Corporate Governance Code
Corporate governance statement in respect of United Oil & Gas PLC
The Board recognises the importance of sound corporate governance in the management of the Company and in achieving its strategic goals. Accordingly, the Company has adopted the Alliance Corporate Governance Code (the “QCA Code”) published in April 2018. The QCA code is tailored to meet the needs of small and mid-size quoted firms and the Board believe that this code provides the most appropriate framework for a company of our size and stage of development. The Board will annually assess its compliance with the QCA code and will consider as part of that review, whether the QCA code continues to remain the most appropriate code for the Company to adopt.
Principle 1. Establish a strategy and business model which promotes long-term value for shareholders
The Board has concluded that the highest medium and long-term value can be delivered to its shareholders by the adoption of a strategy to create value by actively managing our existing assets whilst growing our business through additional high-margin opportunities.
The Company’s interests currently consist of a multi-stage portfolio of low- cost producing assets with significant development and exploration upside in Egypt, exploration and appraisal assets in the UK and an exploration asset in Jamaica.
Principle 2. Seek to understand and meet shareholder needs and expectations
The Company communicates with shareholders primarily via regular announcements of operational and corporate updates and semi-annual release of audited financial statements. The investor section of the Company’s website (www.uogplc.com/investors/) is updated regularly and includes regulatory news announcements (press releases), annual and interim reports, corporate presentations, and a list of major shareholders. Shareholders and analysts have the opportunity to discuss issues and provide feedback at meetings, in presentations from the Company and on shareholder calls which are hosted a number of times a year.
The Company, through its public relations firms, attendance at shareholder events, website, conference calls social media and its email@example.com email address, seeks to provide multiple communication lines through which private shareholders can engage with the Company.
The Company shall include, when relevant, in its Annual Report, any matters of note arising from the Board Committees.
Principle 3. Take into account wider stakeholder and social responsibilities and their implications for long-term success
The Board recognises that the long-term success of the Company is reliant upon maintaining effective working relationships across a wide range of stakeholder groups. These include the Company’s host governments and regulatory authorities, employees and contractors, joint venture partners, suppliers, shareholders and financing partners. Oversight of stakeholder engagement and the Company’s social responsibilities is provided by the Environmental, Social and Governance (ESG) Committee. The Board values feedback from all stakeholders and has systems in place to ensure that there is oversight, accountability and contact with its key resources and relationships.
Principle 4. Embed effective risk management, considering both opportunities and threats, throughout the organisation
The Company maintains a principal risks and mitigations register that is reviewed by the Audit and Risk Committee on an annual basis. Risks are categorised as Strategic, Financial, Operational and Reputational and an explanation is given on how these risks are mitigated to enable the Company to achieve its strategic objectives. In addition, the management team meet quarterly to review the Risks and risk register.
MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK
Principle 5. Maintain the Board as a well-functioning, balanced team led by the Chair
The Board comprises: an independent non-executive Chair, Chief Executive Officer, a Chief Operations Officer, a Chief Financial Officer and two non-executive directors who are considered by the Board to be independent. Biographies of the Board appear both on the Company’s website and in the Annual Report.
Executive and non-executive directors are subject to re-election at the Company’s Annual General Meeting at intervals of no more than three years although in practice all directors put themselves up for re-election annually. The service agreements and letters of appointment of all Directors are available for inspection at the Company’s registered office during normal business hours.
The Board expects to meet at least six times per annum. It has established an Audit and Risk Committee, a Remuneration Committee, an Environmental, Social and Governance Committee and an AIM Rules Compliance Committee. Full details of the number of Board and Committee meetings and the attendance record of each director are set out in the Annual Report. The terms of reference for each Committee are set out on the Company’s website www.uogplc.com. The Board has agreed that appointments to the Board at this stage would be made by the Board as a whole and so has not created a Nominations Committee.
Principle 6. Ensure that between them the directors have the necessary up to date experience, skills and capabilities.
The Company believes that, at its current stage of development as an independent upstream oil and gas company, the balance of skills on the Board as a whole, reflects a sufficiently broad range of technical, operational, commercial, legal, financial and risk management experience, together with an in-depth knowledge of the sector and experience of public markets, that are necessary to ensure the Company is equipped to deliver its strategy. The composition of the Board is kept under review to ensure that the necessary breadth and depth of skills are available to support the ongoing development of the Company. The directors have access to the Company’s Nomad, legal advisors, tax advisors and auditors and are able to seek advice from other professional advisors as required.
Full Biographies of the Board are available on the Company’s website https://www.uogplc.com/about-us/our-team/ and in the Annual Report page 56.
Principle 7. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
Internal evaluation of the Board, the Committees and individual Directors is undertaken on an annual basis by way of individual discussions between the Chair and each director to determine the effectiveness and performance of the Board. A Board evaluation was conducted in 2021 and an overview is provided in the Annual Report.
