Annual Report and Accounts 2006 - Optos

Corporate Governance
continued
Barry Rose joined the Company as non-executive Director on 21 December 2005.
Dr David Guyer joined the Company as non-executive Director on 5 May 2006.
Michael Rutterford and Ann Gloag resigned as non-executive Directors on
21 December 2005. David Cairns resigned as an executive Director on
21 December 2005. Mr Cairns retains his position as Chief Technology Officer
of the Company. Barry Sealey resigned as non-executive Chairman on
31 December 2005 and as a non-executive Director on 27 January 2006.
Stephane Sallmard resigned as an executive Director on 30 September 2006.
Mr Sallmard concurrently resigned his position as Chief Executive Officer.
Thomas Butts joined the Company and the Board as Chief Executive Officer
on 18 December 2006. Mr Butts comes to Optos with a proven ability in
leading top-performing teams and driving shareholder value. He has both
an exceptionally strong grasp and understanding of the global healthcare
marketplace, and extensive operating experience across North America
and Europe.
Role of Non-Executive Directors
Each of the Company’s non-executive Directors has a significant input into the
business. Each contributes to and constructively challenges the development of the
Company’s strategy, scrutinises the performance of management, is required to be
satisfied that the financial information is accurate and that the policies and procedures
governing risk management are robust and effective. The non-executive Directors
have the responsibility of ensuring that the actions proposed by the executive
Directors are critically probed and examined, and discussed in detail.
The Company’s non-executive Directors have exposure to and are available to
major shareholders. The independent contributions that the non-executive
Directors bring to the Board are considered by the Company to be a major strength.
The Board considers that all of the non-executive Directors are independent of
management and, with the exception of two of the four non-executive Directors
excluding the Chairman, free from any business or other relationship which
could materially interfere with the exercise of independent judgement within
the meaning of the Combined Code.
Attendance at Meetings
Below is a table showing the number of Board and committee meetings held
from 15 February 2006, which represents the date of admission to the Official List
and to trading on the main market of the London Stock Exchange, to the financial
year ended 30 September 2006.
Full Audit Remuneration Nomination
Members Board Committee Committee Committee
Meetings 4 2 3 1
Douglas Anderson 4 – – –
Anne Glover 4 2 3 1
Dr David Guyer (3) 3 – – 1
Dr John Padfield (1) 4 2 3 1
Patrick Paul 4 2 3 1
Barry Rose (2) 4 2 3 1
Ian Stevens 4 – – –
Allan Watson 4 – – –
Stephane Sallmard (4) 4 – – –
(1) Joined the Board on 17 November 2005 and appointed Chairman with effect
from 1 January 2006.
(2) Joined the Board on 21 December 2005.
(3) Joined the Board on 5 May 2006.
(4) Resigned from the Board on 30 September 2006.
Executive Directors are in regular contact with one another and participate in
meetings as part of the Company’s senior management team in addition to any
Board meetings. The non-executive Directors met as a group on two occasions
during the year without the presence of any of the executive Directors. They did
not meet during the year without the Chairman.
The Board receives a regular flow of information to enable it to discharge its
duties effectively, including monthly management accounts detailing current
and forecast trading results and treasury position. It also receives an analysis
of the shareholder register on a monthly basis. Board papers are generally
distributed not less than seven days in advance to allow the Directors to
prepare fully for meetings. Minutes of Board meetings are distributed as soon as
practically possible following the meeting. Minutes of committee meetings are
circulated to all Directors. The Board is kept informed of developments within
the Company through regular updates and presentations by the members of the
senior management team covering their respective departments.
In those instances when a Director has been unable to attend Board or committee
meetings, his or her comments on the papers to be considered at that meeting
have been relayed in advance to the relevant Chairman.
Performance Evaluation
The Combined Code provides that the Board should undertake a formal and
rigorous annual evaluation of its own performance and that of its committees
and individual Directors. Individual evaluation should aim to show whether each
Director continues to contribute effectively and to demonstrate commitment to
the role, including commitment of time for Board and committee meetings and
any other duties.
The Chairman is aware that it is his responsibility to select an effective process
to assess the performance of the Board, its committees and individual members
and to report and act on its outcome. The Board did not carry out a performance
evaluation at the end of the 2006 financial year. The Chairman considered that the
changes to strengthen the balance and structure of the Board leading up to and
following the Company’s initial public offering did not provide sufficient time or
constitute sufficient basis to conduct a fair and accurate performance evaluation
of the full Board, its committees or individual members.
The Chairman will initiate a performance evaluation process for the 2007
financial year, which will be used constructively as a mechanism to improve the
effectiveness of the Board and the committees. The performance evaluation will
aim to maximise strengths and tackle apparent weaknesses. The results of the full
evaluation of the Board and the committees will be shared with the Board as a
whole, but the results of individual assessments will remain confidential between
the Chairman and the Director concerned.
Accountability and Audit
While all Directors have a duty to act in the interests of the Company, the audit
committee has a particular role, acting independently from the executive, to
ensure that the interests of shareholders are properly protected in relation to
financial reporting and internal control.
Internal Control
The Board is responsible for the Company’s system of internal control and
for reviewing its effectiveness. Its system is designed to manage rather than
eliminate the risk of failure relative to achieving business objectives and can only
provide reasonable and not absolute assurance against material misstatement
or loss. Monitoring of internal control has been delegated by the Board to the
Chief Executive Officer. The audit committee determined that, due to the current
size of the Group, an internal audit function was not required for the year ended
30 September 2006. This will be reviewed annually by the audit committee.
The audit committee’s role in this area is confined to a high-level review of the
arrangements for internal financial and overall business risk management control.
The Board’s agenda includes a regular item for consideration of risk and control.
The Board receives regular reports thereon from the senior management team
and the audit committee.
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Optos plc Annual Report & Accounts 2006