Corporate Governance at Alkermes

NORTHAMPTON, MA / ACCESSWIRE / December 20, 2023 / Alkermes
Originally published in Alkermes September 2023 Corporate Responsibility Report

Board of Directors

Our Board is currently comprised of eleven members, each of whom has a term expiring at the Company's 2024 annual general meeting of shareholders.

Board Declassification Ongoing

In June 2021, after considering feedback from certain of our shareholders, we asked our shareholders to approve, and our shareholders approved, certain amendments to our Articles of Association that serve to declassify our Board over a three-year period. Accordingly, as of the Company's 2024 annual general meeting of shareholders, the Board will be fully declassified, with each director up for re-election on an annual basis.

Board Leadership

Richard Pops, our CEO, serves as Chairman of the Board. Recognizing the equal importance of effective independent oversight of the Board, the independent members of the Board annually elect an independent non-employee director to serve as the Lead Independent Director of the Board, with significant leadership, facilitation and shareholder engagement responsibilities. Effective July 2022, Nancy J. Wysenski was appointed to serve as the Lead Independent Director of the Board. For additional details about the role and responsibilities of the Lead Independent Director of the Board, see the Charter of Lead Independent Director which is available on the Corporate Governance page of the Investors section of our website.

Board Diversity and Composition

We recognize the immense value of a diverse and inclusive Board and the importance of setting an example at the Board level for the diverse and inclusive culture and talent that the Company seeks to foster and attract. Each of our current directors is qualified to make unique and substantial contributions to the Board. The Nominating and Corporate Governance Committee of the Board strives to ensure that the composition of the Board reflects an appropriate diversity of tenure, viewpoints, financial expertise, industry experience, skills and personal characteristics such as age, gender, race, ethnicity, and geographic or cultural backgrounds, and periodically reviews and updates the Company's criteria and desired qualifications for nomination to the Board to reflect this goal.

Consistent with this approach, in 2019, the Board codified in the Company's Corporate Governance Guidelines our practice, also known as the "Rooney Rule", of requiring that diverse candidates, including candidates who are women and candidates from underrepresented communities, be included in any pool from which nominees for a director opening are selected. We are proud that since 2011, women have comprised no less than 25% of our Board and that as of the date of this report, 45% of our Board is diverse in terms of gender or race/ethnicity, and we continue to look for ways to improve and enhance our Board's diversity.

Additional information about the diversity, qualifications and experience of our Board is set forth in our proxy statement for our 2023 annual general meeting of shareholders, which is available on the SEC Filings page of the Investors section of our website. A current copy of the Corporate Governance Guidelines is available on the Corporate Governance page of the Investors section of our website.

Commitment to Maintaining a Robust Board

Our Board is comprised of skilled and highly experienced directors who are actively engaged in oversight of the Company and its strategy. Our Board has a strong and diverse set of skills and experiences relevant to our industry and operations, including management and governance experience; corporate strategy and business development; industry experience or knowledge; commercial marketing and sales; finance and accounting; human capital management and more.

In order to help ensure that the current and future business and stakeholder needs of the Company are being appropriately served by the Board and its committees, the Nominating and Corporate Governance Committee of the Board regularly reviews and evaluates the skills, diversity, expertise and effectiveness of the Company's Board members, and of the Board and its committees as a whole, and facilitates an annual Board, Board committee, and individual director self-assessment process.

Board Refreshment

Since September 2019, the Board has engaged in significant refreshment activities.

As a result of these ongoing efforts, five of our longerserving directors have retired and the Board has appointed seven new independent directors, including two appointed in 2021 and one appointed in 2022.

These efforts have further added to the diversity of our Board and strengthened the Board's expertise in targeted areas of importance to our business strategy, including additional scientific, corporate governance and financial experience and investor perspectives.

Overboarding

As detailed in our Corporate Governance Guidelines, Board members are expected to ensure that their other existing and planned future commitments do not materially interfere with their service as an effective Board member and are subject to our "overboarding" policy that limits the number of external public company boards on which each Board member may serve. The limitations under this policy are reviewed and updated periodically and were revised in 2022 to align with market practices and shareholder feedback. In addition, Board members must seek approval from the Nominating and Corporate Governance Committee of the Board before accepting an invitation to serve on any new board of directors, and service on boards and board committees of other companies must be consistent with the Company's conflict of interest policies set forth in our Code of Conduct.

Board Committees

The Board delegates substantial responsibilities to its three standing committees - Audit and Risk Committee, Compensation Committee, and Nominating and Corporate Governance Committee - each of which is comprised solely of independent directors and led by an independent chair, and to other committees that the Board may establish from time to time, including the recently constituted Financial Operating Committee.

