Corporate Governance

Statement of Corporate Governance

Afentra PLC is committed to operating in a safe, ethical and responsible manner and the Board recognises the importance of high standards of corporate governance. The Board has adopted the Quoted Companies Alliance Corporate Governance Code (QCA Code) which the Board considers appropriate for a Company of the size and stage in development of Afentra.

The QCA Code identifies ten corporate governance principles that AIM companies should follow and the disclosures required for each of those principles. Details of how the Company follows these ten principles can be found here and in our Annual Report.

Principle 1: Establish a strategy and business model which promotes long-term value for all shareholders

Our purpose is to support the African energy transition as a responsible, well managed independent Oil & Gas company working to enable the continued economic and social development of African economies and bridging the gap to the renewable forms of energy.

Our mission is to be the trusted partner of both IOCs and host governments in the divestment of legacy assets.

Our strategy is to focus on proven hydrocarbon basins where fields have been discovered or are currently producing. We intend to execute value accretive M&A, targeting robust cash flow and proven resources to support sustainable shareholder returns.

We intend to redevelop and unleash the full potential of legacy producing fields or undeveloped discoveries that no longer fit the portfolio of IOCs. We will do this in a safe, responsible and sustainable manner.

Principle 2: Seek to understand and meet shareholder needs and expectations

The Company seeks an open and transparent dialogue with shareholders with the desire to hear shareholders views on the performance of Afentra and to understand shareholders’ objectives and expectations.

Whilst Covid-19 restrictions continue the Company will endeavour to host any shareholder meetings on an electronic platform (with votes cast by proxy) to allow all shareholders access to management. All Directors will be  available at the AGM and will answer shareholder questions submitted prior to the AGM which will be hosted on the openbriefing webcast platform. Once Covid-19 restrictions are eased it is the Company’s intention to hold physical shareholder meetings as it has done previously.

Investor roadshow meetings will be conducted after the Preliminary and Interim results and will aim to serve both institutional and retail shareholders. The Executive Directors are available to shareholders throughout the year.

Shareholder feedback is discussed at Board meetings.

Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success

As a responsible company with a broader social purpose, we understand that we operate within a multi-faceted economic, legislative and social environment.  We will engage with all our stakeholders to understand and respond to their concerns, needs and opinions in order to ensure the ongoing sustainability of our business.

Afentra intends to identify and acquire assets adopting an effective operating approach that seeks to safely optimise and extend production whilst reducing harmful carbon emissions.  The Company is developing a comprehensive ESG strategy which will govern its approach to its environmental, social and governance responsibilities.

Afentra is led by a board and a management team with a proven track record of creating value and positive stakeholder outcomes through delivery of major hydrocarbon developments and production across Africa.

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation

The Group risk register is maintained by the Board and senior finance team.

Details of Afentra’s internal control and approach to risk management can be found in the Business risk section of the Annual Report. The business is currently undergoing an in-depth review of its risk management procedures and stakeholders will be updated in the Annual Report for the financial year ending 31 December 2020 to be published shortly.

Any acquisition will be subject to due diligence and analysis of any risks to which the Company may be exposed. The Board is focused on reducing and managing any identified risks rather than eliminating all risk. Any acquisition of hydrocarbon assets inherently includes subsurface, operational and above ground risks and the Board has regard to such risks within its acquisition parameters. The Board seeks to eliminate HSSE risks and reputational risk.

Principle 5: Maintain the Board as a well-functioning, balanced team led by the Chair

The newly appointed executive team has a proven track record of creating value and positive stakeholder outcomes through delivery of major hydrocarbon developments and production across Africa.  Completing the Board the Non-Executive Directors bring significant industry and capital markets experience as well as an unwavering commitment to all aspects of Governance.

The Board is led by our new Chairman, Jeff McDonald. Gavin Wilson is appointed as an independent non-executive director and the intention is to appoint at least one further non-executive director in the near future.

Paul McDade, CEO and Ian Cloke, COO were appointed in March and Anastasia Deulina was appointed as the CFO and an Executive Director in April.

