Corporate Governance Code

Statement of compliance with the Quoted Companies Alliance Corporate Governance Code (the “QCA Code”)

Last updated: 10 October 2018

Introduction from the Chairman

The Directors of San Leon Energy PLC are committed to maintaining high standards of corporate governance to ensure the Company is run effectively. As an AIM listed company, the Board has decided to adopt the principles of the Quoted Companies Alliance Corporate Governance Code, which is a formally recognised corporate governance code for small and mid-size companies. The QCA Code is based on ten principles that companies should follow to deliver growth in long-term shareholder value.

The QCA Code makes clear it is the prime responsibility of the Chairman to ensure the Company applies the QCA Code to best advantage of all stakeholders of the Company.

We have considered how we apply each principle to the extent that the Board judges these to be appropriate in the circumstances, and below we provide an explanation of the approach taken in relation to each. This report explains in broad terms how the Company applies the main principles of the QCA Code.

We have identified two areas where we are not in full compliance with the guidelines of the QCA Code. We explain in detail under Principle 5 and Principle 7 why we have departed from the guidelines in these areas.

We will provide annual updates on our compliance with the code.

Mutiu Sunmonu
Non-Executive Chairman

Principle 1: Establish a strategy and business model which promote long-term value for shareholders

San Leon Energy plc has articulated its strategy and business model, which were developed in 2015 when we started focussing on Nigeria, in the Company’s latest annual report and accounts for the year ended 31 December 2017. The strategy, which has evolved since then, is reviewed by the Board as appropriate. The Executive Directors led by the Chief Executive Officer are responsible for executing the strategy once agreed by the Board. All developments in the Company’s business are communicated to the shareholders via regulatory news service (RNS) announcements, Annual Report and Accounts, half yearly announcements and in investor presentations at the Company’s Annual General Meetings.

The Company’s overall strategic objective is to secure and develop high-potential asset opportunities in Africa and produce a near-term operating cash flow, yielding value to shareholders. The Company aims to achieve this through our technical expertise, operational capabilities and industry contacts, secured by the close links we forge with governments and the local communities in which we operate. We have built our industry reputation as a capable operator in various European and African countries and our key asset is now the indirect economic interest in OML 18 – a world class asset onshore Nigeria. The Company continues to seek to monetise or otherwise dispose of its non-core assets.

Key challenges and how they are addressed:
The Company’s risks and uncertainties, which are broadly typical for an exploration and production company, and our approach to managing and mitigating these risks, are set out on pages 34 and 35 of the Company’s 2017 Annual Report which is available to view on the Company’s website by clicking here.

Risk assessment and evaluation is an essential part of the Company’s planning and an important aspect of the Company’s internal control system. The Company strives to develop strong working relationships with its partners and suppliers in its various operating locations to manage and mitigate the operational risks.

Capital distribution policy
As part of the Company’s strategy to generate value for shareholders, within the Admission Document published in September 2016, the Company undertook to implement a shareholder distribution policy. This policy is based upon the evolution of the Company to its current and expected future cash flow generation. The Company is committed to making distributions equivalent to 50 per cent. of OML 18 free cash flows (net of any taxes payable by the Company on receipt of these cash flows) to Shareholders either by way of buyback of Ordinary Shares or by way of dividends for a five year period commencing on the date the Company first receives cash flows from its interest in OML 18. The ability for the Company to make such distributions is dependent both upon the availability of cash to distribute, as well as completing a capital reorganisation in the Irish Courts.

Principle 2: Seek to understand and meet shareholder needs and expectations

The Company’s Chief Executive Officer and other Executive Directors are responsible for shareholder liaison. They hold regular meetings with major shareholders and analysts to discuss the Company’s strategy and performance and maintain a dialogue between the Company and its investors.

Private investor events and investor roadshows are organised by the Company’s brokers and public relations consultants, where the Chief Executive Officer and other Executive Directors meet with current (and potential future) institutional and retail shareholders and brokers to update them on the Company’s progress.

The entire Board receives feedback following these meetings and any issues raised are discussed. Any significant reports from analysts are also circulated to the Board. Such feedback has assisted the Board in implementing the shareholder distribution policy.

