly companies admitted to trading on AIM and Euronext Growth. It is the Board’s objective to continue to enhance its Corporate Governance structures and to transition to full compliance with the UK Code of Corporate Governance within 3 years.

The Board comprises 12 Directors, 3 of whom are Executive Directors and 9 of whom, including the Chairman, are Non-Executive Directors, reflecting a blend of different experience and backgrounds. The Board will meet at least 6 times a year to review, formulate and approve the Company’s strategy, budgets and corporate actions and oversee the Company’s progress towards its goals.

The Corporate Governance Code requires the Company to apply ten principles of good corporate governance and publish certain disclosures in its annual report and also on its website. The Company has committed to applying these principles within its business and the following describes in detail how the Company is applying these principles.

Principle One – Establish a strategy and business model which promote long-term value for shareholders

In 2018 the Company engaged Stonehaven Consulting, a strategy and reputation consultancy, to assist it in defining a clear strategic vision for the Group. The Company’s vision is to improve patient access to pharmaco-medical products and treatments by enhancing connectivity between manufacturers and healthcare stakeholders.

The Group’s strategy is to double Group EBITDA over the 5-year period 2019 – 2023 by expanding its European commercial offering and developing its global Product Access capabilities to meet the increasing needs of speciality products and innovative medical technologies. In its Commercial & Clinical division the Group is building a pan-European service offering from the present footprint in Ireland, the UK and the Benelux.

The Group’s focus in the short to medium term is to become a strategic partner for manufacturers seeking to address the European market in the most efficient way. With a growing geographic footprint and its network of strategic alliances and third-party logistics providers, the Group has positioned itself with the objective of acquiring further manufacturer clients with a regional mandate in Europe. In its Product Access division the Group has an ambition to become a global leader and the Board is excited about the opportunity for the Group to become a leading player in the provision of On-Demand and Exclusive Access services on a global basis following the integration of the Durbin group.

Furthermore, the Company believes that its increased ability to offer Product Access services with a global reach will significantly strengthen the Group’s European Commercial & Clinical solutions with both emerging and established pharmaco-medical clients.

Many of these clients have expressed an interest in procuring a strategic partner with the ability to take a product from market access through to full commercialisation. The Board believes that the Group's ability to manage speciality products across their lifecycle will differentiate it compared to competitors. The Group’s strategy for its Supply Chain & Retail division is to continue to leverage its high-tech distribution facilities, longstanding manufacturer relationships and scalable digital infrastructure to maintain market leadership in Ireland, reinvesting in the Group’s growth platforms, while supporting increasing service levels and managing continued operational and financial efficiency within this division.

With strategic platforms in place in its Commercial & Clinical and Product Access divisions, the Board is confident in the growth prospects for the Group which are underpinned by continued operational and financial efficiency within the Supply Chain & Retail division.

The Group believes that through a combination of organic growth and further strategic acquisitions it will continue to drive long-term value for its shareholders.

Principle Two – Seek to understand and meet shareholder needs and expectations

The Group has established a framework for stakeholder engagement which identifies the key stakeholders of the Group (including shareholders), sets out mechanisms for engaging and communicating with them and details key responsibilities.

The Group’s main method of communication with its shareholders has traditionally been through its Annual Report and AGM process. The Group recognises that understanding and meeting shareholder needs and expectations is a key business objective in and of itself and as a demonstration of the Group’s commitment to this going forward, the Company has recently appointed a new Director of Investor Relations and Corporate Development who will manage investor relations and shareholder communications on behalf of the Group. The Group has also put in place an Investor Relations Policy to:

  • Outline the Group’s methods of communication to shareholders;
  • ensure that the Group communicates effectively with all shareholders; and
  • ensure that the Group discloses information correctly, in a balanced, transparent and timely way and simultaneously to shareholders.

Shareholders are kept up to date on matters of a material substance and/or a regulatory nature via announcements made through a Regulatory News Service. Updates are provided to the market and any expected material deviations to market expectations are announced via this Regulatory News Service.

The Company’s AGM is an opportunity for shareholders to meet with the Chairman and other members of the Board. The meeting is open to all shareholders, giving them the option to ask questions and raise issues during the formal business or, more informally, following the meeting, and the results of the AGM will be announced via the Regulatory News Service. The Company’s website also includes important information in respect of the Group, its business, results and governance.

The Company has recently implemented a “Significant Votes Against a Resolution Procedure” which will ensure that where 20% or more of votes have been cast against the Board’s recommendation for a resolution at a general meeting of shareholders, the Board will engage with shareholders and seek to understand their views in relation to the significant vote against.

