Statement of Corporate Governance

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The Directors are committed to maintaining high standards of corporate governance to ensure accountability and transparency and to protect the interests of all of our shareholders. The Company has adopted the Quoted Companies Alliance (QCA) Code as the main benchmark against which Amerisur will measure itself.

The Company is in full compliance with the QCA Code for the website disclosure element. In order to become fully compliant with the Annual Report QCA Code disclosure requirements we will add additional notes to the 2018 Annual Report, primarily relating to Principle 7 on: the Board evaluation process that is being undertaken at present; disclosure of the “criteria against which board, committee, and individual effectiveness is considered”; and additional disclosure of how the directors are keeping their skills and training updated. Following the publication of the 2018 Annual Report, the Company expects to be in full compliance with the QCA Code.

Governance improvements during 2017

The Board feels that overall compliance with governance best practice has improved during the year under review, with the following having been achieved:
•  the Board refreshment continued during the year with:
  •  a Board evaluation has been undertaken, and as the result of an extensive and independent search process led to the addition of one independent Non-Executive Director with extensive City experience and one with oil and gas sector experience;
  •  the appointment of these two new independent Directors: Dana Coffield as an independent Non-Executive; and Alex Snow as Senior Independent Director has increased the level of Board independence; and
  •  three Directors: Nigel Luson; Victor Valdovinos; and George Woodcock, stepping down from the Board;
•  following the reorganisation of the Audit and Remuneration Committees they are considered to be fully independent by the Company;
•  the Remuneration Committee has continued to review the Company’s remuneration policy and practices with the support of a respected third-party remuneration consultancy;
•  the Remuneration Committee had committed to not making any option awards in 2017 to Executive Board members and did not do so during the year;
•  share-based incentives have and will not been made to Non-Executive Directors or the Chairman; and
•  the Board confirms that it is again voluntarily submitting the Remuneration Report to a shareholder vote for the third year in succession.

The Board of Directors

The Board of Directors is responsible for formulating, reviewing and approving the Group’s strategy, budgets, major items of capital expenditure and acquisitions, and reporting to the shareholders. The Chairman ensures that all Directors are properly briefed and have access to independent professional advice and to the services of the Company Secretary, and receive the appropriate training, as necessary and as determined by an annual review. All Directors receive detailed induction training upon joining the Board, covering compliance issues, risk management considerations, Board processes and corporate governance considerations.

The Board met ten times during the 2017 financial year and all meetings have a formal agenda. Directors also have ongoing contact on a variety of issues between formal meetings. The Non-Executive Directors’ role is to constructively challenge, and they can suggest agenda items for Board meetings. The Board is planning to review the most appropriate method for undertaking an annual evaluation of its own performance and that of its key Board Committees and individual Directors.

Retirement of Directors

All Directors are submitted for shareholder approval at regular intervals.

The Board of Directors and biographical information on each Director are detailed on pages 36 and 37 of the 2017 Annual Report.

Board Composition

The Board consists of seven Directors, comprising the Chairman, two Executive Directors and four Independent Non-Executive Directors.

Date of appointment Independent from Company
Chairman G Clarke 28 February 2007 n/a*
Executive Directors N Harrison 17 April 2007 No
J Wardle 27 February 2007 No
Non-Executive Directors C Jenkins 27 May 2016 Yes
D Coffield 7 April 2017 Yes
A Snow 10 May 2017 Yes
E Grant Goodey 8 October 2018 Yes

*The Chairman was independent upon appointment

The Board has carefully considered the independence of the Non-Executive Directors and has concluded that four Directors, Dana Coffield, Chris Jenkins, Alex Snow and Elodie Grant Goodey are independent and the Chairman was independent upon appointment. This means that more than half of the Board is independent.