The Non-Executive Chairman and Independent Non-Executive Directors are available to meet with shareholders if required.

The Annual General Meeting (AGM) is the main forum for dialogue between the Board and the shareholders. All Directors aim to attend the AGM. The Non-Executive Chairman, Mutiu Sunmonu, leads the AGM and takes questions from the floor. The chairmen of the Audit, Remuneration, Nomination and Risk and Safety Committees are on-hand to answer questions that may arise at the meeting.

The primary contact points for investors are Vigo Communications telephone: +44 (0)20 7830 9700,
Plunkett Communications telephone: +353 (0)1 280 7873 or email to: dublin@sanleonenergy.com.

The Executive Directors receive regular industry and peer updates, to enable them to keep current on issues relevant to the Company and its shareholders.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success

The Company’s ability to achieve its long-term success is dependent on good relations across a wide range of stakeholders both internally (employees) and externally (partners, suppliers, regulatory authorities, local governments and communities in which we operate).

Our employees are one of the most important stakeholder groups and the Board recognises the need for two-way communication with the workforce. The small size of the Company means that the Directors and senior managers are relatively accessible to all employees to provide and receive feedback. To retain our highly skilled workforce and keep their satisfaction high, the Company offers competitive remuneration, employee share option awards and health and critical illness cover. We seek to ensure that all employees are treated fairly and with dignity. The Company has a zero tolerance policy towards any form of discrimination or harassment.

We recognise our responsibilities to the environment and community in the areas in which we operate. The Company places a high priority on operating to high standards of integrity and ethics. Our Anti-Corruption and Bribery Policy can be found by clicking here 

The Company recognises that our activities may have impact on the environment and it therefore aims to minimise that impact by operating in a socially responsible manner. The Company’s environmental policy can be found by clicking here.

The Company seeks to behave as a responsible employer and make positive contributions to the local economies. Engagement with local communities in which we operate, has assisted the Board in implementing policies such as local contracting and inviting school groups to well sites to help them understand what we are doing.

The Board is aware of its duty to promote the Company for the benefit of its members and complies with the obligations under section 172 of the Companies Act. All of the Company’s stakeholders have access to contact information for communication with the Company. Feedback is respectfully acknowledged by the Company and appropriately dealt with.

The Board believes that its investment in the wider stakeholder network is expected to assist the Company’s management in achieving its long-term goals by creating an environment of trust and communication which will have positive implications for the long term success of the Company.

The Board believes holding the Company’s responsibilities in high regard to be a requirement for building its business and being considered an operator or partner of choice.

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation

The Board acknowledges its overall responsibility for ensuring that the Company has a robust framework of risk management and an appropriate system of internal control. However, any system can only provide reasonable, not absolute, assurance against material misstatement or loss and is designed to manage but not to eliminate the risk of failure to achieve business objectives. The key procedures are:

  • preparation of annual cash flow projections for approval by the board;
  • ongoing review of expenditure and cash flows;
  • establishment of appropriate cash flow management and treasury policies for the management of liquidity, currency and credit risk on financial assets and liabilities;
  • regular management meetings to review operating and financial activities;
  • consideration of industry and country-specific risks as part of the Company’s review of strategy;
  • recruitment of appropriately qualified and experienced staff to key financial and management positions; and
  • preparation of financial statements, including external auditing.

The Audit Committee reviews the risk register and the effectiveness of the system of internal control and is responsible for ensuring that appropriate procedures are in place for mitigating financial and other risks.

The Risk and Safety Committee is responsible for evaluating risks in Company operations including property, personnel and environmental risks and ensuring that appropriate procedures are in place for mitigating risk.

Both the Audit and Risk and Safety Committees report directly to the Board. As part of the business continuity plan, a risk register and an IT disaster recovery plan are prepared by senior management and reviewed by the Board annually. This year the Company has engaged an external expert to review the areas of legal and governance, IT and internal controls.

For further details of the principal risks and uncertainties that may affect the business and the Company’s approach to risk and its management, please refer to 2017 Annual Report (page 32), a copy of which can be downloaded by clicking here.  

