Corporate Governance

Chair’s corporate governance statement

Maintaining the highest standards of corporate governance in the context of the stage, size and complexity of any company, together with robust systems of internal control are fundamental building blocks for any business.

Following the change to the AIM Rules in March 2018, the Board resolved to adopt the QCA Corporate Governance Code. In July 2018, the Financial Reporting Council published an update to the UK Corporate Governance Code for accounting periods beginning on or after 1 January 2019 (the “Code”), and the Board resolved to adopt this code with immediate effect.

The UK Corporate Governance Code is widely recognised as setting the highest standard for corporate governance and is written to accommodate very large companies as well as much smaller ones. The directors have therefore satisfied themselves that appropriate governance structures, policies and procedures are in place, and have made training available to all directors.

All directors have access to the services of the Company Secretary, who is responsible for advising the board on all governance matters. Both the appointment and removal of the Company Secretary are matters for the whole board.

The provisions of the Code that the Company does not apply are summarised below, and described in further detail within the Company’s Annual Report:

Employee engagement
The Board has not appointed a director from the workforce, created a formal workforce advisory panel, or designated a non-executive director to engage with the workforce. This is contrary to Code provision 5 and is explained in the section headed “Culture and employees” on page 9 of the Annual Report.

Senior independent director
The Board has not appointed a senior independent director. This is contrary to Code provision 12 and is explained in the section headed “Senior Independent Director” on page 8 of the 2018 Annual Report.

Meetings with non-executive directors
Significant changes to the Board were made during 2018 and as a consequence, neither Chair met with the non-executive directors in the absence of the executive directors during the course of 2018. This is contrary to Code provision 13. The Chair intends to meet with the non-executive directors in accordance with this Code provision during 2019.

Annual evaluation of the performance of the board
The Board does not carry out a formal annual evaluation of the performance of the board, its committees, the Chair and individual directors. This is contrary to Code provision 21 and is explained in the section headed “Board assessments” on page 15 of the Annual Report.

Performance related pay
Non-executive directors participate in the Company’s share option plan. This is contrary to Code provision 34 and is explained in the section headed “Share Option Plan and Option-Based Awards” on page 13 of the Annual Report.


Board leadership

The Board of Directors is responsible for overseeing the long term success and strategic direction of the Company in accordance with the schedule of matters reserved for board decision and it responsible for monitoring the activities of the executive management.

Non-executive Chair

Daniel Smith

(appointed 26 February 2019)

Skills and experience

Dan Smith has over 10 years’ capital markets experience working in various roles including as an Executive and Non-Executive Director and Company Secretary of companies with shares quoted on AIM, ASX and NSX. He is the founder of Minerva Corporate Pty Ltd, a boutique corporate services firm focused on providing corporate advisory, company secretarial, and accounting services to listed and unlisted entities, as well as compliance manager services for IPOs and RTOs across sectors including natural resources. Dan is currently a Non-Executive Director and Company Secretary of AIM traded Europa Metals Ltd, a European focused zinc-lead exploration company.

Roles on Board committees

None

Executive Director

Bill Brodie Good

(appointed 4 July 2019)

Skills and experience

Bill has over 25 years’ in mineral exploration, working for start-ups, juniors, mid-tier and major (Rio Tinto Mining and other Rio Tinto group companies in a variety of roles) resource companies, as well as 5 years as a principal with SRK Exploration Services Ltd, a leading global mining consultancy group. He has had extensive experience setting up new companies, establishing exploration teams and managing mineral exploration projects throughout Africa, with a specialised focus on francophone African countries, where his spoken and written fluency in French is an essential asset.

He has worked most of the major mineral commodities, including Gold, Base Metals, Iron Ore, Diamonds and Uranium, operating in diverse geological terrains, and in running teams of up to 100 employees.

Bill manages the entire process of field exploration, from area selection and project acquisition, through recruitment, planning and execution of field work and project development. He has the constant drive to advance a good exploration project, and the personal and management skills that are necessary to work effectively with the local population and authorities, whilst advancing the interests of a company’s stakeholders and investors. Bill is currently a Director of KBG Consultants Ltd, an exploration consultancy business.

Roles on Board committees

None

________________________

Chief Executive Officer

Peter Taylor

(appointed 26 February 2019; resigned 5 July 2019)

Skills and experience

Peter Taylor commenced his career as a mining engineer at De Beers Consolidated Mines in 1986. He has over 25 years’ experience leading strategic operations within the mining and exploration sector in Africa, Southeast Asia and Europe, including as Chief Operating Officer at formerly AIM and TSX:V traded African gold and iron company, African Aura Mining Inc.

