Last reviewed 9 September 2018
There is no prescribed corporate governance code for AIM companies and London Stock Exchange prefers to give companies the flexibility to choose from a range of codes which suit their specific stage of development, sector and size.
The Board considers the corporate governance code published by the Quoted Companies Alliance Corporate Governance Code 2018 (“the QCA Code”) is the most suitable code for the Company and has adopted the principles set out in the QCA Code and applies these principles wherever possible, and where appropriate to its size and available resources.
The Executive Chairman, Patrick Cheetham, has overall responsibility for the Corporate Governance of the Company. This Corporate Governance Statement was approved by the Board on 7 September 2018.
The QCA Code sets out ten principles which should be applied. The principles are listed below with an explanation of how the Company applies each principle, and the reasons for any aspect of non-compliance. Where reference is made to the Annual Report, it is a reference to the latest annual report which can be viewed at the following link:
Principle One: Establish a strategy and business model which promote long-term value for shareholders.
The Company has a clearly defined strategy and business model that has been adopted by the Board and is set out on pages 4 and 5 of the Annual Report.
Principle Two: Seek to understand and meet shareholder needs and expectations.
All shareholders are encouraged to attend the Company’s Annual General Meetings where they can meet and directly communicate with the Board. After the close of business at the Annual General Meeting, the Chairman makes an up to date corporate presentation and opens the floor to questions from shareholders.
Shareholders are also welcome to contact the Company via email at email@example.com with any specific queries.
The Company also provides regulatory, financial and business news updates through the Regulatory News Service (RNS) and various media channels such as Twitter. Shareholders also have access to information through the Company’s website, www.sunriseresourcesplc.com, which is updated on a regular basis and which includes the latest corporate presentation on the Group. Contact details are also provided on the website.
Principle Three: Take into account wider stakeholder and social responsibilities and their implications for long-term success.
The Board takes regular account of the significance of social, environmental and ethical matters affecting the business of the Group. At this stage in the Group’s development, the Board has not adopted a specific written policy on Corporate Social Responsibility as it has a limited pool of stakeholders other than its shareholders. Rather, the Board seeks to protect the interests of the Group’s stakeholders through individual policies and through ethical and transparent actions. The Company engages positively with local communities, regulatory authorities and stakeholders in its project locations and encourages feedback through this engagement. Through this process the Company identifies the key resources and fosters the relationships on which the business relies.
Principle Four: Embed effective risk management, considering both opportunities and threats, throughout the organisation.
The Board regularly reviews the risks to which the Group is exposed and ensures through its meetings and regular reporting that these risks are minimised as far as possible whilst recognising that its business opportunities carry an inherently high level of risk. The principal risks and uncertainties facing the Group at this stage in its development and in the foreseeable future are detailed on page 12 and 13 of the Annual Report together with risk mitigation strategies employed by the Board.
Principle Five: Maintain the board as a well-functioning, balanced team led by the chair.
The Board’s role is to agree the Group’s long-term direction and strategy and monitor achievement of its business objectives. The Board meets formally four times a year for these purposes and holds additional meetings when necessary to transact other business. The Board receives reports for consideration on all significant strategic, operational and financial matters.
The Board is supported by the audit and remuneration and the nomination committees, details of which can be found on page 19 of the Annual Report.
The Board currently consists of the Executive Chairman (Patrick Cheetham), a Senior non-executive director (David Swan) and one further non-executive director (Roger Murphy). The current Board’s preference is that independent non-executive directors comprise the majority of Board members. Mr Patrick Cheetham is currently the Chairman and Chief Executive. Mr Cheetham has a service contract as Chairman of the Company and his services as Chief Executive are provided to the Company at cost through a management agreement with Tertiary Minerals plc which is a shareholder in the Company and where he is employed as Chairman. Currently Mr. Cheetham dedicates 90% of his working time to his positions with the Company. The combined role of Chairman and Chief Executive results in cost savings and is considered acceptable whilst there is a majority of independent directors on the Board and having regard to the fact that the Company is not yet revenue generating.
The non-executive directors are considered independent of management and free from any business or other relationship which could materially interfere with the exercise of their independent judgement.
Principle Six: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities.
The Board considers the current balance of sector, financial and public market skills and experience which it embodies is appropriate for the current size and stage of development of the Company and that the Board has the skills and experience necessary to execute the Company’s strategy and business plan and discharge its duties effectively. Details of the current Board of Directors’ biographies are set out in the Annual Report, page 18 and on the Company’s website at the link below:
All Directors have access to the Company Secretary who is responsible for ensuring that Board procedures and applicable rules and regulations are observed.
