Feedback PLC Governance

The Quoted Company Alliance Code (The QCA Code)

The directors are fully supportive of good corporate governance and have chosen to apply The QCA Code. The reasons for this include: it helps to put into practice a worthwhile, effective and flexible governance model; it encourages positive engagement with all our stakeholders and it is one of the foundations of a sustainable corporate growth strategy.
The QCA Code is constructed around ten broad principles and a set of disclosures. Each principle, together with its application (as set out by QCA) and what we do and why (Implementation) is set out below:

Deliver Growth

Principle 1: Establish a strategy and business model which promotes long-term value for shareholders.

Application: The board must be able to express a shared view of the company’s purpose, business model and strategy. It should go beyond the simple description of products and corporate structures and set out how the company intends to deliver shareholder value in the medium to long-term. It should demonstrate that the delivery of long-term growth is underpinned by a clear set of values aimed at protecting the company from unnecessary risk and securing its long-term future.

Implementation: Feedback’s strategy is explained fully within the Strategic Report section on pages 5 – 7 of the Company’s annual report and accounts for the year ended 31 May 2017. However, due to the fast-moving and innovative industry in which the Company operates in, its strategy may be subject to change.

The Company is focused on the following areas:

  • Developing and marketing its Cadran Research PACS, especially in the Asian market.
  • Developing and marketing its TexRAD® Research software, especially through worldwide distributorships.
  • Developing and marketing its TexRAD® Lung CE marked product.

The key challenge in implementing the strategy is deploying the Company’s limited resources in the most effective way to deliver growth.

Principle 2: Seek to understand and meet shareholder needs and expectations.

Application: Directors must develop a good understanding of the needs and expectations of all elements of the company’s shareholder base. The board must manage shareholders’ expectations and should seek to understand the motivations behind shareholder voting decisions.

Implementation: Feedback encourages two-way communication with its investors and responds quickly to queries received. The Company has an email address (IR@fbk.com) where shareholders can communicate with the Board. The Chairman communicates regularly with major shareholders and ensures that their views and concerns are fully communicated back to the Board and management team. The Board is available at the Company’s Annual General Meetings and general meetings to speak to shareholders enabling the directors to ensure they have a sound understanding of shareholder sentiment. Should voting decisions not be in line with Board’s expectations then the Board will liaise with shareholders in order to address any issues.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success.

Application: Long-term success relies upon good relations with a range of different stakeholder groups both internal (workforce) and external (suppliers, customers, regulators and others). The board needs to identify the company’s stakeholders and understand their needs, interests and expectations. Where matters that relate to the company’s impact on society, the communities within which it operates or the environment, have the potential to affect the company’s ability to deliver shareholder value over the medium to long-term, then these matters must be integrated into the company’s strategy and business model. Feedback is an essential part of all control mechanisms. Systems need to be in place to solicit, consider and act on feedback from all stakeholder groups.

Implementation: Feedback is committed to being a responsible employer in all aspects of our business. This is evidenced and underpinned by our vision and values and in particular: satisfied customers, operational excellence, improving product design and innovation and an engaged workforce. We are focused on our employee wellbeing and endeavour to respond swiftly to our prestigious customer base.

Through monitoring its customer base, the Company is able to identify its key relationships on which the business relies and is able to ensure feedback is obtained from those relevant persons. It obtains this feedback by regular dialogue and face to face meetings. Products have been enhanced as a result of evaluating customers’ comments.

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation.

Application: The board needs to ensure that the company’s risk management framework identifies and addresses all relevant risks in order to execute and deliver strategy; companies need to consider their extended business, including the company’s supply chain, from key suppliers to end-customer.

Setting strategy includes determining the extent of exposure to the identified risks that the company is able to bear and willing to take (risk tolerance and risk appetite).

Implementation: The principle risks and uncertainties can be found on pages 5-6 of the Company’s annual report and accounts for the year ended 31 May 2017.

The Board considers business risk at every Board meeting (held approximately 10 times a year). This includes risks associated with its key customers and suppliers, ongoing trading performance and budgets. The risk register is prepared and updated by the management team and is reviewed by the Board at board meetings. The management team hold regular meetings (at least three a month) when they review the risk register and ensure that it is updated and accurately reflects the risks to the Company. The management team consists of all the Company’s managers. The risks identified are evaluated into cause, impact on the Company, likelihood and seriousness, mitigating actions, timelines and responsibilities.

Maintain a dynamic management framework

Principle 5: Maintain the Board as a well-functioning, balanced team led by the chair.

Application: The board members have 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 chair of the board. The board (and any committees) should be provided with high quality information in a timely manner to facilitate proper assessment of the matters requiring a decision or insight. The board should have an appropriate balance between executive and non-executive directors and should have at least two independent non-executive directors. Independence is a board judgement. The board should be supported by committees (audit, remuneration, nomination) that have the necessary skills and knowledge to discharge their duties and responsibilities effectively. Directors must commit the time necessary to fulfil their roles.

Implementation: The company is controlled by the Board of Directors. The Board is led by the Chair, Dr Alastair Riddell. Dr Riddell is currently the Executive Chairman, but this is only a temporary measure pending a Chief Executive being appointed. The Chief Financial Officer, Mr Lindsay Melvin, has increased duties and responsibilities whilst the Company is in the process of appointing a Chief Executive. The Company currently has two non-executive directors, therefore providing a suitable balance of executive and non-executive directors. The two non-executive directors are: Tim Irish, who is a Professor of Practice at Kings College London, as well as a board member of Bournemouth University. Tim has worked in the life sciences industry for thirty years and currently holds a number of non-executive positions in healthcare and technology related entities. Simon Sturge is Chief Operating Officer at Merck Healthcare and a member of their Healthcare Executive Committee.  He is an experienced healthcare executive in the UK and has built a very strong reputation, not only in the biotechnology industry but also in the investment community.

