Herantis Pharma Plc is a public Finnish limited liability company, which complies with the Finnish Companies Act, Securities Market Act, Finnish Accounting standards (FAS), the rules of Nasdaq First North Growth Market, and the company’s Articles of Association.
Annual General Meeting
The Annual General Meeting is Herantis Pharma’s highest decision-making body. The company’s Board of Directors invites the Annual General Meeting within six months after the end of the financial year. The Annual General Meeting decides on adopting the financial statements and on distribution of the result shown in the balance sheet, grants the discharge of the Board of Directors and the CEO from liability, decides the number of the members of the Board of Directors, and the remuneration of the Board of Directors and the auditors. The Annual General Meeting also elects Board members and auditors, as well as deals with any other matters on the agenda. General meeting documents are kept on the company’s website for a period of no less than five years from the general meeting.
Board of Directors
The Board of Directors is responsible for the administration of the company and the appropriate organization of its operations. According to the Articles of Association the Board of Directors consists of four to eight ordinary members. The term of the Board member shall begin from the General Meeting where he or she has been elected and last until the closing of the following Annual General Meeting. The Board of Directors shall elect a Chairperson and, if it finds it warranted, a Vice-Chairperson from among its members for one term at a time. All Board members of Herantis Pharma are deemed to be independent of the company. The Board of Directors has implemented a written charter for its work. An Audit Committee and Remuneration Committee have been established and the main duties and operating principles of each committee are included in a written charter. A Shareholders’ Nomination Committee has also been established. A written charter has been implemented regulating the nomination and composition of the Nomination Committee and defining the tasks and duties thereof.
The following members have been appointed to the Shareholders’: Nomination Committee:
- Kyösti Kakkonen, representing Joensuun Kauppa ja Kone Oy (Chairman),
- Pia Gisgard, representing Swedbank Robur,
- Timo Syrjälä representing himself and Acme Investments SPF S.à.r.l., and
- Timo Veromaa, the Chairman of Herantis Pharma’s Board of Directors.
The Shareholders’ Nomination Committee consists of four members, of which three represent the company’s shareholders. The Chairman of Herantis Pharma’s Board of Directors serves as the fourth member of the committee. The committee prepares and presents to the Annual General Meeting proposals on the remuneration, number and members of the Board of Directors.
CEO manages the day-to-day operations in accordance with guidelines and rules set out by the Board of Directors and actively looks after the interests of the company. CEO is appointed and removed from office by the Board of Directors, to whom he reports e.g. on the company’s financial position, business environment, and other significant issues. CEO guides and supervises the company and its businesses and is responsible for the daily operational management of the company as well as strategy implementation.
Along with the CEO, Herantis’ Management team includes as of today the Chief Scientific Officer (CSO) and Chief Financial Officer (CFO).
Internal Controls and Risk Management
The risks of Herantis Pharma are mainly drug development related, such as clinical, technical, biological, regulatory, and strategic decision-making risks, and financial, such as budgeting, accounting, funding and other financial control risks. With its internal control policies and practices Herantis Pharma aims to ensure that appropriate financial information is available timely and accurately for any decision making and other needs, and that its financial reports are reliable, complete, and timely. Further, they aim to ensure that the company’s operations are efficient and implement the strategy of the company. Also, they aim to ensure that the company is in compliance with all applicable laws and regulations.
The shares of Herantis Pharma Plc are listed for trading on the Nasdaq First North Growth Market Finland with ticker symbol “HRTIS”. The First North Growth Markets require the nomination of a Certified Advisor. The Certified Advisor is responsible for ensuring that the company complies with the rules and regulations of First North Growth Market. UB Securities Ltd, a company residing at Aleksanterinkatu 21A, FI-00100 Helsinki, Finland, is the Certified Advisor to Herantis Pharma Plc. UB Securities’ phone number is +358 9 25 380 225.
Remuneration of the directors
Herantis’ Board members were paid in total EUR 134,376.32 as remuneration during the financial year 1 Jan 2022 – 31 Dec 2022. On 21 April 2022 the General Meeting of Herantis resolved that the remuneration payable to the members of the Board of Directors shall be EUR 18,000 annually for each member of the Board except for the Chairman of the Board who shall be paid EUR 30,000 annually. The remuneration proposed above remains unchanged from the previous year. The Chairman of the Audit Committee shall receive a fixed annual fee of EUR 8,000 and each member of the Audit Committee a fixed annual fee of EUR 4,000. The Chairman of the Remuneration Committee shall receive a fixed annual fee of EUR 4,000 and each member of the Remuneration Committee a fixed annual fee of EUR 2,000. The board members are also reimbursed reasonable travel expenses related to Board of Director’s duties. Board member Frans Wuite was interim CEO of Herantis from end of January 2022 until mid of July 2022.
