The Company has adopted a corporate governance structure with the following key features in order to implement its business strategy:
- the Board is knowledgeable and experienced and has relevant experience in the oil and gas sector;
- consistent with the rules applicable to companies with a Standard Listing, unless required by law or other regulatory process, Shareholder approval is not required in order for the Company to complete any Acquisition (including an Acquisition constituting a Reverse Takeover). The Company will, however, be required to obtain the approval of the Board of Directors, before it may complete any Acquisition;
- the Board intends to comply, so far as it is practicable for a company of the Company's size and nature, with certain main principles of the UK Corporate Governance Code (as set out in more detail below); and
- following any Acquisition (and in particular, an Acquisition constituting a Reverse Takeover), the Company may seek to transfer from a Standard Listing to either a Premium Listing or other appropriate listing venue, based on the track record of the company or business it acquires, subject to fulfilling the relevant eligibility criteria at the time. If the Company is successful in obtaining a Premium Listing, further rules will apply to the Company under the Listing Rules and Disclosure and Transparency Rules and the Company will be obliged to comply or explain any derogation from the UK Corporate Governance Code. In addition to, or in lieu of, a Premium Listing, the Company may determine to seek a listing on another stock exchange or seek re-admission to a Standard Listing.
Members and responsibility
The Directors are responsible for carrying out the Company's objectives, implementing its business strategy and conducting its overall supervision, Acquisition, divestment and other strategic decisions will all be considered and determined by the Board.
The Board will provide leadership within a framework of prudent and effective controls. The Board will establish the corporate governance values of the Company and will have overall responsibility for setting the Company's strategic aims, defining the business plan and strategy and managing the financial and operational resources of the Company and reviewing the performance of the officers and management of the Company's business.
Unless required by applicable law or other regulatory process, no Shareholder approval will be sought by the Company in relation to the making of any Acquisition. Any Acquisition will be subject to Board approval.
Frequency of meetings
The Board will schedule quarterly meetings and will hold additional meetings as and when required.
The Company will observe the requirements of the UK Corporate Governance Code (so far as it is practicable for a company of the Company's size and nature). As at the date of this document, the Company is, and at the date of Admission will be, in compliance with the UK Corporate Governance Code, save as set out below:
- Given the size and non-executive composition of the Board, certain provisions of the UK Corporate Governance Code (in particular the provisions relating to the composition of the Board and executive compensation) are not being complied with by the Company as the Board considers those provisions to be inapplicable to the Company.
- No Director will be required to submit for re-election until the first annual general meeting of the Company following Admission.
- The Company will not have a nomination committee. If a material/significant Acquisition is completed, the Board intends to put in place a nomination committee. The Board as a whole will review the appointment of new members of the Board, taking into account the interests of Shareholders and the performance of the Company.
- The Board will not comply with the provision of the UK Corporate Governance Code that at least half of the Board, excluding the Chairman, should comprise non-executive directors determined by the Board to be independent. In addition, the Company's Chairman on Admission will be executive director, Nils Trulsvik.
- The Board will not comply with the provision of the UK Corporate Governance Code that an audit committee should comprise at least two non-executive directors determined by the Board to be independent, as only one member of the audit committee, Stephen Smedley, is determined to be independent.
- The Board will not comply with the provision of the UK Corporate Governance Code that all members of a remuneration committee should be independent non-executive directors, as Nils Trulsvik is an executive director.
The Board may from time to time establish committees to streamline the discharge of its responsibilities. The Board has established an Audit and Risk Committee and a Remuneration Committee. Other committees may be established by the Board as and when required.
Audit and Risk Committee
The UK Corporate Governance Code recommends that an audit committee should comprise at least three members, or in the case of smaller companies (which are below the FTSE 350 index) two members, who are independent non-executive directors and that at least one member should have recent and relevant financial experience.
The members of the Audit and Risk Committee are Stephen Smedley (Chair) and Nils Trulsvik. The Audit and Risk Committee will meet at least three times a year. The Audit and Risk Committee's responsibilities include:
- overseeing the Company's relationship with the external auditor and the external audit function generally;
- overseeing the Company's relationship with the internal auditor and the internal audit function generally;
- overseeing the preparation of the financial statements and reports;
- overseeing the Company's financial controls and systems; and
- managing the process of identification and management of risk.
