Corporate Governance

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.

From 28th September 2018 as part of a change to the AIM Rules, the Company is required to maintain on its website details of a recognised corporate governance code, how the Company complies with this code and an explanation of any deviations from the code.

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 Quoted Companies Alliance Corporate Governance Code (the "QCA Code"). The QCA Code sets out ten broad principles that promote good corporate governance and the Board believes that these principles have been appropriately applied, taking into account the size of the Company and its activities. As part of the governance process the Company regularly and at least annually reviews its governance framework to ensure that a high level of corporate governance is maintained at all times, which includes a review of the information contained on this website, with the date on which the information was last reviewed clearly displayed.

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 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 the following policies so that all aspects of the Company are run responsibly:

  • anti-corruption and bribery;
  • whistleblowing;
  • health and safety;
  • environment and community; and
  • social media.

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 the past year, all of the directors attended all Board meetings held. By implementing the QCA 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:

Director

Position

Independent    (Y/N)

Remuneration & Nomination Committee Membership

Audit & Risk Committee Membership

Nicholas Von Schirnding

Executive Chairman

N

-

-

Brian McMaster

Senior Independent Director

Y

Chairman

Member

Michael Foster

Non-Executive Director

Y

-

Chairman

Jonathan de Thierry

Non-Executive Director

Y

Member

-

Don Bailey

Non-Executive Director

Y

Member

Member

 

The Company has appointed a Company Secretary who assists the Executive Chairman and Committee Chairmen in preparing for and running effective board and committee meetings, including the timely dissemination of appropriate information. The Company Secretary provides advice and guidance to the extent required by the Board and Committees on the legal and regulatory environment.

Each director serves on the Board until the expiry of their current term, after which their term may be renewed by resolution put to shareholders at the Annual General Meeting prior to the expiration of their term. 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, 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, and other stakeholders.
  • 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.
  • 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 and, in particular, the QCA Code, the Board has established the following corporate governance committees:

Audit and Risk Committee
The purpose of the Audit and Risk Committee is to monitor the integrity of the financial statements and to oversee the effectiveness of the risk management and internal control systems of the Company.

Some of the Audit and Risk 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 and Risk 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 Audit and Risk 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 as well as the composition of the Board itself.

The main duties of the Remuneration Committee include:

  • reviewing the pay and employment conditions of all directors, officers and senior management across the Group, including the board of directors of the Company and Chairman of the Board; 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. The committee Chair is Brian McMaster. 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 that directors and certain employees do not abuse, nor 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.

Additionally, under the share dealing code, no person discharging managerial responsibilities is permitted to deal in Company securities (whether directly or through an investment manager) during a closed period; being the period either: from the end of the relevant financial year up to the release of the preliminary announcement of the Company’s annual results; from the end of the relevant financial period up to the release of the Company’s half-yearly financial report. 

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 and through certain social media channels. In addition to the publication of its Annual Report and announcements made in compliance with AIM Rule 26, the Company has elected to host its AGMs in London, which the Directors believe will make the meetings more accessible thereby enhancing engagement with the Company's shareholders. To continually improve transparency, the Board would be delighted to receive feedback from shareholders, which 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, governments, suppliers, contractors, employees and customers. These relationships are key to the successful running of the Company’s projects and are reviewed by the Board and management on a regular basis to ensure that all potential risks are mitigated. To the extent that any issues or concerns come to light following such review, or upon engagement with such stakeholders, the Company seeks to address matters in an expeditious manner in order to preserve and strengthen relationships.