Tony Rice

Non-Executive Chairman

Dear Shareholder

On behalf of the Board, I am pleased to present Dechra's Governance report for the year ended 30 June 2019.

Our Values

Dechra has a Code of Conduct which sets out the standards of conduct to be adopted by all employees. The Board is committed to the highest possible standards of openness, integrity and accountability and encourages any individual who has genuine concerns about any form of malpractice, including any breaches of the Dechra Values, to raise those concerns.

Managing Governance

The Board recognises that excellence in corporate governance is important in order to generate and protect value for our investors. Our governance structure is designed to maintain effective control and oversight of our business whilst at the same time promoting the entrepreneurial spirit that has underpinned Dechra's success to date.

In our Corporate Governance report we aim to provide a clear and meaningful explanation of how the Board leads the Group and discharges its governance duties, including how we apply the provisions of the UK Corporate Governance Code 2016 (the Code). During the year, we have reviewed the UK Corporate Governance Code 2018 (the New Code) and assessed its impact on our Governance structure. We have put in place an action plan in readiness to enable us to comply with the New Code, which will apply from 1 July 2019.


We have a strong and balanced Board with a range of complementary skills to support the strategic and operational direction of the Group. During the year there were two membership changes to the Board. We welcomed Lisa Bright as Non-Executive Director in February 2019. Lisa's biographical details can be found in the Senior Executive Team. She will act as the Employee Engagement Designated Non-Executive Director, working closely with the Group HR Director. Lisa has been appointed as a member of the Audit, Nomination and Remuneration Committees. Richard Cotton stood down in April 2019 as the Chief Financial Officer. We are currently looking for his successor (further details of the recruitment process can be found in the Nomination Committee report; however, in the meantime the Dechra Veterinary Products EU Finance Director, Paul Sandland, has stepped in as the Acting Chief Financial Officer in accordance with our emergency succession planning.

The Senior Executive Team (SET) has the responsibility for the overall leadership of the Group, driving the successful implementation and execution of the strategy.

Board Effectiveness

As Chairman, I am responsible for the leadership of the Board and driving its effectiveness in all aspects of its role. During the 2019 financial year we undertook an internal evaluation of the Board, its Committees and individual Directors. I am delighted to report that the overall outcome from the evaluation was that the Board and its individual Directors are performing effectively, and that the Board is dynamic and consistent with the organisational culture of openness.

During the year the Board undertook the annual review of the Diversity Policy. I am pleased to report that the female representation of our Board has increased from 14.3% to 28.6%. The Board is proud of the diversity within the Group and monitors and reviews our position in this area.


We are required by the Code to include an assessment of the viability of the Group. This is covered in the Corporate Governance. The Audit Committee Report contains further details on how it has assisted the Board in reviewing the financial reporting and internal financial control effectiveness, and managing the relationship with the external auditor.


Our Remuneration Policy is designed to promote the long term success of the Group and to reward the creation of long term value for shareholders. During the year, work has commenced on our Global SAYE Plan and preparations are in place for the initial launch to our USA employees.

Relations with Shareholders

The Annual General Meeting will be held in Northwich on 18 October 2019 and I would like to invite our shareholders to attend. It will provide you with an opportunity to meet the Board and ask any questions that you may have in respect of the Group's activities.

Finally, should you have any questions in relation to this report, please feel free to contact me or the Company Secretary.

Tony Rice

Non-Executive Chairman

2 September 2019