Corporate Governance

Establishing a strategy and business model which
promotes long-term value for shareholders

The Group’s purpose is to improve health outcomes by providing highly advanced medical technology. Our mission is to pioneer medical technology that improves the outcomes of patients, starting with the very first breaths of life. Our strategy is defined clearly in Our Business Strategy of our Annual Report. Our business model is set out clearly in our Annual Report (click here). Our strategy and business model are underpinned by a clear set of values: patient focus, outcome changing, pioneering and research driven, which reflect our long-term objective of enhancing patient care and delivering business growth and profitability. Our Key Performance Indicators (“KPIs”), which are set out in the Chief Executive Officer’s Review in our Annual Report measure various growth and profitability metrics, reflecting our business model.

Seek to understand and meet shareholder needs and expectations

Relationships with our shareholders are important to us and we seek to provide effective communications through our Interim and Annual Reports along with Regulatory News Service announcements, including RNS Reach. The Executive Directors meet shareholders and other investors/potential investors at regular intervals during the year. The Chief Executive Officer and the Chief Financial Officer make presentations to institutional shareholders and analysts each year immediately following the release of interim and full year results. They also attend retail shareholder events. The slides used for such presentations are made available on the Group’s website under the Annual Reports section.

The Group’s NOMAD and broker, Cenkos Securities plc, is briefed regularly and updates the Board during the year on shareholder sentiment and expectations. The Annual General Meeting (“AGM”) is regarded as an opportunity to meet, listen and present to shareholders and their participation is encouraged; all Directors attend the AGM and are available to meet shareholders individually or as a group. However, because of the pandemic, this year’s AGM was a closed meeting. For each resolution the number of proxy votes received for, against and withheld is circulated to all attendees. All 2021 AGM resolutions were passed comfortably.

When circumstances allowed in December the Executive team hosted institutional investors at our Croydon site for a factory visit and company presentation. Feedback was very positive. In January 2022, the Chairman, Mark Abrahams, and Remuneration Committee Chair, Liz Shanahan, met with major institutional investors to discuss governance and reporting matters. Following these meetings the Board discussed the points raised and agreed some improvements to annual reporting around ESG and other KPI’s.

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

The Board considers that it has operated in full regard of its responsibilities under section 172 of the 2006 Companies Act
as outlined in the Strategic Report in our Annual Report. The Group’s Purpose is widely understood and drives the
decision-making which aims to optimise the long-term value of the business.

People

Our continued success is built on the talented people who work here, and employee engagement forms a major part of our strategy. Our senior independent Director has the additional responsibility of representing employees’ interests at the Board and has hosted two all Company “question time” meetings, where employees are able to ask questions to the Executive Team. He is also the Board level point of contact for the Group’s whistleblowing policy. Everyone at Inspiration Healthcare Group is a valued member of the team, and our aim is to help every individual achieve their full potential. We are a living wage employer and offer equal opportunities regardless of race, sex, gender identity or reassignment, age, disability, religion or belief, marital status, pregnancy and maternity or sexual orientation. During the year we implemented and enhanced our Parental leave and Pay policy as well as flexible working arrangements including a blended working policy as well as a compressed 4-day working week which has been adopted by about a third of our workforce. The health and safety of our workforce is our most important consideration and features as the first item on each board meeting agenda. We have introduced a comprehensive set of processes and measures to keep our people safe, and we continue to enforce a strong set of Covid-19 protocols in our offices We hold regular all-employee on-line meetings to keep employees updated on business progress and we also operate an incentivised Improvement Ideas scheme. Due to the pandemic, we were unable to hold our normal annual conference for all employees but intend to hold one as soon as circumstances allow.

Customers

A key element of our business model is to work closely with key opinion leaders in the healthcare system and to develop, evaluate and enhance our propositions in full co-operation with those partners. Our reputation for innovative, outcome-enhancing products and excellent service is key and we regularly seek feedback on the performance of our products. Our Vice President of Clinical, Innovation and Compliance has considerable experience as a neonatal consultant in the NHS and ensures high levels of engagement with the medical community.

Suppliers

Our key strategic suppliers are long-term in nature and work with the Group on product innovations. As a medical technology Company, we regularly assess key supplier performance and engage with them to discuss and agree objectives and to enhance product capability and performance.

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

The Board recognises the need for a robust system of internal controls and risk management. The assessment of risks and
the development of strategies for dealing with these risks are achieved on an ongoing basis through quarterly updates from
the executive team followed by Board review and challenge. Risk management is integral to the ability of the Group to deliver
on its strategic objectives and the Board’s appetite for risk is communicated to shareholders in our Annual Report. The Board
review the Risk Register formally every 6 months and Board reports from the Executives are discussed at Board meetings where
‘ad hoc’ risks are discussed and action to mitigate them undertaken.