Principle 5: Maintain the board as a well-functioning, balanced team led by the chair

The Board is responsible for setting the overall strategy of the business, reviewing management performance and ensuring the Company has sufficient financial and human resources to meet its objectives. It directs the Company’s activities in an effective manner through regular Board meetings and monitors performance through timely and relevant reporting procedures. In addition, the Board:

  • approves the financial statements, annual and long-term capital expenditure plans;
  • approves major contracts and capital projects;
  • monitors financial performance and critical business issues;
  • ensures that the principal risks and uncertainties to the Company are identified and that the systems of sound risk management and internal control systems are maintained;
  • approves key policies and procedures;
  • reviews and approves the remuneration policy, on the recommendation of the Remuneration Committee;
  • is putting in place systems to measure its own performance, and the performance of its committees and individual directors;

Specific responsibilities are delegated to four formally-constituted Board committees: The Audit, Nomination, Remuneration, and Risk and Safety Committees.

The Board comprises the Non-Executive Chairman, four executive Directors and three non-executive Directors. The Chairman, Mutiu Sunmonu, is responsible for the leadership of the Board, ensuring its effectiveness and setting its agenda. He is not involved in the day-to-day operation of the Company.

The Chairman is responsible for the Company’s approach to corporate governance and the application of the principles of the QCA Code. Mutiu Sunmonu, Mark Philips, Linda Beal and Bill Higgs are the Company’s independent directors and, as such, are independent of management and any business or other relationships which would interfere with the exercise of their independent judgement. Further details pertaining to the Board are set out in the Governance section of the Annual Report and Accounts.

Leadership structure

Leadership structure 

The Chairman considers that the Company has a balanced and diverse board with the requisite skills to build a successful, sustainable Nigerian-focussed oil and gas business.

To ensure that the Directors can properly carry out their roles, they are provided with relevant information and financial details prior to all Board meetings. All Directors have access to the advice and services of the Company Secretary, whose duty is to ensure that the Board complies with applicable rules and procedures. The Board meets at least six times a year to discuss and decide the Company’s business and strategic decisions and additional board calls are held as required. In addition, there is a high degree of contact between the Directors outside of Board meetings to ensure all Directors are aware of the Company’s business. If necessary, the non-executive Directors may take independent advice at the expense of the Company.

Each board member commits sufficient time to fulfil their duties and obligations to the Board and the Company. They attend board meetings and join ad hoc board calls and offer availability for consultation when needed. The contractual arrangements between the directors and the Company specify the minimum time commitments which are considered sufficient for the proper discharge of their duties. However, in exceptional circumstances all board members understand the need to commit additional time.

The attendance of individual board members at board and committee meetings is set out below and in the Governance section of the Annual Report and Accounts.

Board meetings attendance in 2017

Name Position Board
    Maximum
possible attendance
Meetings
attended
Mutiu Sunmonu Chairman 11 10
Oisin Fanning CEO 11 11
Joel Price COO 11 11
Ewen Ainsworth Finance Director 11 11
Alan Campbell Director of Commercial
and BusDev
11 10
Ray King** Non-Exec Director
and CoSec
11 9
Mark Phillips Non-Exec Director 11 10
Nick Butler* Non-Exec Director 7 5

*Resigned 6 September 2017
** Resigned as a Director from 28 September

Committee memberships and attendance in 2017

Name Position  Committee membership, attendance (attended/maximum)
       NomCom Audit RemCom Risk & Safety
Mutiu Sunmonu Chairman Member (2/2) Member (1/5) Chair (1/1) Member (1/1)
Oisin Fanning CEO Member (0/2) - - -
Joel Price COO - - -  
Ewen Ainsworth Finance Director - - -  
Alan Campbell Dir Commercial & BusDev - - - -
Ray King** Non-Exec Director and CoSec - - - -
Mark Phillips Non-Exec Director Member/Chair (2/2) Member (5/5) Member (1/1) -
Linda Beal+ Non-Exec Director - Chair (n/a) Member (n/a) -
Bill Higgs~ Non-Exec Director - - - Chair (n/a)
Nick Butler* Non-Executive Director Member (2/2) Chair (3/3) Chair (3/3) Member (1/1)

* Resigned 6 September 2017
** Resigned as a Director from 28 September
+ Linda Beal was appointed to the board on 16 January 2018
~ Bill Higgs was appointed to the board on 22 May 2018

Departures from the Code

Non-Executive Directors’ participation in Option Schemes
The Company encourages non-executive directors to participate in the Company’s option schemes, as is the case with many AIM-listed companies, and believes such participation enhances alignment between the non-executive Directors and shareholders. The Company does not currently fully comply with the QCA Code in this respect.

