In 2017, following the combination of Andes Energia plc and Trefoil Holdings B.V., the Board decided to follow the principal provisions of the UK Corporate Governance Code 2016 (“the Code”) on a comply or explain basis, commensurate with the standards expected by stakeholders of Premium Listed companies. The Code and associated guidance are available on the Financial Reporting Council website at www.frc.org.uk.
The Board assesses its compliance with the Code on an annual basis and publish the status of its compliance in its annual report and accounts. As at the date of this statement, 28 September 2018, the Company was in compliance with the provisions of the Code with the following exceptions, (relevant Code provisions referenced):
1. Code Provision B.1.2: Except for smaller companies, at least half of the board, excluding the chair, should comprise non-executive directors determined by the board to be independent. A smaller company should have at least two independent directors.
Company position: Excluding the chairman, four of the nine directors are determined to be independent, representing just less than 50% of the board. Given the substantive reorganisation of the board following the 2017 combination, the directors considered it prudent to allow the new board to operate for a period of time before making any further appointments. In addition, a relationship agreement in place with the company’s major shareholder governs how the two directors proposed by the major shareholder participate in certain matters, thereby increasing the influence of the independent directors.
2. Code Provision B.6.1: The board should state in the annual report how performance evaluation of the board, its committees and its individual directors has been conducted.
Company position: Since the 2017 combination, the focus of the board has been on the integration of the legacy businesses and no formal assessment was carried out in 2017. The effectiveness of the board, its committees and its individual directors will be formally assessed in 2018.
The Audit and Risk Committee, the Remuneration Committee, the Nomination Committee and the Integration Committee of the Company each have formally delegated rules and responsibilities.
The members of each committee (including non-director members for the Integration Committee) and directors with formal observer rights on each committee is as follows:
|Audit and Risk Committee||Garrett Soden||Sir Michael Rake
|Remuneration Committee||John Bentley||Sir Michael Rake Garrett Soden David Jackson Nicolas Mallo Huergo*|
|Nomination Committee||Sir Michael Rake||Javier Alvarez John Bentley Nicolas Mallo Huergo*|
*Observer rights only
Audit and Risk Committee
The Audit and Risk Committee consists of no less than three members, at least one of whom has recent and relevant financial experience and the quorum for meetings is two members. The majority of the committee is Independent Non-Executive Directors. The Chairman is an Independent Non-Executive Director and shall not be the Chairman of the company. The committee meets at such times as it may be necessary and at least four times a year.
Its responsibilities include: monitoring the integrity of the company’s financial statements and formal announcements; reviewing financial reporting issues and significant accounting policies and disclosures in financial reports; reviewing the effectiveness of the company’s internal audit function and risk management systems; making recommendations to the Board on the appointment or re-appointment of the Group’s external auditors; overseeing the New Board’s relationship with the external auditors (including an external reserves auditor) and, where appropriate, the selection of new external auditors; and ensuring that an effective whistle-blowing procedure is in place.
The Remuneration Committee consists of not less than three members and the quorum for meetings is two members. All the members of the committee are independent non-executive directors. The chairman is an Independent Non-Executive Director and is not the chairman of the company. The committee meets at such times as may be necessary and at least three times a year.
The Remuneration Committee is responsible for determining, and agreeing with the Board, the remuneration policy for the Chief Executive Officer, Chairman, Chief Financial Officer, Chief Operating Officer/Secretary and Executive Directors, (together, the “Relevant Individuals”) approving the design of, and determining targets for, an incentive plan for the executive directors and senior managers; reviewing the design of share incentive plans for approval by the Board and Phoenix Global Resources Shareholders, approving the remuneration policy applicable to the Relevant Individual (no Relevant Individual being involved in any decisions as to their own remuneration); and within the terms of the agreed policy, determining the remainder of the remuneration packages (including pension) for each executive director and senior executive; reviewing and having regard to pay and employment conditions across the company, especially when determining annual salary increases.
The Nomination Committee consists of not less than three members and the quorum for meetings is two members. A majority of the members are non-executive directors. The chairman of the committee is the Chairman of the company or an independent non-executive Director. The chairman of the committee does not however chair the committee when it is dealing with the appointment of a successor to the chairmanship. The committee will meet at such times, as may be necessary and at least twice a year.
The Nomination Committee’s responsibilities include reviewing the structure, size and composition of the Board and making recommendations to the Board with regard to any changes required; succession planning for directors and other senior executives; identifying and nominating, for the Board approval, candidates to fill Board vacancies as and when they arise; reviewing annually the time commitment required of Non-Executive Directors and making recommendations to the Board with regard to membership of the Audit and Risk Committee and Remuneration Committee in consultation with the chairman of each of these committees.
The Integration Committee consists of six members comprising the CEO, CFO, two Non-Executive Directors and two senior managers of the company and the quorum for meetings is three members to include a majority of members who are Directors. The Chairman of the committee is Anuj Sharma. The committee has an initial fixed term of 12 months from Admission and meets at regular intervals at least twice a month which can be held via conference call.
The Integration Committee’s responsibilities include reporting and making recommendations to the Board on all aspects of the integration process, reviewing the ongoing appropriateness and relevance of the company’s integration plan; overseeing and reporting on the progress and compliance with the integration plan; reporting to the Board on the post-Completion actions required by the Share Purchase Agreement and any integration measures referred to in other agreements or documents entered into in connection with the Transaction; overseeing and reporting on the integration of day to day operations, employees, It systems, accounting and financial reporting procedures, IP and real estate within the group.
Share Dealing Code
The company has adopted a share dealing code for Directors and applicable employees (within the meaning of the AIM Rules for Companies) of the company for the purpose of ensuring compliance by such persons with the provisions of the Market Abuse Regulation relating to dealings in the company’s securities. The Directors consider that this share dealing code is appropriate for a company whose shares are admitted to trading on AIM.