Corporate Governance

 

From 9th January 2023, following the Yourgene Health General Meeting, the Board structure was rationalised such that the Board Committees are now comprised as follows:

Name of Committee
Chair of Committee
Other Member(s) of Committee
Audit and Risk
Mary Tavener
Dr John Brown and Andy Leeser
Nominations
Dr John Brown
Other Non-executives in attendance
Renumeration
Dr John Brown
Other Non-executives in attendance

Mary Tavener is Senior Independent Director (SID) and prior to Mary’s appointment John Brown was the SID

Corporate Governance Statement – For the year ended 31 March 2022

The Board recognises the importance of sound corporate governance and has elected to implement the
Corporate Governance Code for Small and Mid-Size Quoted Companies, as published by the Quoted
Companies Alliance (the QCA Code), to the extent it is considered appropriate in light of the Group’s size,
stage of development, risk profile and resources. The Company is also subject to the UK City Code on
Takeovers and Mergers. Further information on the Group’s governance practices, the business model and
strategy can be found in the Company Overview, Strategic Report and Governance sections in this Annual
Report and Accounts.
This Governance Statement was last reviewed and updated on 28 June 2022.

Yourgene Health | Our Company | Manchester Headquarters
QCA Logo
QCA Principle
Application
How Company Complies
Departure & Reason
1. Establish a strategy and business model which promote long-term value for shareholders
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.
Yourgene develops molecular diagnostic products and services that will have a positive impact on human health and deliver long-term shareholder value. The Group has a clear strategy to increase penetration of sales in the markets in which it operates, to expand the geographic markets in which it operates and to launch new products and services into these markets. This strategy is being driven organically, and through acquisitions where target companies are found which support one or more of these four strategic ‘pillars’.

The Group is currently focused on delivering high-quality genomic services, products and technologies to support a growing international customer base of laboratories and healthcare professionals. The Group provides customers with clinical and research genetic testing services across different fields such as reproductive health, oncology and infectious diseases, from its facilities in the UK and Taiwan. In addition to these genomic services the Group manufactures a range of reagents and instrumentation to support these service offerings and also to enable third parties to offer genomic testing services through their own laboratory and clinical networks. Yourgene has also established a contract development partnership programme for customers, building on our expertise in developing in vitro diagnostic products. In June 2020, Yourgene launched its first infectious disease product which is a COVID-19 diagnostic test, Clarigene™ and at the same time launched an in-house COVID-19 testing service.

The IONA® Test is a CE-IVD marked test for prenatal screening which enables clinical laboratories around the world to establish their own quality assured non-invasive prenatal screening service. In other regions we offer the Sage™ Prenatal Screen which provides a greater clinical depth of data that is reported and allows labs and clinics greater flexibility with the analysis work package. By having these two complementary prenatal screening solutions we meet a wider scope of customer and market needs. The Group continues to expand the range of in vitro diagnostic technologies into different fields as demonstrated by the August 2020 acquisition of Coastal Genomics Inc of Canada (now renamed Yourgene Health Canada Inc), after a series of other acquisitions in recent years.

None
2. Seek to understand and meet shareholder needs and expectations
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.
The Company places a great deal of importance on communicating with its shareholders. All shareholders are given at least 21 days’ notice of the Annual General Meeting and are encouraged to attend. An opportunity is provided for them to ask questions at the meeting. Throughout the year the Chairman, Chief Executive Officer and Chief Financial Officer are in regular contact with the Company’s major investors and respond to queries from private investors through an investor contact email or via the Company’s financial PR firm, Walbrook PR. The CEO is responsible for ensuring that shareholders’ views are communicated to the Board as a whole. The Group is supported by its joint brokers Singer Capital Markets and Stifel Nicolaus as well as its Nominated Adviser, Cairn Financial, and its Registrar, Link Asset Services, to further improve the quality and quantity of investor relations activities.
None
3. Take into account wider stakeholder and social responsibilities and their implications for long-term success
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 those 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.

