DIVISION OF RESPONSIBILITIES.
The Board has overall responsibility for promoting the success of the Group. The Executive Directors have operational responsibility for the management of the Group’s activities on a day to day basis. The Non-Executive Directors are responsible for applying an objective and independent assessment to Board decisions.
There is a clear separation of the roles of Chief Executive Officer and Chairman. The Chairman is responsible for overseeing the running of the Board, ensuring that no individual or group dominates the Board’s decision-making and ensuring the Non-Executive Directors are properly briefed on matters. The Chairman also has overall responsibility for corporate governance matters in the Group. The Chief Executive Officer has the responsibility for implementing the strategy of the Board and managing the day-to-day business activities of the Group. The Company Secretary is responsible for ensuring that Board procedures are followed and applicable laws and regulations are complied with.
The Board of Directors has established an Audit and Risk Committee, a Remuneration Committee, a Nominations Committee and a Research and Development Committee, with formally delegated duties and responsibilities.
Dr Pakianathan chairs the Audit and Risk Committee, Mr Bains chairs the Remuneration Committee, the Chairman Dr Fellner chairs the Nomination Committee and Dr Ekblom chairs the Research and Development Committee.
Risk Management and Internal Controls
The Board is responsible for ensuring systems of risk management and internal control are appropriate and holds ultimate responsibility for reviewing their effectiveness.
The internal controls are designed to manage rather than eliminate risk and provide reasonable but not absolute assurance against material misstatement or loss. These procedures include the preparation of management accounts, forecast variance analysis and other ad-hoc reports. A Financial Procedures Manual sets out accounting procedures, policies and minimum reporting standards.
During 2019, we reviewed our internal controls including whether there was adequate oversight without an internal audit function. The Audit and Risk Committee did not consider it necessary for the Group to have an internal audit function due to the small size of the ﬁnance function. This need will be evaluated annually.
During 2019 the Audit and Risk Committee reviewed the Risk and Control Matrix established by the Group, reviewed and approved a full assessment of identiﬁed control deﬁciencies relating to control design and operating effectiveness, together with associated mitigating measures, agreed the principal risks in the business and reviewed a number of principal risk mitigation plans presented by individual risk owners. A summary of the principal risks facing the Group, as well as mitigating actions, are set out on pages 20 to 34 of the Group’s 2019 Annual Report.
The Board recognizes that a healthy corporate culture is important to the Group’s business purpose and strategy. The Executive Ofﬁcers of Mereo have a key role in establishing the key elements of our culture and the behaviours we expect to see.
The Board takes seriously the role of embedding a corporate culture across the business that is based on ethical values and behaviours. These values are documented and reflected in written policies, which further ensure compliance with applicable law and the high standards the Group sets for its employees, officers and directors.