Chairman’s Introduction

Corporate governance

The business that now comprises RUA Life Sciences has changed out of all recognition over the past two years and the Board believes that fully participating in good Corporate Governance provides a platform to articulate and communicate the strategy and objectives of the Company. Our vision is to improve the lives of millions of patients by providing the worlds leading implantable polyurethane to medical device companies whilst using this platform technology, Elast-EonTM, to design, develop, manufacture and market our own improved devices. The recent acquisition of RUA Medical has provided the people, infrastructure and systems to help turn this vision into reality.

Until the acquisition of RUA Medical, the role of Chairman and Chief Executive was combined, we fully explained why this was the case but this has now been normalised as part of the journey of growth and development.

These recent changes are a new chapter in RUA Life Sciences’s development with the objective of delivering long term shareholder value.

The Board of RUA Life Sciences has chosen to adopt the Quoted Companies Alliance Corporate Governance Code (the ‘QCA Code’). As Chairman, it is my responsibility, working with my fellow board colleagues, to ensure that good standards of corporate governance are embraced throughout the Group. The Board believes that it satisfies the requirements of the QCA Code.

To see how RUA Life Sciences addresses the key governance principles defined in the QCA Code, please refer to the table below. Further information on compliance with the QCA Code will be provided in our annual report for the year ending 31 March 2020.

Bill Brown, Executive Chairman

This disclosure was last reviewed and updated on 9 June 2020

The Principles of the Quoted Company Alliance (QCA) Code

Delivery Growth

QCA Code PrincipleApplicationRUA Life Sciences Disclosure
1. Establish a strategy and business model which promote long-term value for shareholdersThe 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.The RUA Life Sciences Board conducted a thorough strategy review in 2018 which culminated in the adoption of a new growth business model focused developing medical devices utilising the key strengths of Elast-EonTM. 

This strategy is set out in the Strategic Report section of the Company’s Annual Report and Accounts for the year to 31 March 2019 and will be updated further in period to 31 March 2020, available on the website

Additionally, the Company’s shareholder circular dated 11 March 2020, also available on the website, provides additional details of the strategy and plans for delivery of long-term growth to shareholders and the rationale for the acquisition of RUA Medical.
2. Seek to understand and meet shareholder needs and expectationsDirectors 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.
RUA Life Sciences is currently developing new medical devices incorporating our world class biomaterial, ElastEon™. The Board is focused on the successful development of these products and understands that shareholders expect capital growth from the execution of the Company’s clearly defined strategy.

RUA Life Sciences encourages two-way communication with both its institutional and private investors and responds promptly to all queries received. The Chairman and Chief Executive both talk regularly with the Group’s major shareholders and ensures that their views are communicated fully to the Board.

The Board recognises the AGM as an important opportunity to meet with the Company’s private shareholders. The Directors are available to listen to, and answer questions from, shareholders, both formally as part of the meeting and informally immediately following the AGM.

Where voting decisions are not in line with its expectations, the Board will engage with those shareholders to understand and address any issues. The Company Secretary is the main point of contact for such matters.
3. Take into account wider stakeholder and social responsibilities and their implications for long-term successLong-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.

The principal operating subsidiary of RUA Life Sciences PLC, RUA Medical Devices Limited operates a detailed balance score card system within its overall QMS. The balanced scorecard monitors relationships with employees, suppliers, customers and regulators. Data is gathered on a monthly basis and reviewed by the senior management team and further presented to the Board.
4. Embed effective risk management, considering both opportunities and threats, throughout the organisationThe 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).

On pages 10 and 11 of the Company’s Annual Report and Accounts for the year ended 31 March 2019, the risks to the business are identified and how these are mitigated and the change in the identified risk over the last reporting period.

The Board is responsible for reviewing and evaluating risk and the Executive Directors meet at least monthly to review ongoing trading performance, discuss budgets and forecasts and any new risks associated with ongoing product development.

Maintain a Dynamic Management Framework

QCA Code PrincipleApplicationRUA Life Sciences Disclosure
5. Maintain the board as a well- functioning, balanced team led by the chairThe 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 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 fulfill their roles.

The Company is controlled by the Board of Directors. William Brown, the Executive Chairman, is responsible for the running of the Board and setting strategy and David Richmond has executive responsibility for running the Group’s business and implementing Group strategy.

All Directors receive regular and timely information regarding the Group’s operational and financial performance. Relevant information is circulated to the Directors in advance of board meetings. All Directors have direct access to the advice and services of the Company Secretary and are able to take independent professional advice in the furtherance of their duties, if necessary, at the Company’s expense.

