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.

The list of matters reserved for the board are found here.

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

The Company’s 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.

The Company’s mission is to be the trusted partner of both IOCs and host governments in the divestment of legacy assets.

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

The Company intends to redevelop and unleash the full potential of legacy producing fields or undeveloped discoveries that no longer fit the portfolio of IOCs. The Company 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 the Company and to understand shareholders’ objectives and expectations.

Investor roadshow meetings will be conducted after the Company’s 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, the Company understand that it operates within a multi-faceted economic, legislative and social environment. The Company will engage with all the Company’s stakeholders to understand and respond to their concerns, needs and opinions in order to ensure the ongoing sustainability of its 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 the 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 Audit Committee undertook an in-depth review of the Group’s risk management procedures and reported its findings in the Company’s 2022 Annual Report.

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 executive team has a proven track record of creating value and positive stakeholder outcomes through delivery of major hydrocarbon developments and production across Africa. 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 the Chairman, Jeffrey MacDonald. Thierry Tanoh and Gavin Wilson are appointed as independent non-executive directors.

Paul McDade, CEO, and Ian Cloke, COO and Anastasia Deulina, CFO and an Executive Director, were appointed in 2021.

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.

Most recently the Company has strengthened its Board with the addition of Thierry Tanoh as an Independent Non-Executive Director and Chair of the Audit Committee in June 2023.

Thierry Tanoh is an experienced senior director with global experience, a strong track record in both public and private sectors and has held senior positions within African Government ministries.

Thierry’s relevant experience includes various roles within International Finance Corporation (IFC), including being Vice President within the Senior Executive Team and a member of IFC’s credit committee based in Washington, and Director of Sub-Saharan Africa based in Johannesburg.

Full details of each Board member and their relevant experience, skills and personal qualities are set out in paragraph 14 of Part I of this document, 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 Board annually performs a formal review of its own performance, which includes the assessment of its effectiveness. In addition, through the Audit Committee, the Remuneration Committee and the Nominations Committee, the Board receives regular updates on its performance.

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

The Company’s 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 the Company do, including its name, which signifies its purpose: African Energy Transition. The Company is 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 its 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.

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 leads the Company and implements the strategy to focus on value accretive M&A, proven resources and target 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.

Details on the composition of, and roles fulfilled by, the Audit Committee, Remuneration Committee and Nominations Committee are set out in paragraph 15 of Part 1 in this document.

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.

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