The Board believes that independence is a matter of independence of mind, judgement and integrity and that Mutiu Sunmonu, Mark Phillips, Linda Beal and Bill Higgs are independent of management. The Board considers their ability to act independently to be unaffected by participation in the Company’s option scheme.

Nomination Committee
Oisín Fanning (Chief Executive Officer) sits on the Nomination Committee along with Mutiu Sunmonu (Non-Executive Chairman) and Mark Phillips (Non-Executive Director and chairman of the Nomination Committee). The Nomination Committee is responsible for reviewing the structure, size and composition of the Board and making recommendations to the Board with regard to any changes required. It is responsible for locating appropriate senior candidates and conducting initial interviews and submitting recommendations on any appointment to the Board.

The Board accepts that it is unusual for the Company’s Chief Executive Officer to be part of this Committee. However, Mr Fanning has almost 30 years' experience in structured finance, stockbroking and corporate finance, with 12 years specialising in the oil and gas industry and as such has many useful and relevant contacts. He recognises the importance of finding and developing talented people to help the Company achieve its objectives and without his direct input, the Committee would be denied his relevant opinion on suitable candidates to join the Board.

Principle 6: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities

The Board members bring extensive and diverse experience encompassing operational, financial, African, European, AIM and regulatory, commercial expertise and large and developing company experience.

The Corporate Governance report included in the Annual Report and Accounts identifies each member of the Board and describes the Board’s responsibilities and sets out the relevant experience, skills and personal capabilities and qualities that each member brings to the Board.

The Board comprises four Executive Directors and five Non-Executive Directors, four of whom are independent. There are eight men and one woman on the Board. Their biographies are available on this website by clciking here.

The Chairman believes that the Board should always have a suitable mix of skills and competencies covering all essential disciplines bringing a balanced and diverse perspective that is beneficial both operationally and strategically.

Executive Directors

The executive directors bring significant listed company, oil and gas operations and financial, commercial and transactions experience.

Oisín Fanning, Chief Executive Officer
Oisín brings almost 30 years’ experience in structured finance, stockbroking and corporate finance, with 12 years specialising in the oil and gas industry. Formerly CEO of Astley & Pearce Ltd., MMI Stockbrokers, and Smart Telecom Plc, Oisín was closely involved with the restructuring of Dana Petroleum Plc in the early 1990s. He was also a major supporter of Tullow Oil Plc in its early growth phase.

Joel Price, Chief Operating Officer
Joel is a petroleum engineer with 25 years’ experience, having worked across well operations, reservoir engineering, production optimisation, asset management and business development. He was instrumental in the drilling and hydraulic fracturing of the first multi-fracced horizontal wells in Poland. He holds a BA Hons. in Natural Sciences (Geology) from Cambridge University, an MEng in Petroleum Engineering from Heriot-Watt University, and an MBA with distinction from Durham University.

Ewen Ainsworth, Finance Director
Ewen is an experienced Finance Director, having worked in a variety of senior and board-level finance roles in the oil and gas industry for nearly 30 years, most recently as Finance Director for Gulf Keystone Petroleum Limited. He qualified as a chartered management accountant, moving into leading commercial roles. He holds a degree in Economics and Geography from Middlesex University, and is a member of the Energy Institute.

Alan Campbell, Director of Commercial & Business Development
Alan has 15 years’ experience in business, banking and the oil & gas industry. He has had key project management roles in international merger, acquisition and divestment deals valued at over US$350 million – including origination, negotiation, due diligence, deal structuring, closing, post deal integration and management. He holds a Masters in Project Finance & Venture Management (First Class Honours).

Non-Executive Directors
The independent non-executive directors bring significant African oil and gas, investor, AIM and main board and financial expertise to the Board.

