Chairman’s corporate governance statement
In March 2018, the London Stock Exchange introduced a requirement for AIM companies to adopt and apply a recognised corporate governance code (‘the Code’) and communicate details of how they comply with that code. Set out below and in our annual report we outline the governance principles, policies and procedures adopted to ensure compliance. This information will be reviewed annually. The adoption of the code, for all AIM companies, takes effect 28 September 2018.
As Chairman, it is my responsibility, working with my board colleagues, to ensure that good standards of corporate governance are implemented. As a Board, we set clear expectations concerning the Company’s culture, values and behaviours. Since the Company’s incorporation we have been committed to high standards of corporate governance and whilst the Company was not required to comply with the UK Corporate Governance Code, the Company implemented where appropriate and applicable the provisions set out therein.
It is the Board’s responsibility to ensure that the Group is managed for the long-term benefit of all shareholders and other stakeholders with effective and efficient decision-making. As Chairman, I recognise that corporate governance is an important part of that job, reducing risk and adding value to the Group. We have therefore chosen to apply the QCA Code. The Board will continue to monitor the governance framework of the Company as it grows.
The Code requires us to apply the ten principles and publish certain disclosures in our Annual Report and/or on our website. In accordance with the Code, our website disclosures are outlined below.
The Company’s primary objective is to build sustainable and long-term value for shareholders through the implementation of its strategy and business model. In conjunction with that objective, the importance of communication and developing an understanding of shareholder expectations has been recognised by the Company and consequently a dedicated Investor Relations Representative is in place to facilitate shareholder engagement. The role of the Investor Relations Representative is judged to be integral to meeting the needs of shareholders, understanding their expectations, encouraging shareholder interaction and providing a channel to communicate directly with the Company.
Through the Investor Relations Representative, Annual General Meetings, the Company’s website, multimedia, social media, the annual reports and the Regulatory News Service etc., the Company is able to offer multiple and various channels of communication to meet and understand shareholders’ needs and expectations.
The primary point of contact for shareholder correspondence is the Investor Relations Representative who can be contacted via email: [email protected]. In accordance with the Company’s Communications Policy, communications comply with AIM Rules and Market Abuse Regulations. All Material Information will be publicly disseminated in a non-exclusionary and non-selective manner. The Company’s historical annual reports and other governance-related material, including notices of all general meetings over the last five years, can be found on the Company website within the investors section: www.nu-oilandgas.com/investors/.
The Company seeks to grow shareholder value through the implementation of its business model, namely: the acquisition and development of oil and gas assets. That model leverages the technical, commercial and financial experience of the Company’s directors and senior management in identifying, evaluating and developing those assets and opportunities. The implementation of the model through opportunity delivery requires careful consideration of the resources and stakeholder engagements required.
The Company recognises that integral to the success of its business model is its collaboration with stakeholders. Through its joint venture, Marginal Field Development Company (“MFDevCo”), a number of collaboration agreements with respected specialists have been structured to assemble a consortium of strategic partnerships. This consortium reflects the importance the Company places on relationships with its partners and supply chain.
It is apparent that growing shareholder value requires engagement and collaboration across the stakeholder base, where those stakeholders include, but are not limited to: shareholders, members of staff, partners, suppliers, financiers, local communities, government and regulatory bodies. The Company’s maintains close dialogue with these stakeholders. Issues are monitored and resolved as necessary, with due consideration of the appropriate level of senior or professional oversight.
The Company’s Annual Report and Accounts outline the principal risks and uncertainties; these reports can be found on the Company website within the investors section: www.nu-oilandgas.com/investors/Annual-Reports. The Company’s Annual Report will identify how the board has embedded effective risk management in order to execute and delivery strategy.
The Board recognises decisions made regarding strategy and risk are likely to influence the culture of the Company. In addition, the tone and culture set by the Board helps to attract and retain the people and partners needed to achieve the corporate objectives it sets.
As appropriate, the Company seeks to ensure all employees, partners and suppliers understand the Company’s ethical values and behaviours. The close working relationships developed within the Company provide opportunity to demonstrate ethical behaviour and for possible deviations to be easily identified and quickly addressed.
Clear policy and procedures are in place to deal with anti-bribery & corruption risk as well as a whistleblowing policy which provides a clear process for unethical conduct to be appropriately reviewed and addressed. These have been communicated to all staff.
The Directors and applicable employees are aware of the obligations under AIM Rule 21 and to ensure compliance the Company has adopted a share dealing code which reflects the model code on share dealings set out in the Listing Rules.
