Valereum Plc (“VLRM”) – Statement of Compliance with the QCA Corporate Governance Code
Valereum plc (“Valereum” or the “Company” has adopted the Quoted Companies Alliance Corporate Governance Code 2018 (the “QCA Code”), the corporate governance code tailored for small and mid-size quoted companies and considers this to be appropriate given the nature of Valereum’s activities and the size of the Company.
The Board is committed to maintaining high standards of corporate governance and considers that a strong corporate governance foundation is essential in delivering shareholder value. The Board has governance procedures and policies that are considered appropriate to the nature and size of the company and its subsidiaries.
The QCA Code is constructed around ten broad principles. Valereum seeks to adhere to these principles to the highest possible level.
Set out below is an explanation of how the Company currently complies with the principles of the QCA Code and, to the extent applicable, those areas where the Company’s corporate governance structures and practices differ from the expectations set out in the QCA Code.
Annual updates will be provided on the Company’s compliance with the QCA code.
Principle 1: Establish a strategy and business model which promote long-term value for shareholders
The Board is committed to delivering long-term value for Valereum’s shareholders. The Board conducts an annual review of the Group’s strategy, alongside regular discussions on progress against the business’ strategic aims.
The Group’s business model, strategy and key developments during the year are discussed in more detail in the Chairman’s Statement and Director’s Report in the Financial Statements each year and in ad hoc shareholder updates.
Principle 2: Seek to understand and meet shareholder needs and expectations
The Group is committed to open and ongoing engagement with all its shareholders on the business’ performance and strategy and maintaining positive relationships with shareholders is important to the Board.
The Chair of the Board is responsible for ensuring that appropriate methods of communication are established between the executive directors and shareholders, ensuring shareholders’ views and feedback are shared with the Board.
The Board are committed to holding ad-hoc meetings to discuss the Group’s performance and to understand shareholder needs and expectations.
The Group ensures that any price sensitive information is released to all shareholders at the same time in accordance with AQUIS Stock Exchange requirements. Updates to the market are published via the regulatory news service (“RNS”) on matters of material substance and/or a regulatory nature. In conjunction with the Group’s brokers, RNS announcements will be distributed in a timely fashion to ensure shareholders are able to access material information on the Group’s progress.
The Group’s website (www.valereum.gi) has a section for investors which is kept updated to contain all publicly available financial information and news on the Group. Our shareholders also have the opportunity to ask questions throughout the year through a dedicated investor relations email address.
The Annual General Meeting is an important opportunity for the Board to engage with shareholders. The Notice of AGM is sent to shareholders at least 21 days before the meeting. The Chair of the Board, together with all the other directors, wherever possible, attend the AGM and are available to answer shareholder questions.
Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long term success
The Board is committed to maintain strong engagement across all stakeholder groups and will ensure the Company’s Financial Statements provide an update each year.
Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation
A summary of the principal risks and uncertainties relating to Valereum and its business, along with how those risks are mitigated, can be found in the Strategic Report section in the Company’s Financial Statements. The Board has introduced a significantly enhanced risk management framework in January 2024.
Principle 5: Maintain the Board as a well-functioning, balanced team led by the Chair
The Company is controlled by the Board of Directors. The members of the Board have a collective responsibility and legal obligation to promote the interests of the Group. They are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the Chair of the Board.
Refer to the Statement of Directors’ Responsibilities section in the Company’s Financial Statements for further details.
Board composition
The Board consists of six directors, four of whom are full time executives and two whom are part time non-executives. The non-executive directors devote as much time as is necessary to fulfil their roles. The Group considers both of the non-executive directors to be independent.
The Board is satisfied with the balance between executive and non-executive directors. The Board considers that its composition is appropriate in view of the size and requirements of the Group’s business and the need to maintain a practical balance between executive and non-executive directors.
The Group believes that the makeup of the Board represents a suitable balance of independence and detailed knowledge of the business to ensure that it can fulfil its roles and responsibilities as effectively as possible. The executive directors are directly responsible for running the business operations and the non-executive directors are responsible for bringing independent judgement and scrutiny to decisions taken by the Board.
The Board is highly committed and experienced and is supported by a qualified executive management team which includes 4 members of the Board, the Chair, the Chief Executive Officer, the Chief Financial Officer and the Investor Relations Director.
Before undertaking the appointment of a non-executive director of the Board, the Chair establishes that the prospective director can give the time and commitment necessary to fulfil their duties, in terms of availability both to prepare for and attend meetings and to discuss matters at other times.
Board meetings
Board meetings are planned to occur not less than 4 times a year with additional meetings as and when required. The Chair is responsible for ensuring that directors receive accurate, sufficient and timely information. A scheduled meeting calendar is arranged as far in advance as possible, and ad hoc meetings are held in person or by video conference when it is necessary for the Board to discuss specific issues.
Minutes are taken of each meeting and every director is aware of the right to have any concerns minuted and to seek independent advice at the Group’s expense where appropriate. Information on the Group’s operational and financial performance is circulated to the directors in advance of meetings.
Roles and responsibilities of the Chair and the executive directors
The role of the Chair and CEO are split in accordance with best practice.
