Investors: Statement of Compliance with the QCA Corporate Governance Code


There is no prescribed corporate governance code for NEX companies and the London Stock Exchange prefers to give companies the flexibility to choose from a range of codes which suit their specific stage of development, sector and size.

The Board considers the corporate governance code published by the Quoted Companies Alliance Corporate Governance Code 2018 (“the QCA Code”) as the most suitable code for the Company and has adopted the principles set out in the QCA Code and applies these principles wherever possible, and where appropriate to its size and available resources.

Rupert Lowe, Non-executive Chairman, and Michael Moran, CEO, have overall responsibility for the Corporate Governance of the Company. This Corporate Governance Statement was approved by the Board on 21 February 2019. The QCA Code sets out ten principles which should be applied. The principles are listed below with an explanation of how the Company applies each principle, and the reasons for any aspect of non-compliance.

Chairman’s Statement

As a listed company traded on the NEX Growth Market, we understand the importance of sound corporate governance and of adopting the principles of good governance across the business. We aim to maintain an efficient and effective management framework that enables long-term, sustainable growth for our shareholders.

As Chairman, I carry the ultimate responsibility for the corporate governance of the Group. In September, the Board has reaffirmed its commitment to good corporate governance by adopting and applying the Quoted Companies Alliance (QCA) Corporate Governance Code 2018. The QCA has ten broad principles and we have set out below how we apply these principles to the business. More information is provided each year in our Annual Report.

Last updated: 25 February 2019


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

Our Business Model - 

The Group is at the vanguard of advancing cancer care.

We are developing and building a network of oncology centres across the UK known as the Rutherford Cancer Centres, offering a comprehensive range of cancer treatments to patients.

We plan to open a network of centres in the next few years and the first centre in Newport, South Wales, was the first in the UK to offer high energy proton therapy. In addition, each centre offers radiotherapy, chemotherapy, immunotherapy, diagnostic imaging and supportive care services.

As well as the Rutherford Cancer Centre South Wales, Rutherford Health plc has opened two further centres – the Rutherford Cancer Centre North East in Northumberland and the Rutherford Cancer Centre Thames Valley in Reading, with proton therapy available in both in 2019. A fourth site is under construction in Liverpool, the Rutherford Cancer Centre North West.

The Group has partnered with world-leading healthcare technology providers to equip each centre with the very latest and innovative technology, including IBA and Philips.

We create value for our shareholders through our providing quality clinical care and by leveraging centralised, scalable infrastructure.

Our Strategy - 

We seek to create sustainable value by becoming the leading provider of proton beam therapy.


Principle Two: Seek to understand and meet shareholder needs and expectations

The Group provides up to date information to its shareholders through market announcements and copies of all results and announcements are available online from www.rutherfordhealth.com (and www.proton-int.com).

The Chief Executive Officer and the Chief Financial Officer carry out presentations and meetings to key stakeholders on a regular basis and the Group encourages all shareholders to attend its Annual General Meeting where the Directors are available to answer any shareholders questions or concerns.

The Group intends to appoint a Financial PR Adviser and Broker in the near-term, both organisations provide feedback from institutional shareholders from investor presentations and the Directors will use this feedback to improve and enhance future Annual Reports and presentations as appropriate.


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

The Board recognises that the Group’s long-term success relies on good relations with its wider stakeholders including – patients, employees, strategic partners and suppliers.

Patients - The Group has processes to gather regular feedback from patients, including surveys, for identifying any improvements that would result in better patient satisfaction. Also, the Group details key patient-focussed performance measures and has established a Clinical Governance Committee which meets three time a year. This Committee reviews all matters involving the patients’ clinical experiences.

Employees - Employees have regular 1-2-1 sessions with their immediate line manager, and annual reviews where development plans are discussed to ensure each individual’s objectives are aligned to the business strategy and to improve levels of employee engagement. Internal newsletters, briefings and communications are distributed to keep all employees informed of important developments. A forum for the senior management of the Group takes place on a regular basis to involve the broader management team in business planning and to improve teamwork and Group identity.

Strategic partners - The strategic partners, namely IBA, Elekta and Philips, provide machines and equipment in the provision of the facilities utilised by the clinical organisation. Each is also a shareholder of the Company. Regular development forums are held, and these are attended by senior management of the Group. In addition, performance measures are discussed.