The system of internal control is structured around an assessment of the various risks to the business and is designed to address those risks that the Board considers to be material, to safeguard assets against unauthorised use or disposition and to maintain proper accounting records which produce reliable financial and management information. However, any such system of internal control can provide only reasonable, but not absolute, assurance against material misstatement or loss. The Board considers that the internal controls in place are appropriate for the size, complexity, and risk profile of the Group. The Board is responsible for reviewing and approving overall Group strategy, approving revenue and capital budgets and plans and for determining the financial structure of the Group including treasury, tax, and dividend policy. Monthly results and variances from plans and forecasts are reported to the Board. The Audit Committee assists the Board in discharging its duties regarding the Financial Statements, accounting policies and the maintenance of proper internal business and operational and financial controls, including liaison with the Group’s external auditors.

The key features of the Group’s system of internal control are as follows:

an ongoing process of risk assessment to identify, evaluate and manage business risks
management structure with clearly defined responsibilities and authority limits
a comprehensive system of reporting financial results to the Board
the Group’s operating companies all maintain Quality Management Systems certified to ISO 13485:2016 for industry regulatory compliance
a comprehensive system of reporting health and safety performance along with other well-being matters to the Board
appraisal and authorisation of major capital expenditure, research & development projects
dual signatories on all bank accounts

Maintain Dynamic Management Framework

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

The Board is made of up three Executive Directors and three independent Non-executive Directors, chaired by Mark Abrahams. Meetings are open and constructive, with every Director participating fully. Meetings take place at our various sites or through ‘virtual’ meetings using platforms such as Teams or Zoom. Face to face meetings are preferable as it allows the Board to see different operating facilities and meet other employees. The Chairman is responsible for the leadership of the Board and ensuring its effectiveness in all aspects of its role. The Chairman is also responsible for creating the right Board dynamic and for ensuring that all-important matters, in particular strategic decisions, receive adequate time and attention at Board meetings. The Executive Directors are responsible for the day-to-day running of the business and developing corporate strategy, while the Non-executive Directors are tasked with constructively challenging the decisions of executive management and satisfying themselves that the systems of business risk management and internal financial controls are robust. The Non-executive Directors give informal advice to the Executives between meetings and devote sufficient time to be effective in this regard. The Board meets regularly during the year as planned as well as ad-hoc meetings relating to such matters that arise from time to time; a calendar of meetings and principal matters to be discussed is agreed at the beginning of each year. Board papers are circulated at least one week before meetings, allowing time for full consideration and necessary clarifications before the meetings. Board dinners are held from time to time on the evening before meetings and allow broader discussion and development of effective Board relations. The Group has effective procedures in place to monitor and deal with conflicts of interest. The Board is aware of the other commitments and interests of its Directors. Changes to these commitments and interests are reported to and, where appropriate, agreed with the rest of the Board. The Chief Financial Officer is also the Company Secretary and is responsible for ensuring that Board procedures are followed and that the Group complies with all applicable rules, regulations and obligations governing its operation. If required, the Directors are entitled to take independent legal advice and, if the Board is informed in advance, the cost of such advice will be reimbursed by the Group.

Leadership Team

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

The Non-executive Directors have both a breadth and depth of skills and experience to fulfil their roles. All have experience of being on other Boards of companies listed on the London Stock Exchange. Details of the Directors’ experience and areas of expertise are outlined in the Board of Directors section on our website. The Board undertakes an appraisal process to see how the mix of skills, experience and behaviours match with the Company’s ambitions and is satisfied that, between the Directors, it has an effective and appropriate balance of skills and experience, needed at this stage of the Group’s development, including in the areas of medical devices, sales and marketing, external communications, product development, finance, innovation, international trading, risk management, corporate governance, and M&A. The Audit Committee Chair updates his technical and financial experience by attending workshops held by the major accounting firms. The Chair of the Remuneration Committee obtains regular updates on best practice for executive remuneration packages and initiates periodic reviews, taking account of changes to the business. Other Directors are regularly kept up-to-date via the latest governance and business updates from major accountancy or legal firms and via membership of various professional bodies. All Directors stand for re-election by shareholders each year.

