During the Year, We Continued to Promote Our Hikma Values of Integrity, Respect, Excellence and Transparency
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During the year, we continued to promote our Hikma values of integrity, respect, excellence and transparency. 55 Chair overview 56 Corporate governance at a glance 58 Leadership 62 Structure 66 Nomination and Governance Committee 69 Audit Committee 73 Compliance, Responsibility and Ethics Committee 75 Remuneration Committee 79 Remuneration policy 86 Annual report on remuneration 101 Directors’ report Corporate governance 54 Hikma Pharmaceuticals PLC | Annual Report 2019 Chair overview Evolving governance Chair letter The Board has made excellent progress in further developing CORPORATE and enhancing its governance arrangements and overseeing GOVERNANCE the continued development and delivery of the Group’s strategy.” Dear Shareholders that Pat Butler will become our Senior Culture and strategy During 2019, the Board made excellent Independent Director over the course of The Board and the Executive Committee have progress in further developing and enhancing 2020 after a suitable transitional period. focused their efforts in 2019 on understanding its governance arrangements and overseeing and evolving the culture of the Company, the continued development and delivery of After nine years of excellent contribution and engaging with our employees, and promoting the Group’s strategy. dedication, Robert Pickering will retire from the relevant values to help us deliver the the Board during 2020. During his time with us, strategy. Further details are available on Executive leadership Robert has been a great friend to me and to pages 4 to 5. In the prior year, we separated the roles of Hikma. Robert has led the development of Chairman and Chief Executive Officer, with the structure of the Board and our governance Nina Henderson, the independent Board Siggi Olafsson joining us to take on the role arrangements as we have progressed from member overseeing employee engagement, of Chief Executive Officer. As I reported last being a family company to a global company has undertaken her first year in the role. The year, this change has greatly improved the with family values. engagement programme has been sponsored organisation and has taken us in a new internally by the Chief Executive Officer. Nina direction. Moving into 2020, our highly With Pat taking on the roles of Senior has met with employees at all levels in the effective leadership roles will help us achieve Independent Director and Chair of the organisation and has attended internal events the optimal performance from our people, Nomination and Governance Committee, we which have given employees an opportunity to assets and technology. have already begun the process of identifying communicate their ideas directly including the: a successor for his responsibilities as Chair of — Global Leadership Conference Board and committee composition the Audit Committee. We will ensure that a — Generics sales and marketing annual In 2019, we welcomed Cynthia Schwalm candidate with appropriate financial and audit conference to the Board. Cynthia brings extensive experience is appointed and that there is a — Business operations global team meeting commercial and leadership experience in suitable transitional period building on our the pharmaceutical and biotech industries, desire to ensure the transfer of organisational Nina formally reports to the Board on her as well as her experience as a healthcare knowledge. I would like to thank Pat for his findings at each meeting and provides us practitioner. She brings a fresh perspective achievements as the Committee Chair, with the benefit of her insights as we consider to the Board and will greatly assist in our particularly the enhancements to our financial formal business. next stage of growth. reporting and risk management which are now fully integrated into Hikma’s processes and Stakeholders Last year I reported that we would consider regularly considered at the Executive The Board undertakes significant efforts to succession arrangements for the Senior Committee. understand and take account of the desires Independent Director position over the course and perspectives of our patients, suppliers, of 2019. The Nomination and Governance The implementation of these changes and the employees, investors and communities in Committee has assisted the Board in new executive succession plan (see page 66 which we operate. Further details are available assessing the strengths of our current for further details) will ensure that the Board is on pages 10 to 11 and 102 to 103. Directors, areas where additional expertise well positioned for the next few years. Over the is required on the Board and developing a course of 2020 and beyond, Pat will develop a If there are any