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(1) duty, and the effect on certain decisions made by the directors.

The directors have taken steps to implement a more structured reporting process, increasing the scope of information received and considered by the directors at the formally scheduled board meetings. The directors received information on a range of matters concerning the business activities of the Company, to support the directors in exercising their discretion when considering the matters set out in section 172.

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.

The directors received and considered reports outlining stakeholder engagement activities which had taken place at a group level, whereby much of this activity takes place, due to the diversity and breadth of the group’s stakeholders. Further details of the group’s stakeholders and how their interests are considered can be found on pages 10 to 13 of ConvaTec Group Plc’s Annual Report 2019. During the year, the directors considered feedback from healthcare professionals and customers through the me+ programme, further details of which may be found on page 51 of ConvaTec Group Plc’s Annual Report 2019.

During the year, the directors considered certain transactions to be entered into by the Company, as part of the group’s debt refinancing programme (“Refinancing Programme”). When considering the proposed transactions undertaken by the Company, the directors had regard to the Company’s assets, liabilities, and the benefit to the Company and its sole member, of the successful completion of the Refinancing Programme. Further details of the Refinancing Programme may be found on page 54 of ConvaTec Group Plc’s Annual Report 2019.

As part of a rationalisation initiative within the Amcare Group, the directors reviewed and approved the acquisition of the business and assets of several subsidiary entities. In reaching their decision, the directors were mindful of the benefits to the Company and wider group, achieved through a more streamlined group structure.

During the year, the directors reviewed and approved data concerning the Company’s payment practices and policies with regard to the payment of the Company’s suppliers, and received and considered reports in relation to environmental and health & safety matters.