Georgia Healthcare Group PLC Annual Report 2018 Governance Directors’ Governance Statement Bill Huyett David Morrison Chairman Senior Independent Non-Executive Director Dear shareholders, Our Board recognises the importance of, and is committed to new Code and we look forward to providing an update in next year’s maintaining, the highest standards of corporate governance and is Annual Report on the steps we have put in place to align ourselves convinced of the strategic and operational benefits that good governance with the additional requirements. brings. We are pleased with the range of corporate governance actions We remain committed to working with our management to assure we have taken this year, the main highlights of which are set out below. that our high standards extend beyond the boardroom and are The Board is entirely committed to the principles of good corporate continually implemented in the successful delivery of the Group’s governance. Good governance gives us as a Board confidence that strategic priorities. we are making decisions that are truly in the Group’s long-term interest. It allows us to take into account the opinions of our stakeholders, including our shareholders, our customers, our employees and our Bill Huyett David Morrison suppliers. It allows us to be a positive driver for the healthcare sector Chairman Senior Independent Non-Executive Director and for the society we operate in more widely. 2 April 2019 2 April 2019 For the purposes of this Report, we report against the 2016 UK Corporate Governance Code (the “Code”) issued by the Financial Reporting Council (“FRC”) and are now compliant with each of the principles and provisions of the Code. Please see our Compliance Statement for changes made across the year. All Directors are fully Compliance statement aware of their duties and responsibilities under the Code, the Listing Throughout the year ended 31 December 2018, we applied the Rules, and the Disclosure Guidance and Transparency Rules. main Principles and complied with the Provisions of the 2016 Governance highlights UK Corporate Governance Code (except for D.2.1 and A.3.1 for which we became compliant during the year as explained • We reviewed the strategic direction of the Group and supported below). The Code and associated guidance is published by the the development of our strategy to grow our healthcare services Financial Reporting Council and is available at www.frc.org.uk. business through rolling out a network of new polyclinics, the development of medical tourism and other initiatives. We engaged with investors following last year’s AGM and • We received detailed updates on a number of our core operational made some important changes in response to matters that were functions, including the development of a customer application for raised. In response to concerns expressed by investors on the healthcare services, which we are confident will have wide-ranging composition of the Remuneration Committee (D.2.1), we took benefits for our customers. action to ensure that all members of the Remuneration Committee • Through our Audit and Clinical Quality and Safety Committees, are independent, in line with the Code, by the end of 2018. we engaged with and maintained oversight of the Internal Audit We were also mindful of the need to address the temporary and the Clinical Audit Process Units, ensuring a sound system of solution we had in place for our Audit Committee in 2018, control and that our activities cover the rapidly evolving business. and took action to ensure that only independent members We received reports and discussed with management the of the Board sit on the Audit Committee. improved controls and reporting in our hospitals and the harmonised health and safety procedures being put into place. Finally, with a view to further emphasise the independence • We appointed an independent firm specialising in Board of the Group’s governance from that of its majority shareholder evaluations, to conduct a formal evaluation of the Board as a Georgia Capital, Irakli Gilauri suggested to the Board that it whole and its Committees. We were pleased with the results of consider replacing him as Chairman (A.3.1). After considering the evaluation and are confident that the Board has a good balance the advantages and disadvantages of this proposal, the Board of skills, experience and diversity of personality and backgrounds was pleased to announce the appointment of Bill Huyett that encourages open, transparent debate and change. We also as independent Chairman of the Board in September 2018. refreshed the membership of the Committees after this evaluation. Set out on our website at: http://ghg.com.ge/compliance-with- The Board has been briefed on the revisions made to the Code for the the-main-principles-of-the-corporate-governance-code is the 2019 reporting year, as well as additional legislation introduced by the Board’s assessment of its application of the Main Principles Government. Extensive work has already been undertaken to ensure of the Code, as required by LR 9.8.6. the Company’s compliance against the provisions and principles in the 66