LENMED AIR 2019.pdf

STRATEGY AND PERFORMANCE Principle 4 The governing body should appreciate that the organisation's core purpose, its risks and opportunities, strategy, business model, performance and sustainable development are all inseparable elements of the value creation process. The Board recognises that all these elements are inseparable throughout the organisation, and Lenmed follows the six capitals approach as described in this report. This integrated approach is taken by the Board at its meetings, strategy sessions and committee meetings. The Board and senior management attend a two-day annual strategy session and strategic targets are monitored at every meeting. Also, risks and opportunities are monitored at every meeting of the Audit and Risk Committee and the Board. The Board agenda and meeting structure focuses on strategy, business performance monitoring and governance matters, with emphasis on strategy and business performance. All budgets and strategic plans (medium and longer term and which take account of risks and opportunities) are approved by the Board. REPORTING Principle 5 The governing body should ensure that reports issued by the organisation enable stakeholders to make informed assessments of the organisation's performance, and its short-, medium- and long-term prospects. The Board is responsible for the integrity of the information contained in this report and other reports, including the annual financial statements and interim results presentations. It is assisted in this regard by the various Board committees which review and recommend their respective reports to the Board in accordance with their terms of reference. The annual financial statements and Integrated Reports reviewed by all members of the Board are provided in printed and online form and are published on the website. The reporting framework is set out on the inside front cover of this Annual Integrated Report. Regarding external assurance of external reports, Lenmed does not consider it necessary to appoint third-party consultants to provide assurance. The Audit and Risk Committee is satisfied that assurance is provided by a combination of management, internal audit and external audit. Independent oversight is also provided by the Board (which has a majority of non-executive directors, the majority of whom are independent). PRIMARY ROLE OF THE BOARD Principle 6 The governing body should serve as the focal point and custodian of corporate governance in the organisation. The Board is the focal point and custodian of corporate governance in the company. Various key policies supporting the strategy are in place. The Board has a Board Charter which is reviewed annually against best practices. An outline of the Board Charter is set out under Principle 7. The Board met five times this year. In addition, a two-day strategy session was held. Directors are provided with all necessary information in advance, including a detailed Board pack, to enable them to discharge their responsibilities. A work plan is approved by the Board annually, setting out matters for each meeting and specific matters for certain meetings. The Board agenda and meeting structure focuses on strategy, business performance monitoring and governance matters. The Board’s meeting attendance is set out in this Annual Integrated Report. COMPOSITION OF THE BOARD Principle 7 The governing body should comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance role and responsibilities objectively and effectively. Assisted by the Remuneration and Nominations Committee (Remco), the Board reviews its knowledge, skills, experience, diversity and independence annually, or as circumstances change. The Board considers gender and race in any new appointments and the composition of the Board in general. The Board comprises a majority of non-executive members, most of whom are independent. The Chairman, who is also the CEO, is not independent. This is a historical arrangement arising from the control structure. This shortcoming is addressed through the appointment of a lead independent non-executive director. The Board is based on a unitary structure and exercises full and effective control over the Group. It comprises seven members: + An executive Chairman who also assumes the role of Chief Executive Officer (CEO) + Three independent non-executive directors + One non-executive director + Two executive directors — the Deputy CEO and Chief Financial Officer (CFO) Lenmed’s corporate governance continued King IV™ overview continued 64 ENSURING AND PROTECTING VALUE