Roles on Board committees

None

Non-executive director

Christopher Gordon

(appointed 15 May 2018)

Skills and experience

Chris Gordon has a Bachelor of Economics degree awarded by the University of London and over 10 years’ experience in the financial services sector in London, working in dealing and trading roles with a focus on raising capital for listed companies. Chris Gordon previously acted as a non-executive director for Gunsynd plc which is listed on AIM.

Roles on Board committees

Member: Audit Committee

Member:Nomination & Remuneration Committee

Non-executive director

James Cable

Skills and experience

James Cable has been a chartered accountant for over 40 years and has extensive experience at board level in various companies. He has significant international and commercial experience gained in the Middle East, Africa, Far East and Europe in several business sectors including natural resources and construction. He is a former Finance Director of Kopane Diamond Developments Plc and Mantle Diamonds Ltd and he advises natural resources companies on corporate strategy and project finance and is a director of GemRock Company Ltd.

Roles on Board committees

Chair: Audit Committee

Chair:Nomination & Remuneration Committee

Company Secretary

David Taylor

Skills and experience

David Taylor is a Fellow of The Institute of Chartered Secretaries and Administrators (“ICSA”), has held senior roles in a number of international blue chip companies, and most recently prior to his appointment to the Company, served as Assistant Company Secretary of ICSA, a leading authority on governance and compliance.

Roles on Board committees

Secretary: Audit Committee

Secretary:Nomination & Remuneration Committee

Directors who served during the year ended 31 December 2018 are listed on page 51 of the 2018 Annual Report.

In the period to May 2018 (when Jim Williams retired as Chief Executive), there had been a clear division of responsibilities between the Chair and the Chief Executive. The Chair was responsible for the leadership of the Board and ensuring its effectiveness. The Chief Executive was responsible for the performance of the Company, together with the Chair. Following Jim Williams’ retirement, Dennis Edmonds served as the sole executive director until the appointment of Peter Taylor as Chief Executive Officer in February 2019. Following the resignation of Dennis Edmonds in April 2019, Dan Smith was appointed as Non-Executive Chair.

The following documents are available on the Company’s website, www.alienmetals.uk:

Independent directors

At least half the Board, excluding the Chair, comprises independent non-executive directors who provide a balance of skills and experience, and who are responsible for providing constructive challenge to and assistance in, developing proposals on strategy.

James Cable is deemed an independent director; he has acted as a director of the Company for more than nine years, which can in some circumstances be seen to impair a director’s independence, however, the Board recognises significant value of having a director familiar with the history of the Company and the Board consider Mr Cable to be independent in character and judgement. All the non-executive directors participate in the Company’s share option plan; the extent of their participation is not considered to impact their independence.

Each of James Cable and Chris Gordon is deemed independent.

Senior Independent Director

The role of a Senior Independent Director is to provide a sounding board for the Chair and serve as an intermediary for the other directors and shareholders. In addition, a senior independent director would be expected to meet the other non-executive directors without the Chair present, to appraise his performance.

The Company Secretary, as well as each of the non-executive directors, is available as a sounding board to the Chair and to serve as an intermediary for shareholders. The Company Secretary is also available to serve as an intermediary for any of the directors when required. The nomination of any one particular director to act as a Senior Independent Director is not considered by the Board, at the present time, to improve its effective operation, although the matter is kept under review.

The process through which board assessments are undertaken is more fully described in the section headed “Board assessments”, on page 15 of the 2018 Annual Report.

Operation of the board

All directors are required to allocate sufficient time to the Company to discharge their responsibilities effectively. In any decision-making, the directors are required to exercise their judgement in determining the likely impact of each decision as to the likelihood of promoting the success of the company for the benefit of its members as a whole. In doing so, the directors consider whether the decision is likely to promote the success of the company for the benefit of its members as a whole, having regard for (amongst other matters):

The Chair is ultimately responsible for ensuring that each board decision is taken having sufficient information on and with all due discussion of, each of the aforementioned items as is relevant to such decision.

The Company has a schedule of matters reserved for its own decision, an executive committee comprising exclusively executive directors or officers, and two committees comprised entirely of non-executive directors: the Audit Committee and the Nomination & Remuneration Committee. From May 2018, the Executive Committee had only one member and is therefore not expected to meet until such time as additional members are appointed.

Each committee has formally delegated responsibilities by way of terms of reference.

The performance of the Board, committees and individual directors are evaluated on a regular basis.

