CORPORATE GOVERNANCE STATEMENT

INTRODUCTION

OBD is a public company, with a growing register of shareholders from across the globe and the Board remains mindful of the trust placed in it by institutional and retail investors, employees and other stakeholders. The Group’s corporate governance activities exist to help the Board make robust, informed decisions and to manage risk. This forms a large part of the Chairman's role in leading the Board, assisted by the other non-executive and executive directors, the Company secretary and the Group’s professional advisors. Maintaining and developing the Group’s corporate governance practice is particularly important as the Group continues to expand its international footprint.

The Board has adopted the principles of the 2018 Quoted Companies Alliance Corporate Governance Code (the “QCA Code”) to support the Company's ongoing development and operation of its governance activities. These principles focus on the pursuit of medium to long-term value for a diverse shareholder base, without stifling the Group’s entrepreneurial spirit. This page sets out how we currently apply each of the QCA Code’s ten principles, and the reasons for any current departures from compliance. The Board last reviewed the Company’s compliance with the QCA Code in January 2022.

Principle

How we comply with the QCA Code in this area

How and why we do not currently comply, if applicable

1

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

 

OBD’s strategy and business objectives are underpinned by the Group’s values: Innovative, Pioneering, Achieving Excellence, Diverse, Professional. The Group’s strategy and business model are set out in the Strategic report in the most recent Annual Report.

OBD’s approach to risk management, as well as key risks and their mitigation, is shown in the Strategic report in the most recent Annual Report. The Directors’ obligation under s172(1) to consider the long-term consequences of their decisions is also addressed in more detail in the Annual Report.

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2

Seek to understand and meet shareholder needs and expectations

The Company recognizes the importance of engaging with its shareholders and reports formally to them when its full-year and half-year results are published.

The Board also seeks to engage with shareholders to understand their needs and expectations, primarily through online and in-person meetings with the Executive Directors, both individually as required (this mainly applies to institutional investors and/or those with significant shareholdings), by webinar presentations advertised on the Group’s website and at annual and other general meetings, at which all shareholders are welcome and may ask questions of the Board.

The Non-Executive Directors may be contacted by shareholders who wish to raise matters with them, and the Chairman and other Non-Executive Directors attend meetings with institutional investors and analysts as required. Investors may contact the Company directly by emailing investor relations.

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3

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

The Board recognizes that it is responsible not only to the Company’s shareholders and employees, but to a wider group of stakeholders (including customers and suppliers) and the communities in which the Group operates. Whilst OBD still does not have direct contact with patients, the Group aims through its products and technology to improve outcomes for the public, including those who are suffering from diseases with unmet or poorly-met medical needs.

As noted in the Strategic report and s172(1) statement in the Annual Report, the Group seeks to follow best practice by:

  • Treating all stakeholders fairly;
  • Communicating openly and honestly all shareholder and stakeholder information;
  • Providing safe, secure and healthy working conditions for all employees;
  • Promoting equality, judging neither by race, nationality, religion, age, gender, disability, sexual orientation nor political opinion; and
  • Observing the laws and regulations of each country in which it operates

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4

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

The Board has implemented what it considers to be a sensible approach to risk management for a company of OBD’s size. The Group’s approach to risk management, including the maintenance of risk registers, is outlined in the Strategic report in the Annual Report.

The Group follows detailed prescribed risk assessment and management processes for its ISO-certified activities. In addition, the Board regularly considers risks relating to other areas of the business and steps taken to mitigate or reduce them.

The principal elements of the Group’s internal control system include:

  • Direct management of the day-to-day activities of the Group by the Executive Directors;
  • Clearly defined lines of responsibility and delegated authority;
  • A comprehensive system for consolidating financial results from Group companies and reporting these to the Board each month;
  • Annual revenue, cost, and capital forecasts, which are reviewed regularly during the year, regular monitoring of management accounts and capital expenditure reported to the Board, and regular comparisons with forecasts;
  • Financial control policies and procedures including hierarchical dual authorization of purchases and payments and segregation of duties;
  • Computerised quality and project management systems; and
  • Audit Committee approval of audit plans and published financial information, review of reports from the external Auditor arising from the audit and consideration of the Group’s approach to financial risk management.

