Our governance, structure and management
Management of risk The Trustees are responsible for the Charity’s risk management and the effectiveness of internal control systems. Council reviews major risks and the Audit Committee’s work to ensure that we have taken reasonable measures to manage these risks. The impact of the continuing economic uncertainty remains a major risk to the Charity. As a result, we regularly update and review our rolling five-year financial plan, reserves and investment policies (see pages 12 and 13). During the year, these plans demonstrated that we can maintain our research funding capacity over the long-term. We continued to improve our reporting procedures to ensure that we are able to anticipate and respond to changes in the economic environment.
The Audit Committee (for details of committees and advisory groups see page 17 to 19) provides Council with an informed, independent opinion on the management of risk and effectiveness of controls. During the year, the Audit Committee continued to review the process for identifying and evaluating risk. It oversaw the appointment of a General Counsel to whom the Risk Management, Internal Audit, Health and Safety, Legal and Company Secretariat teams report. The appointment is intended to further enhance the focus on governance across the organisation. The Audit Committee reviewed reports on internal audits undertaken across key operations of the Charity, and the major risks, control recommendations and follow-up actions. The Audit Committee reviewed the progress and delivery of several key programmes to monitor delivery of benefits. The Audit Committee also met the external auditors in private sessions. Taken together, these processes ensure internal controls and risks are monitored by management and employees with oversight from the Audit Committee and Council itself.
Financial riskmanagement Our activities expose us to a number of financial risks including credit risk, market risk, cash flow risk and liquidity risk. Any use of financial derivatives is governed by policies approved by Council and we do not use derivatives for speculative purposes.
Credit risk The principal financial assets are bank balances, investments, trade and other receivables. Our credit risk is primarily attributable to bank balances and a policy is in place to limit the amount held with any one banking group and to constantly review their credit ratings.
Market risk A number of our investments are subject to market movements and we have recorded some limited realised and unrealised gains in the year. Our investment policy focuses on minimising the Charity’s exposure to losses as explained in ‘Investment policy and performance’ on page 13.
Cash flow risk Our activities expose us to some risk of changes in foreign currency exchange rates, primarily on US dollars through our trading subsidiaries and Euros on our grants receivable. We use foreign exchange forward contracts to hedge these exposures.
Liquidity risk The current economic climate continues to emphasise the need to ensure we are able to meet our liabilities as and when they fall due. We have continued to improve our cash flow management and forecasts. Our reserves policy is explained on page 12.
Corporate social responsibility and sustainability Our environmental policy’s key intention is to proactively manage our environmental impacts.
The consolidation of eight London offices into a single location at Islington has delivered both financial and environmental benefits. We now occupy 20% less space and the new building is more energy efficient than those we have left behind. Co-location has also enabled us to reduce the level of staff travelling. The new office has enabled us to implement changes, such as a zero to landfill waste/recycling scheme and centralised high efficiency printing/copying. It has also allowed us to implement thin client information technology which will provide operational, energy and environmental efficiencies.
The use of technology in research is accelerating, bringing with it a significant challenge to mitigate environmental impact. Improvements in efficiency are being sought by focusing on processes in research, fundraising and administration.
We registered with the Government’s CRC Energy Efficiency Accreditation Scheme. We are also developing energy efficiency initiatives in key parts of our organisation to reduce consumption, carbon emissions and costs.
Employees We continue to strengthen our focus on efficiency and effectiveness and look at opportunities to develop new ways of working and to streamline processes. Throughout the year, we continued to pursue a strong change agenda and to reposition the Charity to deliver our objectives.
Our wide network of employees, grantees, supporters and volunteers continues to work enthusiastically to pursue our vision, purpose and goals. In spite of the recession we have found that the search for talented people in our field remains highly competitive in both public and private sectors and we are actively reviewing our resourcing processes to ensure that we attract and retain high-calibre individuals.
16 / Annual Report and Accounts / Our governance, structure and management
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