Nomination Committee Chairman
On behalf of the Board, I am pleased to present the report of the Nomination Committee (the Committee). The 2016 financial year has been a busy year for the Committee in light of recent changes to the Board and the Senior Executive Team (SET); and the acquisitions completed since the last report which have brought in an increased talent pool.
There were five additional meetings during the year, which mainly dealt with the succession planning for the role of Chairman. Ishbel Macpherson, the Senior Independent Director, led the comprehensive recruitment process which I am pleased to report resulted in the appointment of my successor, Tony Rice, subject to his election at the forthcoming Annual General Meeting. The Committee has also continued with its focus on succession planning, leadership development and talent management.
The following report provides an overview of the work carried out during the year under review.
Dechra's stance in relation to diversity is detailed in the Corporate Governance Report.
Should you have any questions in relation to this report or the Committee, please feel free to contact me or the Company Secretary.
Nomination Committee Chairman
5 September 2016
Committee Membership and Attendance
The membership of the Committee, together with appointment dates and attendance at meetings during the year, is set out in the Board of Directors and the Corporate Governance Report. Other attendees at the meetings include the Chief Executive Officer, the Group HR Director and the Company Secretary (who acts as secretary to the Committee).
The Chairman does not chair the Committee meeting if it is dealing with the appointment of his successor. The Senior Independent Director, Ishbel Macpherson, takes the chair when required.
Role and Responsibilities
The main role and responsibilities of the Committee are set out in the written terms of reference, which are available on the Company website at www.dechra.com. The Committee's terms of reference are reviewed on an annual basis and during the 2016 financial year this took place at the January meeting. An overview of the terms of reference is detailed in the Corporate Governance Report.
Principal activities of the Committee during the year included:
Appointment of Chairman
As reported in last year's Nomination Committee Report, the recruitment process for my successor commenced in the 2015 financial year. An independent recruitment consultancy, JCA Group (JCA), was retained to assist in the recruitment and was provided with a role description detailing the skills and experience required for the position of Chairman of the Board. To assist JCA with their understanding of the requirements of the role, they met with the Chief Executive Officer, Chief Financial Officer and members of the Committee during the previous financial year. Following a rigorous recruitment process, which was led by Ishbel Macpherson, Tony Rice was appointed to the Board on 5 May 2016 and, subject to his election at the forthcoming Annual General Meeting, he will be appointed as Chairman of the Company. Tony Rice has extensive board level experience across a range of sectors. Further details relating to his background and experience can be found in the Board of Directors.
Recruitment of Chief Financial Officer and Non-Executive Director
Following the resignation of Chris Richards in April 2016, an independent recruitment consultancy, Odgers Berndtson (Odgers), has been retained to assist in the recruitment of a Non-Executive Director. At the commencement of the recruitment process, a role description was defined and agreed by the Committee detailing the skills and experience required for the position of Non-Executive Director. To assist Odgers with the understanding of the requirements of the role, they met with the Chief Executive Officer, the Managing Director of DVP EU and the Chairman. A long list of candidates has been identified for interview.
Anne-Francoise Nesmes resigned as Executive Director and Chief Financial Officer on 31 July 2016. Odgers were also retained to assist with the recruitment of her replacement. At the commencement of this recruitment Odgers met individually the Chief Executive Officer, Chief Financial Officer, Company Secretary, Group HR Director, the Audit Committee Chairman and the Chairman. Following these meetings a brief was established and a short list of candidates were interviewed by the Chief Executive Officer, Group HR Director, the Chairman and the Audit Committee Chairman. As announced on 17 August 2016, this has resulted in the appointment of Richard Cotton. It is anticipated that he will commence working with Dechra in January 2017.
Recruitment of Company Secretary
During the year, the Board approved the appointment of a new General Counsel and Company Secretary, Suzana Cross, who joined in November 2015. Suzana has extensive experience as a General Counsel and Company Secretary across a range of organisations. Further details of which are disclosed in the Board of Directors.
Non-Executive Directors and Senior Executive Team (SET) Succession Planning
There have been a number of changes at Board level, as described above, and within the SET with the addition of Suzana Cross and the retirement of Mike Annice, the Group Manufacturing Director, who retired on 31 July 2016. Odgers were appointed to assist with the recruitment process for the latter role. A field of candidates were identified for interview, which resulted in the successful recruitment of Greig Rooney as Group Manufacturing and Logistics Director. Greig commenced employment on 4 July 2016, which permitted a successful handover with the outgoing post holder, Mike Annice. Dr Anthony Lucas, the Group's Product Development Director, was also promoted to the SET.
Further details in relation to the changes to the SET can be found in the Corporate Social Responsibility Report. The succession planning review which was undertaken in the 2015 financial year will be updated to reflect these changes.
Leadership Needs of the Group
During this financial year, the SET worked with an external partner to identify key areas to optimise their effectiveness. In light of the recent acquisitions and changes to the SET membership, we will continue to build on this work.
In addition, during the year a number of leadership development programmes have been initiated within key areas of the Group to ensure that the Company has strong internal candidates for key leadership positions. Further details can be found in the Corporate Social Responsibility Report.
The three acquisitions, further details of which can be found in the Strategic Report, have added significantly to the overall talent pool and a Group-wide review of talent and succession is scheduled to take place during the 2017 financial year. This will be supported by the new Human Capital Management (HCM) system. The details relating to the implementation of the HCM system can be found in the Corporate Social Responsibility Report.
Appraisal Process and Re-appointment of Directors
Following an internal evaluation, further details of which are provided in the Corporate Governance Report, the Committee has concluded that each of the Directors seeking re-election continues to be an effective member of the Board. At the forthcoming Annual General Meeting Tony Rice, who was appointed to the Board on 5 May 2016, will offer himself for election, and all of the remaining Directors will retire and offer themselves for re-election, excluding Michael Redmond.
Nomination Committee Chairman
5 September 2016