Mutiu Sunmonu, Chairman
Mutiu Sunmonu, as previous Managing Director of Shell Nigeria, brings valuable Nigerian operating experience and relationships and, together with Oisin Fanning, sits on the Board of OML 18’s operator - Eroton Exploration and Production Company Ltd.

Linda Beal, Non-Executive Director
Linda was a partner at PwC LLP for 16 years specialising in the natural resources sector and was then global leader for energy and resources at Grant Thornton UK LLP. She has extensive experience of advising groups with African assets. She is currently a non-executive director and chair of the Audit and Risk Committee of Tax Systems plc. Linda is a chartered accountant and holds a degree in Mathematics from Nottingham University.

Bill Higgs, Non-Executive Director
Bill has nearly 30 years of global exploration, development and operations experience, including over five years in executive roles for independent Exploration and Production companies including Genel Energy plc where he is Chief Operating Officer and Ophir Energy plc. He was also CEO of Mediterranean Oil and Gas where he oversaw the successful sale of the company in 2014 and previously spent 23 years at Chevron. He is a qualified geologist with extensive expertise in all engineering and other technical and commercial aspects of hydrocarbon development and production.

Mark Philips, Non-Executive Director
Mark was a founding partner of private equity firm Penta Capital LLP and had previously been a senior investment executive with the private equity team at Royal Bank of Scotland plc. He holds an honours degree in Economics and Law from the University of Strathclyde as well as an MBA from the University of Edinburgh. He is a member of The Merchant Company of Edinburgh.

Company Secretary
Ray King

Ray is a qualified Chartered Secretary, Banker, Compliance Officer and has considerable experience in IT and Finance. As a Chartered Secretary with 40 years’ experience, much of it with a large City bank, he has acted as Company Secretary and in various senior Executive and Non-Executive Director roles for companies which have been brought to the AIM, Nasdaq and Plus.

Summary background and diversity of the Board

Director Background Diversity
  Oil & gas/energy Finance/Commercial Investor - Female Non-UK/Irish
Mutiu Sunmonu - -
Oisin Fanning - - -
Joel Price - - - -
Ewwn Ainsworth - - - -
Alan Campbell - - - -
Linda Beal - - -
Mark Phillips - - - -
Bill Higgs - - - -


The Nomination Committee is responsible for reviewing the structure, size and composition of the Board and making recommendations to the Board with regard to any changes required. It is responsible for locating appropriate senior candidates and conducting initial interviews and submitting recommendations on any appointment to the Board. To this effect an external recruitment agency is used as appropriate. All directors were considered carefully to ensure they have the necessary up-to-date experience, skills and capabilities on appointment. During the recruitment process the Nomination Committee considers the breadth of experience of the board as a whole, and the diversity of knowledge brought to the Board (from both within and outside the industry). The Board assesses the need for any additional independent directors regularly.

The nature of the Company’s business requires the Directors to keep their skillset up to date. The Directors are kept informed on relevant regulatory compliance and statutory matters through briefings by external advisers and all Executive and Non-Executive directors have access to the Company’s external advisers.

The Company changed its Nominated Advisor (“Nomad”) in 2018, a process which included the new Nomad making a presentation to the board on ‘Directors’ Responsibilities & Continuing Obligations under the AIM rules for Companies’.

The Directors receive regular briefing papers on the operational and financial performance of the Company from the Executive and senior management.

All Company Non-Executive Directors also hold Director (Non-Executive or Executive) roles in other companies, helping to ensure broad and current experience. Further training is available at the Company’s expense.

The Company Secretary is a non-executive director of the Company and reports directly to the Chairman on governance matters.

Principle 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

The Board considers that the combination of Non-executive and Executive Directors are of sufficient competence and experience to support the strategy and development of the Company. During 2018, the Nominations Committee sought to add independent technical and operational experience to the Board, which resulted in Mr Bill Higgs being appointed in May 2018.

The Chairman and Nominations Committee will continue to review and monitor the strength and objectivity of the board and seek improvement.

Succession planning
Succession planning is currently undertaken on an informal basis by the CEO in consultation with the Board. The Board is satisfied that this is appropriate for this stage in the Company’s development.

