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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 both the website disclosure element and the Annual Report.


Governance improvements during 2018

Over the course of 2018, we have continued to make progress and we are proud that we have achieved the following:
  •  Full compliance with the QCA Code, for both website disclosure in September 2018 and the Annual Report disclosure requirements of the QCA Code with this edition of the Annual Report.
  •  As part of our succession planning we refreshed the Board with four new high-calibre independent Directors over the last few years. More specifically for this year, we have welcomed another high-calibre independent Director to the Board in Elodie Grant Goodey. With the Board refreshment that has been in progress for the last couple of years we feel there is the correct mix of skills, experience and independence to take us through the next step of development.
  •  Our new Senior Independent Director (“SID”), Alex Snow, is keen to build on the outstanding work done by our previous SID, Stephen Foss, and continues the pace of governance improvements. This has included internal and external Board reviews and recommending several of the suggestions from this process are adopted.
  •  Amerisur’s fully independent Audit and Remuneration Committees have continued to expand their reporting, and the Chairmen of these Committees make themselves available for engaging with shareholders. In line with recent developments in best practice in this area, the Audit Committee conducted a competitive tender for the external audit. Following the Committee’s recommendation, as described in the Audit Committee report, we appointed BDO as our external auditor.
  •  As part of our commitment to shareholder engagement, we have been seeking the views of shareholders through outreach campaigns and roadshows. To enfranchise investors, we have been voluntarily putting our Remuneration report up for shareholder approval, and this is being proposed for the fourth consecutive year.
  •  The remuneration changes have been numerous and are explored in the Remuneration report including a new Chair of the Remuneration Committee being appointed during the year who has contributed to this process.


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 new Directors receive detailed induction training upon joining the Board, covering compliance issues, risk management considerations, Board processes and corporate governance considerations.

The Board met five times during 2018 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 undertook a detailed, and externally supported, Board review and this is reviewed on pages 46 and 47 of the 2018 Annual Report.


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 in the 2018 Annual Report.


Board Composition

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


Role
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
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 current Non-executive Directors and has concluded that the current three Directors, Chris Jenkins, Alex Snow and Elodie Grant Goodey are independent and the Chairman was independent upon appointment. This means that half of the Board is independent.

It is considered to be best practice 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 on 10 May 2017, and prior to this Stephen Foss had undertaken the role since 5 January 2015.

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 2018



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 9/9 3/3

J Wardle 9/9 3/3

N Harrison 9/9


S Foss1 8/9 3/3 6/6 2/2
C Jenkins 9/9 3/3 6/6 2/2
D Coffield2 9/9
6/6 2/2
D Ellenor3 9/9
6/6 4/4
A Snow 7/9 3/3
1/2
E Grant Goodey4 3/3

1/1

1 Resigned on 1 February 2019 and was replaced as Chairman of the Remuneration Committee from the start of 2019
2 Deceased on 23 April 2019
3 Retired from the Board on 31 December 2018 and the Audit Committee during 2018
4 Appointed 8 October 2018


Board Committees

The Board has established Nomination, Remuneration and Audit Committees, with formally delegated duties and responsibilities. The terms of reference for these Committees are available on this website.


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
•  keep under review the adequacy and effectiveness of the Company’s internal financial controls and internal control and risk management systems; and
•  oversee the relationship with our external auditor, including: reviewing its plans and audit findings; ensuring its continuing independence; appraising the effectiveness of its work prior to considering its reappointment; and considering whether to put the external audit contracts out to tender. 

Best practice recommends 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 this guideline.

The members of the Audit Committee, both of whom are deemed to be independent Non-Executive Directors by the Company are:
•  Chris Jenkins (Chairman)
•  Alex Snow (joined the Committee on 1 January 2019) 

Alex Snow joined the Committee on 1 January 2019, succeeding Stephen Foss. Chris Jenkins has recent and relevant financial experience and the other members contribute a range of financial, oil industry, investment and risk management experience.

The activities of the Committee for 2018 are outlined in the Audit Committee Report on page 48 of the 2018 Annual Report. 


Nomination Committee

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

The Nomination Committee’s key responsibilities are: to review the size, structure and composition of the Board in order to recommend changes to the Board and to ensure the orderly succession of Directors; to formalise succession planning and the process for new Director appointments; and to identify, evaluate and recommend candidates for appointment as Directors taking into account the balance of knowledge, skills and experience required to serve the Board. The terms of reference of the Committee were reviewed by the Board in May 2015.

The Committee’s full terms of reference are available on request, and an overview of the Committee’s activities in 2018 can be found on page 46 of the 2018 Annual Report.

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. 

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:
•  Chris Jenkins
•  Alex Snow 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 in light of the Company’s size and profile and with the interests of shareholders. 

The Committee’s summarised terms of reference are available on the Board Committees page of the Company website and in the 2018 Annual Report. 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. 


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 and Human Trafficking 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.

The Board has also taken the view that a deep knowledge of corporate responsibility (“CR”) is important to managing risks and has recruited a new Board member with CR experience to provide oversight on progress in this area.

Amerisur is committed to continual improvement and understanding in identifying and managing risks associated with modern slavery. In 2019, the Company will continue to monitor the effectiveness of its approach to ensure modern slavery and human trafficking is not part of its supply chain.

During 2018, the Company did not identify any issues related to modern slavery and human trafficking.

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 2018 financial year.


Relations with shareholders

The Board is committed to maintaining ongoing communications with the Company’s shareholders through regulatory 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 2018 financial year. For 2018, 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. 

The Company has also decided to engage with all key shareholders, including those that had not voted in support of the Board’s recommendations to better understand their thinking on the issues in question; this will continue for 2019. This is to understand their reasoning and see to what extent their position can be accommodated by the Board.

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 have passed at the recent AGMs with a minimum of 85% support.


This page was last updated on 26th April 2019
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