Section 172(1) Statement

Section 172(1) of the Companies Act 2006 requires a director of a company to act in a way he or she considers in good faith, would most likely promote the success of the company for the benefit of its members as a whole, and in doing so, have regard, amongst other matters, to:

(a) the likely consequences of any decision in the long-term;
(b) the interests of the Company’s employees;
(c) the need to foster the Company’s business relationships with suppliers, customers and others;
(d) the impact of the Company’s operations on the community and the environment;
(e) the desirability of the Company maintaining a reputation for high standards of business conduct; and
(f) the need to act fairly as between members of the Company.

Set out below are some examples of how the directors have had regard to the matters set out in section 172(1)(a)-(f) when discharging their section 172 duty, and the effect on certain decisions made by the directors.

The directors consider the likely consequences of any decision in the long term. Each company within the ConvaTec Group is bound by Group policies consistent with the Group’s culture in all key areas including supplier management and outsourcing, customer interactions, human resources, legal and compliance, quality and regulatory, and health and safety.

During the year, the directors have continued to hold quarterly board meetings, the majority took place virtually, supplemented by adhoc meetings where appropriate. The directors received information on a range of matters concerning the business activities of the Company and its employees, to support the directors in exercising their discretion when considering the matters set out in section 172(1). The Directors closely monitored the developments of the Covid-19 pandemic to ensure measures were in place to safeguard employees and business continuity, particularly at the Company’s manufacturing sites which remained operational during the year. Two of the Company’s directors in their roles as senior managers, separately had oversight of the Company’s manufacturing operations and face-to-face patient interaction which supported the board in receiving comprehensive updates. One of the directors was a member of the cross functional Covid-19 Rapid Response Team, providing regular updates to the Group Board. Further details the group’s response to the pandemic may be found on page 11 of the ConvaTec Group Plc Annual Report 2020.

The directors received and considered reports detailing: environmental, social and governance initiatives; health & safety matters; and projects to promote energy efficiency at various locations, including office and manufacturing sites from the Global Environment. Health & Safety Team. The directors received updates concerning Brexit, outlining key risks and mitigations that were being taken across the group to minimise impact to the supply chain. The directors reviewed and approved data concerning the Company’s payment practices and policies with regard to the payment of the Company’s suppliers.

To support the conduct of normal business in an expeditious manner, the board delegates certain authority to management, pursuant to the Company’s Delegation of Authority which is regularly reviewed by the directors.

The majority of stakeholder engagement takes place at a group level and further details of the group’s stakeholders and how their interests are considered can be found on pages 40 to 41 of ConvaTec Group Plc’s Annual Report 2020