The Board comprises three Executive Directors and three Non-Executive Directors. The Board considers that all Non-Executive Directors bring an independent judgement to bear notwithstanding the varying lengths of service.

The Board has a formal schedule of matters reserved to it and is supported by the Audit, Remuneration and Nominations Committees. The Schedule of Matters Reserved and Committee Terms of Reference are available on the Company’s website.
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilitiesThe 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.
A Nominations Committee comprising the Chairman and all of the Non-Executive Directors has been established and considers the issues of succession planning and identification of potential Board recruits.

The Board recognises that it is healthy for membership of the Board to be periodically refreshed and 50 per cent. of the Board have been appointed within the last two years. 

The Nominations Committee is chaired by the Company’s Chairman. Meetings are arranged as necessary. The Committee is responsible for nominating candidates (both executive and Non-Executive) for the approval of the Board to fill vacancies or appoint additional persons to the Board.

All Directors receive induction on joining the Board covering the Group’s operations, goals and strategy, and their responsibilities as directors of the Company. The Company supports the Directors in developing their knowledge and capabilities. 

The Board has established a procedure for Directors in the furtherance of their duties to take independent professional advice, if necessary, at the Company’s expense. 

All Directors are subject to election by shareholders at the first opportunity after their appointment. In accordance with the Company’s Articles of Association, all Directors are required to retire by rotation and shall be eligible for re-election. The terms and conditions of appointment of the non-Executive Directors are available for inspection upon request. 

The terms of reference of the Nominations Committee have been placed on the Company’s website.

The Company Secretary supports the Chairman in addressing the training and development needs of the Directors.

7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvementThe 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 Nominations Committee has undertaken a review of the Boards performance together with the contribution and effectiveness from each Director.

The process was an internal review by the Chairman of the Nominations Committee with support from the Company Secretary and discussions with individual Board members.

8. Promote a corporate culture that is based on ethical values and behavioursThe board should embody and promote a corporate culture that is based on sound ethical values and behaviors 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.
RUA Life Sciences operates in the medical device field where human life is dependent upon its products. As such, sound ethical values and behaviours are not only an asset to the Company, but a requirement under the regulatory standards under which its products are required to be designed, tested and manufactured.

RUA Life Sciences is still a very small company so the actions of its executives are highly visible and reflect directly upon the Company. The Company operates through a number of partnerships and it seeks to work with other businesses that portray similar business ethics and values and have the capabilities of operating under strict regulatory environments.

9. Maintain governance structures and processes that are fit for purpose and support good decision- making by the boardThe 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.
Bill Brown, as Executive Chairman, is responsible for leading an effective board, fostering a good corporate governance culture and ensuring appropriate strategic focus and direction as well as overall responsibility for proposing the strategic focus to the Board. Implementing the strategy once it has been approved and managing the Group’s business is the responsibility of David Richmond, CEO. In addition, David Richmond, has responsibility for development and manufacture of the new product portfolio.

The non-executive directors are all willing to engage with shareholders should they have a concern that is not resolved through the normal channels.

John McKenna, an Executive Director of the Company has responsibility for advising on design inputs to new product development, establishing a sales and marketing network and managing Key Opinion Leaders.
John Ely, a Non-Executive Director of the Company, has responsibility for the design and oversight of the regulatory process for the Company’s Heart Valve project.
Geoff Berg, a Non-Executive Director of the Company, provides advice on surgical matters regarding the design and ultimate implantation of the Company’s devices.
The Company has appointed three principal committees, Audit, Remuneration and Nominations. The function, composition and terms of reference are set out in the Board and Committees section of

Certain matters are reserved for the Board which include:
1. Setting strategy
2. Capital structure
3. Financial reporting and controls
4. Borrowing powers
5. Acquisition and disposals
6. Shareholder resolutions and circulars
7. Board composition
8. Remuneration policies
9. Corporate governance
10. Capital markets compliance

Build Trust

QCA Code PrincipleApplicationRUA Life Sciences Disclosure
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 structure 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 Company encourages two-way communication with both its institutional and private investors and responds promptly to all queries received. The Chairman talks regularly with the Group’s major shareholders and ensures that their views are communicated fully to the Board.

The Board recognises the AGM as an important opportunity to meet private shareholders. The Directors are available to listen to the views of shareholders and answer any questions immediately following the AGM.

Updated: 08 June 2022.