Since September 2018, all AIM-listed companies have been required to apply a recognised corporate governance code. ECR Minerals plc (“ECR” or the “Company”) has chosen the Quoted Companies Alliance (QCA) Corporate Governance Code published in April 2018 for this purpose. High standards of corporate governance are a priority for the ECR board of directors (the “Board”), and details of how ECR addresses the key governance principles defined in the QCA code are set out below.
- Strategy and business model
ECR’s business model and strategy to deliver shareholder value is set out each year in the Strategic Report section of the annual report, together with the Company’s values and risk management approach.
- Understanding and meeting shareholder needs and expectations
The Company maintains a dedicated email address which investors can use to contact the Company. This address is prominently displayed on the Company’s website together with its address and phone number.
Annual general meetings are held, which all members have the right to attend, and during each annual general meeting, time is set aside specifically to allow questions from attending members to be addressed to the Board. As the Company is too small to have a dedicated investor relations department, the CEO is responsible for reviewing all communications received from members and determining the most appropriate response. In addition to these passive measures, the CEO typically engages with members through investor shows once or twice each year.
- Stakeholder and social responsibilities
In addition to its members, the Company recognises that its main stakeholder groups are its employees, consultants and contractors, and the communities and governmental authorities where the Company and its subsidiaries operate. Where necessary, the Company is willing to dedicate significant time to understanding and acting on the needs and requirements of each of these groups. Board members assess the needs and requirements of the Company’s stakeholders as and when they interact with each stakeholder group, and matters can then be raised at Board level for appropriate action.
With regard to corporate social responsibility, the Board is aware of the impact the activities of the Company and its subsidiaries may have on the communities in which they operate, and aims to ensure this impact is positive.
- Risk Management
The Company operates in the mineral exploration and development sector, which is generally high risk but can provide exceptionally high returns for shareholders. The Company maintains a register of risks across a number of categories including personnel, competition, finance, environmental, political, technical and legal. These risks can be identified and kept up to date with the aid of regular discussions at Board level. For each risk the Board estimates the potential impact and likelihood of adverse events, and identifies mitigating strategies. This register is reviewed periodically as the Company’s situation changes and at a minimum annually to determine whether the systems in place are effective or need updating.
Maintain a dynamic management framework
- Board structure
The Board currently comprises one executive director and one independent non-executive Chairman. The Board meets at least quarterly, and all current directors have attended all Board meetings held in the current financial year. Under the Company’s articles of association, each director must periodically offer himself for re-election by vote of the members at the Company’s annual general meeting.
The contracts of engagement for the Company’s non-executive directors require that they dedicate up to one additional day per month to the Company on request. In addition, non-executives may provide paid consulting services at rates specified in their contracts, however no such services have been provided by non-executives in the current financial year.
The Company notes that best practice under the QCA code is to have half the Board made up of independent non-executive directors. The Board is actively seeking to appoint another non-executive director to comply with regulatory expectations.
In addition, the Company notes that its Non-Executive Chairman David Tang has been in post for one year and the Board is satisfied as to his independence, especially in light of the periodic requirement for all directors to offer themselves for re-election, which offers shareholders an opportunity to vote on their suitability.
- Board diversity and experience
The individuals who have been appointed to the Board have been chosen because of the skills and experience they offer. The members of the Board at the present time are listed below, together with an outline of their experience, skills and personal qualities relevant to the Company’s business:
- David Tang (Non-Executive Chairman) has over 12 years’ experience in the mining industry. He was previously the President of China Nonferrous Metals Int’l Mining Co., Ltd. (CNMIM) and the Managing Director of China Nonferrous Gold Ltd, an AIM-listed company which was formerly known as Kryso Resources plc. China Nonferrous Gold is focused on the Pakrut gold mine in Tajikistan, where first gold was poured in 2015. Mr Tang graduated with a Bachelor of Science degree (1988) majoring in computer science from Central-South University, China and also holds a Master of Science degree (1991). In the 1990s, he pioneered the trading system for the first nonferrous metals futures exchange in China. He worked for several years in Canada in investment management and consulting, before returning to China to take up office at CNMIM in 2003. David’s experience in the mining industry, roles at the level of president and managing director and the contacts he has developed over his career are highly relevant to his role as Chairman of ECR. David Tang attends conferences, seminars and courses regularly to update and refresh his skills and knowledge of the minerals industry.
