Compliance With the 2018 UK Corporate Governance Code

The 2018 UK Corporate Governance Code published by the Financial Reporting Council (the “Code”) sets out standards of good practice in relation to: board leadership and company purpose; division of responsibilities; composition, succession and evaluation; audit, risk and internal control; and remuneration.

The Board is supportive of the standards set by the Code. This section describes how the Board has applied the Principles of the Code. Throughout the financial year and up to the date of this report, the Company has complied with the Provisions of the Code, with the exception of the following:

Provision 20 – Appointment of Non-Executive Director

An external search process was not used in connection with the appointment of Jerome Lande. Mr Lande is a representative director of Scopia Management LP (“Scopia”), a significant shareholder of the Company. The Company was therefore not compliant with Provision 20 of the Code in respect of Mr Lande’s appointment. An external search process was used for the appointments of Joanna Le Couilliard, Mark Stejbach and Juliet Thompson. Further details can be found in the Nomination and Governance Committee Report on pages 86 to 87.

Provision 21 – Annual performance evaluation

There were a number of new appointments to the Board in 2021, with new Board members attending their first Board meeting in April 2021 (virtually) and their first in-person meeting in November 2021. As a result of these changes to the Board, it was agreed to defer the annual evaluation process to allow the new Directors to complete their induction process and develop their understanding of the business. Dr Tracy Long of Boardroom Review Limited has been appointed to undertake a full external evaluation; the external evaluation process is underway and will be completed in the first half of 2022.

The Company was therefore not compliant with Provision 21 of the Code as it did not complete the annual review of its performance during the year.

Provision 24 – Audit Committee composition

In November 2020, Graham Hetherington was appointed Chair of the Board. Mr Hetherington, who was the designated member of the Audit Committee with recent and relevant financial experience and competence in auditing and accounting, remained a member of the Audit Committee until March 2021, when Joanna Le Couilliard and Juliet Thompson were appointed as members. Both Ms Le Couilliard and Ms Thompson are considered to have recent and relevant financial experience and competence in auditing and accounting.

Jerome Lande was appointed as a member of the Audit Committee in March 2021. Mr Lande is a partner of Scopia Capital Management LP (“Scopia”), a significant shareholder of the Company; he is therefore not considered independent under Provision 10 of the Code. Notwithstanding this, given Mr Lande’s considerable financial and investment experience in the pharma sector, it was agreed that he would bring significant skills and expertise to the Audit Committee and would therefore be appointed a member of the Committee. A Relationship Agreement between the Company and Scopia was in place throughout the year to manage any conflicts of interest that may arise from Mr Lande’s connection with Scopia. Please refer to the Directors’ Report on page 114 for further information on the Relationship Agreement.

The Company was therefore not compliant with Provision 24 of the Code during the year as the Chair of the Board was a member of the Committee between January and March 2021 and Mr Lande, who is not considered independent, was a member of the Committee from March 2021 onwards.