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

A calendar of meetings and principal matters to be discussed is agreed at the start of the year. The Board held nine scheduled meetings in the year, two meetings during the year focused on strategic matters and the remaining seven meetings focused on specific key matters, including risk management, R&D reviews, financial forecasts, employee engagement, and shareholder feedback. Following changes made after the SLE acquisition the Board intends to use an externally facilitated evaluation process during 2022. The Board considers succession planning for the Executive Directors on an ad-hoc basis.

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

The Group’s culture is understood and led by the example set by the behaviours of the three Executive Directors, one of whom was the founder of Inspiration Healthcare Limited. Taking into account that the Group is relatively small with approximately 200 employees, this is considered an effective means of conveying the Group’s approach to ethical behaviour. The common culture is based upon four core values:

Outcome Changing

Research Driven

Pioneering

Patient Focused

The integration of SLE provided an opportunity to align Health and Safety and HR processes, as well as aligning the quality management and ERP systems used throughout the Group, which bought a more cohesive culture to the Group by allowing employees access to the same data platforms. An extensive communication programme on the Group’s culture and priorities was carried out to ensure that the SLE team understand the Group’s expectations and processes.

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

The Board reviews our corporate governance arrangements regularly and expect to evolve these over time as the business grows. There is a clear division of responsibilities between the Chairman and the Chief Executive Officer. The Chairman is responsible for leading the Board, setting its agenda and monitoring its effectiveness. He meets regularly and separately with the Chief Executive Officer and the other Non-executive Directors. The Board has recently reviewed the schedule of matters reserved for its decision and a full copy is published on the Group’s website.

Matters reserved for Board decision include:

overall business strategy including Environmental, Social and Governance
review of key operational and commercial matters including health and safety
review of significant risks, risk appetite, and controls following report on effectiveness of controls from the audit committee
review of key financial matters, including approval of financial plans, changes to capital structure u acquisitions and disposals of businesses, material capital expenditure, treasury policy, and dividends u governance, including the appointment and removal of Board members, remuneration of Directors, set up and delegation of matters to committees and the reviewing of reporting back thereof approval of Financial Statements
stock exchange-related issues including the approval of communications

All Directors receive monthly information on the Group’s operational and financial performance and a full set of board papers circulated to the Board in advance of meetings. The Board delegates authority to three committees to assist in meeting its business objectives while ensuring a sound system of internal control and risk management. The committees meet independently of Board meetings.

Audit Committee

The Audit Committee has two members, Bob Beveridge (Chair) and Liz Shanahan. The Chief Financial Officer and external auditors attend meetings by invitation. The Audit Committee’s responsibilities include the review of the scope, results, and effectiveness of the external audit, the review of half-year and Annual Financial Statements, and the review of the Group’s risk management and internal control systems. A separate report of the Audit Committee activities is in our Annual Report.
The terms of reference for the Audit Committee can be found here.

Remuneration Committee

The report of the Remuneration Committee is set out in our Annual Report. The Remuneration Committee has two members, Liz Shanahan (Chair) and Bob Beveridge. The Committee is responsible for setting the remuneration arrangements, including short-term bonus and long-term incentives, for Executive Directors as well as approving the remuneration principles for senior employees.

A more detailed terms of reference for the Remuneration Committee can be found here.

Nominations Committee

Inspiration Healthcare Group plc’s main country of operation is the United Kingdom, although some of our staff may be domiciled overseas to provide more localised service and support.

Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant shareholders.

The Board has formal responsibilities and agendas and three sub-committees; in addition, strong informal relations are maintained between Executive and Non-executive Directors. During the last year most meetings have taken place online and Non-executive Directors have continued to meet with other senior managers and give advice and assistance online. Two board dinners have been held during the year to provide opportunities for broader discussions. The Chief Executive Officer and Chief Financial Officer meet with investors after results announcements have been made and at other shareholder participant events. They also meet regularly with the Group’s Nomad/ broker to discuss any shareholder feedback – the Board is briefed accordingly. The Chief Executive Officer and the Chief Financial Officer make presentations to institutional shareholders and analysts each year immediately following the release of interim and full-year results. They also attend retail shareholder events. The slides used for such presentations are made available on the Group’s website under the Annual Reports section. The Group retains a financial public relations firm to assist it in ensuring that key messages reach the appropriate audiences.

Principal Risks and Uncertainties

Please click here to see the full Principal Risks and Uncertainties faced by the Group.

Country of Incorporation

The Company (Company number 03587944) was incorporated on 25 June 1998 in England and Wales. Following a reverse takeover by Inspiration Healthcare Limited, completed on 24 June 2015, the Company changed its name to Inspiration Healthcare Group plc and was re-admitted to the London Stock Exchange’s Alternative Investment Market (LSE:IHC).

Main Country of Operations