Remuneration of the management team members
The Board of Directors is responsible for appointing the CEO, and for approving the remuneration of the CEO and other management team members. The Remuneration Committee prepares decision proposals to the Board of Directors regarding said matters. The Board of Directors considers the interests of shareholders when deciding on the remuneration. The remuneration of the CEO and other management team members comprises fixed basic salary, fringe benefits (such as company phone), a performance- based bonus, and a stock option plan. The bonus payments are assessed and decided upon annually by the Board of Directors, and a possible bonus is paid in January of the following year. The maximum bonus for the CEO is 50% and for other management team members 33% of fixed annual compensation. The remuneration to the CEO for 2022 consists of payroll and transition costs for previous CEO, payroll for interim CEO from January – mid of July 2022 and payroll from mid of July 2022 to end of December 2022 for existing CEO, in total EUR 886,804.75. For the management excluding CEO, the remuneration for 2022 was EUR 941,674.40 whereof part of it has been paid as consultancy fee and classified as other operating expenses in the statement of profit & loss. The CEO contract may be terminated by the company or by the CEO with a six-month notice period. If terminated by the company the CEO is entitled to severance payment equal to 6 months base salary. The CEO is entitled to statutory pension benefits.
Persons discharging managerial responsibilities and their holdings
The company voluntarily maintains a public list of its persons discharging managerial responsibilities, as well as a list showing changes that have occurred in their own security holdings as well as in the holdings of their closely associated persons. The list of holdings by persons discharging managerial responsibilities is provided below. A list of transactions is also available on the web site of the company. The Board of the Directors of the company has approved an Insider Policy, which aims to ensure compliance with Finnish law, EU regulations and directives, and the rulebook of the Nasdaq First North Growth Market.
The external audit is to verify that the financial statements give a true and fair view of the company’s financial performance and financial position for the fiscal year. The company’s auditor gives the company’s shareholders the statutory auditor’s report on the annual financial statements. The audit performed during the financial period is reported to the Board of Directors. The auditor and the Board of Directors will meet at least once a year. The Annual General Meeting elects the auditor. The auditor’s term of office includes the current financial year and ends at the end of the following Annual General Meeting. Herantis Pharma’s auditor is authorized public accountants PricewaterhouseCoopers Oy (Business ID 0486406-8), principal auditor is APA Panu Vänskä.
Public Disclosure policy
Herantis complies with the disclosure obligations as outlined and defined in the Market Abuse Regulation ((EU) No 596/2014) and in the First North Nordic Rulebook, which states that the company is required to disclose information to the public in a timely and consistent manner.
In addition to company announcements, the most important disclosure channel for information related to the company’s activities and financial situation is on the company’s website www.herantis.com. Herantis Pharma publishes its company announcements through Nasdaq Helsinki Ltd, in the most relevant public media and on the company’s website in both English and Finnish. Herantis Pharma publishes any essential materials that have been presented in public events, such as result presentations and conference attendance, on its website as simultaneously as possible.
The information made public by the company shall be accurate and complete and give a true and fair picture of the company’s operations. The information is disclosed as soon as possible as set forth in the applicable regulations. The company’s announcements are issued to give information on matters that could likely have a significant effect on the price of the company’s financial instruments. The timing of their publishing shall be defined based on applicable regulations and when otherwise deemed relevant by the company. The following situations and/or activities are considered as inside information to be disclosed and are reviewed regularly on a case-by-case basis and take into consideration the stage of the company’s development projects:
- Any significant activities related to clinical development projects, such as their launch, completion, and end results;
- Information related to new collaboration agreements with pharmaceutical companies;
- Significant decisions made by regulatory or other relevant authorities relevant to the company’s clinical development projects;
- Information on significant financing transactions;
- The status of the company’s clinical research project changes significantly compared to previously disclosed information or otherwise announced expectations the company will inform of deviations;
- If the company’s financial performance or liquid cash position significantly deviates from what can be justifiably concluded on the basis of the information previously reported by the company, the company shall issue a profit warning.
The company regularly assesses the potential effect of the various facts on the price of its financial instruments. The assessment shall be made from the point of view of whether a reasonable investor would be likely to use the information as part of the basis of his/her investment decisions. The company adheres to a standard thirty (30) calendar days silent period prior to publication of its half-yearly reports and other financial results. During the silent period, the company does not organize or attend private meetings with the media, analysts or investors. The company may, however, during the silent period, answer questions in relation to its known business operations and publicly available information. As a general policy, the company does not comment on market rumors, stock price trends, actions of competitors or customers, analyst estimates, or confidential and unfinished business unless the company deems it relevant to correct clearly incorrect information. If inside information regarding the company has leaked to public the company shall issue a related company announcement.
The designated authorized persons to make public statements on behalf of Herantis Pharma are its CEO and Chairperson of the Board. The CEO is responsible for the company’s communications.
Approval of the disclosure policy
The Board of Directors of Herantis Pharma has approved this disclosure policy on 14 December 2021.