My own choice for splashbacks is maybe a bit "traditional" - namely tile, stainless steel, glass or laminate (HPL, not laminated chipboard) - all of which will withstand steam, water and a certain amount of heat. These materials are all impervious to water, which really isn't such a bad idea in a kitchen, because any timber-based upstand will inevitably be affected by water and steam over time, no matter what you do with it/to it. To my mind the use of timber/timber-derived upstands is another example of style over function.I think replacing it , but unless it made really water proof , its only going to happen again.
Depending on budget, and whats else is there , i would look at maybe tiling