Board meeting attendance

The small size of the Board and frequent contact between the directors enables decisions to be taken quickly and effectively using written resolution procedures rather than physical board meetings. The number of occasions on which the written resolution procedure was exercised is also set out in the table below.

Board

Audit Committee

Nomination &

Remuneration

Committee

No. meetings

5

1

2

No. written resolutions

9

3

1

Dennis Edmonds

2 of 2

n/a

n/a

James Cable

5 of 5

1 of 1

2 of 2

Chris Gordon

0 of 2

1 of 1

1 of 1

Tom Bailey

3 of 4

1 of 1

1 of 1

Jim Crombie

3 of 4

1 of 1

1 of 1

Tony Williams

3 of 3

n/a

n/a

Jim Williams

3 of 3

n/a

n/a

Value generation and preservation

The Company’s business model and opportunities immediately available are more fully described in the “Business overview” section of the Company’s Annual Report. Over the long-term, the Company seeks to create value by acquiring mining rights, demonstrating the presence of mineralisation and thereby significantly increasing the value of those mining rights.

As the Company does not expect to generate operating revenues in the immediate future, it is dependent upon the financial support of new or existing investors and it is believed that companies that are well-governed enjoy a lower cost of capital which, all things being equal, should translate to greater business success.

The risks to the business are set out in the Risk Management section commencing on page 16.

Culture and employees

At the Company’s present stage of development, it has few employees and its culture therefore exists principally in the boardroom and amongst any contractors. In the UK, all contractors report directly to the Company Secretary. Overseas, all contractors report directly to the country manager. Both the Company Secretary and the country manager report to the Chief Executive Officer. It is considered that the board is well positioned to ensure that policy, practices and behaviour throughout the business is aligned with the Company’s purpose, values and strategy. In the event that the Board had any concerns, it would require the Company Secretary or country manager to take remedial action.

We are confident we understand our employees’ needs and that all employees feel able to speak openly to the Chair, or any of the other directors. If for any reason, an employee feels unable to raise concerns in this way, the Company’s whistleblowing policy sets out the process for raising concerns, and how to do so anonymously. In addition, employees are provided details of the charity, Public Concern at Work, who will provide free and confidential advice.

In view of the small number of company employees, the Board has considered there to be no need or benefit gained by appointing a director from the workforce, creating a formal workforce advisory panel, or designating a non-executive director to engage with the workforce.

The Board recognise the importance of the remuneration structure supporting its strategy and reinforcing the culture of the organisation. This is further described in the Nomination & Remuneration Committee report on page 11.

Relations with shareholders

The Executive Chair welcomes major shareholders to discuss the Company’s strategy and governance, including, as explained in the Nomination & Remuneration Committee report, on the appointment of key board appointments. The Chair reports to the Board as a whole, on the views of major shareholders.

All investors are encouraged and welcomed at the Company’s annual general meeting, at which there is opportunity to pose questions to the directors.

Annual general meeting

At the Company’s annual general meeting held during 2018, all resolutions were passed and proxy voting figures were published immediately following the AGM held on 20 September 2018. The Company received more than 20% of votes against the resolutions relating to the proposal to change the name of the Company to Alien Metals Limited at the Company’s Annual General Meeting. The number of investors who voted against the resolutions represented less than 10% of the number who voted. It being clear that the majority of investors were in favour, the Company proceeded with the change of name but the Chair extended an invitation to investors who wished to discuss the matter, to do so. The invitation was not taken up by investors and no further action has therefore been taken.

Major shareholders

As at 24 June 2019 being the latest practicable date prior to the date of publishing the Company’s 2018 Annual Report, the Company had been notified of the following companies or individuals interested 3% or more of the Company’s shares:

Shareholder

No. shares

%

Gravner Ltd

202,247,000

22.02

King Dragon (Far East) Limited*

120,000,000

17.09

Peel Hunt LLP

142,764,851

12.77

* As at 18 June 2019, 120,000,000 Common shares represented 10.73% in the Company. The most recent notification by King Dragon (Far East) Limited is reflected here, at which time, 120,000,000 represented 17.09% of the total issued share capital in the Company.

Conflicts of interest

All Directors have duties under the BVI Business Companies Act to act with care, diligence and skill, in the best interests of the Company.

Certain directors and officers of the Company may also serve as directors and/or officers of, or have investments in other companies involved in mineral exploration and development and consequently there is the potential for conflicts of interest.

Conflicts of interest can arise amongst shareholders, especially where one shareholder, or a small group of shareholders, has a significant stake in the Company. The directors must not to allow this to compromise or override their independent judgement, especially in the context of acting fairly as between members of the Company.

