Corporate Governance Statement

The Board is accountable to the Company’s shareholders for good corporate governance and it is the objective of the Board to attain a high standard of corporate governance. This information is disclosed in accordance with Rule 26 of the AIM Rules for Companies.

Corporate Governance Statement

The Board is accountable to the Company’s shareholders for good corporate governance and it is the objective of the Board to attain a high standard of corporate governance. The Board has adopted the Quoted Companies Alliance Corporate Governance Code (QCA Code) and the following text sets out how the Group complies with the 10 Principles of the QCA Code. The Board will monitor the suitability of the QCA Code on an annual basis and revise its governance framework as appropriate as the Group evolves.

References to "the Company" refer to Synairgen plc, and references to "the Group" refer to Synairgen plc and its wholly-owned subsidiaries.

Principle 1 - Establish a strategy and business model which promote long-term value for shareholders

Our business model is to leverage our deep understanding of respiratory biology to develop an investigative broad-spectrum inhaled antiviral for the possible prevention and treatment of severe viral lung infections in high-risk patient groups, including the elderly, those with compromised immune systems, and those with certain co-morbitities. Using our BioBank platform (consisting of human tissue models of respiratory diseases), and our clinical trial capabilities, the Group's strategy is to identify novel drug targets, progress them through early stage clinical trials and commercialisation.

The Board reviews the strategy annually and more frequently if circumstances dictate.

Principle 2 - Seek to understand and meet shareholder needs and expectations

The Company is committed to communicating openly with its shareholders to ensure that the Group's strategy and performance are clearly understood. We communicate with shareholders through the publication of our Annual Report and Accounts, the preliminary statement and half-year announcements, press releases on RNS, the annual general meeting (AGM), and face-to-face meetings. A range of corporate information (including all the Company's announcements and presentation of certain trial data) is also available to shareholders, investors and the public on our website. We also maintain a subscription service for announcements.

Private shareholders: The AGM is the principal forum for dialogue with private shareholders, and we encourage all shareholders to attend and participate. The Notice of Meeting is sent to shareholders at least 21 clear days before the meeting. The chairs of the Board and all committees, together with all other directors, whenever possible, attend the AGM and are available to answer questions raised by shareholders. Shareholders vote on each resolution, by way of a poll. For each resolution we announce the number of votes received for, against and withheld. We present, from time to time, at investor meetings which are particularly focused at private/retail investors.

Institutional shareholders: The directors actively seek to build a mutual understanding of objectives with institutional shareholders. Our CEO and CFO make presentations to institutional shareholders and analysts immediately following the release of the full-year and half-year results. The majority of meetings with shareholders and potential investors are arranged by the Company's brokers. Following meetings, the broker provides anonymised feedback from fund managers met.

The CEO is the key contact for shareholder liaison.

Principle 3 - Take into account wider stakeholder and social responsibilities and their implications for long-term success
StakeholderReason for engagementHow we engage
StaffMotivation, operational efficiency, alignment with strategic objectives and opportunity to contribute ideasCompany and departmental meetings, appraisals, LTIP participation
Pharmaceutical companiesFuture potential customersConference attendance, early stage interaction on projects, website awareness
Collaboration partnersMaximise outcome from projectRegular meetings
Consultants and advisersSynairgen runs a virtual model and therefore relies heavily on external expertsRegular interaction and project meetings (weekly if necessary)
University of SouthamptonSynairgen collaborates closely with University of Southampton researchers, and has intellectual property licences and a facilities agreement in place with the University.Meetings with academic founders and other researchers, joint projects, and jointly written academic papers
Major suppliersRegular project meetings where appropriate
ShareholdersAnnual report, interims, meetings formal (AGM) and post results or major announcements
Principle 4 - Embed effective risk management, considering both opportunities and threats, throughout the organization

A summary risk register is maintained, which is reviewed annually by the Board. The principal risks and uncertainties facing the Group, with mitigation strategies, are set out in the Annual Report and Accounts.

Project risk management is continually evaluated by weekly project meetings and other management tools. IT risk is covered at bi-annual meetings with external IT advisers. A Health and Safety report is prepared for the Board.

Principle 5 - Maintain the Board as a well-functioning, balanced team led by the chair

The members of the Board have a collective responsibility and legal obligation to promote the interests of the Group, and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the Chairman of the Board.

The Board consists of eight directors of which three are executive and five (including the Chairman) are non-executive. The Board is supported by two committees (Audit and Remuneration & Nomination) and a Scientific Advisory Board. The Board convenes for monthly meetings and ad hoc meetings when necessary. Non-executive directors are required to be available at other times as required for face-to-face and telephone meetings with the executive directors and, if necessary, members of the management team.

The Board notes that certain of its non-executive directors have been appointed for more than nine years but considers that they remain independent in that they remain fully committed and prepared to act to promote the success of the Company for the benefit of shareholders as a whole. The Company puts all directors up for re-election on an annual basis rather than the three-year rotation period stipulated in the Company's articles of association to enable shareholders to confirm their support of the directors, particularly that the non-executive directors remain independent.

The Board has a schedule of regular business, financial and operational matters, and each Board committee has defined terms of reference to ensure that all areas for which the Board has responsibility are addressed and reviewed during the course of the year. The Chairman is responsible for ensuring that, to inform decision-making, directors receive accurate, sufficient and timely information. The Company Secretary compiles the Board and committee papers which are circulated to directors prior to meetings. The Company Secretary provides minutes of each meeting and every director is aware of the right to have any concerns minuted and to seek independent advice at the Group’s expense where appropriate.