The Board receive monthly board papers which cover operational, financial and key stakeholder up to date information. Board minutes are recorded and approved at the next meeting. All Board members have held positions of responsibilities on other boards and are well versed in their roles and responsibilities. All Directors have direct access to the advice and services of the Company’s professional advisers, enabling them access to all required information in the furtherance of their duties.

The Board is supported by audit and remuneration committees as outlined on page 11 of the Company’s annual report and accounts for the year ended 31 May 2017.

Principle 6: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities

Application: The board must have an appropriate balance of sector, financial and public markets skills and experience, as well as an appropriate balance of personal qualities and capabilities. The board should understand and challenge its own diversity, including gender balance, as part of its composition. The board should not be dominated by one person or a group of people. Strong personal bonds can be important but can divide a board. As companies evolve, the mix of skills and experience required on the board will change, and board composition will need to evolve to reflect this.

Implementation: Given the small size of the Company, it is not considered by the Board to be appropriate to have a formal Nomination Committee. However, suggested changes to the Board are carefully evaluated by all Board members, and all appointments are made against objective criteria, on merit, ensuring that the Board has the appropriate skill set and experience, as a whole.

The members of the Board have been members of a wide variety of boards and are highly skilled and experienced to perform their duties. Biographies of the board members can be found in the latest annual report and the Company website (https://fbkmed.com/about-us/team/)

The directors keep their skills up to date through events they attend, media they read or listen to and regular dialogue with other skilled professionals.

Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continual improvement.

Application: The board should regularly review the effectiveness of its performance as a unit, as well as that of the committees and the individual directors. The board performance review may be carried out internally or, ideally, externally facilitated from time to time. The review should identify development or mentoring needs of individual directors or the wider senior management team. It is healthy for membership of the board to be periodically refreshed. Succession planning is a vital task for boards. No member of the board should be indispensable.

Implementation: The members of the Board are relatively new to the Company and no-one has served on the Board for more than three years. During 2018, four directors have resigned from the Board and  three have joined. It is not, therefore, appropriate to conduct any formal board evaluation at present but the Board intend to review both its performance and that of its individual members, annually, commencing in 2019. The non-executive directors are currently responsible for informally reviewing the directors’ performance and highlighting any issues identified.

In addition, one-third of the Board is required to retire and seek re-election at the AGM, in accordance with good governance.

The Board is seeking to appoint a new Chief Executive and the Chief Financial Officer joined the Board in March 2018.  The Board will continue to be mindful of succession planning

Principle 8: Promote a corporate culture that is based on ethical values and behaviours.

Application: The board should 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. The policy set out by the board should be visible in the actions and decisions of the chief executive and the rest of the management team. Corporate values should guide the objectives and strategy of the company. The culture should be visible in every aspect of the business, including recruitment, nominations, training and engagement. The performance and reward system should endorse the desired ethical behaviours across all levels of the company. The corporate culture should be recognisable throughout the disclosures in the annual report, website and any other statements issued by the company.

Implementation: The Company has not yet defined a formal set of ethical values and behaviours. However, the Company endorses a ‘no-blame’ culture and has an ‘open door’ policy with regular staff meetings and management meetings. Management conduct regular one-to-one meetings with all staff, through which they are able to support staff in ensuring the Company’s values are being recognised and reflected and assist in any staff training needs. The Board are committed to developing a high standard in both ethical behaviours and values and are very supportive of employee wellbeing.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision making by the board.

Application: The company should maintain governance structures and processes in line with its corporate culture and appropriate to its size, complexity, capacity and tolerance for risk. The governance structures should evolve over time in parallel with its objectives, strategy and business model to reflect the development of the company.

Implementation: The Company’s corporate governance statement can be found on pages 11 – 13 of its annual report and accounts for the year ended 31 May 2017 and provides details on corporate governance structures and the rationale for their implementation.

Build Trust

Principle 10: Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.

Application: A healthy dialogue should exist between the Board and all of its stakeholders, including shareholders. To enable interested parties to come to informed decisions about the company. In particular, appropriate communication and reporting structure should exist between the board and all constituent parts of its shareholder base. This will assist: the communication of shareholders’ views to the board; and the shareholders’ understanding of the unique circumstances and constraints faced by the company. It should be clear where these communication practices are described (annual report or website).

Implementation: The Company encourages two-way communication with its stakeholders and responds quickly to queries received. The chair talks regularly via an investor information channel, either by a recorded phone interview or by a face to face interview. RNS announcements are regularly produced to provide up to date operational as well as statutory and board news. General meetings are held where the Board is present to speak formally as well as informally to shareholders. The communications issued are available on the website.

The Company retains a broker and PR advisers, contact details of whom are included on announcements. Shareholders and stakeholders are able to contact the Company’s advisers to arrange meetings with management when convenient. The Board also recognises the AGM as an important opportunity to meet private shareholders. The Directors are available to listen to the views of shareholders informally, immediately following the AGM.

The annual report and accounts and the notices of all general meetings for the last five years are contained on the Company’s website at https://fbkmed.com/plc-landing-page/reports-and-presentations/

In the past the Company has not provided the outcomes of all votes at any general meeting of the Company in a clear and transparent manner but it is intended that such information will be provided in future

This disclosure was last updated on 19 September 2018.