The results and recommendations from the Board evaluation also identify the key corporate and personal targets relevant to each Director. Progress against previous targets shall also be assessed where relevant.
Principle 8. Promote a corporate culture that is based on ethical values and behaviours
The Board recognises that its decisions regarding strategy and risk will impact the corporate culture of the Company as a whole and that this will impact the performance of the Company. The Board is very aware that the tone and culture set by the Board will greatly impact all aspects of the Company as a whole and the way that employees behave. The corporate culture places a strong emphasis on conducting business ethically, transparently and with clear lines of responsibility. The corporate governance arrangements that the Board has adopted are designed to ensure that the Company delivers long term value to its shareholders and that shareholders have the opportunity to express their views and expectations for the Company in a manner that encourages open dialogue with the Board.
The Company maintains an open and respectful dialogue with employees, partners and other stakeholders acknowledging that sound ethical values and behaviours are crucial to the ability of the Company to successfully achieve its corporate objectives. The Board places great import on this aspect of corporate life and seeks to ensure that this flows through all that the Company does. The Directors consider that at present the Company has an open culture facilitating comprehensive dialogue and feedback thus enabling positive and constructive challenge.
The Company has adopted, with effect from the date on which its shares were admitted to AIM, a code for Directors’ and employees’ dealings in securities which is appropriate for a company whose securities are traded on AIM and is in accordance with the requirements of the Market Abuse Regulation.
Principle 9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board
Ultimate accountability for all aspects of the Company’s activities rests with the Board, the respective responsibilities of the non-executive Chair and Chief Executive Officer arising as a consequence of delegation by the Board. The non-executive Chair is responsible for the effectiveness of the Board together with the responsibility to oversee the company’s corporate governance practices. The Board has also established appropriate Committees as detailed below to oversee the effectiveness of its operations and governance. Terms of reference for each Committee are available on the Company’s website at https://www.uogplc.com/about-us/our-team/.
Audit and Risk Committee
The Audit and Risk Committee comprises Tom Hickey (Chair) and Iman Hill. This Committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Company is properly measured and reported on and for reviewing reports from the Company’s auditors relating to the Group’s accounting and internal controls. The Committee is also responsible for making recommendations to the Board on the appointment of auditors, the audit fee and for ensuring that the financial performance of the Group is properly monitored and reported. The Committee will meet no less than three times a year.
The Remuneration Committee comprises Graham Martin (Chair), Tom Hickey and Iman Hill. This Committee is responsible for ensuring that executive remuneration is appropriate for this stage of the Company’s growth. It has established a Remuneration Policy which outlines the principles on which executive remuneration will be structured, including an appropriately benchmarked base salary with bonus and share award opportunities which reflect the performance of the Company and take account of the interests and experience of shareholders. The Remuneration Policy also seeks to ensure that all employees have an opportunity to share in the Company’s success. The Remuneration Policy is reviewed annually by the Committee. The Committee will meet no less than three times a year.
AIM Rules compliance Committee
The AIM Rules compliance Committee comprises Graham Martin (Chair), Tom Hickey and Brian Larkin and its prime responsibility is to ensure the Company has sufficient procedures in place to ensure ongoing compliance with the AIM Rules. The Committee will meet at least once a year.
Environmental, Social and Governance (ESG) Committee
The ESG Committee comprises Iman Hill (Chair), Graham Martin, David Quirke and Jonathan Leather. Its prime responsibility is to ensure sufficient oversight in the following areas of key importance to the Company: the environment, health and safety, corporate social responsibility, sustainability, reputation, diversity, equality and inclusion, and community issues. The Committee will meet no less than three times a year.
The Board has agreed that appointments to the Board will be made by the Board as a whole and so has not created a Nominations Committee.
The Board generally meets monthly. In addition to the scheduled monthly meetings the Board also regularly held additional update calls throughout the year to closely monitor progress on key matters. If any director was unable to attend, full comments on papers were received from that director in advance of the meeting.
Principle 10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.
The Board recognises that a healthy dialogue should exist between the Board and all of its stakeholders, including shareholders, to enable all interested parties to come to informed decisions about the company. In particular, appropriate communication and reporting structures should exist between the Board and all constituent parts of its shareholder base. This will assist the communication of shareholders’ views to the Board; and the shareholders’ understanding of the unique circumstances and constraints faced by the company. The Corporate Governance section of the Annual Report includes disclosure of Board Committees, their composition and where relevant, any work undertaken during the year.
The company’s website includes all historic Annual Reports, results announcement, results presentations and other governance-related material, including notices of all AGMs over the last six years.
To date, none of the resolutions proposed at The Company’s AGMs have resulted in a material proportion of votes (e.g. 20% of independent votes) having been cast against them, but were this to happen the Company would announce this in a timely basis, including an explanation of what actions it intended to take to understand the reasons behind such a vote result and, where appropriate, any action it had taken, or would take, as a result of the vote.
Information last updated on the 13th June 2022.