matters that you wish to plan for an orderly transition. This succession new medium-term succession plan for the discuss, please do not hesitate to contact me. plan takes account of our continued belief in Non-Executive Directors and will continue to the advantages of continuity and knowledge oversee the development and delivery of the of Hikma when undertaking additional executive succession arrangements. responsibilities on behalf of the Board. Accordingly, I am delighted to announce Said Darwazah Executive Chairman Hikma Pharmaceuticals PLC | Annual Report 2019 55 Corporate governance at a glance Highlights 2019 Priorities 2020 — Increased the level of independent representation on the Board — Identify, appoint and induct an additional independent Board member — Developed a new executive succession plan reflecting recent structural and people changes to the leadership — Complete the implementation of the Senior Independent Director succession plan — Considered the executives’ strategic and business plans — Undertake a full interview-based external Board evaluation — Further enhanced gender diversity in the boardroom — Develop a plan for the orderly transition of the Audit Chair — Oversaw management’s delivery of employee enablement responsibilities enhancements — Implemented recommendations arising from the recent externally facilitated Board evaluation — Enhanced the consideration of employee and stakeholder perspectives in the boardroom Experience Geographical experience The percentage of the Board with direct experience in the following areas: MENA 45% Business ethics and integrity 82% UK 64% Listed environment 91% Europe 91% Manufacturing 82% US 91% Sales 82% Multinational 100% Finance 100% Country of origin Governance 91% Iceland Commercial 100% UK Ireland Germany Pharmaceutical 100% USA Jordan Human resources 100% Regulatory and political 91% Strategy and risk 100% 56 Hikma Pharmaceuticals PLC | Annual Report 2019 > Corporate governance at a glance Attendance Time Meetings attended Directors (8 scheduled and 1 unscheduled) % 2019 2018 Said Darwazah 9/9 100% Corporate governance 14% 24% Financial performance 20% 20% Siggi Olafsson 9/9 100% Performance and operations 22% 20% Mazen Darwazah 9/9 100% Risk 14% 16% Strategy and acquisitions 30% 20% Robert Pickering 9/9 100% Ali Al-Husry 9/9 100% CORPORATE Pat Butler1 7/9 78% Dr Pamela Kirby 9/9 100% 2019 2018 GOVERNANCE Dr Jochen Gann 9/9 100% John Castellani 9/9 100% Nina Henderson 9/9 100% Cynthia Schwalm2 4/5 80% 1. Pat Butler was unable to attend meetings due to a family bereavement and a timing change made by Hikma 2. Cynthia Schwalm joined the Board on 1 June 2019 and was unable to attend one meeting because of a pre-existing commitment Diversity (as at 31 December 2019) Composition Board Executive Committee February March 2020 2019 Executive Chairman and Chief Executive Officer 18% 20% Other Executive Directors 9% 10% Non-Independent NED 18% 20% Independent NED 55% 50% Women 3 (27%) Women 3 (30%) Men 8 (73%) Men 7 (70%) 2020 2019 BAME1 3 (27%) BAME1 6 (60%) White 8 (73%) White 4 (40%) Independent Director tenure (as at 26 February 2020) Executive Committee reports2 Group Number % 0–3 years 2 33% 4–6 years 3 50% 7–9 years 1 17% Women 24 (29%) Women 2,836 (34%) Men 58 (71%) Men 5,488 (66%) BAME1 59 (72%) BAME1, 3 697 (36)% White 23 (28%) White 1,226 (64)% 1. BAME: refers to people who identify themselves as either Black, Asian or Minority Ethnic 2. People reporting to members of the Executive Committee 3. Data from Hikma’s US operations only Hikma Pharmaceuticals PLC | Annual Report 2019 57 Leadership Board of Directors Said Darwazah, 62 Siggi Olafsson, 51 Mazen Darwazah, 61 Executive Chairman Chief Executive Officer Executive Vice Chairman, President of MENA Appointed: 1 July 2007 | Joined Hikma: 1981 Appointed: 20 February 2018 | Joined Hikma: 2018 Appointed: 8 September 2005 | Joined Hikma: 1985 Nationality: Jordanian Nationality: Icelandic Nationality: Jordanian Board experience: Board experience: Board experience: Committee membership: Committee membership: Committee membership: None Experience: Said served as Chief Executive Officer from July 2007 to February 2018 and has served Experience: Siggi has a wealth of international Experience: Mazen has led and expanded the MENA as Chair since May 2014. Said has over 38 years of experience in the pharmaceutical industry, having region at Hikma. Since listing, he has Group level experience in numerous leadership roles at Hikma. held senior roles with Actavis Pharma Inc., Pfizer responsibility in his role as Executive Vice Chairman Under Said’s leadership, Hikma has expanded into Inc. and Omega Farma. Siggi served as President and executive responsibility for leading Hikma’s the US and become a leading player in injectables and CEO of Global Generic Medicines at Teva unique MENA business.