• The Audit and Risk Committee's responsibilities include, among others, appointing and overseeing the work performed by our independent auditor and accounting firm; reviewing our financial reporting and accounting controls; and overseeing our enterprise risk management program.
• The Compensation Committee's responsibilities include, among others, discharging the Board's responsibilities relating to the compensation of our executives; reviewing, approving and administering our incentive compensation and equity plans; and assessing the risks arising from our compensation programs and practices, including as they may impact our human capital development and management initiatives.
• The Financial Operating Committee's responsibilities include, among others, reviewing and providing advice with respect to the achievement by the Company of its financial targets; implementation of the Company's cost structure optimization activities; and evaluation of potential options related to the Company's non-core assets, including potential monetization and divestiture opportunities.
• The Nominating and Corporate Governance Committee's responsibilities include, among others, identifying qualified director candidates; facilitating an annual Board evaluation and self-assessment with respect to the performance and effectiveness of individual directors, the Board and its committees; and reviewing our governance objectives, practices, policies and initiatives, and overseeing related risks and opportunities, including in respect of director overboarding and conflicts of interest, political activities and contributions, human capital management initiatives and other corporate responsibility matters.

Each of the standing committees and the Financial Operating Committee, has a written charter, approved by the Board, which describes the committee's general authority and responsibilities. Each standing committee of the Board undertakes an annual review of its charter and works with the Board to make such revisions as it and the Board consider appropriate. A current copy of the charters for each of the standing committees and the Financial Operating Committee is available on the Corporate Governance page of the Investors section of our website.

Board's Role in Oversight of Risks and Opportunities

Assessing and managing risks and opportunities is the responsibility of our management. Our Board, directly and through its committees, oversees and reviews various aspects of the Company's management of such risks and opportunities, including periodic review of the Company's operating plans and overall corporate strategy, and discussion of key enterprise risks to such plans and strategy, ways to mitigate such risks, and key related opportunities.

In addition, the Board has adopted a Compliance Policy Statement pursuant to Section 225 of the Irish Companies Act 2014. On an annual basis, our directors review the Company's arrangements and structures intended to secure material compliance with the Company's relevant obligations under applicable Irish corporate and tax laws.

In performing their oversight functions, the Board and each committee of the Board has full access to management, including the Company's Chief Risk Officer and the Company's Chief Compliance Officer, as well as the ability to engage outside advisors. Additional information about our Board's role in oversight of risks and opportunities is set forth in our proxy statement for our 2023 annual general meeting of shareholders, which is available on the SEC Filings page of the Investors section of our website.

Public Policy Participation

We believe that public policy engagement is important and appropriate for Alkermes. Public policy plays an integral role in helping to facilitate patient access to important medicines and in promoting and supporting medical innovation.

Our public policy advocacy reflects our commitment to enhancing public health and advancing medical innovation. We seek to do this by advocating for, among other things, patient access to, and awareness of, medicines approved by the FDA for use in our disease areas of focus, including addiction and serious mental illness, and treatment system reforms that foster patient-centered care - care customized by the physician and patient to the clinical needs of the patient, regardless of the treatment setting in which the patient is seen.

At the federal and state levels, Alkermes team members actively participate in public policy discussions with governments, trade associations, patient groups and other organizations to share our perspective and experience as a biopharmaceutical company committed to advancing therapies for patients with unmet medical needs.

Our public policy engagement is guided by our commitment to our Code of Conduct, and support of policies that benefit patients who may use our products, including policies designed to support and improve access to medicines and foster innovation in health care.

For both our federal and state engagement efforts, our public policy priorities and positions are determined in consultation with our management team, and our Board is updated and provided an opportunity to comment on, our advocacy priorities and efforts. We also hire outside firms that can provide expertise on our key policy issues.

Additional information on our public policy participation, our political contributions and our trade association memberships can be found on the Public Policy page of the Responsibility section of our website.

Information Security and Privacy

As a global biopharmaceutical company, it is imperative that we maintain strong oversight of the security of all information in our possession to protect the privacy of patients, employees, partners and other stakeholders. This is essential to the sustainability and scalability of our business.

Our Information Security Governance Framework defines our information security strategy and is designed to provide oversight of our Information Security Management System (ISMS), which is aligned to the structured principles of the international standard ISO/IEC27001:2017. The ISMS is an integrated set of organizational processes designed to preserve the Confidentiality, Integrity and Availability (CIA) of Alkermes-owned, -managed or -maintained information. We have an information classification hierarchy in place that includes definitions and handling rules for the different information classifications, and processes for the review of information security incidents and development of Information Security policies and strategies. We regularly review the framework and update it as appropriate to ensure the program's effectiveness.

We have an established global data privacy compliance program that is designed to promote compliance with the requirements of the European Union's General Data Protection Regulation (GDPR) and the Health Insurance Portability and Accountability Act of 1996, as amended (HIPAA), as well as other applicable state and national laws and regulations, such as the California Consumer Privacy Act (CCPA). We also have a global Information Technology (IT) Governance, Risk and Compliance program that includes periodic audits and the assessment of IT and third-party risk.

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SOURCE: Alkermes