We see good practice in corporate governance as the key to directing the business to ongoing success. It forms the foundation of the company’s aim of continuing to build value for shareholders over the long term.
As an AIM quoted company, we are not obliged to comply with the UK Corporate Governance Code (the “Code”). Nonetheless, the company draws on its provisions in guiding governance structures and comply with a number of its key provisions including:
- A strong independent representation on the Board.
- An Audit Committee led by David Swan.
- A Remuneration Committee led by Robert Cathery comprising solely independent Non-Executive Directors.
Although not a Code requirement, we also have a Corporate Social Responsibility Committee comprising both Executive and Non-Executive Directors, as we see this as another key area of governance.
Each of these committees reports into and provides great value to the Board. The Board itself comprises a diverse group of Directors from the UK and Kazakhstan, most of whom have worked internationally in different parts of the world. This enriches debates within the Board and provides a good environment for decisions to be taken in the best interests of shareholders.
The role of the board
The Board of Directors leads the Company in making key decisions about strategy, financial planning, investments and our Directors. The Board considers this role as fundamental to steering and enabling the Group to achieve success in its business, and to the Company in delivering long-term value to shareholders.
We have a diverse Board, constituted as follows:
- Three Executive Directors: Nick Clarke, Nigel Robinson, Gavin Ferrar.
- Six Non-Executive Directors.
- Four are considered fully independent: Nigel Hurst-Brown, Robert Cathery, David Swan, and Roger Davey.
- Two are based in Kazakhstan including Kenges Rakishev, who is a major shareholder in the Company, who brings depth of experience in the Kazakh business environment.
Our Board offers significant expertise and experience in the mining industry, financial and operational aspects of businesses, public markets and in operating in different geographies around the world.
The Board meets at least four times per year, and at other times where required for specific matters. The Board receives comprehensive reports in advance of meetings to enable matters to be properly considered and debated on an informed basis during the meetings.
Whilst most contact with the Company’s institutional investors is with the Executive Directors, the other Board members receive reports of views expressed by shareholders, and the other directors and are available to meet with investors where requested.
All Directors on the Board have access to the Company Secretary who acts as secretary of the Board and its Committees, reporting directly to the Chairmen in ensuring appropriate governance procedures are followed. All Directors are also able to seek advice from the Company’s external advisors if they wish.
Relationship agreement
Kenges Rakishev has entered into a relationship agreement with the Company due to his position as both a Board member and significant shareholder. This is to ensure that transactions entered into between any member of the Group and Kenges Rakishev, or any of his associates, are conducted on an arm’s length basis and on normal commercial terms.
Under this agreement, Kenges Rakishev has given certain undertakings, including, to exercise his voting rights, insofar as he is able, as a shareholder and as a Board member to: (1) ensure that no variations are made to the Company’s Articles of Association which would be contrary to the maintenance of the Company’s independence; (2) that transactions between Kenges Rakishev (and his associates) and any member of the Group are made on an arm’s length basis and on, in the Company’s opinion, normal commercial terms; and (3) that the Company will make decisions for the benefit of shareholders of the Company as a whole and not solely for the benefit of Kenges Rakishev.
The Board has specific Audit, CSR and Remuneration Committees covering three of the areas of the Group’s operation which the Board views as having key importance to the Group’s stakeholders. Each of these Committees have their own terms of reference which provide the necessary authorities for them to operate as they consider appropriate.
Audit committee
The committee assists the Board in its oversight of the Company’s financial reporting, internal control and risk management. Our committee is made up of Nigel Hurst-Brown, Roger Davey and Committee Chairman, David Swan.
The committee’s primary responsibilities are:
- Evaluate and when appropriate select external auditors and ensure their independence and objectivity
- Review with the external auditor the nature and scope of their audit and review of half year results and outcomes from these
- Review the effectiveness of the Company’s systems of internal controls, and
- Monitor the effectiveness of risk management of the Group
The committee considers these roles to be of fundamental importance to the long term sustainability of the Group, in achieving its ongoing successes and continuing to build value for shareholders.
System of internal control
The Audit Committee is responsible for monitoring and reviewing the effectiveness of the Group’s internal control systems. Key elements within the internal control structure are summarised as follows:
- The Board and management – the Board is responsible for overseeing the day-to-day management of the Company which is undertaken by the Executive Chairman supported by the Executive Directors.
- Budgeting – there is an annual budgeting process whereby budgets for the following financial year are reviewed by the Board.
- Long-term forecasts are reviewed by the Board on a regular basis.
- Management reporting – the financial performance of the Group is monitored against budget on a monthly basis and is updated by periodic re-forecasts.
- Operating controls – such controls are in accordance with Group policies and include management authorisation processes.
- Monitoring – the effectiveness of the system of internal control is monitored regularly through internal reviews and external audits.
Risk management
Whilst the Board of Directors has ultimate responsibility for risk management, Group staff have a role to play in the implementation of policies and procedures aligned to mitigate and manage risk. Risk committees consisting of senior staff are responsible for the development of risk management policies and procedures, the identification, analysis, mitigation and review of the risks of the business. These committees report to the Audit Committee on a regular basis.
Remuneration committee
The Remuneration Committee determines the remuneration of Executive Directors, oversees the remuneration of our senior management, and approves awards under the Company’s Long Term Incentive Plan (“LTIP”). Our Committee is made up solely of independent Non-Executive Directors, David Swan, Nigel Hurst-Brown, and Committee Chairman, Robert Cathery.
The Remuneration Committee reviews the performance of the Executive Directors and sets the scale and structure of their remuneration and the basis of their service agreements. In doing so, it has due regard to the interests of shareholders.
In determining the remuneration of Executive Directors, the Remuneration Committee seeks to enable the Company to attract and retain executives of the highest calibre. The Remuneration Committee also reviews the remuneration of other senior management. In addition, it decides whether to grant share awards in the Company and, if these are to be granted, who the recipients should be.
The Company’s policy is to remunerate senior executives fairly so as to encourage recruitment, retention and motivation. The Committee agrees with the Board a framework for the remuneration of Executive Directors and senior management of the Company. The principal objectives of the Committee are to ensure that Executive Directors and members of the senior management of the Company are provided incentives to encourage enhanced performance and are, in a fair and responsible manner, rewarded for their individual contributions to the success of the Company. We believe this is the key to the Company achieving its strategic aims and building shareholder value over the long term.
Non-Executive Director fees are considered and agreed by the Board (excluding the Non-Executive Directors) with no Director participating in any decision relating to his own remuneration.
CSR committee
The CAML Board has always considered the Group’s corporate social responsibilities to be at the core of its activities. These are key to operating an ethical and sustainable business. It was in this context that our Corporate Social Responsibility (“CSR”) Committee was established in June 2012.
Our Committee comprises independent non-executive Directors from both the UK, Roger Davey (Chairman) and, from Kazakhstan, Nurlan Zhakupov and Chairman, Nick Clarke. This ensures a full breadth of perspectives are brought to the Committee’s important and varied activities.
Given the importance that the Board places in this area, the Committee meets on a regular basis throughout the year, usually on the same day as Board meetings.
CAML continues to believe that the health and safety of our employees, protecting the environment in which we operate, and helping to develop the local communities are extremely important matters. These areas will continue to receive the appropriate attention from the CSR Committee and from the Group as a whole.
Share dealing code
The Company has adopted a share dealing code for directors and applicable employees, which is appropriate for a company whose shares are admitted to trading on AIM (particularly relating to dealing during closed periods in accordance with Rule 21 of the AIM Rules for Companies) and the Company will ensure compliance with such code by its directors and applicable employees.