Suppliers - The Group has identified key suppliers such as the NEX Corporate Adviser, external auditor, legal adviser and PR consultants. The Group seeks the independent and experienced view of its key advisers on various matters as and when required.  The Group values their independence and seeks to establish long-term business relationships to benefit the Group.

Regulators - Part of the Group’s business is the provision of clinical care, which is highly regulated. The Group takes an open and co-operative approach to regulation and positively embraces a safety culture. The Group complies with the requirements of all health and social care legislation applicable to regulated activities. Regular external compliance audits to provide assurance that the Group is meeting the regulatory requirements are arranged.


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

The Group has a formal risk governance framework that provides a structured process for identifying, evaluating and mitigating risks deemed by the Board as being of significant relevance to the Group in view of its risk profile and risk appetite. The Group considers its extended business, including the Group’s supply chain, from key suppliers to end-customers, in assessing and managing risks to the business. A summary of risks is included in the Admission Document submitted to the NEX Growth Market.

The process seeks to understand and mitigate, rather than eliminate risks and therefore can provide reasonable rather than absolute assurance against loss. The Board regularly reviews a register of principal risks and uncertainties, which is maintained on behalf of the Board by the Chief Financial Officer. The risk register is reviewed by the Board on a quarterly basis and a detailed review is undertaken on at least an annual basis.


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

Board - The Board consists of seven Directors including the Chairman. There are three executive and four non-executive Directors. Rupert Lowe, Non-executive Chairman and Michael von Bertele are considered independent non-executive directors. The Board is scheduled to meet six times a year and has full and timely access to all the relevant information to enable it to carry out its duties. The Board has access to the Group’s advisers and the Company Secretary to keep up to date with corporate governance matters and to ensure the relevant rules and regulations are followed. The Board has delegated specific responsibilities to the Audit and Remuneration Committees. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the chair of the board.

Audit - The Audit Committee comprises Rupert Lowe (Chairman) and Michael von Bertele. It meets at least twice a year and is responsible for ensuring that the financial performance of the Group is properly recorded and monitored on a regular basis. This includes reviews of the annual and interim accounts, results announcements, internal control systems and procedures and accounting policies. The Audit Committee has responsibility for recommending the appointment of the external auditor. It will review the cost effectiveness, independence, and objectivity of the current auditors.

Due to the recent departure of the former Audit Committee Chair, the Board does not consider that its Audit Committee currently complies with the QCA Code and it is the intention of the Board to appoint a suitably financially qualified non-executive director in the future who would take up the position of Audit Committee Chair.

Remuneration - The Remuneration Committee comprises Michael von Bertele (Chairman) and Rupert Lowe. It meets at least twice a year and is responsible for determining the Group’s policy on the remuneration of the Executive Directors. It is also responsible for making any recommendations for the introduction of share options schemes and long-term incentive plans for the Executive Directors.

Attendance - The attendance record by individual Directors at scheduled meetings will be found in the latest Annual Report and Accounts.


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

The Board has established a skills, diversity and experience matrix which is set out below. This will be periodically review by the Board to ensure this meets current and future requirements.


 

Rupert

Michael

Christopher

Alain

Michael

Edward

Paul

 

Lowe

von Bertele

Evans

Baron

Moran

Karol Sikora

Tuson

Position

Chairman

NED

NED

NED

CEO

CMO

CFO

Age

60+

60+

50-60

30-40

50-60

60+

50-60

Gender

M

M

M

M

M

M

M

Fast Growth Business

Y

 

Y

 

Y

 

Y

Healthcare Regulation

 

Y 

 

 

 

Y

 

Healthcare Market

 

Y 

Y

 

 

Y

 

Financial Planning

Y 

 

Y 

 

Y

 

Y

Risk Management

Y 

Y 

Y

 

Y

Y

Y

Listed Board

Y 

 

Y 

 

 

 

Y

Corporate Finance

Y 

 

Y

 

Y

 

Y

Business Development

Y 

 

Y 

 

Y

 

 

The biographies of the Directors can be found here.


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

With effect from 2019 the Board will conduct an internal Board performance evaluation and annually thereafter. The criteria against which Board effectiveness is reviewed are:

  • Board composition
  • Board processes
  • Behaviours, including Executive Director performance and contribution
  • Activities

The Chairman leads the Board evaluation process and where considered appropriate, will use external advisers to ensure the process is robust and fit for purpose. The non-executive Directors meet annually to consider each Executive Directors contribution and performance. The Chairman provides individual feedback to each Executive Director.