Principle 6 - Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities

All eight members of the Board have relevant sector experience in life sciences. Four members of the Board have public markets experience from other companies. The Board has expertise in the following key areas: public markets; discovery and pre-clinical respiratory projects, clinical development, business development/licensing, finance and M&A. The Board believes that its blend of relevant experience, skills and personal qualities and capabilities is sufficient to enable it to successfully execute the current phase of the Group's strategy.

Two of the non-executive directors hold recognised financial qualifications. One of them, Amanda Radford, chairs the Audit Committee. The Board is comprised of six male members and two female members. The Board will continue to keep its gender diversity under review and improve where and when practicable.

The Company appointed a part-time Company Secretary in 2021, who is a qualified corporate lawyer and acts as company secretary to several other publicly quoted companies. The Company Secretary reports directly to the Chairman on governance matters.

Principle 7 - Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

The Board has previously completed evaluation processes, whereby all of the directors completed a questionnaire about the effectiveness of the Board. The same exercise was carried out to assess the performance of the Chairman. The Board reviewed the outcome of the questionnaires and has addressed several of the issues raised, specifically the previous gender imbalance of the Board. The Board will continue to consider ways to address its effectiveness and how to best implement any findings.

Principle 8 - Promote a corporate culture that is based on ethical values and behaviours

The Group is a biotechnology group focused on developing new respiratory therapies which will make a difference to people’s lives. We recognise the importance of our relationships with all our stakeholder groups (as set out above).

We foster a positive, values-based culture and assess colleague performance based on the following:

Pioneering: We pioneer through a relentless approach to research and analysis from “bench to bedside” and by being open and supportive with colleagues and collaboration partners.

Caring: We demonstrate care in the way we put patients first; and always show respect to others.

We Deliver: In an uncertain environment, we deliver through rigorous control of execution and the passion to see our programmes through.

Principle 9 - Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

The Board provides strategic leadership for the Group and operates within the scope of a strong corporate governance framework. Its purpose is to ensure the delivery of long-term shareholder value, which involves setting the culture, values and practices that operate throughout the business, and defining the strategic goals that the Group implements in its business plan.

The Board defines a series of matters reserved for its decision and has approved terms of reference for its Audit and Remuneration & Nomination Committees to which certain responsibilities are delegated.

The chair of each committee reports to the Board on the activities of that committee.

The Audit Committee has primary responsibility for ensuring that the financial performance of the Group is properly measured and reported on, reviewing the interim financial information and annual financial statements before they are submitted to the Board. The committee also reviews, and reports on, reports from the Group’s auditors relating to the Group’s accounting controls. It makes recommendations to the Board on the appointment of auditors and the audit fee. The committee monitors the scope, results and cost-effectiveness of the audit. It has unrestricted access to the Group’s auditors. In certain circumstances it is permitted by the Board for the auditors to supply non-audit services. The committee monitors the application of this policy in order to safeguard auditor objectivity and independence.

The Remuneration & Nomination Committee is responsible for making recommendations to the Board on remuneration policy for executive directors and the terms of their service contracts, with the aim of ensuring that their remuneration, including any share options and other awards, is based on their own performance and that of the Group generally. The committee administers the Long-Term Incentive Plans and approves grants under these schemes. It also advises on the remuneration policy for the Group’s employees. The committee is responsible for all senior appointments that are made within the Group.

The Scientific Advisory Board provides strategic advice and input on the scientific aspects of the Group’s research and development programmes.

The management team, consisting of the three executive directors, the Head of Clinical Operations, the Chief Regulatory Officer, the Head of Finance, the Chief Commercial Officer, and the Head of CMC and Quality reviews operational matters and performance of the business, and is responsible for significant management decisions while delegating other operational matters to individual managers within the business.

The Chairman has overall responsibility for corporate governance and in promoting high standards throughout the Group. He leads and chairs the Board, ensuring that committees are properly structured and operate with appropriate terms of reference, ensures that performance of individual directors, the Board and its committees are reviewed on a regular basis, and leads in the development of strategy and setting objectives.

The CEO provides coherent leadership and management of the Group, leads the development of objectives, strategies and performance standards as agreed by the Board, monitors, reviews and manages key risks and strategies with the Board, ensures that the assets of the Group are maintained and safeguarded, leads on investor relations activities to ensure communications and the Group’s standing with shareholders and financial institutions is maintained, and ensures that the Board is aware of the views and opinions of employees on relevant matters.

The Executive Directors are responsible for implementing and delivering the strategy and operational decisions agreed by the Board, making operational and financial decisions required in the day-to-day operation of the Group, providing executive leadership to managers, and championing the Group’s core values.

The Non-Executive Directors contribute independent thinking and judgement through the application of their external experience and knowledge, scrutinise the performance of management, provide constructive challenge to the executive directors and ensure that the Group is operating within the governance and risk framework approved by the Board.

The Company Secretary is responsible for providing clear and timely information flow to the Board and its committees and supports the Board on matters of corporate governance.

For details of matters reserved for the Board, click here.

Principle 10 - Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

In addition to the investor relations activities described above, a directors’ remuneration report outlining the activities of the Remuneration Committee, remuneration policy, directors’ interests in share options and directors’ remuneration is included in the annual report and accounts. A report from the Audit Committee is included in the annual report and accounts.