Arc Minerals Limited (the "Company") is committed to maintaining the highest standards in corporate governance throughout its operations and to ensuring that all of its practices are conducted transparently, ethically and efficiently. The Company believes that scrutinising all aspects of its business and reflecting, analysing and improving its procedures will result in the continued success of the Company and improve shareholder value. Therefore, and in accordance with the AIM Rules for Companies (March 2018), the Company has chosen to formalise its governance policies by complying with the UK's Quoted Companies Alliance Corporate Governance Code (the "QCA Code"). As part of the governance process the Company periodically reviews its governance charter to ensure that a high level of corporate governance is maintained at all times.

Accordingly, the Company has established specific committees and implemented certain policies, to ensure that:

  • it is led by an effective board which is collectively responsible for the long-term success of the Company;
  • the board and the committees have the appropriate balance of skills, experience, independence and knowledge of the Company to enable them to discharge their respective duties and responsibilities effectively;
  • the board establish a formal and transparent arrangement for considering how it applies the corporate reporting, risk management and internal control principles and for maintaining an appropriate relationship with the Company's auditors; and
  • there is a dialogue with shareholders based on the mutual understanding of objectives.

In addition, the Company has adopted policies in relation to:

  • anti-corruption and bribery;
  • whistleblowing;
  • health and safety;
  • environment and community;
  • IT, communications and systems; and
  • social media,

so that all aspects of the Company are run in a robust and responsible way.

The Board of Directors

The board of directors is responsible for the proper management of the Company by formulating, reviewing and approving the Company's strategy, budgets and corporate actions. In order to achieve its objectives, the board adopts the ten principles of the QCA Code. Through successfully implementing these principles, the Company is able to deliver medium to long-term growth for shareholders whilst maintaining a flexible, efficient and effective management framework within an entrepreneurial environment.

It is important that the board itself contains the right mix of skills and experience in order to deliver the strategy of the Company. As such, the board is comprised of:

  • an executive chairman, whose responsibility is the delivery of the Company's strategy and governance model
  • three non-executive directors, and
  • one independent, non-executive directors.

The board has not appointed a senior independent director but intends to as soon as it is prudent to do so taking into account the Company's size and stage. Additionally, the Company has appointed a professional Company Secretary who assists the chairman in preparing for and running effective board meetings, including the timely dissemination of appropriate information. The Company Secretary provides advice and guidance to the extent required by the board on the legal and regulatory environment.

Each director serves on the board until the annual general meeting following his election or appointment, and the board meets at least three times a year.

The following matters are reserved for the Board:

Management Structure and Appointments

  • Executive Director responsibilities.
  • Board appointments or removals.
  • Board and senior management succession, training, development and appraisal.
  • Appointment or removal of Company Secretary.
  • Appointment or removal of internal auditor.
  • Remuneration, contracts, grants of options and incentive arrangements for Executive Directors and senior management, including any plans to be put to shareholders for approval.
  • Delegation of the Board's powers.
  • Agreeing membership and terms of reference of board committees and task forces.
  • Approval of delegated levels of authority, include the CEO’s limits, which must be in writing.
  • Matters referred to the Board by the board committees.

Strategic/Policy Considerations

  • Business strategy.
  • Diversification/retrenchment policy.
  • Ensuring maintenance of a sound system of internal control and risk management, including:
    • Group’s risk appetite statements
    • Procedures for detection of fraud and the prevention of bribery
    • Approval of the overall levels of insurance for the group, including directors’ and officers’ liability insurance
  • Agreement of codes of ethics and business practices.
  • An on-going assessment of significant risks and effectiveness of internal controls.  
  • Calling of shareholders' meetings and approval of resolutions and corresponding documentation to be put forward to shareholders at a general meeting, plus any circulars, prospectuses and listing particulars.
  • Avoidance of wrongful or fraudulent trading.
  • Ensuring a satisfactory dialogue with shareholders based on the mutual understanding of objectives.
  • Considering the balance of interests between shareholders, employees, customers and the community.
  • Reviewing the group’s overall corporate governance arrangements.
  • Undertaking an annual review of its own performance, that of its committees and individual directors and the division of responsibilities.

Transactions

  • Transactions which are notifiable under the AIM Rules.
  • Approval of major capital projects.
  • Contracts which are material strategically or by reason of size entered into by the Company in the ordinary course of business e.g. bank borrowings over £1 million and acquisitions or disposals of fixed assets (including intangible assets such as intellectual property) above £1 million.
  • Major investments (including the acquisition or disposal of interests of more than 3 per cent. in the voting shares of any company or the making of any takeover offer.
  • Contracts not in the ordinary course of business.
  • Actions or transactions where there may be doubt over propriety.
  • Approval of certain announcements, prospectuses, circulars and similar documents.
  • Disclosure of directors' interests.
  • Transactions with directors or other related parties.

