SDX Energy adheres to the highest standards in its corporate governance processes and policies. We operate in the best interest of our shareholders and in compliance with legal and regulatory requirements. This includes evolving our governance practices in accordance with current expectations and guidelines for corporate governance.
The Board of Directors recognises that good corporate governance is of fundamental importance to the success of SDX Energy Plc (“SDX” or the “Company”), and believes that the Quoted Companies Alliance Corporate Governance Code (the “Code”) provides the company with the right framework to sustain a strong level of governance, given its size and quotation on the AIM market of the London Stock Exchange.
The QCA Code has ten principles of corporate governance that the Company has committed to apply within the foundations of the business. These principles are:
- Establish a strategy and business model which promotes long-term value for shareholders;
- Seek to understand and meet shareholder needs and expectations;
- Take into account wider stakeholder and social responsibilities and their implications for long term success;
- Embed effective risk management, considering both opportunities and threats, throughout the organisation;
- Maintain the board as a well-functioning balanced team led by the Chair;
- Ensure that between them the directors have the necessary up to date experience, skills and capabilities;
- Evaluate board performance based on clear and relevant objectives, seeking continuous improvement;
- Promote a corporate culture that is based on ethical values and behaviours;
- Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board;
- Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.
Updated on 28 June 2024
The Board retains overall accountability for the running of the Company and is accountable for making decisions that could have a material impact on the business. It discharges this responsibility through the executive management team, which is responsible for the day-to-day management of the operations of the Company.
The Board gives strategic direction to the Company. The Board retains full and effective control over the Company and monitors executive management in implementing plans, policies, tactics, procedures and strategies. The ultimate responsibility for the Company rests with the Board. The Board retains effective control through a well-developed governance structure of Board subcommittees and suitable delegation of authority. There is a policy evidencing clear balance of power and authority to ensure that no one director has unfettered powers of decision making.
The Board recognises that it is responsible for implementing practices of good governance and that companies no longer act independently from the societies and the environment in which they operate. The Board is committed to high standards of corporate governance in order to facilitate an environment in which the Company’s assets are safeguarded and the interests of all stakeholders and shareholders are protected.
The Board consists of the independent Non-Executive Chair, two independent Non-Executive Directors, one Non-Executive Director who is not independent, and two Executive Directors. The Chair is responsible for leadership of the Board and for the efficient conduct of the Board’s function. The Chair is expected to encourage the effective contribution of all Directors and promote constructive and respectful relations between Directors and senior management. The Directors believe that they have sufficient experience in implementing accounting systems and controls, which provide a reasonable basis for them to make proper assessments as to the financial position and prospects of the Company.
The Company has established an Audit Committee, a Remuneration Committee and a Reserves Committee, each of which holds scheduled meetings and may also be convened as necessary. The Nominations Committee will be re-established in 2023. The mandate and composition of each committee are outlined below.
Directorships held by directors of the Corporation in other reporting issuers are set forth below:
Director Directorships held by Krzysztof Zielicki: Rette Farm Holdings Ltd, Rette Farm Project Ltd and Rette M&A Ltd.
Director Directorships held by Jay Bhattacherjee: Blixtra Ltd, C21 Advisors Ltd, Citadel Security Solutions Ltd., Guardian Global Securities plc, PMA Life Sciences Ltd, TerraCreo Ltd, Trilogy Assets Ltd and Trilogy Ventures Ltd.
The board is mindful of the need for succession planning and will re-establish the Nominations Committee in 2023 to ensure the company meets the requirements for this and board appointments to ensure that the board is fit for purpose. If external training or assistance with recruitment is required by the board, this will be made available.
As part of their overall responsibility to good stewardship, the directors encourage and promote a culture of ethical business conduct through communication and oversight. In addition, the Company has adopted a code of conduct which addresses the Company’s continuing commitment to integrity and ethical behaviour. The code of conduct establishes procedures that allow directors, officers, and employees of the Company to submit their concerns to the chief executive officer or the chairman of the board regarding questionable ethical, moral, accounting or auditing matters, on a confidential basis and without fear of retaliation. To the Company’s knowledge, there have been no departures from this code of conduct that would necessitate the filing of a material change report. A copy of the code of conduct is available to review at the head office of the Company during business hours.
SDX aims to provide strong corporate governance supported by policies procedures, and systems to ensure that the highest professional standards are maintained through adherence to compliance and the code of conduct across all of our operations.
Our first formal ESG report was published in 2019, with material ESG reporting topics established in 2020. These metrics provide the framework for SDX’s ESG policy, in line with standards set out by the SASB, which we have begun measuring and started reporting on in our 2020 Annual Report.
| Material ESG reporting topics | |
|---|---|
| Greenhouse gas emissions | Water and wastewater management |
| Ecological impacts | Health and safety |
| Business ethics | Critical incident risk management & systematic risk management |
| Employee engagement, diversity and inclusion | Human rights, labour practices and community relations |
The Nominations Committee will be re-established in 2023. Currently the recruitment and induction of directors is within the full remit of the Board.