Departures from the Code

Formal evaluation of Board and Directors

The Board engaged an external third party consultant to observe and evaluate its Board meetings from Q2 2018, with one of their deliverables being to review Directors’ and Board performance. Initial minor recommendations to improve Board processes and procedures have already been implemented, and further recommendations for improvement will be implemented if received.

While the Chairman and Nominations Committee evaluate requirements for the Board, and an external third party has been asked to review certain matters, a formal evaluation process for the Board as a whole, as well as of its Committees and Directors, will be implemented by the end of 2018. The process will be led by the Chairman. The Executive Directors and other Non-Executive Directors will review the Chairman’s performance. The Company does not fully currently comply with the QCA Code in this respect.

Principle 8: Promote a corporate culture that is based on ethical values and behaviours

The Company aspires to, and encourages its staff to, operate in a socially responsible manner, acting ethically and professionally at all times. Communication between management and the workforce is encouraged and the relatively small size of the Company means that the Directors and senior managers are accessible to all employees to provide and receive feedback.

The Company is committed to a culture encompassing the highest standards of quality, honesty, openness and accountability, and understands that any issues counter to this culture could have an extremely negative impact on the business. Consistent with Principle 3 above, the Company operates with an inclusive, transparent and respectful culture. The Board places particular emphasis on operating to the highest ethical and environmental standards.

The Company’s objectives include observing the highest level of health and safety standards, developing our staff to their highest potential and being a good corporate citizen in our chosen countries of operations.

The Company is also committed to providing a safe working environment for its employees and anyone doing work on the Company’s behalf. The Company has a Risk and Safety Committee which meets to review and make recommendations concerning risk, health and safety issues. HS&E is covered at board meetings during discussion on operations.

The Company is an equal opportunity employer and seeks to hire, promote and retain the highly skilled people based on merit, competence, performance, and business needs. The Company is committed to employment policies which follow best practice, based on equal opportunities for all employees, irrespective of ethnic origin, religion, political opinion, gender, marital status, disability, age or sexual orientation.

The Company has a Whistleblowing Policy in place to assist employees, suppliers, contractors and others with the reporting of any malpractice or illegal act or omission by others. The policy is reviewed at least every two years or more often if necessary and is communicated to all employees. It was last reviewed in September 2018.

The Company’s Anti-Bribery and Corruption policy (Anti-Bribery and Corruption Policy) formalises the Company’s zero-tolerance approach to bribery and corruption. The Company expects all employees, suppliers, contractors and consultants to conduct their day-to-day business activities in a fair, honest and ethical manner, and to be aware of and refer to the Anti-Bribery & Corruption Policy in all of their business activities worldwide and to conduct all business in compliance with it. The Company seeks to enforce effective systems to counter bribery, such as secondary authorisations for payments.

Future Annual Report and Accounts will include a statement in the Governance section setting out the Company’s corporate culture and approach to ethical values and behaviours.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

The Board of Directors recognises the importance of applying the highest standards of corporate governance to enable effective and efficient decision making, and to give a structural aid for Directors to discharge their duty to promote the success of the company for the benefit of its shareholders.

The Board reserves for itself a range of key decisions to ensure that it retains proper direction and control of the Company whilst delegating authority to individual Directors who are responsible for the day to day management of the business. The list of such matters may be found by clicking here.

The Roles of the Non-Executive Chairman and Chief Executive Officer and other Directors who have specific responsibilities or remits (e.g. for engagement with shareholders or other stakeholder groups)

The roles of the independent Non-Executive Chairman and Chief Executive Officer are exercised by different individuals.

Mutiu Sunmonu, the independent Non-Executive Chairman, has overall responsibility for fostering high standards of corporate governance throughout the Company. He is responsible for the leadership and effectiveness of the Board, setting the Board’s agenda and leading the Board meetings ensuring sufficient time for full discussion of agenda items. The Chairman is also responsible for promoting a culture of contribution and constructive dialogue during the meetings. Mutiu Sunmonu chairs AGMs and any other general meetings of the Company. He is also the Chair of the Remuneration Committee.