In the event a conflict of interest should arise, each individual so conflicted is required to disclose the conflict in accordance with the Company’s Articles of Association in order that it can be considered and approved if appropriate. No director may vote on any matter in which he or she may be deemed to be interested.

On an ongoing basis, each director is responsible for informing the Company Secretary of any new actual or potential conflicts that may arise or if there are any changes in circumstances that may affect an authorisation previously given. Even when provided with authorisation, a director is not absolved from his or her statutory duties.

Board Committees

The Board of Directors has two standing committees:

The Company Secretary is Secretary to each Committee and attends all meetings.

The Board considers that each of the Committees has an appropriate balance of skills, experience, independence and knowledge of the Company to enable them to discharge their respective duties and responsibilities effectively.

The Corporate Governance Committee and a Health & Safety Committee were dissolved in July 2018 as the size of the Board and the extent of operations did not warrant their continuance.

Audit Committee

The Audit Committee meets at appropriate times in the reporting and audit cycle, and otherwise as required. It is responsible for nominating the external auditor recommending to the Board the auditor’s compensation, overseeing the work of the auditor, and approving any proposals for non-audit services. The Audit Committee is also responsible for reviewing public announcements relating to the Company’s profit or loss or cash flow, satisfying itself of the adequacy of procedures for the release of financial information, and ensuring the maintenance of appropriate and proportionate procedures for addressing matters relating to accounting, internal financial controls and auditing matters.

It is the Board of Directors’ conclusion that each of the members of the Audit Committee has an understanding of the accounting principles used by the Company to prepare its financial statements, the ability to assess the general application of such accounting principles in connection with the accounting for estimates, accruals and reserves, and experience in evaluating financial statements that present a breadth and level of complexity of accounting issues generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements.

The Audit Committee is currently composed of two members, being James Cable and Chris Gordon, each of whom is an independent non-executive director and each of whom is deemed financially literate. Mr Cable serves as Chair of the Audit Committee.

Nomination & Remuneration Committee

The Nomination & Remuneration Committee meets at least once each year, and otherwise as required. It is responsible for identifying and nominating for the approval of the Board, candidates to fill Board vacancies as and when they arise, having due regard for the structure, size and composition of the Board together with the skills, knowledge, experience and diversity of both the Board and the individual. Additionally, the Nomination & Remuneration Committee is responsible for reviewing the results of any board effectiveness review that relates to the composition of the board.

The scale and structure of the remuneration and compensation packages for the directors is set taking into account time commitment, comparatives, and risks and responsibilities, to ensure that the amount of compensation adequately reflects the individual’s previous performance, achievements, experience, responsibilities and the risks of the office or position held, and in the context of the Company’s risk profile, to ensure they do not encourage excessive risk taking.

The Nomination & Remuneration Committee is currently composed of two members, being James Cable and Chris Gordon, each of whom is an independent non-executive director.

James Cable serves as Chair of the Nomination & Remuneration Committee.

Nomination & Remuneration Committee report

Overview

The Nomination & Remuneration Committee (“N&R Committee”) makes recommendations to the Board as to the appropriate structure, size and composition (including the skills, knowledge, experience and diversity) of the Board and is responsible for identifying and nominating suitable candidates to fill Board vacancies.

The N&R Committee is also responsible for recommending the remuneration policy to the Board, determining the remuneration of the directors and senior executives, ensuring that remuneration is reported correctly, and reviewing the results of any assessment of the effectiveness of the Board.

The N&R Committee meets as required each year to review the performance of the executive directors and to determine their respective compensation.

The N&R Committee is governed by terms of reference, which are available on the Company’s website at www.alienmetals.uk. The N&R Committee’s terms of reference require it to review its own terms of reference once a year; they were last amended on 28 September 2018.

During the year, Dennis Edmonds was appointed as Executive Chair of the Company and Chris Gordon joined the Board as an independent non-executive director. Anthony Williams and James Williams resigned as Executive Chair and CEO, respectively, in May 2018. Thomas Bailey and James Crombie resigned as non-executive directors in June 2018.

Messrs Edmonds and Gordon received a significant award of share options to ensure there was a strong link between their contribution to the Company and their reward. As their appointments came about at the same time as the private placing of shares in May 2018, the potential significant investor was consulted as to the appropriateness of the remuneration structure.

The Board is not aware that the workforce has any particular desire to engage in the discussion of remuneration policy and how executive remuneration aligns with wider company pay policy. The Board will make appropriate provision should it appear that this is not the case or the situation changes.

