b'Strategic report Governance Financial statementsGovernance principles Compliant Explanation Further reading4.Embed effective risk The Groups approach to risk management together with thePages 52 to 55 of this management,principal risks and uncertainties applicable to Mercia, theirAnnual Report and the considering bothpossible consequences and mitigation are set out in the PrincipalAIM Rule 26 section of opportunities andRisks and Uncertainties section of this Annual Report. The Boardthe Groups websitethreats throughout reviews, evaluates and prioritises risks to ensure that appropriate the organisation measures are in place to effectively manage and mitigate those identifiedfor risk tolerance (focusing on Mercia-specific internal, external and strategic risks) and risk appetite (specifically in terms of the Groups investing policy).Maintain a5.Maintain the Board as The Board has a formal schedule of matters reserved for itsPages 60 to 62 of this dynamica well-functioning,approval and is supported by the Nominations, Audit and Risk andAnnual Report and the managementbalanced team led byRemuneration Committees. All Directors are required to devoteAIM Rule 26 section of framework the Chair sufficient time to carry out their role. The Governance section ofthe Groups websiteMercias Annual Report details the composition of its Board and Committees. These are also included within the Investor Relations section of its website, under the Organisational Structure page.6.Ensure that between The Board is satisfied that, between the Directors, it has anPages 56 to 57 of this them the Directorseffective and appropriate balance of experience, skills andAnnual Report and the have the necessarycapabilities. To ensure that the Directors maintain appropriateAIM Rule 26 section of up-to-date experience,skills they are provided with training when identified asthe Groups websiteskills and capabilities appropriate by the Chair. Mercias Annual Report includes a biography of each Board member. These are also included within the Investor Relations section of its website, under Meet the Board. They list the current and past roles of each Board member and also describe the relevant business experience that each Director brings to the Board, plus their academic and professional qualifications. This Annual Report describes and explains where external advisers have been engaged (eg by the Board in April 2019). Internal advisory responsibilities, such as the role performed by the Company Secretary in advising and supporting the Board, are also described in this Annual Report.7.Evaluate Board The Board regularly considers and evaluates its own performancePage 61 of this Annual performance based onand that of its individual members. An externally-facilitated BoardReport and the AIM Rule clear and relevantevaluation and effectiveness review was undertaken during April26 section of the Groups objectives, seeking2019 and the actions taken in response to the recommendationswebsitecontinuousarising from this review are set out in this Annual Report.improvement8.Promote a corporate The Board believes that the promotion of a corporate culturePages 40 to 45 of this culture that is basedbased on sound ethical values and behaviours is essential toAnnual Report and the on ethical values andcreating a workplace environment that allows people to flourishAIM Rule 26 section of behaviours and that this will contribute to enhancing shareholder value.the Groups websiteWithin this Annual Report, the Chairs statement includes specific reference to people and culture. The People, Culture and Values section of the Strategic Report includes a section on business ethics and further details on how Mercias culture is consistent with the Groups objectives, strategy, business model and approach to risk management. The Remuneration Report refers to the Executive Directors KPIsthose for 2019/20 and 2020/21 include Mercias cultural values.9.Maintain governance The Board is collectively responsible for the long-term success ofPages 60 to 62 of this structures andMercia. It has a schedule of matters reserved for its approval whichAnnual Report and the processes that are fitcovers key areas of management and governance of the Group.AIM Rule 26 section of for purpose andThis Annual Report details the composition and terms of referencethe Groups websitesupport good decision- of the Board and its Committees. These are also included within making by the Board the Investor Relations section of its website.Build 10. Communicate how the Mercias Annual Report includes disclosure of Board Committees,Pages 39 and 60 to 62 of trust Company is governedtheir composition and where relevant, any work undertakenthis Annual Report and and is performing byduring the year. It includes a detailed Remuneration Report.the AIM Rule 26 section maintaining a dialogueMercias website includes all historic Annual Reports, resultsof the Groups websitewith shareholders andannouncements, results presentations and other governance-other relevantrelated material, including notices of all AGMs. These can be found stakeholders in the Investor Relations section, under Regulatory News. This section of the website also includes the results of all AGMs.Mercia Asset Management PLC 63Annual Report and Accounts 2020'