Finance

  • Raising new capital and confirmation of major financing facilities.
  • Changes relating to the group’s capital structure, including the reduction of capital and/or share issues.
  • Treasury policies requested to be put in place by the Board.
  • Discussion of any proposed emphasis of matter on the accounts.
  • Final approval of annual and interim reports and accounts and material changes to accounting policies.
  • Appointment/reappointment or removal of the external auditor, to be put to shareholders for approval in general meeting, following the recommendation of the Board or its Committee.
  • Charitable and political donations.
  • Approval and recommendation of dividends.
  • Approval before each year starts of operating and capital expenditure budgets for the year and any material changes to them.

General

  • Major changes to the Group’s corporate structure.
  • Any changes to the Company’s listing status and status as a PLC.
  • Approval of key policy documents including the share dealing code and MAR policy, anti-bribery policy and whistleblowing policy.
  • This schedule of matters reserved for board decisions.

Corporate Governance

In compliance with UK best practice, the board has established corporate governance committees.

Audit Committee

The purpose of the Audit Committee is to monitor the integrity of the financial statements of the Company.

Some of the Audit Committee's duties include:

  • reviewing the Company's accounting policies and reports produced by internal and external audit functions;
  • considering whether the Company has followed appropriate accounting standards and made appropriate estimates and judgements, taking into account the views of the external auditor;
  • reporting its views to the board of directors if it is not satisfied with any aspect of the proposed financial reporting by the Company;
  • reviewing the adequacy and effectiveness of the Company’s internal financial controls and internal control and risk management systems;
  • reviewing the adequacy and effectiveness of the Company's anti-money laundering systems and controls for the prevention of bribery and receive reports on non-compliance; and
  • overseeing the appointment of and the relationship with the external auditor.

The Audit Committee has three members, each of whom being independent, non-executive directors, and at least one member has recent and relevant financial experience. The current members of the committee are Michael Foster, Brian McMaster and Don Bailey. The committee Chair is Michael Foster. The full Terms of Reference of the Remuneration Committee can be found here.

Remuneration Committee

The purpose of the Remuneration Committee is to determine and agree with the board the framework or broad policy for the remuneration of the Company’s chairperson and executive directors. The main duties of the Remuneration Committee include:

  • reviewing the pay and employment conditions across the Company, including the board of directors; and,
  • approving targets and performance related pay schemes operated by the Company and all share incentive plans and pension arrangements;

The Remuneration Committee has three members, each of whom being independent, non-executive directors. The current members of the committee are Brian McMaster, Jonathan de Thierry and Don Bailey. Don Bailey is the chair of the committee. The full Terms of Reference of the Remuneration Committee can be found here.

Share Dealing Code

The Company has adopted a share dealing code to ensure directors and certain employees do not abuse, and do not place themselves under suspicion of abusing inside information of which they are in possession and to comply with its obligations under the Market Abuse Regulation ("MAR") which applies to the Company by virtue of its shares being traded on AIM. Furthermore, the Company's share dealing code is complaint with the AIM Rules for companies published by the London Stock Exchange (as amended from time to time).

Under the share dealing code, the Company must:

  • disclose all inside information to the public as soon as possible by way of market announcement unless certain circumstances exist in which the disclosure of the inside information may be delayed;
  • keep a list of each person who is in possession of inside information relating to the Company;
  • procure that all persons discharging managerial responsibilities and certain employees are given clearance by the Company before they are allowed to trade in Company securities; and
  • procure that all persons discharging managerial responsibilities and persons closely associated to them notify both the Company and the Financial Conduct Authority of all trades in Company securities that they make.

Engagement with Shareholders

The Company recognises that maintaining strong communications with its shareholders promotes transparency and will drive value in the medium to long-term. Accordingly, the Company will provide regular updates on the progress of the Company, detailing recent business and strategy developments, in news releases which will be posted on the Company's website. In order to continually improve transparency, the board would be delighted to receive feedback from shareholders. Communications should be directed to info@arcminerals.com. Nick von Schirnding has been appointed to manage the relationship between the Company and its shareholders and will review and report to the board on any communications received.

Key Relationships

There are a number of key relationships and resources that are fundamental to the Company's success, such as maintaining good relationships with local communities and governments where the Company operates as well as with engineering and financing groups to ensure that the company’s has adequate resources to deliver its strategy.

The information contained herein was last reviewed on 11 November 2018.