Corporate Governance Statement

Corporate governance statement

The Board of Directors of Verona Pharma recognizes the importance of sound corporate governance and strives to comply with and will report against the standards of corporate governance prescribed by the Corporate Governance Code for Small and Mid-Size Quoted Companies from The Quoted Companies Alliance (the “QCA Code”). The Board believes that this corporate governance framework is appropriate for the Company, having regard to its size and nature. The Board periodically reviews the QCA Code and updates the framework if necessary, with the last review undertaken on 13th September 2019. For a copy of the QCA Code, visit the Quoted Company Alliance (QCA) website at www.theqca.com. Click here for an analysis of how Verona Pharma applies the ten principles of the QCA Code.

Responsibilities of the Board of Directors

The Board maintains and periodically reviews a list of matters that are reserved to, and can only be approved by, the Board. These include:

  • setting the Group’s Strategy;
  • appointment, termination and remuneration of any Director;
  • directing the capital raising process;
  • monitoring risk management and associated controls;
  • approval of the annual budget and forecasts;
  • approval of activities of a certain nature or above certain financial thresholds; and
  • monitoring performance against key financial and non-financial indicators.
  • Matters that are not reserved for the Board are delegated to its committees or to management. The Board has established an Audit Committee, a Remuneration Committee and a Nomination and Corporate Governance Committee, with formally delegated duties and responsibilities. The composition and terms of reference of these committees can be found here.
Responsibilities of the Chairman and Chief Executive Officer

There is a clear separation of the roles of Chief Executive Officer and non-Executive Chairman. The non-Executive 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 Chief Executive Officer has the responsibility for implementing the strategy of the Board and managing the day to day business activities of the Group.

Board performance

The Board undertakes an annual performance evaluation process, based on clear and relevant objectives and seeking continuous improvement.

Generally, the performance evaluation is conducted in June each year and done in the form of a structured questionnaire circulated to all Directors, asking them to rate the performance of the Board and its Committees in a number of strategic areas and provide a rationale for any low rating. Results are analyzed by the Chairman and Legal Counsel and any key themes are reported and discussed with the Board. Any recommendations arising from such review which are designed to specifically address any issues identified are implemented by the Board.

The annual performance evaluation conducted in June 2019 resulted in the following recommendations, which are being implemented by the Board: increased exposure to senior management through their attendance at Board meetings and separate working group meetings on strategically important issues; and expanding the Board skill set to include drug product launch and commercialization expertise.

Succession planning

The Nomination and Governance Committee and, where appropriate, the full Board, regularly review the composition and skills of the Board and the status of succession to both executive and non-executive directors. Through their networks, Directors have regular contact with and access to succession candidates.

Committees of our Board of Directors

Our Board has established three standing committees: an Audit Committee, a Remuneration Committee and a Nomination and Governance Committee, with formally delegated duties and responsibilities. The composition and terms of reference of these committees can be found here.

Relations with shareholders

The Board values good relations with the Company’s shareholders and understands the importance of effectively communicating the Company’s operational and financial performance as well as its future strategy. The Company’s website provides financial information as well as historical news releases and matters relating to corporate governance.

The Chairman, Chief Executive Officer and Chief Financial Officer maintain ongoing dialogue with shareholders and communicate their views to the Board. The Board recognizes it is accountable to shareholders and ensures that their views are taken into account in agreeing the Company’s strategy and other operational matters.

Annual and interim results are communicated by regulatory news services as are ad hoc operational and regulatory releases. Shareholders may also attend the Annual General Meeting where they can discuss matters with the Board.

The Board believes that the Company has strong relationships with its major shareholders and, through its shareholder communications and news releases, its shareholder base as a whole.

Relations with other stakeholders

In the performance of its duties the Board listens to the views of other key stakeholders, including our target patient groups, clinicians, regulators, suppliers and employees, and is cognizant of the potential impacts of decisions it makes.

The Company has established a Clinical and Scientific Advisory Board (“CSAB”) which consists of clinicians with relevant experience in the treatment of respiratory diseases. The CSAB provides a means of identifying emerging issues for patients and health care providers in the treatment of respiratory diseases that can be brought to the attention of the Board. Details of the membership of our CSAB can be found here.

To ensure that our Non-Executive Directors develop and maintain a greater insight and understanding of the business and key stakeholders:

  • senior management are invited to attend and present at Board meetings on their operational area;
  • directors are invited to attend working group sessions with management on strategically important operational issues; and
  • directors meet employees informally during visits to the Company’s operations and at receptions held with employees.
What does our business model require to be successful?

Our Board believes that our business model requires the following to be successful:

  • a talented and diverse workforce;
  • effective partnerships;
  • Intellectual Property (IP); and
  • financial strength.
Corporate governance polices and procedures

The Company has adopted a number of corporate governance policies and procedures, including the following:

Share dealing code

The Company has adopted a share dealing code in order to ensure compliance with the EU Market Abuse Regulation and Rule 21 of the AIM Rules.

Download the Verona Pharma Share dealing code.

Code of business conduct and ethics

The Company has adopted a code of business conduct and ethics in order to ensure compliance with the UK Bribery Act (2010) and as the Company’s “code of ethics” within the meaning of the Sarbanes-Oxley Act (2002).

Download the Verona Pharma Code of business conduct and ethics.

Policies and procedures for complaints

The Company has adopted policies and procedures regarding accounting, internal accounting controls, fraud and auditing matters. The Board has appointed a "compliance officer" to oversee compliance with the policies and procedures.

Download the Verona Pharma Policies and procedures for complaints policy.


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