The Board is collectively responsible for the long-term success of the Company and for its leadership, strategy, values, standards, control and management.
Day-to-day management of the Group is delegated to the Executive Directors, subject to formal delegated authority limits; however, certain matters are reserved for whole Board approval. These matters are reviewed periodically and include Board and Committee composition, strategy, funding decisions and corporate transactions among others. Directors are required to commit sufficient time to their role to appropriately discharge their duties. All Directors are offered regular training to develop their knowledge and ensure they stay up-to-date on matters for which they have responsibility as a Board member.
The Board currently consists of a Non-Executive Chairman, two Executive Directors and three Non-Executive Directors. Three of our Non-Executives are considered independent.
Biographies of each Director can be found here.
The Board has established Audit and Risk , Remuneration and Nomination Committees to enable the Board to operate effectively and ensure a good governance framework for decision making.
The interplay between the Board and its committees is as follows:
Audit and Risk committee
Oversees financial reporting
Determines the Executive
|Recommends Board appointments|
Monitors internal controls
|Recommends to the Board LTIP distribution and scope of the plan||Board and Executive succession planning|
Monitors internal and external auditors
|Monitors remuneration trends throughout the group||Reviews mix of skills and experience on the Board|
|Determines the Chairman's remuneration|
The objective of the Committee is to provide oversight and governance to the Group’s financial reports, its internal controls and processes in place, its risk management systems and the appointment of and relationship with the external auditor.
- Monitor the integrity of the financial statements of the Group, reviewing any significant reporting issues and judgements they contain.
- Advise on the clarity of disclosure and information contained in the Annual Report and Accounts.
- Ensure compliance with applicable accounting standards and review the consistency of methodology applied.
- Review the adequacy and effectiveness of the internal control and risk management systems.
- Oversee the relationship with the external auditor, reviewing performance and advising the Board on their appointment and remuneration.
- To keep under review the need for an internal audit functions and make recommendations to the Board.
Membership and meetings:
The Audit and Risk Committee currently consists of four independent Non-Executive Directors, Mary Tavener, Peter Jensen, Cheryl MacDiarmid and Anthony Parker. The Committee is chaired by Mary Tavener, who is considered to have recent and relevant financial experience. The Chief Financial Officer, Company Secretary and members of the Finance Team attend by invitation. It meets three times per year and at least twice a year with the external auditors present.
Risk Management and Internal Controls:
The Executive Team are responsible for the day to day operational and commercial activity across the Group and are therefore responsible for the management of risk. The Committee reviews the key risks on an annual basis and any emerging risks can be identified and reported to the Board.
The Committee monitors and reviews the effectiveness of the Group’s internal controls and reports to the Board on its work and conclusions. In reviewing the effectiveness of the Group’s internal controls, the Committee considers reports from the internal audit team and the External Auditors as part of their auditing process. No significant failings or weaknesses have been identified in the review process during the year.
The Group’s internal controls are managed via:
- The schedule of matters reserved for the Board.
- The terms of reference for Board Committees.
- The schedule of delegated authorities.
- Documentation of significant transactions.
- The whistleblowing procedure under which staff may raise matters of concern confidentially.
The controls relating to financial reporting are:
- An appropriately qualified management structure, with clear lines of responsibility.
- A comprehensive budget review and approval process.
- Board and Committee updates from the Chief Financial Officer which include forecasts and performance against budget.
- Regular internal audit of the financial control procedures.
The primary purpose of the Committee is to lead the process for Board appointments, reviewing succession planning and to make recommendations for maintaining an appropriate balance of skills on the Board.
Nomination Committee members and meetings
The Committee currently consists of Peter Jensen (Chairman) and Tunde Otulana (Independent Non-Executive Director). The Committee meets twice during the year.
- Reviewing the structure, size and composition (including the skills, knowledge, experience and diversity) of the Board on a regular basis and making recommendations to the Board with regard to any changes;
- Considering succession planning, taking into account the challenges and opportunities facing the Group and the skills and expertise needed on the Board in the future;
- Reviewing the leadership needs of the organisation, both executive and non-executive, with a view to ensuring the continued ability of the organisation to compete effectively in the marketplace;
- Identifying and nominating for the approval of the Board, candidates to fill Board vacancies as and when they arise;
- Evaluating the balance of skills, knowledge, experience and diversity on the Board and, in the light of this evaluation, preparing a description of the role and capabilities required for a particular appointment;
- Ensuring that, on appointment to the Board, non-executive directors receive a formal letter of appointment setting out clearly what is expected of them in terms of time commitment, committee service and involvement outside Board meetings; and
- Reviewing annually the time required from a non-executive director.
The Committee’s key objectives are to develop remuneration policies and packages that ensure that the Allergy Therapeutics’ Executive Team is appropriately motivated and support the delivery of business objectives in the short, medium and long term and that the interests of Executive Directors are aligned with the interests of long term shareholders. The Committee is responsible for determining and agreeing the overall Remuneration Policy, including appropriate salary levels for each Executive Director; the composition of remuneration packages, performance periods, measures and targets for variable remuneration components and any clawback arrangements. In addition, the Committee also agrees or recommends to the Board various compensation matters, including any share-related compensation, for executive management.
Remuneration Committee members and meetings
Currently, the Remuneration Committee consists of four independent Non-Executive Directors Mary Tavener (chairman), Tunde Otulana, Cheryl MacDiarmid and Zheqing (Simon) Shen. The Chief Executive Officer is invited to attend meetings of the Committee but no Director is involved in any decisions relating to their own remuneration.
The Committee is responsible for setting the framework and policy for the remuneration of the Executive Directors and designated senior managers. It determines specific elements of their remuneration, their contractual terms and, where necessary, compensation arrangements.
The key objectives of the Company’s remuneration policy are to:
- Align Executive and shareholder interests;
- Underpin an effective pay-for-performance culture;
- Support retention, motivation and recruitment of talented people;
The Committee aims to achieve an appropriate balance between fixed and variable remuneration, and between variable remuneration based on short-term and longer term performance. Fixed remuneration includes base salary, benefits and pension. Variable remuneration includes annual bonus and awards made under the Long Term Incentive Plan.
The Policy is aligned to the strategy and nature of the business and reflects the importance of rewarding the Executive Directors for delivering strong performance against the Company’s KPI’s. Details of each element of remuneration, their operation, purpose, link to strategy and performance metrics are set out in the Policy table below.
The Committee determines the remuneration and benefit of the Executive Directors. The service contracts of Executive Directors are approved by the Remuneration Committee. The service contract of Manuel Llobet contains a 12 month notice period. The service contracts may be viewed at the Company’s registered office.
The remuneration of Non-Executive Directors is determined by the Board. They have letters of appointment, with the Company and their appointments are terminable on three months written notice on either side.
The Committee keeps itself informed of all relevant developments and best practice in the field of remuneration and seeks advice from external advisers when it considers it appropriate.