We take seriously our responsibilities to our staff, trading partners, neighbours, the clinical, research and laboratory communities we supply and the pregnant and patient populations we support. We operate a high standard of quality management to ensure we comply with the appropriate regulations in the various territories in which we operate, and that we thoroughly investigate any occurrences which fall below our high standards so we can implement corrective and improvement actions.

Family-friendly and flexible employee policies, rigorous health, safety and environmental practices are very important additions to the quality management system in ensuring we manage our stakeholder and social responsibilities appropriately.

None
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation
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).
The environment in which we operate presents certain general risks as well as particular risks that are specific to our own circumstances, as exemplified by the Covid-19 pandemic. The Board monitors the key legal, regulatory, market, financial and operational risk areas to identify relevant risks, assess their potential impact and to develop mitigation strategies that will enable the Group to flourish. Principal risks and uncertainties are described in the appropriate section in this Annual Report and Accounts and are set out below.

The Audit and Risk Committee monitors key risks and is responsible for:

* Reviewing the Company’s external reporting process, including the financial statements, reports and announcements and the accounting policies and judgements that underline them, and making recommendations to the Board before release;
* monitoring the statutory audit of the annual accounts; and
* monitoring of the independence of the external auditors and the establishment of a policy for their use for non-audit work.

None
5. Maintain the board as a well-functioning, balanced team led by the chair
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 (e.g. 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.
The Chairman has considerable experience of Boards operating in the AIM environment and ensures the Board has an appropriate composition of skills. The Board now comprises five Non-executive Directors and five Executive Directors.

The role of the Board

The Directors collectively bring a broad range of business experience to the Board which is considered essential for the effective management of the Company. The Board is responsible for strategic and major operational issues affecting the Company. It reviews financial performance, regulatory compliance, monitors key performance indicators and will consider any matters of significance to the Company, including corporate activity. Certain matters can only be decided by the Board and these are contained in the schedule of matters reserved to the Board. The day-to-day management of the Company’s business is delegated to the Chief Executive Officer and Executive Directors of the Company. During the reporting period to 31st March 2022 the Board held nine meetings and there were two Audit and Risk Committee meetings. All Directors eligible to participate attended all meetings.

The composition of the Board and division of responsibilities

The Board currently consists of a Non-executive Chairman, a Vice Chairman, three further Non-executive Directors, a Chief Executive Officer and four other Executive Directors. The composition of the Board ensures that no single individual or group of individuals is able to dominate the decision-making process. Board composition remains under review going forward to move towards QCA compliance. Details of the individual Directors and their biographies are set out in this Annual Report and Accounts and on the website www.yourgene-health.com

Roles of Chairman and Chief Executive Officer

The roles of the Chairman and the Chief Executive Officer are separate to ensure a clear division of authority and responsibility at the most senior level within the Company.

Whilst this does not meet QCA guidance in this area the Board believes this is compensated by the breadth of skills, geographic coverage and experience that is represented and that there is adequate challenge to the Executives with this structure. Board composition is monitored and it is intended to migrate to a best practice structure as the business evolves.
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
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 also 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 change.
Directors are provided with access to the Company’s Nominated Adviser and Corporate lawyers who provide briefings on necessary legislation and regulations from time to time. Directors are supported if required to ensure their skills remain up to date, including training and continuing professional development and participation in peer networks via the Institute of Directors, the Quoted Companies Alliance and external advisers.
None
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
The board should regularly review the effectiveness of its performance as a unit, as well as that of its 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 become indispensable.
The Board to date has operated an informal performance review and succession planning process but is committed to implementing formal procedures. The focus is currently on psychometric profiling and performance management of the senior management team which may be extended to the Board in due course.
The Company has yet to carry out a formal assessment of board effectiveness.

The board will keep this under consideration and put in place procedures when it is felt appropriate.