The UK Corporate Governance Code (the “Code”) also recommends that the Board should appoint one of the independent Non-Executive Directors to be the Senior Independent Director to provide a sounding board for the Chairman and to assist in building relationships between major shareholders and the Board. The Senior Independent Director is available to shareholders if they have concerns which contact through the normal channels of Chairman, Chief Executive or other Executive Directors has failed to resolve or for which such contact is inappropriate.

Alex Snow was appointed as the Senior Independent Director ("SID") on 10 May 2017.

The Chairman is not an Executive and was independent upon appointment. Due to the CEO being based in South America there are additional roles the Chairman undertakes, including when it is not feasible for the CEO to attend. These are primarily key stakeholder and governmental engagement meetings and the Chairman is an important element in having built the relationships which have allowed operations to proceed and prosper.

Board and Committee meetings 2017

Committee meetings attendance

(Entitled to attend/Actually attended)

Director Board Chair:
Giles Clarke
Nomination Chair:
Giles Clarke
Audit Chair:
Chris Jenkins
Remuneration Chair:
Stephen Foss
G Clarke 10/10 3/3

J Wardle 10/10 3/3

N Harrison 10/10

S Foss6 10/10 3/3 5/5 4/4
C Jenkins 10/10 3/3 5/5 4/4
D Coffield1 6/6

D Ellenor5 9/10
4/5 4/4
A Snow3 5/6 0/0
N Luson2 1/1
3/3 1/2
V Valdovinos4 1/1

G Woodcock4 1/1

1 Appointed on 7 April 2017
2 Retired on 7 April 2017
3 Appointed on 10 May 2017
4 Retired on 31 March 2017
5 Retired on 31 December 2018
6 Retired on 1 February 2019

Board Committees

As envisaged by the Code, the Board has established Nomination, Remuneration and Audit Committees, with formally delegated duties and responsibilities. The terms of reference for these Committees are available upon request.

Audit Committee

The key responsibilities of the Audit Committee are to:
•  monitor the integrity of the annual and interim financial statements, including focus on significant judgements and estimates used in the accounts
•  review the effectiveness of financial and related internal controls and associated risk management (the full Board being responsible for oversight of strategic and operational risks) and
•  oversee the relationship with our external auditor, including: reviewing their plans and audit findings; ensuring their continuing independence; appraising the effectiveness of their work prior to considering their reappointment; and considering whether to put the external audit contract out to tender.

The Code recommends that in companies below the FTSE 350 the Audit Committee should comprise at least two independent Non-Executive Directors and at least one member should have recent and relevant financial experience. Amerisur meets and exceeds this guideline.

The members of the Audit Committee, all of whom are deemed to be independent Non-Executive Directors by the Company are:
•  Chris Jenkins (Chairman)
•  Dana Coffield (joined 20 December 2017)
•  Alex Snow (joined 1 February 2019)

Chris Jenkins joined the Committee upon his appointment to the Board on 27 May 2016, and was appointed Chairman, succeeding Nigel Luson in this role. Chris Jenkins has recent and relevant financial experience.

The activities of the Committee for the year under review are outlined in the Audit Committee Report on page 47 of the 2017 Annual Report.

Nomination Committee

The current members of the Nomination Committee are:
•  Giles Clarke (Chairman)
•  John Wardle
•  Chris Jenkins (appointed January 2017) and
•  Alex Snow (appointed May 2017)

The Nomination Committee is responsible for ensuring that the Board is well equipped to continue to discharge its responsibilities and to canvas future candidates for the position of Director, to ensure that the Company continues to be governed by suitably qualified people. Thus, the Committee is responsible for ensuring that the Board has the appropriate structure, competencies, experience, skills and independence of oversight to ensure effective functioning. The Committee recommends and reviews nominees for the appointments of new Directors to the Board and ensures there is due process used in selecting candidates.

