Michael Redmond

Michael Redmond

Nomination Committee Chairman

Dear Shareholder

On behalf of the Board, I am pleased to present the report of the Nomination Committee (the Committee). During the year, the Committee has 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.

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 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 2015 financial year this took place at the February meeting. An overview of the terms of reference is detailed in Corporate Governance.

Principal activities of the Committee during the year:

  • Review of the Chairman's Tenure
    The Committee reviewed the Chairman's tenure in 2014 and agreed that it remained in the best interests of the Group and its stakeholders for Michael Redmond to remain in position as Chairman until the 2016 Annual General Meeting. This will provide sufficient time to oversee the continued development of the Board and develop their understanding of Dechra further. The recruitment process for a successor has commenced. During the year an independent recruitment consultant, JCA Group (JCA), was retained to assist in the recruitment of the new Chairman. 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 Chairman of the Board. To assist JCA with the understanding of the requirements of the role, they met with the Chief Executive Officer, Chief Financial Officer and members of the Committee. A list of candidates has been long listed for interview.

    The Committee considers that Michael Redmond continues to lead the Board effectively and maintains his independence and integrity at all times. His previous pharmaceutical experience and the longevity of his association with the Company enables him to continue to make a strong and effective contribution.

  • Non-Executive Directors and Senior Executive Team (SET) Succession Planning
    The Group HR Director undertook a succession planning review of both the Non-Executive Directors and the SET and presented her findings to the Committee in February 2015. This review included restructuring the reporting lines for senior management. Appropriate succession plans have been documented for key roles and where an internal successor has been identified, development plans are being put in place to support these individuals.
  • Leadership Needs of the Group
    In considering the leadership needs of the Group, the Committee has focused on two key areas: defining the current talent map, and understanding the organisation's current capability versus the needs of the future strategic direction of the Company. In order to address these points a Group-wide talent review commenced with the SET and their direct reports. It is now being rolled out across the Group. The needs of the future strategic direction of the Company have been scoped in discussion with the Board and the process of matching talent to needs has begun.

    These are the first steps towards building a coherent Leadership Development Strategy which will ensure that our Leadership Team has the capabilities required to manage the business effectively and sustainably. The Company is working to ensure it has strong internal candidates for key leadership positions.
  • 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. All of the Directors will stand down and be proposed for re-election at the 2015 Annual General Meeting.

Michael Redmond
Nomination Committee Chairman
7 September 2015