Principle Three – Take into account wider stakeholder and social responsibilities and their implications for long-term success

In establishing its framework for stakeholder engagement, the Group has identified the following key stakeholders and methods of engagement:

Stakeholder

How we Engage with our Stakeholders

Shareholders

As described under Principle 2, the Group believes that understanding and meeting shareholder needs and expectations is a key business objective in and of itself and Principle 2 sets out how the Group seeks to achieve this.

Employees

With a workforce of over 2,000, communication is a key priority for the Group. The Group recognises that an essential part of its continued success is the support and involvement of its employees. Given the diverse range of functions throughout the Group, there is no one size fits all approach to employee engagement and communication. The Group uses a combination of direct communication through meetings and reviews, as well as Group wide communication via the intranet, notice boards and regular training. The Group also recognises the Trade Unions of which some of its employees are members and engages with them as necessary.

Customers/Suppliers

Customer and Supplier satisfaction is key to the business of the Group and therefore the Group must continually engage with its customers and suppliers to ensure satisfaction and achievement of KPIs. The method of communication depends on the nature of the relationship and the effectiveness of the communication strategy is kept under constant review by the Group.

Advisors

The Group has a number of long-standing and trusted advisors in addition to new engagements on an as needed basis. Open communication between the Group and its advisors ensures expectations are managed and optimum service levels are achieved. Where appropriate, the Group encourages communication between its advisors to ensure a cohesive approach.

Regulators

The Group takes its obligations to make notifications, filings and returns to various Regulators seriously and seeks to ensure prompt, effective and transparent communication with its Regulators.

Press/Media/Public

The Group engages the services of Q4 Public Relations to handle its media and press communication and Alchemy Communications has been a longstanding PR advisor to the Group. The Group’s Director of Investor Relations and Corporate Development will also play a key role in communicating with this important stakeholder.

The Group also takes its responsibilities as a corporate citizen seriously. In 2016, Uniphar carried out an audit of its practices in conjunction with Business in the Community and the Group continues to monitor its progress against those recommendations.

The Group is committed to minimising its impact on the environment. The Group is compliant with the European Union (Packaging) Regulations 2014 and 2015, which require suppliers/producers of packaging and packaged products to fund the recovery and recycling of their used packaging. The Group has been funding the recovery and recycling of their used packaging as a member of Repak since 1999. During 2018 the Group had a 96% Recycling/Recovery rate on all packaging. Of this material 54% was recycled with an additional 42% recovered.

In 2018 the Group undertook numerous projects to reduce its energy consumption levels and environmental impact. One of the larger projects completed during 2018 was the introduction of a new high efficiency Afatek freezer system used in the Group's Greenogue warehouse. Eleven cabinet freezers were installed which allows for a more selective use of freezers to match demand along with the ability to remove the conditioning phase from the ice packs. Along with greatly reducing labour hours, there was a 200 hour per week reduction in active freezing cycle time in comparison to a traditional bulk freezer.

From a community perspective, it is important to the Group to be a good neighbour. The Group’s retail pharmacies are located at the heart of many communities around Ireland. In 2017, Allcare pharmacies began the Give for Good campaign, which allows each pharmacy to choose a local charity and do everything they can to fund-raise for them over a six-week period annually. In 2018, Allcare pharmacies also worked with local sports teams and clubs, focusing on ensuring that they were provided with free first aid kits to help them to look after their players’ welfare.

One of the Group’s national multi-year sponsorships is with CROSS, a cancer research charity, which organises a week-long cycle around Ireland to raise funds. Staff train for the event together and take part in the round Ireland cycle every year.

Principle Four – Embed effective risk management, considering both opportunities and threats, throughout the organisation

The Directors have overall responsibility for the Group’s system of internal control and for reviewing its effectiveness. This system is designed to help the Group meet its business objectives by appropriately managing, rather than eliminating, the risks to those objectives. Through the activities of the Audit, Risk and Compliance Committee, the effectiveness of these internal controls is regularly reviewed.

The Company’s Risk Management Policy is designed to provide the framework to identify, assess, monitor and manage the risks associated with the Group’s business. The principal risks and uncertainties facing the Group are also described in the Admission Document.

The Board adopts practices designed to identify areas of business risk and to effectively manage those risks in accordance with the Company’s risk appetite. The Group recently engaged Deloitte, as an independent advisor, to assist it in a review of its risk identification and reporting structures and the population of a risk appetite statement to ensure a clear and comprehensive approach to risks within the business.

