The Board recognises its responsibility for the proper management of the Company and is committed to maintaining a high standard of corporate governance. The Directors recognize the importance of sound corporate governance commensurate with the size and nature of the Company and the interests of its Shareholders.
The Corporate Governance Code does not apply to companies quoted on AIM and there is no formal alternative for AIM companies. The Quoted Companies Alliance has published a set of corporate governance guidelines for AIM companies, which include a code of best practice comprising principles intended as a minimum standard, and recommendations for reporting corporate governance matters. The Directors intend to comply with the QCA Corporate Governance Guidelines for Smaller Quoted Companies so far as it is practicable having regard to the size and current stage of development of the Company.
The Board currently comprises two executive Directors (being the Chief Executive Officer and the Chief Financial Officer) and three non-executive Directors (including the Chairman). Mr. David Knox, Mr. Majid Shafiq and Mr. Richard Ames (these being the three non-executive Directors) are, in the opinion of the Board, independent in character and judgment.
The Board’s decision making process is not dominated by any one individual or group of individuals. None of the Directors have any potential conflicts of interest between their duties to the Company and their private interests and/or duties owed to third parties.
The composition of the Board will be reviewed regularly and strengthened as appropriate in response to the Company’s changing requirements. Appropriate training and an induction programme will be undertaken in respect of all Directors on appointment and subsequently as necessary, taking into account existing qualifications and experience. The Board intends to have monthly Board meetings, including physical meetings at least four times a year, which also shall include an annual strategy day. At these meetings, the Board will review the Company’s long-term strategic direction and financial plans. All necessary information will be supplied to the Directors on a timely basis to enable them to discharge their duties effectively. Certain matters are reserved for consideration by the Board whilst other matters are delegated to Board committees.
The Board is responsible for leading and controlling the Company and, in particular, for formulating, reviewing and approving the Company’s strategy and budget.
The Board has established the following committees:
The role of the audit committee is to assist the Board in discharging its responsibilities with regard to monitoring the integrity of the Company’s financial reporting, to review the Company’s internal control and risk management systems, to monitor the effectiveness of the Company’s external and internal audit function and to oversee the relationship with the Company’s external auditors.
The audit committee focuses particularly on compliance with legal requirements, accounting standards and the AIM Rules and ensures that an effective system of internal financial control is maintained.
The audit committee is chaired by Mr. Shafiq and the other member is Mr. Knox. The audit committee will meet at least three times a year with further meetings as required. The Chief Executive Officer, the Chief Financial Officer, other Directors and representatives from the finance function may also attend and speak at meetings of the audit committee. No members of the audit committee have links with the Company’s external auditors.
The Corporate Governance Committee (“CG Committee”)
The primary purposes of the corporate governance committee are to develop and recommend to the Board guidelines, policies and procedures relating to corporate governance; identify individuals qualified to become Board members; recommend to the Board director nominees for election to the Board; recommend to the Board committee composition and appointments; evaluate the performance and effectiveness of the Board and committees of the Board; and, review and make recommendations to the Board on non-employee director compensation.
The CG committee will meet at least twice a year or as otherwise required. The CG committee is chaired by Mr. Knox and the other member is Mr. Shafiq. The Chief Executive Officer, the Chief Financial Officer and other Directors may also attend and speak at meetings of the CG committee.
The reserves committee assists the Board in monitoring and reviewing the appointment of an independent engineering firm retained by the Company to report on the quantity and the value of the Company’s oil and gas reserves. The reserves committee reviews the procedures by which the Company provides information to the independent engineering firm to be used as the basis of evaluation and audit, ensuring disclosure complies with applicable laws and regulations, and is also responsible for matters relating to the preparation and public disclosure of estimates of the Company’s reserves. In addition, the reserves committee monitors the Company’s joint venture partners to ensure policies and procedures are in place to minimize environmental, occupational health and safety and other risks such that damage to or deterioration of asset value is mitigated.
The reserves committee will meet at least twice a year. The reserves committee is chaired by Mr. Ames and the other member is Mr. Shafiq. The Chief Executive Officer, the Chief Financial Officer and other Directors may also attend and speak at meetings of the reserves committee.
The role of the remuneration committee is to determine and agree with the Board the broad policy for executive and senior employee remuneration, as well as for setting the specific remuneration packages (including pension rights and any compensation payments of all executive Directors and the Chairman) and recommending and monitoring the remuneration of the senior employees.
In accordance with the remuneration committee’s terms of reference, no Director shall participate in discussions relating to or vote on his own terms and conditions of remuneration. Non-executive Directors’ fees will be determined by the Board and the Chairman’s fees will be determined by the Board.
The remuneration committee will meet at least twice a year and as otherwise required. The remuneration committee is chaired by Mr. Ames and the other member is Mr. Shafiq. The Chief Executive Officer, the Chief Financial Officer and other Directors may also attend and speak at meetings of the remuneration committee.
Share Dealing Code
The Directors intend to comply, and to procure compliance, with Rule 21 of the AIM Rules relating to dealings in the Company’s securities by the Directors and other applicable employees. The Company has adopted a share dealing code for Directors’ and applicable employees’ dealings appropriate for a company whose shares are admitted to trading on AIM and will take all reasonable steps to ensure compliance by the Directors and any relevant employees.
Terms of reference