The Chair has the responsibility of ensuring that the Board discharges its responsibilities and facilitates full on constructive contributions from each member of the Board in determination of the group strategy and overall commercial objectives. The Chair oversees the running of the Board, ensuring that no individual or group dominates the Board’s decision making and ensuring the non-executive directors are properly briefed on matters. The Chair has overall responsibility for corporate governance matters in the Group and chairs the Nomination Committee.
The Board retains ultimate accountability for good governance and is responsible for monitoring the activities of the executive management team.
The CEO manages the day-to-day business activities of the Group under the executive management team ensuring that strategic and commercial objectives are met. He is accountable to the Board for the operational and financial performance of the business. The CFO is responsible for the Group’s financial controls and reporting to the Board.
The executive management team regularly engages with the CEO. The day-to-day operations of the Group are managed by the executive management team.
Board committees
The Group has established Audit, Remuneration and Nomination committees with clearly defined terms of reference which are set by the Board:
- The Audit Committee has the primary responsibility of monitoring the quality of internal controls and ensuring that the financial performance of Valereum is properly measured and reported on. The committee also considers the appropriateness of the group’s accounting policies on an annual basis. The Committee liaises with the Group’s auditors on future changes to such accounting policies.
- The Remuneration Committee reviews the performance of the executive directors and makes recommendations to the Board on matters relating to their remuneration and terms of service.
- The Nomination committee regularly reviews the structure, size and composition of the Board.
Principle 6: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
Each member of the Board brings different skills and experience to the Board and the Board Committees. The Board is satisfied that there is sufficient diversity in the Board structure to bring a balance of skills, experience, independence and knowledge to the Group
The Board conducts an annual review of its composition to ensure there is adequate diversity to allow for its proper functioning and that the Board works effectively together as a unit. When a new appointment to the Board is to be made, consideration will be given to the particular skills, knowledge and experience that a potential new member could add to the existing Board composition.
The non-executive directors hold senior positions with other companies ensuring that their knowledge is continuously refreshed. Specific training will be provided to the Board by the Group when required to support the directors existing skill sets.
The Board has access to external advice, including the company’s solicitors were required. The Company’s corporate advisor is available to provide guidance and additional training to the Board on specific regulatory matters as required.
Principle 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
The effectiveness of the Board, individual directors and senior management is evaluated on an ongoing basis as part of the Board’s ongoing review of the business.
In line with the requirements of the QCA code, an annual evaluation process has been implemented, led by the Chair, which considers the effectiveness of the Board, its committees and individual directors, highlighting relevant areas for improvement.
The Board’s effectiveness is also assessed in an informal manner by the Chair on an ongoing basis. The Chair has been tasked with assessing the individual contributions of each of the members of the team to ensure that their contribution is relevant and effective, they are committed and, where relevant, can continue to be considered independent.
The Nomination Committee is responsible for considering succession planning and advising the Board accordingly.
Principle 8: Promote a corporate culture that is based on ethical values and behaviours
The Board places significant importance on the promotion of ethical values and behaviours within the Group and takes ultimate responsibility for ensuring these are promoted and maintained throughout the organisation and that they guide the Group’s business objectives and strategy.
Valereum is an innovative and forward thinking business where employees are encouraged to share their views, contribute to decision making, challenge behaviours and improve processes to make a positive contribution to business success. The Group has a diverse workforce where inclusion is key to building a high performing, engaged and successful team.
The Group has adopted, and will operate as applicable, a code for Directors and applicable employees’ dealings in securities in accordance with Rule 4.1 of the Aquis Stock Exchange Growth Market Rulebook.
All group policies are available to the employees through the Group’s SharePoint.
Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision making by the Board
The Board has overall responsibility for promoting the success of the Group.
Further detail on Board and committee roles and responsibilities are described above under ‘Principle 5: Maintain the Board as a well-functioning balanced team led by the Chair’.
The Board has a formal schedule of matters reserved to it, including the approval of annual financial plans and the review of performance against these plans, the Group’s strategy and objectives, and the treasury and risk management policies.
The Board reviews its governance framework on a regular basis to ensure it is fit for purpose and carries out a review of the Committees’ terms of reference during each financial year.
Principle 10: Communicate how the company is performing by maintaining a dialogue with shareholders and other relevant stakeholders
The Group places a strong emphasis on the standards of good corporate governance and maintaining an effective engagement with its shareholders and key stakeholders, which it considers to be integral to longer term growth and success and it aims to ensure that all communications concerning the Group’s activities are fair, balanced and understandable.
Communications with shareholders and communications with other relevant stakeholders are described in detail above under ‘Principle 2: Seek to understand and meet shareholder needs under expectations’ and ‘Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long term success’ respectively.
The Group’s website sets out details of the group and its activities, regulatory announcements and press releases, annual and half year reports, AGM notices, outcome of AGM votes and other governance materials required by the Aquis Stock Exchange Growth Market Rulebook and the QCA code.
THIS INFORMATION WAS LAST REVIEWED AND UPDATED ON 2 FEBRUARY 2024.