Non-committee members, including members of management and the external auditor, may attend all or part of a meeting of the committee at the invitation of the committee chair.
From the date of Admission, the Audit and Risk Committee chairman will be available at annual general meetings of the Company to respond to questions from Shareholders on the activities of the Audit and Risk Committee.
The Audit and Risk Committee has taken appropriate steps to ensure that the Company's Auditors are independent of the Company.
The Remuneration Committee assists the Board in discharging its responsibilities relating to the composition and make-up of the Board and any committees of the Board. It recommends what policy the Company should adopt on executive remuneration, determines the levels of remuneration for executive directors and recommends and monitors the remuneration of members of senior management, save that no director or senior manager shall be involved in any decisions as to their own remuneration. The Board, or where required by the Articles, the Shareholders should determine the remuneration of non-executive Directors. The Remuneration Committee will also be responsible for generating the annual remuneration report to be approved by the Shareholders of the Company at its annual general meeting. The Remuneration Committee will normally meet at least twice a year and otherwise as required.
The members of the Remuneration Committee are Nils Trulsvik (Chair) and Stephen Smedley. The UK Corporate Governance Code recommends that all members of a remuneration committee should be independent non-executive directors in compliance with the UK Corporate Governance Code.
The Company considers that, at this stage of its development, and given the current size of its board, it is not necessary to establish a formal nomination committee. This position will be reviewed on a regular basis by the Directors.
The Company's current intention is to retain any earnings for use in its business operations, and the Board does not anticipate declaring any dividends in the foreseeable future. The Company will only pay dividends to the extent that to do so is in accordance with the Isle of Man Companies Act, the Articles and all other applicable laws.
Share dealing policy
The Company has adopted a securities dealing policy for the Board and certain employees in accordance with the provisions of MAR, and the Company will take all reasonable steps to ensure compliance by the Board with such code.
The share policy is intended to explain the types of conduct in relation to dealings in securities that are prohibited by law and establish procedures for the buying and selling of securities that protect the Company, Directors and employees against the misuse of unpublished information, which could materially affect the price or value of the Company's securities.
The policy provides that Directors, employees and their connected persons must not:
- deal in the Company's securities when they are aware of ‘inside' information;
- deal in the Company's securities on a short-term trading basis (except in exceptional circumstances with approval); or
- hedge unvested equity remuneration or vested equity subject to holding locks.
In addition, Directors, certain restricted employees and their connected persons must not deal in the Company's securities during close periods, being either (i) the period of thirty (30) calendar days immediately preceding the announcement of the Company's interim financial report and its year-end report (or, if earlier, the preliminary results, where the preliminary results announcement contains all inside information expected to be included in the Company's year-end report); or (ii) the period when they possess any inside information.
Anti-Corruption and Bribery Policy
The Company has adopted a formal anti-corruption and bribery policy which complies with the UK Bribery Act 2010 and which applies to all staff, consultants and contractors that work with the Company across its operations. The policy seeks to ensure that the Company operates in an ethical and transparent manner in all business dealings and that the Company has a mechanism for staff to alert management should any issues or incidents occur. The Company will continue to review its anti-corruption procedures to ensure that they are sufficiently robust to prevent corruption and to mitigate the risk of the Company committing an offence under applicable bribery legislation.
Market Abuse Regulation
The Company will be subject to the provisions of MAR. The Board will be responsible for taking all proper and reasonable steps to ensure compliance with the MAR by the Directors and persons discharging managerial responsibilities. The FCA is the competent authority for MAR and has powers to intervene as competent authority and will be responsible for the investigations and enforcement of breaches of MAR.
Following an Acquisition, subject to eligibility and if it is regarded as appropriate, the Directors will consider transferring from a Standard Listing to either a Premium Listing or other appropriate listing venue, based on the track record of the company or business it acquires, subject to fulfilling the relevant eligibility criteria at the time.
01 October 2018
17 August 2018