The members of the Nomination & Remuneration Committee have the necessary experience of executive compensation matters relevant to their responsibilities as members of such a committee by virtue of their respective professions, contacts within the minerals industry as well as experience in the broader business community. In addition, each member of the Nomination & Remuneration Committee keeps abreast on a regular basis of trends and developments affecting executive compensation. Accordingly, it is considered that the Nomination & Remuneration Committee has sufficient experience and knowledge to set appropriate levels of compensation. Neither the Company nor the Nomination & Remuneration Committee engaged independent consultants to evaluate the levels of compensation during the year ended 31 December 2018.

The recommendations of the Nomination & Remuneration Committee are submitted to the independent members of the Board of Directors for consideration and approval.

Remuneration policy


The Company’s remuneration policy is intended to support the Company’s long-term strategy and sustainable success in a manner consistent with the Company’s purpose and values, attracting and retaining the highest quality of directors and senior executives. The pay policy is to:

The remuneration policy does not require post-employment shareholding requirements. Share options ordinarily lapse upon the resignation of the option holder.

The scale and structure of the remuneration and compensation packages of directors is set taking into account time commitment, comparatives, risks and responsibilities, to ensure that the amount of compensation adequately reflects the individual’s previous performance, achievements, experience, responsibilities and risks of the office or position held, and in the context of the Company’s risk profile, to ensure they do not encourage excessive risk taking on the part of the recipient of such compensation.

As the Company is at an early stage of development, the use of traditional performance standards, such as corporate profitability, is not considered by the Nomination & Remuneration Committee to be appropriate in the evaluation of corporate or directors’ performance. Discretionary bonuses may be paid to aid staff retention and reward performance.

The Board considers that the remuneration policy has operated as intended in terms of company performance and quantum.

The Company provides executive directors with base salaries which represent their minimum compensation for services rendered during the financial year. The base salaries of directors and senior executives depend on the scope of their experience, responsibilities, and performance.

The N&R Committee has considered the risk implications of the Company’s compensation policies and practices and has concluded that there is no appreciable risk associated with such policies and practices since such policies and practices do not have the potential of encouraging an executive officer or other applicable individual to take on any undue risk or to otherwise expose the Company to inappropriate or excessive risks. Furthermore, although the Company does not have in place any specific prohibitions preventing executives from purchasing financial instruments, including prepaid variable forward contracts, equity swaps, collars, or units of exchange funds that are designed to hedge or offset a decrease in market value of options or other equity securities of the Company granted in compensation or held directly or indirectly, by the director, the Company is unaware of the purchase of any such financial instruments by any director.

The Company does not anticipate making any significant changes to its compensation policies and practices during 2019.

Share Option Plan and Option-Based Awards

All share options granted under the Company’s Unapproved option plan as amended and restated effective as of 1 December 2006 have now lapsed and no further share options will be awarded under this plan.

The Company currently has in place an EMI share option plan (the “Approved Plan”) which was adopted by the Board on 3 February 2017, and which provides for the award of share options under HMRC’s approved Enterprise Management Incentive scheme, the HMRC approved Company Share Option Plan, as well as (for awards which are not eligible under either of the Enterprise Management Incentive scheme or the Company Share Option Plan rules), Unapproved share options.

In February 2017, the Board resolved that no further options would be granted under the Unapproved Plan and succeeded it with the Approved Plan.

Share options are approved by the Board of Directors on the recommendation of the Nomination & Remuneration Committee. Option awards are reviewed periodically, take into account previous option grants, changes in executive positions and overall contribution to the Company.

The Approved Plan provides that the maximum number of shares which may be reserved and set aside for issue under it, is 10% of the Company’s issued share capital at the date of grant. The aggregate number of shares which may be reserved for issuance to any one person under the Share Option Plan and which are subject to outstanding options granted under a prior plan, must not exceed 5% of the issued shares (determined at the date the option was granted), in a 12 month period.


The Company’s non-executive directors participate in the Unapproved Plan because the Board considers that the holding of options helps align the interests of the non-executive directors with shareholders by incentivising their decision making with a view to providing growth in the Company’s share price. The Company’s long term success will be dependent upon raising additional finance in future; aligning the interests of all directors and senior executives with shareholders incentivises all concerned to achieve the best possible price for such placings and to minimise undue dilution of interests.


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Audit Committee
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Anti-Corruption and Bribery Policy
Matters Reserved for Board Decision
Responsibilities of Chairman and CEO
Share Dealing Code
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