Board Appointments

There have been a number of Board changes in the 2023 financial year. In September 2022, Julian Heslop retired from the Board and in June 2023 Ishbel Macpherson also retired.

As communicated in the 2022 Annual Report, we had commenced the search for a new Non-Executive Director to succeed Ishbel as Remuneration Committee Chair. Cognisant of the Parker Review requirements and the new listing requirements regarding diversity targets, the Nomination Committee retained a recruitment consultant who specialised in diverse candidates to find our new Remuneration Committee Chair. We were very pleased to appoint Geeta Gopalan on 1 January 2023. She has a breadth of Non-Executive Director experience as well as chairing risk, audit and remuneration committees since 2017. Geeta was appointed Remuneration Committee Chair on 1 March 2023, allowing Ishbel Macpherson to step down from that role. Ishbel remained as a member of the Remuneration Committee to enable a smooth handover until she retired as a Non-Executive Director on 22 June 2023.

Purpose and Culture

Our Purpose is clearly defined and underpinned by our Culture and Values. Further details can be found in the 2023 Annual Report. Our Values, entrepreneurial attitude and agile approach are the backbone of our Culture. We expect our people to make a difference by working together, and we support them by providing clear guidance on expectations.

Our Values, Culture, people, and strategy have established Dechra as a global leader in therapeutic areas such as endocrinology and topical dermatology, as well as an innovator in specialisations such as the treatment of equine lameness and differentiated generics.

In June the Board attended a site visit of Skipton, UK, where it was great to see the increased engagement following the investment at the site and adoption of the revised shorter working week.

Throughout the year, we have routinely reviewed the policies which support and enable our Values. Core to this is our Code of Conduct, which includes a set of simple one page policy documents. A Code of Conduct e-learning course is mandatory for all employees. It is important to the Board that all employees are able to report any concerns they have and in particular in relation to violations of our Code. We have five reporting channels which include a third party confidential hotline, which is available in 46 languages, or via a hotline, which is manned twenty-four hours a day and is supported in 170 languages.

Stakeholders and Section 172 of the Companies Act

The impact of our decisions on our key stakeholders is front of mind in our decision making. Details of how we consider stakeholders in the Board’s decisions and approvals of material transactions, our engagement with stakeholders and our approach to section 172 of the Companies Act 2006 can be found in the 2023 Annual Report. The most important decision we have had to take as a Board was whether to recommend the offer by Freya Bidco Limited. The Dechra Board considers EQT, together with the Abu Dhabi Investment Authority (Luxinva), to be highly experienced investors with a strong sector understanding who will, we believe, prove to be responsible and supportive owners of Dechra, who can build on its legacy and further accelerate the Group’s growth. Having being advised by Investec Bank plc it is our view that accepting this proposal represents the best interests of all stakeholders and in particular represents a compelling opportunity for shareholders to realise, in cash and with certainty, Dechra’s potential for future value creation.

Sustainability

In March 2023, the Board was asked to consider a proposal for provision of finance in the form of a loan and minority investment in AgCo Tech Ltd, an Australian private limited company which provide practical help to livestock owners in developing countries (further details can be found in the 2023 Annual Report and in the Sustainability Report). This opportunity is rare as it meets all of the ‘Beyond the Value Chain’ requirements, is aligned to our strategy and also to the recent output from COP 27 which stated the need to reduce carbon and methane emissions simultaneously whilst also supporting those on the front lines of climate change. This investment is also strongly aligned with one of our key sustainability objectives (to donate £5 million to philanthropic actions by 30 June 2030). This initiative will accelerate our progress against this objective.

Compliance with the Code

The UK Corporate Governance Code 2018 (the Code) establishes the principles of good governance for companies; the Governance section of the 2023 Annual Report describes how the Company has applied these principles and complied with the provisions, as well as how it meets other relevant requirements, such as the provisions of the Listing Rules and Disclosure and Transparency Rules (DTR) of the Financial Conduct Authority

In the opinion of the Directors, the Company has complied with the Code throughout the period. The Board remains committed to maintaining high standards of corporate governance. The Code can be found at www.frc.org.uk.