The Executive Directors meet annually to consider the contribution of the non-executive Directors. The CEO will provide feedback on an individual basis.

The Group regularly considers succession planning for the senior management of the Group including the Directors. Potential Board candidates are reviewed by a majority of existing Directors to determine an appropriate match to the skills and experience matrix set out above. Advice on all potential Board appointments is sought from the Group’s NEX Corporate Adviser.


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

Ethics Policy - As a matter of Board policy and best practice, directors and management are expected to conduct themselves with the highest ethical standards. All directors, executive and staff are expected to behave ethically and professionally at all times, to comply with the Ethics Policy and to thereby protect and promote the reputation and performance of the Company. The Board is responsible for establishing compliance and evaluating the effectiveness of the company’s Ethics Policy.

Our values - All procedures, policies and ways of working across the Group are designed to ensure compliance with the Excellence Model that overrides the ethos of the Group. The Excellence Model contains four pillars:

  • Operational and clinical excellence
  • The patient experience
  • Improving cancer care
  • Advancing proton beam therapy technology

These pillars represent the values which are at the heart of our business. They guide our company principles and how we deal with our patients, employees, strategic partners, suppliers and investors. It is our philosophy and is reflected in our culture to help us achieve our mission across the Group.


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

Corporate Governance Charter - The Group has an established and detailed Corporate Governance Charter. The Board reviews this Charter from time to time or as regulation requires or as the Group grows in scale and complexity.

"The OECD defines corporate governance as follows: Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined. Good corporate governance should provide proper incentives for the board and management to pursue objectives that are in the interests of the company and its shareholders and should facilitate effective monitoring."

Roles and responsibilities - 

Chairman - The Chairman is responsible for the leadership and effectiveness of the Board. Together with the Chief Executive Officer, the Chairman sets the Board’s agenda and ensures that all items receive appropriate consideration especially strategic issues. The Chairman promotes the culture and values of the Group. The Chairman is the official spokesperson for the Board.

Chief Executive Officer - The CEO is responsible for the running of the business and the implementation of Board decisions and policies. The CEO is also responsible for Investor Relations.

Chief Financial Officer - The CFO is responsible for the Group’s finances including budgets and forecasts.

Non-executive Directors - The NEDs are appointed to provide oversight, independence and constructive challenge to the Executive Directors. They also provide strategic advice, guidance and a monitoring environment.

Chief Medical Officer - The CMO is responsible for clinical standards and care.

Matters reserved for the Board - The following matters are reserved for the Board:

  • The alteration of its memorandum or articles of association or the adoption of any articles or the passing of any resolutions inconsistent with them.
  • Except in the case of a subsidiary undertaking issuing shares to the Company or its nominee, the variation of its authorised or issued share or loan capital or the creation or grant of any option or other rights to subscribe for shares or to convert into shares.
  • The alteration of the rights attaching to any of its shares.
  • The consolidation, subdivision or conversion of any of its shares.
  • The reduction of its share capital or reduction of any uncalled liability in respect of partly paid shares or the purchase or redemption of any of its shares.
  • The issue of debentures, securities convertible into shares, share warrants or options in respect of shares.
  • The issue of any additional Shares or share capital in the Company at a discount to their market value or otherwise than for full value.
  • The declaration or payment of a dividend, other than in accordance with the articles of association of the Company.
  • Unless required to do so by law doing or permitting anything to be done as a result of which the Company may be wound up (whether voluntarily or compulsorily).
  • The creation of a fixed or floating charge, lien (other than a lien arising by operation of law) or other encumbrance over all or part of its undertaking or assets, except to secure it indebtedness to its bankers for sums borrowed in the normal course of business.
  • Any agreement or arrangement concerning any of the foregoing.

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

The Board is committed to good communications with all stakeholders providing them with access to information to help them make informed decisions about the Group.

The Investor Information section of the Group’s website provides access to all required regulatory information. The Directors section provides further details of each Director and the Announcements section details all Group announcements in the last five years. The website also gives information about the Group’s advisers and significant shareholders and Director’s interests. Results of shareholder meetings and votes can also be found here.