Control Environment and Corporate Governance
In accordance with the Companies Act, Morphic’s Board of Directors has adopted written rules of procedure for its work. The rules of procedure and the instructions governing the work of the CEO and the Board committees provide for a clear division of roles and responsibilities that is aimed at ensuring efficient management of the company’s risks.
The rules of procedure and instructions are intended to serve as documents governing the work of the Board and to guarantee that the Board fulfils its duties and obligations in compliance with the Companies Act, Stock Exchange rules, the Code and other rules and instructions, as applicable from time to time, such as good practice in the securities market.
The rules of procedure define the division of work and responsibilities within the Board and its two committees, the duties of the Board Chairman and the duties and authority of the CEO. They also include a plan for the work of the Board in the coming financial year and details of matters to be addressed at each meeting of the Board. The instructions governing the work of the CEO contain restrictions concerning decisions on investments, acquisitions, transfers and certain agreements. They also include instructions on reporting, which regulate the CEO’s reporting to the Board.
The Board has adopted a number of basic guidelines and limits that are significant for internal control. These policies and instructions are reviewed annually. Examples of such guidelines include:
- Rules of procedure
- Finance policy
- Financial handbook
- Investment policy
- Code of conduct
- Information policy
Management reports to the Board regularly in accordance with specified procedures. Management is responsible for ensuring compliance with the adopted procedures and systems for internal control to ensure correct management of significant risks in day-to-day activities. This includes procedures and guidelines for various executives, to ensure that they understand the significance of their respective roles in maintaining a high level of internal control.