- Craig Brown (CEO) joined ECR in May 2016 as Finance Director, bringing with him over 23 years’ experience in mining. He became CEO in September 2016 and is also company secretary. He was a founding shareholder of Kryso Resources plc, now known as China Nonferrous Gold Ltd (CNG), and acted as Finance Director and company secretary of Kryso before becoming Managing Director in 2010 and stepping down from the board in September 2013. During this period, Kryso/CNG delineated a 5 million ounce JORC Mineral Resource at the Pakrut gold project in Tajikistan, completed a bankable feasibility study for the project, obtained debt and equity finance for mine development, and commenced construction of the mine and infrastructure. Prior to his roles with Kryso/CNG, Craig held positions with Gulf International Minerals Ltd and Nelson Gold Ltd, both of which also successfully put gold mines into production during his tenure. Craig’s proven ability to develop and grow businesses and drive towards ambitious goals is of great value in his role as CEO of ECR. Craig Brown is a Chartered Accountant and regularly attends conferences, seminars and courses to further his continuing professional development and keep up with industry and regulatory changes.
The diverse experience and expertise of the directors is intended to ensure that the Board has the skills and capabilities to manage the Company for the benefit of shareholders over the medium to long term.
ECR has numerous consultants who advise the Board on or carry out particular tasks in relation to technical and/or commercial matters where the consultants have specialised expertise and/or significant knowledge of the matters in question.
- Board performance & evaluation
Evaluation of the performance of the company’s Board has historically been implemented in an informal manner. From 2018 however, the Board will formally review and consider the performance of each director at or around the time of the Company’s annual general meeting using a process which is currently under development. The process and its results and recommendations will be published at a future date.
On an ongoing basis, Board members maintain a watching brief to identify relevant internal and external candidates who may be suitable additions to or backup for current Board members, however the directors consider that the Company is too small to have an internal succession plan and that it would not be cost effective to maintain an external candidate list prior to the need arising.
- Corporate culture
The Board believes that the promotion of a corporate culture based on sound ethical values and behaviours is essential to maximise shareholder value in the medium to long term. Adherence to these standards is a key factor in the evaluation of performance within the company, including during annual performance reviews. In addition, staff matters are a standing topic at every board meeting and the CEO reports on any notable examples of behaviours that either align with or are at odds with the Company’s stated values. The Board believes that the Company’s culture encourages collaborative, ethical behaviour which benefits employees and shareholders. The Board further believes that all employees and consultants have worked in line with the Company’s values during the current financial year. This has been assessed by the Board in the course of the day to day management of the Company, which is feasible given the relatively small size of the organisation.
- Governance structures
Due to the size of the Company all strategic and commercial matters are reserved for the Board.
The key Board roles are as follows:
- Chair: The primary responsibility of the chair is to lead the Board effectively and to oversee the adoption, delivery and communication of the Company’s corporate governance model. The chair has sufficient separation from the day-to-day business to be able to make independent decisions. The chair is also responsible for making sure that the Board agenda concentrates on the key issues, both operational and financial, with regular reviews of the Company’s strategy and its overall implementation.
- Chief Executive Officer (CEO): Charged with the implementation of the strategy set by the Board. Works with the chair and non-executives in an open and transparent way. Keeps the chair and the Board as a whole up-to-date with operational performance, risks and other issues to ensure that the business remains aligned with the strategy.
The Board has two committees. They are as follows:
- Audit committee: The audit committee meets to consider matters relating to the Company’s financial position and financial reporting. The audit committee reviews the independence and objectivity of the external auditors. The committee reviews the independence and objectivity of the external auditors, PKF Littlejohn LLP, as well as the amount of non-audit work undertaken by them, to satisfy itself that this will not compromise their independence. Details of the fees paid to PKF Littlejohn LLP during each financial year are given in the annual accounts. The audit committee currently comprises David Tang (Non-Executive Chairman) and Craig Brown (Chief Executive Officer).
- Remuneration committee: The remuneration committee has been established primarily to determine the remuneration, terms and conditions of employment of the executive directors of the Company. Any remuneration issues concerning non-executive directors are also resolved by this committee, although no director participates in decisions that concern his own remuneration. The remuneration committee comprises David Tang (Non-Executive Chairman) and Craig Brown (Chief Executive Officer).
The appropriateness of the Company’s governance structures will be reviewed as the Company evolves, and changes made as necessary.
- Stakeholder Communication
On the Company’s website shareholders can find all historical regulatory announcements, notices of general meetings, governance-related materials, interim reports and annual reports. Annual reports and notices of general meetings are posted directly to all registered shareholders, and the outcome of general meetings is disclosed in a clear and transparent manner via regulatory announcements.
The Company’s website allows shareholders and other interested parties to sign up to a mailing list to enable them to directly receive regulatory and other company releases by email. As described earlier, the Company also maintains email and phone contacts which shareholders can use to make enquiries or requests.
The information on this page was last reviewed on 27 September 2018.