Oísin Fanning, the Chief Executive Officer, is responsible to the Board for the performance of the business within the strategy set by the Board. The Chief Executive Officer develops proposals for the implementation of the Company’s strategy for recommendation to the Board. He leads the team of Executive Directors, who, under his authority, are responsible for the day-to-day running of the operational business.

Oísin Fanning and other Executive Directors are the key contacts with the Company’s major shareholders. Mutiu Sunmonu, the Chairman, and other Non-Executive Directors are also available to shareholders if required.

The Board committees

The Board has established four separate committees: The Audit Committee, Remuneration Committee, Nomination Committee, and Risk and Safety Committee.

Audit Committee
The Audit Committee consists of the Chairman and two independent Non-Executive Directors and is chaired by Linda Beal who has recent and relevant financial experience. The duties of the Committee include the review of the accounting principles, policies and practices adopted in preparing the financial statements, internal control processes and the review of the Company’s financial results. The Committee considers the need for an internal audit function, and is responsible for ensuring that adequate insurance cover is in place for identifiable risks.

The Audit Committee also considers how to maintain an appropriate relationship with the Company’s auditors. The Committee approves any fees in respect of non-audit services provided by external auditors to safeguard the external auditor’s independence and objectivity.

Remuneration Committee
The Remuneration Committee consists of the Chairman, and two independent Non-Executive directors and is chaired by Mutiu Sunmonu. The Remuneration Committee monitors the performance of the Company’s Executive Directors and makes recommendations to the Board on the remuneration packages for the Executives. The remuneration and terms and conditions of appointment of the non-executive Directors are set by the Board as a whole.

Nomination Committee
The Nomination Committee consists of the Chairman, the Chief Executive Officer and an independent Non-Executive Director (Mark Phillips) who chairs the Committee. The Nomination Committee is responsible for reviewing the structure, size and composition of the Board and making recommendations to the Board regarding any changes required. It is responsible for locating appropriate senior candidates and conducting initial interviews and submitting recommendations on any appointment to the Board.

Risk and Safety Committee
The Risk and Safety Committee consists of the Chairman, the Chief Operating Officer and an independent Non-Executive Director (Bill Higgs) who chairs the Committee. The Committee is responsible for evaluating risks in Company operations including property, personnel, security and environmental risks and ensuring that appropriate procedures are in place for mitigating risk. The committee is also responsible for ethics and corporate social responsibility.

The Board committees review their corresponding terms of reference annually.

The minutes of the Committee meetings are made available to the Directors of the Board, unless in the opinion of the Committee Chairman, it would be inappropriate to do so.

The Company conducts a review of the Company’s governance framework each year in line with the Company strategy and takes into account audit recommendations. The appropriateness of the Company’s governance structures will be reviewed in light of further developments of accepted best practice and the development of the Company.

Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

The Company communicates with all stakeholders through its website, Regulatory News Service (“RNS”) announcements, Annual Report and Accounts, half yearly announcements, AGMs and private meetings.

RNS announcements update stakeholders on all material issues related to the Company, including, annual and financial reports, annual and extraordinary general meeting announcements, voting results of the meetings, Board changes, acquisitions, divestments and operational updates.

The Board discloses the result of general meetings by way of announcement and discloses the proxy voting numbers to those attending the meetings. In order to improve transparency, the Board has committed to announcing proxy voting results in future and disclosing them on the Company’s website. In the event that a significant portion of voters have voted against a resolution, an explanation of what actions it intends to take to understand the reasons behind the vote will be included.

The Chief Executive Officer and other Executive Directors are responsible for communicating with major shareholders and other shareholders who wish to be part of a dialogue, as explained in Principle 2. As also stated in Principle 2, the Chairmen of the Audit, Remuneration, Nomination and Risk and Safety Committees are also available to answer questions at the AGM.

Current and potential investors can subscribe to the news we publish on the Company’s website, including RNS announcements, presentations, annual reports and accounts. The website is updated regularly. Directors are available for discussion with shareholders following AGMs, and at other times they can be contacted via the Company’s website, by email, by telephone on +35 31 291 6292 or in writing to San Leon Energy plc, 3300 Lake Drive, Citywest Business Campus, Dublin 24, Ireland.

Further corporate information can be found in the Investors section of the Company’s website by clicking here.

 

Last updated: 10 October 2018

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