The Remuneration Committee is a standing committee of the Board of the Company and is comprised of two independent Non-Executive Directors (including the Committee Chair).
The Committee is currently comprised of Krzysztof Zielicki (Chairman) and Tim Linacre.
The purpose of the Committee is to assist the Board in discharging its oversight responsibilities relating to the attraction, compensation, evaluation and retention of Executive Directors, who are currently the Chief Executive Officer, and Chief Financial Officer, and senior management. The Committee’s role is to ensure that the Company has the right skills and expertise it needs to achieve its strategy and that fair and competitive compensation is awarded with appropriate performance incentives. SDX’s remuneration policy is intended to support the Company’s purpose, values and strategy.
The board has established an Audit Committee, a Reserves Committee and a Remuneration Committee. The Nominations Committee will be re-established during 2023. Health, safety, and environmental matters are within the remit of the full board. All committees report back to the board following a committee meeting.
Audit Committee
The Audit Committee meets regularly and consists of two members, both of whom are non-executive directors. Its purpose is to help the board oversee the integrity of the financial statements and other financial reporting, the application of significant accounting policies, the effectiveness of financial and internal controls, and the independence and performance of the auditors, including the provision of non-audit services. The Audit Committee may hold private sessions with management and with the external auditor without management present.
The Audit Committee met four times in 2022 and proposes to meet at least four times during the next financial year. It is chaired by Tim Linacre and the other member is Krzysztof Zielicki.
Reserves Committee
The Reserves Committee meets at least annually and consists of two members, both of whom are non-executive directors. The Committee is advised by the Chief Operational Officer and the Vice-President Subsurface of the Company. Its purpose is to review the reports of the independent reserves auditors pursuant to Canadian regulations, which require that the board discusses the reserves reports with the independent reserves auditors or delegate authority to a reserves committee comprising at least two non-executive directors. Krzysztof Zielicki chairs the Reserves Committee and the other member is Tim Linacre. The committee met once in 2022 and typically meets once a year prior to publication of the annual results.
Remuneration Committee
The Remuneration Committee meets regularly to consider all material elements of remuneration policy, share schemes, and the remuneration and incentivisation of executive directors and senior management. Its role is to monitor and review remuneration policies to ensure that SDX attracts, retains, and motivates the most qualified talent who will contribute to the long-term success of the Company. The committee met twice in 2022 and proposes to meet at least twice during the next financial year.
The committee is composed of two non-executive directors, both of whom are independent. The committee is chaired by Krzysztof Zielicki and the other member is Tim Linacre.
Nominations Committee
The Nominations Committee, was created as a standing committee of the board during 2020 with the aim to oversee succession planning, the structure, effectiveness, and performance of all members of the board and all board committees, and the recruitment and induction of directors.
The committee met once in 2022 however after the departure of several non-executive directors, the responsibilities of the committee are now within the remit of the full Board. The committee will be re-established in 2023 and will aim to meet at least twice during the next financial year.
The Board considers that its effectiveness and the individual performance of its directors is vital to the success of the Company. A Board performance evaluation was commenced in 2020 and finalized in 2021, led by the Nominations Committee, please refer to detailed discussion in the Company’s 2021 Annual Report and Accounts.
The Company complies with Canadian corporate governance standards, practices and procedures appropriate for a reporting issuer in Alberta, Canada and other Canadian provinces.
The Company is subject, among other laws and regulations, to instruments published by relevant Canadian securities regulators. One such instrument, Canadian National Instrument 58-101 – Disclosure of Corporate Governance Practices (“NI 58-101”) prescribes certain disclosure by the Company of its corporate governance practices and Canadian National Policy 58-201 – Corporate Governance Guidelines (“NP 58-201”) provides non-prescriptive guidelines on corporate governance practices for reporting issuers such as the Company. This section sets out the Company’s approach to corporate governance and addresses the Company’s compliance with NI 58-101 and NP 58-201.
The board of directors recognizes that good corporate governance is of fundamental importance to the success of the Company. The Company complies with Canadian corporate governance requirements with respect to the composition and independence of its board of directors and each committee thereof, the orientation and continuing education of the members of the board of directors, ethical business conduct, nomination of directors and compensation of directors and certain executive officers, amongst others.
As at 1 January 2023 SDX Energy plc is a Designated Foreign Issuer within the meaning of the Canadian National Instrument 71-102-Continuous Disclosure and Other Exemptions Relating to Foreign Issuers and is subject to the foreign regulatory requirements of the AIM market of the London Stock Exchange. As such, the Company is exempt from certain requirements otherwise imposed on reporting issuers in Canada. This status will mean that the preparation of quarterly financial statements and MD&A will not be required in 2023.
Last updated 28 April 2023.