DEAR SHAREHOLDER,

I am pleased to report that for the year ended 30 September 2018, UDG Healthcare is again fully compliant with the requirements of the UK Corporate Governance Code. We have set out on the following pages the important details of our work during the year.

As previously announced, Gerard Van Odijk stepped down at our 2018 AGM, and we were delighted to welcome Erik van Snippenberg, another Dutch national and retired pharmaceutical industry executive, to the Board in June. Similarly, Alan Ralph retired as CFO and as a director during the year and Nigel Clerkin was appointed to replace him. As also previously noted, Philip Toomey has served on the Board for over nine years and will step down at our upcoming AGM, while Chris Brinsmead will have served nine years on the Board in April 2019. Chris Corbin has served on the Board since 2003, and I myself have served on the Board since 2004, and as Chairman since 2012. Thus, succession planning is important.

The Board currently comprises 11 members; myself, two executives and eight other non-executives, three of whom are female. Four board members are resident in Ireland (two executives and two non-executives), four are resident in the UK, two are resident in the US and one is resident in mainland Europe, while eight have pharmaceutical company and/or pharma services experience, and three come from other industries. To ensure our Committees are appropriately staffed and have adequate diversity in gender, geography and background, we believe a Board of between nine and 11 individuals is ideal. We therefore conducted two further searches during 2018, one by PwC and one by Korn Ferry. We expect to make at least one new appointment in the coming months to replace Philip Toomey, to plan for Chris Brinsmead’s retirement in 2020 and to broaden the pool of candidates for my succession, which will need to be considered in due course and in the light of the new 2018 UK Corporate Governance Code, which comes into effect for the Group from 1 October 2019.

During 2018 we engaged Independent Audit, an external independent consultant that we have used previously, to review the Risk, Investment and Finance Committee. Some good recommendations materialised including that there could be some improvements made to the risk oversight process and greater clarity on the remit of the Committee. The Board itself again conducted a self-evaluation in 2018, using an online questionnaire mediated by the Company Secretary, which raised no significant or new issues. An independent external review will be carried out in 2019.

We remain committed to the highest standards of corporate governance. As I said last year, the essence of good governance is a state-of-mind, not a set of rules. We strive to ensure that we focus on the important issues for the business and its stakeholders, using good sense, transparency, openness, and honesty.

Peter Gray
Chairman