8. Promote a corporate culture that is based on ethical values and behaviours
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 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.
The Board sets great store by its values-based corporate culture and ethical reputation which is crucial to the Group’s reputation in the highly regulated field in which it operates. The Company manages a highly regarded quality management system which is used to monitor any complaints or deviations from expected behaviours. The Board monitors any significant non-compliance matters that may arise. In addition, ethical considerations are factored into debates on Board matters as and when this is relevant. Recruitment practices are heavily focused on recruiting people with similarly strong values, and the Group’s senior management team are currently re-evaluating the values, behaviours and communication practices to ensure they remain fit-for-purpose as the Group continues to expand.
None
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board
The company should maintain governance structures and processes in line with its corporate culture and appropriate to its: • size and complexity; and • capacity, appetite 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.
The Company has adopted and operates a share-dealing code governing the share dealings of the Directors and applicable employees to ensure compliance with the AIM Rules.

Chairman: the Chairman is responsible for the leadership of the Board and ensuring the effective running and management of the Board. He is also responsible for the Board’s oversight of the Company’s affairs, which includes ensuring that the Directors receive accurate, timely and clear information, ensuring the effective contribution of the Non-executive Directors and implementing effective communication with shareholders.

Chief Executive Officer: the Chief Executive Officer is responsible for the day-to-day management and the executive leadership of the business. His other responsibilities include the progress and development of objectives for the Company, managing the Company’s risk exposure, implementing the decisions of the Board and ensuring effective communication with shareholders and regulatory bodies.

Non-executive Directors and independence: Non-executive Directors are required to allocate sufficient time to the Company to discharge their responsibilities effectively. The Board considers the Non-executive Directors to be sufficiently independent to provide appropriate oversight and scrutiny.

Re-election of Directors: in accordance with the Company’s Articles of Association all serving Directors are subject to re-election every three years, and a minimum of one-third of Directors are subject to re-election each year. Newly appointed Directors are re-elected at the first Annual General Meeting after their appointment.

Board meetings and information to the Directors: before each Board meeting the Directors receive, on a timely basis, comprehensive papers and reports on the issues to be discussed at the meeting. In addition to Board papers, Directors are provided with relevant information between meetings. The Board has regular scheduled meetings which occur at least quarterly and often monthly.

Board committees and Senior Independent Director

The Board has three committees, namely the Audit and Risk Committee and a Remuneration Committee. It had identified a Senior Independent Director (SID) until that individual's transition to Chairman in July 2022. Arrangements for new Senior Independent Director are under review.

Audit Committee: the Audit and Risk Committee is chaired by Mary Tavener with Adam Reynolds and Dr John Brown as members. Executive Directors, senior financial management and external auditors are invited to attend when their attendance is helpful to the Committee’s work. The Committee activities are reported to the Board and are described in the latest Annual Report & Accounts.

Nominations Committee: due to the size of the Board and the infrequency of senior appointments the Nominations Committee meets on an ad hoc basis. The Committee has delegated responsibility from the Board for identifying and appointing Executive Directors and is chaired by the Chairman with other Non-executive Directors participating where their particular skills and experience are deemed relevant.

Remuneration Committee: The Committee has delegated responsibility from the Board for developing the remuneration policy of the Company and for setting the remuneration of its Executive Directors and senior managers. Adam Reynolds chairs the Committee which is also attended by Dr John Brown and other Non-executive Directors where their experience and skills are deemed relevant. The Committee’s activities are reported to the Board.

Senior Independent Director: Dr John Brown fulfilled the duties of the Senior Independent Director until his appointment as Chairman on 27 July 2022. His successor is currently under review. The Senior Independent Director provides an alternative contact point for Directors and shareholders for matters where they do not wish to approach the Chairman directly.

None
10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders
A healthy dialogue should exist between the board and all of its stakeholders, including shareholders, to enable all interested parties to come to informed decisions about the company. In particular, appropriate communication and reporting structures 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).
The Board communicates regularly with shareholders providing updates on Group performance to shareholders via interim and annual financial reports, trading updates, investor presentations and a regular news flow of significant developments for the Group. Governance practices are described fully in the Annual Report & Accounts and the Company’s website is maintained to be up-to-date and informative.
None