The Committee’s full terms of reference are available on request, and a brief overview of key responsibilities includes:
•  identifying, evaluating and recommending nominees for the role of Director
•  reviewing the merits of the candidates and the relevance of their background, and that appointees do not have time commitment issues
•  periodically reviewing the succession planning for Directors and other Senior Executives
•  ensuring that upon appointment Non-Executive Directors receive a formal letter of appointment setting out what is expected of them, and what training might be required, and •  making recommendations to the Board on the reappointment of any Non-Executive Directors, including a review of their performance, contributions to date and ability to commit enough time to the role.

Chris Jenkins was appointed to the Committee in January 2017 and Alex Snow in May 2017. Chris Jenkins oversaw the recruitment process for additional Non-Executive Directors to boost the independence and specific skill requirements of the Board.

This Committee is structured in line with the Code’s recommendations that a majority of the Committee’s members are independent; and the Chairman chairs this Committee.

Remuneration Committee

The members of the Remuneration Committee, all of whom are deemed to be independent Non-Executive Directors by the Company, are:
•  Dana Coffield (Chairman and appointed 9 April 2017)
•  Chris Jenkins
•  Alex Snow (appointed 10 May 2017) and
•  Elodie Grant Goodey

The Remuneration Committee is responsible for determining and reviewing compensation arrangements for the Directors and the Executive management. The Committee ensures that the remuneration practices of the Company move towards best practice and are linked with the interests of shareholders.

The Committee’s summarised terms of reference are available on the Board Committees page of the Company website here. A brief overview of the principal responsibilities of the Committee includes:
•  determining and recommending to the Board the remuneration policy for the Chairman, Executive Directors and Senior Executives
•  ensuring this policy, “to recruit, motivate and retain individuals of a high calibre with significant technical and strategic expertise”, is carried out
•  rewarding key employees on a basis which is aligned to the performance of the Company
•  setting salaries for individual members of the management team which are competitive, but not egregious
•  reviewing the design of any share-based incentive plans
•  aligning management rewards to the interests of shareholders and
•  overseeing the work of external remuneration consultants where hired.

Dana Coffield was appointed as Chairman to the Committee in January 2019.

Internal Relations

Amerisur aims to operate responsibly in all its business activities. The Company puts importance on safety, integrity and transparency and treats its employees with respect and fairness. Amerisur recognises that employees and how they operate are critical to business success and, in recognition of this, has in place a suite of policies addressing: ethical conduct, human rights, employment, health and safety and diversity.

Ethical Conduct Statement: Amerisur conducts its business with a high ethical standard. The Company helps to manage its ethical conduct risks and protect its licence to operate through its approach to anti-bribery and corruption risk and fraud detection and awareness.

Conflicts of Interest Policy: Amerisur’s Board is committed to ensure that any conflicts of interest are managed fairly. The Conflicts of Interest Policy aims to take reasonable steps to maintain and operate effective requirements to identify and manage conflicts of interest.

Human Rights Policy: Amerisur wants its employees and wider stakeholders to be treated with dignity and respect. Amerisur endorses the UN Declaration of Human Rights. The Company does not tolerate child labour and forced labour; Amerisur respects freedom of association and the rights of employees to be represented by trade unions and work council and does not discriminate based on gender, religion, age, disability or ethnicity. We encourage all who work with Amerisur to adhere to the same principles.

Modern Slavery Statement: Amerisur is committed to identifying and combating slavery and trafficking in all parts of its business and supply chain. The Company’s risk policies and processes seek to identify high risk areas. Training is provided for all employees and ongoing review of the relevant Company policies; audit processes and due diligence arrangements are in force. The Disclosure Statement is also available here.

Health and Safety Statement: Amerisur is committed to the safety of its staff and workplace. To support this aim we have achieved the OSHAS 18001:2007 Occupational Health and Safety Management System standard for our operations, which is intended to help control occupational health and safety risks.

Employee Compensation Statement: Amerisur wants to provide the opportunity for staff to be part of a team and mutually share in our success. To help achieve this aim the Group operates an equity-settled share-based compensation plan for the remuneration of its employees.