The Company additionally, maintains an open and symbiotic relationship with its NOMAD to ensure compliance with AIM and MAR rules more generally, as appropriate.
The Board comprises six Directors of which three are executives and three are non-executives, reflecting a blend of different experience and backgrounds. All Directors bring independent judgement to bear on issues affecting the Company and all have full and timely access to information necessary to enable them to discharge their duties. The Directors have a wide and varying array of experience in the industry.
The Board is satisfied it has a suitable balance between independence on the one hand, and knowledge of the Company on the other, to enable it to discharge its duties and responsibilities effectively, and that all Directors have adequate time to fill their roles. The Non-Executive Directors are independent of management and have no material relationship with the Company.
The Board meets throughout the year and all major decisions are taken by the Board. The Group’s day-to-day operations are managed by the Executive Directors. All Directors have access to the Company Secretary. All Directors receive full Board papers in sufficient time before Board meetings, and any further supporting papers and information are readily available to all Directors on request.
The Directors are responsible for the stewardship of the Company and for overseeing the conduct of the business of the Company and the activities of management, who are responsible for the day-to-day operations of the business. The Directors' primary responsibilities are to preserve and enhance long-term shareholder value and to ensure that the Company can meet its obligations on an on-going basis and that it continues to operate in a reliable and safe manner.
Management are responsible for the day to day operational affairs and decisions in accordance with the strategy, direction and business standards set by the Directors. Management reports to the Directors on a formal basis at least four times a year and there is frequent informal contact between the management and the Directors.
All Directors and Committees have access to independent professional advice when required. The cost of such professional advice is covered by the Company
The Executive Chairman, is responsible for leading an effective board, implementing a good corporate governance culture and ensuring appropriate strategic focus and direction. In addition, in conjunction with the Executive, he has responsibility for the strategic development, for communicating it clearly to the Board and, once approved by the Board, for implementing it. The Company notes that the Chairman should be independent from the day to day business of the Company, however, it has been determined that the Executive Chairman’s experience are of benefit to the success of the Company.
All the executive directors have particular roles and responsibilities. Details of the current Directors, their roles and background are set out with the Company’s Annual Report and on the Company’s website at www.nu-oilandgas.com/about-us. Details of the company’s committees and terms of reference can be found in the investors section of the Company’s website: www.nu-oilandgas.com/investors/.
The Board will have a formal schedule of matters reserved to it for decision including matters relating strategic planning, key investment decisions, risk management and mitigation, senior management determination and assessment, corporate transactions, financing, communication planning and internal control integrity. The number of board meetings and attendance records will be included in the Company’s Annual Report, which can be found on the Company website within the investors section: www.nu-oilandgas.com/investors/Annual-Reports.
As soon as is practicable after any general meeting has concluded, the results of the meeting are released through a regulatory news service and a copy of the announcement is posted on the Company website within the investors section: www.nu-oilandgas.com/investors/. The announcement will also provide details of the total number of voting shares in issue and the number of shares in respect of which valid proxy appointments were received; a table will be included showing the number of votes for and against each resolution and also the number within the chairman’s discretion. Excluded from the table are abstentions, votes withheld, and proxy appointments received from holders who appointed someone other than the chairman of the meeting as their proxy. In the event that a significant proportion of votes (e.g. 25% of independent votes) is cast against a resolution at any general meeting, the Company will provide an explanation of actions which will be taken as a result.
The Company’s board is small and focused on implementing the Company’s strategy. Given the size and nature of the Company, the Board does not consider it practical to have a formal performance evaluation procedure in place, as described and recommended in the QCA Code. The Board will reassess this decision as the Company continues to grow.
Succession planning is regarded by the Board as important to ensure that the Company has potential replacements should they be required and to ensure the success of the business. The Company’s future leaders are identified, and development plans are implemented to prepare those people identified for future roles.
The nomination committee assist the Directors with the appointment and re-appointment of Directors to the Board and to senior executive office. Details of the nominations committee are reflected elsewhere on our website. We expect the Board evaluation process to evolve over time so that it becomes linked to succession.
Where the code requires disclosures in relation to its principles in addition to those detailed above, such disclosures will be made either in the Annual Report and Accounts or on the Company’s website in accordance with the Code’s recommendations.
The Board will continue to assess its corporate governance annually, or in response to changes to the QCA Code as appropriate and will implement changes accordingly.
I am conscious of the need to ensure that we, as a Company, engage with you, our shareholders. In this document we have outlined what we do in this regard. The Company’s AGM is an important part of this and I look forward to meeting you at our next AGM.