In addition, the Group recently appointed a new Head of Internal Audit who will meet with the Audit, Risk and Compliance Committee on a regular basis to monitor the adequacy of the Group’s internal control systems. The Audit, Risk and Compliance Committee also meets with and receives reports from the external auditors. The Chairman of the Audit, Risk and Compliance Committee reports to the Board on all significant issues considered by the Committee. Further details of the terms of reference of the Audit, Risk and Compliance Committee are available here.

The Board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that the Company’s objectives and activities are aligned with the risks and opportunities identified by the Board. The Company operates a Group-wide risk register which is reviewed and updated on a regular basis and is presented to the Audit, Risk and Compliance Committee where they consider the appropriateness of the risk identified and the mitigating action taken by the executive on a risk by risk basis focusing on those deemed most critical.

Where necessary, the Board draws on the expertise of appropriate external consultants to assist in dealing with or mitigating risk.

Principle Five – Maintain the Board as a well-functioning, balanced team led by the Chairman

The Board has a collective responsibility and legal obligation to promote the interests of the Company and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the Chairman.

The Chairman is responsible for the effective leadership, operation and governance of the Board and its Committees. He ensures that all Directors contribute effectively in the development and implementation of the Company’s strategy whilst ensuring that the nature and extent of the significant risks the Company is willing to embrace in the implementation of its strategy are determined and challenged.

The Chief Executive Officer is responsible for the management of the Group’s business and for implementing the Group’s strategy.

As of the date of this document, the Board consists of 9 Non-Executive Directors, including 3 independent Non-Executive Directors, and 3 Executive Directors. The Board has determined that Paul Hogan, Heather Ann McSharry and Sue Webb are independent in character and judgement and that there are no relationships or circumstances which could materially affect or interfere with the exercise of their independent judgement.

The Board believes this combination of Executive and Non-Executive Directors allows it to exercise objectivity in decision making and proper control of the Group’s business and that this composition is appropriate in view of the size and requirements of the Group’s business.

Biographies for each of the directors are available here.

Each Board member commits sufficient time to fulfil their duties and obligations to the Board and the Company and expectations in terms of time commitment are clearly set out in the terms of appointment of all Non-Executive Directors.

The Board has also established an Audit, Risk and Compliance Committee, a Nominations Committee and a Remuneration Committee and details of their terms of reference are available here.

In early 2019, the Board appointed Deloitte to carry out an independent review of the Board’s reporting structure. The review found that certain enhancements could be made to the scope of the information provided to the Board and that historically the information reviewed by the Board has been financially focused.

In light of this, the Board, with the assistance of the Company Secretary, is working on putting in place an annual board reporting calendar and a more formal board reporting process which will include non-financial metrics.

Principle Six – Ensure that between them the Directors have the necessary up to date experience, skills and capabilities

Full details of the members of the Board and their relevant experience are set out here. The Directors believe that the Board has significant industry, financial, public markets and governance experience, possessing the necessary mix of experience, skills, personal qualities and capabilities to deliver the strategy of the Group for the benefit of shareholders over the medium to long-term.

In early 2019, the Board engaged Deloitte to carry out an independent review of Board Structure and Composition. This detailed review focused on the skills and experience of each Board member and identified areas where the collective Board composition lacked certain attributes and diversity. Following this review, the Chairman engaged organisational consultants, Korn Ferry, to assist with the search for additional independent non-executive directors for the Board who would possess the skills identified as being under-represented on the Board. The outcome of this process saw the appointment of Paul Hogan, Heather Ann McSharry and Sue Webb as new Independent Non-Executive Directors ensuring a solid independent representation on the Board.

In addition, the Board engaged external advisers including lawyers, accountants, a nominated adviser and Euronext Growth Advisor and brokers in accordance with fundraising and normal legal and financial processes associated with being a company admitted to trading on AIM and Euronext Growth. The Board is kept abreast of key developments regarding corporate governance and AIM and Euronext Growth regulation by its nominated adviser and Euronext Growth Advisor and legal advisers.

The Company’s lawyers provide updates on relevant legal and governance issues with the Company’s nominated adviser and Euronext Growth Advisor providing the Board with training on the AIM Rules and Euronext Growth Rules (as applicable) and refresher training as and when required.

The Company Secretary also helps keep the Board up to date on corporate governance developments and liaises with the nominated adviser and Euronext Growth Advisor on areas of AIM and Euronext Growth Rules requirements. The Company Secretary has frequent communication with the Chairman and is available to other members of the Board if required. The Directors have access to the Company’s nominated adviser and Euronext Growth Advisor, Company Secretary, lawyers and auditors as and when required and are able to obtain advice from other external bodies when necessary.

