Although Max Petroleum Plc, as an AIM quoted company, is not required to comply with the UK Corporate Governance Code that was issued in 2010 by the Financial Reporting Council (the “Code”), the Board of Directors are committed where practicable to developing and applying high standards of corporate governance appropriate to the Company’s size.
This statement sets out measures taken by the Board to apply the principles of the Code during the year ended 31 March 2012 and to the date of the Directors’ Report.
Board of Directors
The Board currently comprises three executive directors and three non-executive directors:
James A Jeffs
Robert B Holland III
Michael B Young
Executive Director (President and Chief Financial Officer)
David R Belding
Maksut S Narikbayev
Non-executive directors are considered to be independent of management and free from any contractual relationships with the Group, thereby allowing them to exercise full independent judgement on any issue. There is a clear division from the responsibilities of the executive directors.
All directors are permitted access to independent professional advice in the course of execution of their duties, at the Company’s expense.
The Board has established the following committees:
The Audit Committee is comprised of four directors: Messrs Holland, Belding, Jeffs and Butler. Mr Butler is the Audit Committee Chairman.
The Audit Committee is responsible for selecting the Group’s independent auditors, pre-approving all audit and non-audit related services, reviewing with management and the independent auditors the Group’s financial statements, significant accounting and financial policies and practices, audit scope and adequacy of internal audit and control systems.
The Compensation Committee was also appointed in June 2006 and is comprised of Messrs Belding, Holland and Jeffs. Mr Belding is the Compensation Committee Chairman. The Compensation Committee is responsible for determining the terms and conditions of service of the executive directors and of senior management of the Group.
The Executive Committee comprises Messrs Jeffs, Holland, and Young and is responsible for the strategic oversight of the Group.
During the year ended 31 March 2012, the Advisory Committee comprised Messrs James C Langdon and Peter B Moss, Jr, two independent international advisors with extensive experience in, and knowledge of, the energy sector.
The role of this committee is to provide financial, operational, geopolitical and technical advice to the Board and to senior non-Board officers of the Group.
The directors have considered that the Company is not of a size for a nominations committee to be appropriate at the current time. The Board will continue to monitor the situation. In the absence of a committee, all appointments are decided by the full Board.
The Board is committed to provide regular communication with shareholders. During the year ended 31 March 2013, Tom C Randell served as Director of Investor Relations.
The Board acknowledges responsibility for maintaining appropriate internal controls systems and procedures to safeguard the shareholders’ investments and the assets, employees and business of the Group.
The directors have recognised the changing requirements of the Group as it has developed from private company start-up, through re-registration as a public company and admission to trading on AIM, to a growing multi-asset and international operating Group.
The Board has established and operates a policy of continuous review and development of appropriate financial, operational, compliance and risk management controls, which cover expenditure approval, authorisation and treasury management, together with operating procedures consistent with the accounting policies of the Group. The internal control system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can provide reasonable but not absolute assurance against material misstatement or loss.
The Board has approved the Group’s current operating and capital budget and performance against budget is monitored and reported to the Board on a monthly basis.
The directors confirm that the effectiveness of the internal control system during the accounting period has been reviewed by the Board.
The Board does not consider it appropriate to the current size of the Group to establish an internal audit function.