Employee Engagement Statement: Due to the operational nature of the Company the management team work closely with employees ‘on the ground’ and there is a developed workplace engagement programme which help contribute to organisational success. These activities interlink with how we pursue our goals and values, as well as our external relations activities.

Employment of Disabled Persons Policy: The Group maintains a policy of giving fair consideration to applications from physically disabled persons, bearing in mind their respective aptitudes and abilities. In the event of employees becoming disabled, every effort is made to ensure that their employment with the Company continues and that the appropriate training is arranged.

Diversity Statement: Amerisur recognises the benefits of diversity, including gender diversity, throughout the Company and on the Board, to help ensure there is an appropriate balance of skills and experience within the Company.

Quality Statement: Amerisur focuses on quality management and has in place an effective system to manage and improve the quality of its products or services. In support of this the Company has held the ISO 9001:2008 Quality Management System standard since October 2012.

External relations

Environment Policy Statement

Amerisur is committed to limiting its environmental impact in the areas where the Company operates and has a formal environmental policy and framework in place to protect the environment biodiversity and ecosystems. The Company aims to comply with all relevant regulatory and legislative requirements and industry best practice and has been awarded the following certificates: OHSAS 18001:2007 Occupational Health and Safety Management System; ISO 14001:2004 Environmental Management System; and ISO 9001:2008 Quality Management System.

To help manage its environmental risks the ISO 14001:2004 Environmental Management System standard has been in place since October 2012 and the Company communicates its environmental policy to all employees and agents. The standard is valid until October 2018 and there is a yearly review in order to check compliance and processes are regularly reviewed by external parties. The whole Board regularly discusses issues relating to the environment as is deemed appropriate for a company in our sector.

Relationships with communities

Amerisur is committed to building and maintaining good relationships with the communities within the localities of its operations. The Company focuses on responsible behaviour and risk management. Areas of activity are in:
•  respect for communities’ rights, culture and heritage
•  engagement in open dialogue
•  responding and listening to grievances and
•  supporting community development.

Relationships with Governments

The Company did not make any political donations during the 2017 financial year.

Relations with shareholders

The Board is committed to maintaining ongoing communications with the Company’s shareholders through press releases, general presentations, face to face meetings and reports to shareholders twice a year at its annual and interim results. In addition, the Company uses its website to communicate with shareholders.

As part of Amerisur’s ongoing engagement programme with shareholders, their views on key matters have been discussed at Board level during the 2017 financial year. For 2017 the Senior Independent Director and Chairman have made themselves available to attend meetings with major shareholders without the Executive Directors present. This has been to discuss a range of topics from governance matters, such as the progress reporting on activities to increase the independent representation on the Board, right through to the practical challenges of managing risks in Latin America.

The Group dispatches the notice of its Annual General Meeting, together with a description of the items of special business, at least 21 days before the meeting and shareholders are encouraged to participate. Each substantially separate issue is the subject of a separate resolution and all shareholders have the opportunity to put questions to the Board at the AGM. All of the Company’s Directors attended the AGM to answer questions which were relevant to their responsibilities.

Vote outcomes relating to the 2018 AGM:

Resolution Vote outcome
Report and accounts Passed
Approve the Directors’ remuneration report Passed
Elect Alex Snow as Director Passed
Re-elect Nick Harrison as Director Passed
Re-elect Stephen Foss as Director Passed
Reappoint Grant Thornton UK LLP as auditor Passed
Authorise Board to fix remuneration of auditor Passed
Authorise issue of equity with pre-emptive rights Passed
Authorise issue of equity without pre-emptive rights Passed
Authorise issue of equity without pre-emptive rights for an acquisition or other capital investment Passed
Authorise market purchase of ordinary shares Passed

All resolutions passed at the most recent AGM with a minimum of 80% support. The Company has also decided to engage with key shareholders that have not voted in support with management’s recommendations to understand their thinking on the issues in question; this will continue for 2019.

This page was last updated on 4th February 2019
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