Principle Seven – Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

The Board believes that, in addition to dealing with any matters as they arise, it is appropriate to carry out a formal evaluation of the performance of the Board each year. This is intended to ensure that the Board remains effective, well-informed and able to make high quality and timely decisions for the benefit of all stakeholders of the Group.

The Board has recently put a formal Annual Performance Evaluation Procedure in place. As part of the annual evaluation process, the performance of the Board as a whole, Board processes, its committees, the Chairman, and individual directors on an individual basis shall be assessed. The Board will conduct a self-evaluation of its performance on an annual basis and a separate external evaluation of the Board will be facilitated at least every three years. The Chairman is responsible for overseeing the annual evaluation process.

The Annual Performance Evaluation Procedure includes an evaluation of:

  • the composition and structure of the Board, to include balance of skills, experience and knowledge on the Board;
  • the Boards’ diversity, to include gender, social and ethnic backgrounds, and cognitive and personal strengths;
  • independence of the Board and individual directors;
  • how the Board works together as a unit to achieve objectives and fulfil responsibilities;
  • how the Board discharges its roles and responsibilities;
  • Board processes, to include effectiveness of meetings, agendas, forward planning and reporting;
  • the Chairman’s leadership style and approach;
  • performance of committees; and
  • individual Directors’ performance and ability to contribute effectively and ongoing commitment to their role as Director and, if relevant, committee members.

    In addition to the Annual Performance Evaluation Procedure, the Board has also prepared a detailed Succession Plan to ensure that the Board can ensure continuity of relevant skills and independence on the Board in the future.

    Principle Eight – Promote a corporate culture that is based on ethical values and behaviours

    The Directors are committed to ethical values and behaviours across the Board and the Company as a whole.

    The Directors are mindful of the industries that the business operates in and take all issues of ethical behaviours seriously. The Schedule of Matters Reserved for the Board includes an obligation on the Board to:

    Embody and promote a corporate culture that is based on sound ethical values and behaviours and use it as an asset and a source of competitive advantage; and establish a framework for setting, promoting, monitoring and assessing culture.

    The Company intends to engage the services of an external service provider to help the Group identify, define and communicate its corporate culture throughout the organisation and also to its stakeholders.

    Principle Nine – Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

    The Board retains ultimate accountability for good governance and is responsible for monitoring the activities of the executive team. The Chairman has overall responsibility for corporate governance and for promoting high standards throughout the Company. He leads and chairs the Board, ensuring that committees are properly structured and operate with appropriate terms of reference, ensures that performance of individual Directors, the Board and its committees are reviewed on a regular basis, leads in the development of strategy and setting objectives, and oversees communication between the Company and its shareholders.

    The Chief Executive Officer provides coherent leadership and management of the Company, leads the development of objectives, strategies and performance standards as agreed by the Board, monitors, reviews and manages key risks and strategies with the Board, ensures that the assets of the Company are maintained and safeguarded, leads on investor relations activities to ensure communications and the Company’s standing with shareholders and financial institutions is maintained.

    The Non-Executive Directors contribute independent thinking and judgement through the application of their external experience and knowledge, scrutinise the performance of management, provide constructive challenge to the Executive Directors and ensure that the Company is operating within the governance and risk framework approved by the Board.

    The Company Secretary is responsible for providing clear and timely information flow to the Board and its committees and supports the Board on matters of corporate governance and risk.

    The Board is supported in its function by the Audit, Risk and Compliance Committee, the Nominations Committee and the Remuneration Committee and each committee has clearly defined terms of reference which are available here.

    Principle Ten – Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

    The Board recently conducted a review of its relevant stakeholders and those identified, and the methods of communicating with them, are set out under Principle 3 above. The Company has also recently appointed a new Director of Investor Relations and Corporate Development who will manage investor relations and shareholder communications on behalf of the Group.

    The Group has also put in place an Investor Relations Policy which will ensure that all communications with Shareholders are dealt with in a fair and transparent manner. The Board views the Company’s Annual Report and Accounts as well as its half year report as key communication channels through which progress in meeting the Group’s objectives and updating its strategic targets can be given to all Shareholders.

    In addition, the Board uses the AGM as a primary mechanism to engage with Shareholders and both to give information and receive feedback about the Company and its progress. The Company has also recently implemented a “Significant Votes Against a Resolution Procedure” which will ensure that where 20% or more of votes have been cast against the Board’s recommendation for a resolution at a general meeting of shareholders, the Board will engage with shareholders and seek to understand their views in relation to the significant vote against.

    July 2019