Corporate Governance

Although Max Petroleum Plc, as an AIM quoted company, is not required to comply with the Combined Code on Corporate Governance issued in 2008, 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 Combined Code (2008) to the year ended 31 March 2011 and to the date of the Directors’ Report.

Board of Directors

The Board is currently comprised of three executive directors and three non-executive directors:

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:

Audit Committee

The Audit Committee was appointed in June 2006 and is comprised of four directors: Messrs. Holland, Kraus, Belding and Jeffs. Mr Holland is the Audit Committee Chairman.

This 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.

Compensation Committee

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.

Executive Committee

The Executive Committee comprises Messrs. Jeffs, Holland, and Young and is responsible for the strategic oversight of the Group.

Advisory Committee

The Advisory Committee comprises Messrs Langdon and Moss. 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.

Nominations Committee

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.

Investor relations

The Board is committed to provide regular communication with shareholders. Tom C Randell has been appointed Director of Investor Relations effective 1 April 2011.

Internal controls

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.