Board succession and diversity

Succession planning

Executive succession

During 2016, the Nomination and Governance Committee considered potential internal candidates for the position of Chief Executive Officer (‘CEO’). Following discussions with the Chairman and CEO regarding his desire to reduce his executive involvement, the Committee concluded that the Group should undertake an external search process in 2017. The Committee focused the search on candidates with the necessary depth of pharmaceutical experience, vision of where to lead the Company and ability to further develop the executive team.

The Committee spent a significant amount of time developing and implementing its plan to find a new CEO. The Committee oversaw the executive search process that was undertaken by Spencer Stuart
and ensured that the Board and executive team had a thorough understanding of how the final candidate would fit into the organisation. Role profiles for the CEO and Executive Chairman were carefully developed. The profiles allow an appropriate sharing of responsibilities whilst ensuring that the CEO is responsible for delivering the Group’s strategy.

Independent succession

Following the retirement of Dr Ronald Goode in May 2018, the Company has completed the 2014 succession plan for the orderly replacement of longer-serving independent directors who joined when the Company listed. The Committee is cognisant that, following the appointment of an additional executive director and Dr Ronald Goode’s retirement, there will be an equal balance of independent and non-independent directors. During 2018, the Committee will develop arrangements for further succession of independent directors and will consider additional appointments in order to ensure an independent majority and the right mix of skills and experience.

Independent Non-Executive Directors are normally expected to serve for up to nine years. They may be invited to serve for longer, but additional service beyond nine years is subject to particularly rigorous review.

Director recruitment process

In terms of the process for identifying candidates, the Nomination and Governance Committee has the necessary authority to advance the search process to the point when a shortlist of candidates or a candidate is proposed to the Board.

The Committee will undertake a process to identify a candidate to join the Board as an Director, which can be summarised as follows:

  • The Senior Independent Director, in consultation with the Chairman and Chief Executive with the assistance of the Company Secretary, establish a role and experience profile for the position
  • A draft profile with the key characteristics and experience required will be discussed by the Nomination and Governance Committee
  • Following an assessment of the executive search market, an executive search firm will be appointed to identify candidates who meet the role profile
  • An extensive list of candidates will be identified by the executive search firm and a shortlist will be created through discussions with the Senior Independent Director and other committee members
  • The Senior Independent Director and other Committee members will meet the shortlisted candidates, discuss their impressions at the Nomination and Governance Committee and make recommendations
  • A second round of meetings will be undertaken with the Chairman and Chief Executive and the Vice Chairman
  • Following a full induction process and the candidate confirming their desire to join the Board, the Committee will recommend the appointment to the Board

Diversity

Hikma’s inclusive workplace welcomes different cultures, perspectives, and experiences from across the globe. Hikma welcomes variety and treats all employees equally regardless of any actual or perceived characteristic. Hikma is committed to employing and engaging talented people, irrespective of their race, colour, religious creed, age, sex, marital status, national origin, present or past history of mental or physical disability and any other factors not related to a person’s ability to perform a role. Since its founding, Hikma has actively promoted gender diversity across its operations and continues to have excellent diversity in terms of culture, age, background, skills and experience. Hikma has successful empowerment and talent development programmes to help all employees make the most of their potential.

The Board has not set specific, measurable diversity objectives because it needs flexibility to recruit the right candidates. The Board considers that it has always demonstrated strong ethnic diversity. The Committee was pleased to be able to improve gender diversity over the past few years but recognises that the current level of female representation is not sufficient for a leading international organisation. As the Committee considers appointing an additional independent director over the course of 2018, it will seek to identify candidates who bring the right skills and experience, as well as the potential to improve the gender balance. The Committee continues to require the external search consultants to actively seek female candidates and to ensure that a significant proportion of long and shortlisted candidates are female.