Principle 6: Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities

The Board has significant experience of operating and developing major hydrocarbon assets across Africa as well as an established network across the relevant stakeholder audiences and director experience of energy transition in other geographies. The Non-Executive Directors bring significant industry and capital markets experience to the Board.

Full details of each Board member and their relevant experience, skills and personal qualities are set out in the Annual Report and on the Company’s website.

Each Director takes responsibility for maintaining his or her own skill set which includes roles and experience with other boards and organisations.

Non-Executive Directors have a contractual right to receive external advice, at the Company’s expense, when necessary.

Principle 7: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

The Nominations Committee is responsible for evaluation of the Board and its Committees. The Company intends to put in place a process for Board evaluation and further details will be provided to shareholders.

Succession planning is the responsibility of the Nominations Committee who make recommendations to the Board regarding Board composition and succession planning going forward.

Principle 8: Promote a corporate culture that is based on ethical values and behaviours

Our purpose is to support the African energy transition as a responsible, well managed independent Oil & Gas company enabling the continued socio-economic development of African economies and bridging the gap to the renewable forms of energy. This purpose is embedded in everything that we do, including our name, which signifies our purpose: African Energy Transition. We are committed to the transformation of the energy sector to a lower carbon world.

The Board is committed to its ESG responsibilities and these are embedded in our strategy.

Afentra is committed to equal opportunities and intends to recruit, train, promote and retain skilled and motivated people regardless of gender, race, religion, age, disability, sexual orientation, marital status or ethnic or national origin.

The Company is currently in the process of updating its policies and procedures and adopting new policies where required.

Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

The Chairman leads the Company’s approach in the key areas including governance, corporate culture and risk appetite. The Chairman is the main point of contact for shareholders and other stakeholder groups.

The CEO has recently been appointed to lead the Company and implement the strategy to focus on value accretive M&A, proven resources and targeting robust cash flow to support sustainable shareholder returns.

A formal schedule of matters reserved for the Board’s decision includes acquisitions and disposals, strategic planning, authorisation of major capital expenditure and major contractual arrangements, approval of budgets and financial statements, taking on debt, as well as setting policies for the conduct of business including the remuneration policy of Directors and senior management.

As the Board has only recently been constituted, and it is intended that further appointments will be made, Committees’ membership will remain under review and subject to change as the Board evolves.

Audit Committee

The Audit Committee’s primary purpose is to review and report on the integrity of the consolidated financial statements and to monitor the Company’s internal control arrangements including compliance with Group policies and procedures and its risk evaluation statements.  The terms of reference for the Audit Committee can be found here. [link]

Gavin Wilson is the Chairman of the Audit Committee:  Anastasia Deulina is a member of the Committee. Anastasia is the CFO and will only remain on the Committee until a further independent Non-Executive Director has been appointed with the requisite financial experience. These appointments do not currently comply with the Audit Committee’s Terms of Reference and will be reviewed once further Board appointments have been made.

Remuneration Committee

The Remuneration Committee ensures executive remuneration is structured to align the performance of the Executives with the expectations of the Company’s stakeholders. It is also responsible for ensuring remuneration of the Non-Executive Directors is appropriate and proportionate. The terms of reference for the Remuneration Committee can be found here.

Gavin Wilson is the Chairman of the Remuneration Committee:  Jeffrey MacDonald is a member of the Committee.

Nominations Committee

The Nominations Committee reviews Board composition considering size, composition and balance of skills, experience and personal qualities in place and any areas which need strengthening. The Committee considers succession planning for the Board directors and leads any Board recruitment process, including the appointment of search agents. The terms of reference for the Nominations Committee can be found here.

Jeffrey MacDonald is the Chairman of the Nominations Committee:  Gavin Wilson and Paul McDade are members of the Committee.

In the future a Sustainability, Heath, Environment & Safety Committee will be formed for oversight of operations.

Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

The Company’s website contains information about our business activities and gives access to the Company’s Annual Report and Accounts, the Company’s previous Notices of Annual General Meetings, and the Company’s Memorandum and Articles of Association.

Proxy votes received in respect of the resolutions proposed at the Company’s 2021 General Meeting can be found here.

The work of the Audit Committee, Remuneration Committee and Nominations Committee is set out in the Annual Report.