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5

Maintain the board as a well-functioning, balanced team led by the chair

The Board, led by the Chairman, is responsible to the shareholders and sets the Group’s strategy for achieving long-term success. It is ultimately responsible for the management, governance, controls, risk management, direction and performance of the Group.

More information on the composition of the Board is provided here, and meeting attendance and the management of Board activities is described in more detail in the Annual Report.

All the Directors have appropriate skills and experience for the roles they perform at OBD, including as members of Board Committees.

Directors are subject to re-election at least every three years.

The Company is satisfied that the current Board is sufficiently resourced to discharge its governance obligations on behalf of all stakeholders and will consider the requirement for additional Non-Executive Directors as the Company fulfils its growth objectives.

 

All of the Non-Executive Directors offer robust challenge and support to the Executive Directors and are committed to representing the interests of all shareholders. At present, our judgement is that we have two independent Non-Executive Directors, Matthew Wakefield and David Holbrook.

This is because:

  • Stephen Diggle represents a significant shareholder (Vulpes Life Sciences Fund)

6

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

The Nomination Committee is responsible for identifying and assessing the suitability of candidates to fill vacancies on the Board, and also for assessing the appropriateness of the size and composition of the Board as the Group develops.

Directors’ skills and experience and the processes in place to ensure the Board maintains appropriate capabilities are set out in the Annual Report.

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7

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

An annual review of the effectiveness of the Board is conducted through questionnaires and interviews with the Chairman. The last evaluation process was conducted in late 2021 and the Board will use the outcomes of that process to pursue continuous improvement over the coming year.

The performance of individual executive directors is reviewed by the Remuneration Committee, with more details provided in the annual report and accounts.

The Nomination Committee is responsible for succession planning of the executive leadership team and makes recommendations to the Board for the re-appointment of any Non-Executive Directors if and when necessary. Succession planning is reviewed on an ongoing basis alongside the capability of the senior management and Directors.

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8

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

Each member of the Board acknowledges that the maintenance of an organizational culture of ethical values and behaviour is set ‘from the top down’. The Directors seek to promote and support such values and behaviour in the way they lead the Group as a whole.

The Group’s employee handbook, which is read by all employees as part of their induction, sets out in detail the Group’s values and ethical policies, including its anti-bribery, standards of business conduct, whistleblowing, equal opportunities, recruitment, health and safety, training, grievance, share dealing and other policies.

The Strategic report and s172(1) statement in the Annual Report provide further detail on the policies in place to promote and support ethical behaviour and the Group’s values, and how these align with the Group’s objectives, strategy and business model.

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9

Maintain governance structures and processes that are fit for purpose and support good decision-making by the board

The governance structure of the Board and its subcommittees, their terms of reference and matters for which they are responsible and the governance responsibilities of directors who undertake specific roles are shown in more detail here.

The appropriateness of the Board’s structures and processes are reviewed through the ongoing Board evaluation process and on an ad hoc basis by the Chairman together with the other Directors, and these will evolve in parallel with the Company’s objectives, strategy and business model as the Company develops.

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10

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

The Directors typically meet or communicate with institutional shareholders during the year as required. Shareholders are encouraged to attend webinars (advertised on the Company’s website) on the release of preliminary and interim results as well as the annual general meeting (and any other general meetings) at which the Group’s activities are considered and questions answered.

General information about the Group is also available on this website, which includes overviews of the activities of the Group as well as all recent Company announcements. The Non-Executive Directors are available to discuss any matter stakeholders might wish to raise, and the Chairman and the Independent Non-Executive Directors will attend meetings with investors and analysts as required.

Results of shareholder votes are made public on this website after the meetings concerned. None of the resolutions proposed at any of the six annual general meetings held by the Company to date had a significant proportion (more than 20%) of votes cast against them.

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