Principle Seven: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement.
The ultimate measure of the effectiveness of the Board is the Company’s progress against the long term strategy and aims of the business. This progress is reviewed in Board meetings held at least four times a year. The Executive Chairman’s performance is reviewed once a year by the rest of the Board.
The Nomination Committee, currently consisting of the Executive Chairman and the two non-executive directors, meets once a year to lead the formal process of rigorous and transparent procedures for Board appointments. During this meeting the Nomination Committee reviews the structure, size and composition of the Board; succession planning; leadership; key strategic and commercial issues; conflicts of interest; time required from non-executive directors to execute their duties effectively; overall effectiveness of the Board and its own terms of reference. Any Board actions resulting from recommendations of the Nomination Committee will be detailed in the Corporate Governance section of the Annual Report.
Principle Eight: Promote a corporate culture that is based on ethical values and behaviours.
The Board recognises and strives to promote a corporate culture based on strong ethical and moral values. The Group encourages its employees to understand all aspects of the Group’s business and seeks to remunerate its employees fairly, being flexible where practicable. The Group gives full and fair consideration to applications for employment received regardless of age, gender, colour, ethnicity, disability, nationality, religious beliefs, transgender status or sexual orientation. The Board takes account of employees’ interests when making decisions, and suggestions from employees aimed at improving the Group’s performance are welcomed.
The corporate culture of the Company is promoted to its employees, suppliers and contractors and is underpinned by the implementation and regular review, enforcement and documentation of various policies: Health and Safety Policy; Environmental Policy; Share Dealing Policy; Anti-Corruption Policy; Code of Conduct; Privacy and Cookies Policy and Social Media Policy. These procedures enable the Board to determine that ethical values are recognised and respected.
Principle Nine: Maintain governance structures and processes that are fit for purpose and support good decision-making by the board.
The Board has overall responsibility for all aspects of the business. The Chairman is responsible for overseeing the running of the Board, ensuring that no individual or group dominates the Board’s decision-making, and that the non-executive directors are properly briefed on all operational and financial matters. The Chairman has overall responsibility for corporate governance matters in the Group and chairs the Nomination Committee. The Chairman has the responsibility for implementing the strategy of the Board and managing the day-to-day business activities of the Group. The Company Secretary is responsible for ensuring that Board procedures are followed, and applicable rules and regulations are complied with. Key operational and financial decisions are reserved for the Board through quarterly project reviews, annual budgets, and quarterly budget and cash-flow forecasts and on an ad hoc basis where required.
The two non-executive directors are responsible for bringing independent and objective judgment to Board decisions. The Board has established Audit and Remuneration Committees with formally delegated duties and responsibilities. David Swan currently chairs the Audit Committee; Roger Murphy chairs the Remuneration Committee. Further details are available on page 18 of the Annual Report.
This Corporate Governance statement will be reviewed at least annually to ensure that the Company’s corporate governance framework evolves in line with the Company’s strategy and business plan.
Principle Ten: Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.
The Company regularly communicates with, and encourages feedback from, its shareholders who are its key stakeholder group. The Company’s website is regularly updated and users, including all stakeholders, can register to be alerted via email when material announcements are made. The Company’s contact details are on the website should stakeholders wish to make enquiries of management.
The Group’s financial reports can be found here: https://www.sunriseresourcesplc.com/financial-reports. Future Annual Reports will include reports from the Nomination and Remuneration Committees.
Notices of General Meetings are posted to shareholders and copies for at least the past five years are contained within the Annual Reports, copies of which are available in the Company Documents section of the AIM Rule 26 page of the website at the link below:
The results of voting on all resolutions in future general meetings will be posted to the Company’s website, including any actions to be taken as a result of resolutions for which votes against have been received from at least 20 per cent of independent votes.
The Companies Act 2006 permits directors of public companies to authorise directors’ conflicts and potential conflicts, where appropriate, where the Articles of Association contain a provision to this effect. The Company’s Articles contain such a provision.
Procedures are in place in order to avoid any conflict of interest between the Company and Tertiary Minerals plc, which is a shareholder. Tertiary Minerals provides management services to Sunrise Resources in the search, evaluation and acquisition of new projects.